Transport Committee on Oct. 8th, 2024

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Lauzon.

Mr. Barsalou‑Duval, you have the floor for two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Mr. Andrews, in your opening remarks, you said that air transportation is an essential service in a region like yours. I believe a member from your region repeated that afterwards.

In Quebec, when a service is designated as essential, it means that the government must contribute to it. It funds systems such as hospitals, health care and schools. Education is free.

I'm not saying that air travel necessarily has to be free. The main point I want to make is that these services receive government support.

Are you satisfied with the support you are currently getting from the government to buttress regional air service?

[George Andrews]

As an end-user and as a community leader, I'll have to say no. The reason I say that is I see people having to fundraise for the cost of travel to a medical appointment, making turkey dinners to try to get this for people.

On the other side, I could see an opportunity where a province has upped and gone into the subsidy role in helping people travel between the provinces.

From my perspective, the level of service is critical. It is an essential service when there is no road contact. It's 2024. We can't expect people to stay in our communities and do nothing with no economic development and no things like that.

There is a definite role, and the essential side of things needs to be addressed by government.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

So you would be in favour of some sort of system that would fund or subsidize regional air transportation.

Is that correct?

[George Andrews]

Absolutely. Like I said, it should be something that would give the savings to the actual end-user and not to the companies in the hope that it would be passed down to the user.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Barsalou‑Duval.

Thank you, Mayor Andrews.

We'll go next to Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have two and a half minutes, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I believe either Mr. Andrews or Mr. Goudie mentioned the new duty time rules as being one of the regulations that really impact the costs that airlines face in the north. There is this idea that, perhaps, when we look through a northern lens, as Mayor Andrews said, those rules don't make as much sense.

My understanding is that the duty time rules are based on safety and trying to ensure that we have well-rested pilots. Is there a way to look at the duty time rules through that northern lens without compromising safety, or do you feel, simply, that the new rules go too far and place an unnecessary burden on the companies that are forced to pay extra pilots?

[George Andrews]

I personally think there's nothing that trumps safety. Safety is critical and paramount. It puts an undue burden on the remaining staff who are left with the companies. That's more the issue. At 11 o'clock at night, sitting in an airport in Halifax, I shouldn't get an email about duty times. That should already be done. I put that onto the companies from a planning perspective, so at no point in time is safety a thing.

For me, safety is paramount. It's the way it is managed, and that comes down to the companies and how they manage their staff.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mayor Andrews, we've talked a lot about the cost of air service for northerners. I don't think any of our witnesses today have yet mentioned the availability of flights. It's certainly an issue that's come up in my community and in northern British Columbia.

Is the availability of flights also an issue, or the service levels that the airlines are providing, or is it mostly just the total cost?

[George Andrews]

Availability plays a huge part. When I received a phone call from the Air Canada representative, saying they were pulling out of my community, they assured me that because there were still two providers, competition, service and requirements wouldn't be an issue. My first response was that Air Canada didn't have a very successful rate in terms of regular flights and availability, and now they're putting that burden into an arrangement with another company.

We're seeing now what the end result was with Air Canada, which was availability, frequent cancellations and repurposing aircraft to go to charter operations for fly-in, fly-out. We're seeing that; we're living it, and it's costing us additional money because it costs us additional hotels, meals and things like that when people are travelling.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach.

On behalf of all committee members, I would like to thank all of our witnesses who have appeared thus far for your testimony on this very important study. I ask that all witnesses log off now.

I'm going to suspend, colleagues, for two minutes as we switch over to the second round of witnesses.

The meeting is suspended.

[The Chair, Liberal, Peter Schiefke]

I call this meeting back to order.

Colleagues, I am pleased to welcome the second round of witnesses for the second slot. We start with Central Mountain Air and Douglas McCrea, who is followed by, from Perimeter Aviation, Michael Pyle; and from Summit Air, Myles Cane.

We start off with Mr. McCrea. Mr. McCrea, you have five minutes for your opening remarks, sir.

[Douglas McCrea, President, Central Mountain Air]

Thank you. Good afternoon. My name is Douglas McCrea. I'm the president of Central Mountain Air. Thank you for the opportunity to speak with you today.

Central Mountain Air is located in northern British Columbia. For reference, we're considered a small airline as categorized by the air passenger protection regulations. At Central Mountain Air our company purpose and values include providing a safe, affordable and seamless travel experience for all of the clients and communities we serve.

Next I'll simply mention some points for consideration from our perspective that may contribute to reducing the cost of air travel in our region as well as improving air service in Canada. We feel that additional structured assistance for rural and remote communities is required to support air development and future operations. Construction of hard-surface runways from current gravel surfaces, and de-icing equipment availability are becoming standard items for consistent day-to-day operations. On the national front, we feel that Canada can support and advance the development of sustainable aviation fuels and infrastructure.

Policy and regulation dictate the way air carriers operate, and one size does not fit all. Baggage security regulations, cargo security, fatigue during duty, air passenger protection and CTA charges need regular review and, where possible, change for continuous improvement.

In addition to the already high cost of operation, Canadian air carriers face a myriad of external taxes, visual and buried fees, including airport rent, AIFs, PFCs, TSCs, GDS and Nav Canada fees and single-supplier de-icing fees, to name a few. Again, a review and rejig are required.

Interline agreements allow a passenger to travel on multiple airlines on one travel itinerary instead of two or more. It simply allows a reduction with no duplication of fees and the ability to through-check luggage to a passenger's final destination. A more open interlining architecture amongst large and small carriers should be advanced, allowing fair pricing strategies, reduced airport fees and a more seamless travel experience for the traveller.

In closing, despite its great size, Canada is one of the world's most sparsely populated countries. Air operations, we feel, are essential. Aside from the large mainline carriers, small carriers are able to contribute towards improved air services and fair pricing for Canadians. It's certainly not limited to them, but the points I mentioned previously currently add to the incremental cost for the air traveller. The aviation industry requires financial and regulatory reform to set it on a new course for success.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. McCrea.

Next we go to Mr. Pyle. Mr. Pyle, the floor is yours. You have five minutes for your opening remarks, sir.

[Michael Pyle, Chief Executive Officer, Exchange Income Corporation, Perimeter Aviation]

Thank you.

Good morning, honourable members of the committee, and thank you for your time today on this important topic.

In my position as CEO of Exchange Income Corporation, otherwise known as EIC, I am here testifying on behalf of Perimeter Aviation and Bearskin Airlines, two of our aviation subsidiaries.

More broadly, I lead a dedicated team of aviation professionals who manage vital air carriers throughout Canada, including our wholly owned airline brands of Calm Air, Perimeter Aviation, Bearskin and PAL Airways. Wasaya Airways and Air Borealis are jointly owned with first nations and indigenous partners. Keewatin Air, Custom Helicopters, PAL Aerospace and Carson Air provide air ambulance and specialty aviation services.

Each of these air operators has significant track records and experience in providing critical services to remote, northern, indigenous and first nations communities. Together, our family of air operators accounts for over 325 years of experience and investment in northern aviation. We know first-hand that the challenges faced by northern air operators are very different from those of our southern counterparts, and we have learned that the quality of our service and investment in infrastructure are fundamental to our success. Consider the challenges of offering a commercial operation that can move only four or six passengers out of a community on a given day.

Our fleet is diverse and highly customized to meet the demands of the environments in which we fly, while we also operate within the limits of the infrastructure that supports the northern aviation communities and accommodate all the needs of the communities we service. We've invested heavily in basic infrastructure that is needed at northern airports, far beyond what would be typical for traditional airlines, to stabilize our operation and deliver better service.

For instance, the need to build and maintain our own maintenance facilities, fuel farms and ground handling equipment in remote locations, the need to provide staff with housing, and the need to develop our own storage facilities to keep goods at a regulated temperature until our customers can pick them up are all examples of the substantial capital investment EIC has made that our southern cousins would never have to consider.

The communities we serve are very thinly populated and small. For most of the year, they can be accessed only by air. Airlines depend on cargo, especially food, alongside passenger service, to support sustainable service. Any disruption can disproportionately affect remote communities, raising costs and limiting access to essentials. To ensure our operation remains stable and sustainable for the long term, we've built a complex network that links multiple destinations, spreading volume and efficiencies across a network rather than just between two points.

We tailor our operation and invest heavily in our product, because we know that aviation is vital in the places we operate. Alternative access is limited or, in some cases, non-existent.

Air services are crucial for delivering government services like health care, education and public safety, while also being critical in linking the economic opportunity in the north. In that context, our airlines are more akin to public utilities, built on essential services and bonded to the communities we serve.

This is a structure that has allowed our operators to weather market fluctuations. For instance, by partnering with governments and communities, EIC carriers were able to maintain our entire network during COVID, not abandoning a single destination during the pandemic.

At the same time, the investment northern carriers must make to operate shifts the nature of competition. The north cannot sustain multiple providers with overlapping services. Instead, we frequently see multiple providers bidding on long-term contracts for either government or private business, such as mining or natural resource development, that allow the certainty required to build the ecosystem we need to operate and recover our costs over a longer period of time. With reality in mind, we believe that healthy competition in northern aviation should first seek to ensure consistent service, long-term investment and the maintenance of critical infrastructure.

Any policy focused on northern aviation must consider the unique challenges faced by operators and by communities. Southern solutions on regulations, competition or encouraging sustainable investment cannot simply be copied and pasted into the north. Government has a critical role to play in addressing those challenges and finding solutions for sustainable northern aviation. Regulatory frameworks that consider the realities of northern operations or investments in infrastructure that stabilize the operating environment while reducing the cost to communities and our passengers would be welcomed by the industry.

With that in mind, I again commend you for taking on this study. I welcome any questions you may have.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Pyle.

Mr. Cane, I want to confirm that you do have opening remarks. If not, would you like us to proceed with the first line of questioning?

[Myles Cane, Senior Vice-President, Operations, Summit Air Ltd.]

No, I have some opening remarks. I didn't prepare formal speaking notes for the committee, but if it's okay, I can go ahead with some.

[The Chair, Liberal, Peter Schiefke]

By all means. The floor is yours, sir. You have five minutes.

[Myles Cane]

Thank you, Mr. Chair and members of the committee.

My name is Myles Cane. I'm the senior vice-president of operations for Summit Air. Summit Air is a wholly owned subsidiary and member of the Ledcor Group of Companies. I have been involved in Arctic aviation for a period of 33 years. I've performed various roles. I've been an aviation mechanic. I've been an aviation pilot. I've held a variety of management roles over the past 20 years. My role at Summit is very much operational. I'm based in Yellowknife, Northwest Territories.

I'm also the vice-president of the Northern Air Transport Association on the executive committee. For those of you who are not aware, it's a membership group of over two dozen northern airlines. We meet annually at our AGM and meet regularly with our regulator and various other government factions to forward our initiatives and interests in the Arctic.

Summit Air is a business that's a bit different compared with the usual model of aviation carriers. We're a charter business. We're not a scheduled carrier at all, but we support an important market for industry and investment in the north in that we support oil and gas, mining, food retailers and government. The private sector and tourism are our primary clients. We also have a diverse fleet. We have over 25 aircraft now and 300 employees. We have bases in the south, in Alberta, but our primary base is in Yellowknife.

I would welcome questions today that fall into three different categories. First of all, I want to echo some of the comments of the previous witnesses on the essential nature of aviation in the north. My role in NATA has seen a lot of participation in providing comment and guidance to new government regulation. We've seen some shocking disregard for this guidance from the subject matter experts on this jurisdiction, who all operate safe airlines 24-7 in this area. We see new regulations coming down the pipe that have an even more dire impact on the Canadian north and on the constituents and residents of the Canadian Arctic, who will see a further degradation in quality of living and an increase in costs in these areas.

I welcome those questions. These are tied into airport infrastructure issues. Our airports are woefully behind the times in terms of capabilities, lighting and equipment. I also welcome questions around the Competition Act and recent merger activities in the Canadian Arctic with several different carriers.

Those are my opening remarks. Thank you for asking me to participate in this committee.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Cane.

We'll begin our line of questioning today with Dr. Lewis.

Dr. Lewis, the floor is yours. You have six minutes, please.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Thank you, Chair.

I want to thank the witnesses for coming today.

My first question is for you, Mr. McCrea. You mentioned that sustainable aviation fuels and infrastructure were very important for the future of aviation. What do you specifically mean by “sustainable” infrastructure? How do you define that?

[The Chair, Liberal, Peter Schiefke]

I'm sorry, sir, but you are on mute. We'll stop the clock here and ensure that you're given the appropriate time to respond.

[Douglas McCrea]

I'm sorry.

I think as a whole that we shouldn't hold back on advancing or building the infrastructure. I believe it's an up-and-coming requirement for the future and for the environment. We should give it our all to get involved in the production of same.