Transport Committee on May 16th, 2022

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

On the issue of the land the federal government leases to airports, has there ever been an assessment of the market value of that land?

[Monette Pasher]

I don't have that at my fingertips. I know that we have reviewed the model in recent years to look at whether this is the best way forward for Canada, and it was deemed that our model is quite effective. There could be tweaks made. I think there was a report done for the CTA review that looked at whether we are looking at aviation as a toll booth or as a spark plug.

I think we have seen throughout the pandemic, when communities have been cut off across the country, how important aviation is to our daily delivery of goods and connecting workers from coast to coast, so I think now we know how important it is.

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

I guess what I'm getting at, Ms. Pasher, is whether the airports feel that they are paying market rates for the land that they utilize, those federal lands.

[Monette Pasher]

Yes. I think there are some adjustments that could be made to the airport rent model. It is too expensive. It's too expensive for Canadians. It's between 10% and 12% off the top of their revenue. For all of the revenue that comes in, we're paying a fee back to government on that revenue.

Really, when you look at what happened throughout COVID, our airports were taking on a substantial amount of debt—like Pearson, a billion dollars in debt—and their rent was only waived. It has been waived to pay back in future years. It wasn't even forgiven.

I think there are ways that we could be more friendly to airports in terms of costs by the Government of Canada.

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

Okay. What I was trying to get at is my sense that airports pay a fraction of the market value for the land they occupy, and the difference between what is currently paid by airports and the actual market value of that land is essentially a subsidy by the Government of Canada.

Is that a fair characterization?

[Monette Pasher]

I don't have those numbers in front of me to answer that question, but as I said, when you look at our airports and the vital role we play in connecting communities, supply chains and cargo, it's so important for our Canadian framework. I think we're partners with government. It's your land, and we're delivering this as not-for-profits for our communities and making sure that Canadians can connect affordably from coast to coast. I think we need to look at ways that we can be partners together in making sure our costs are low.

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

Certainly, and I don't discount the important role that airports and air travel play in our economy.

Earlier we heard from Mr. Sparling that he feels there should be tax concessions to airlines and that in general the cost of air travel and airports should really be coming out of the government's general revenue, as opposed to the current situation that sees air passengers pay for the bulk of those costs.

Is that a view that you share?

[Monette Pasher]

I think we have a good model in Canada now, but if you look at the airports in the U.S., they are federally owned and operated airports, which are invested in quite heavily. That's our competition. The cost of travel there is lower, and at times Canadians drive across the border so that they can get lower fares.

Can there be improvements made? Absolutely. I think the support that was given throughout the pandemic to our carriers through the regional air transportation initiative for regional carriers was needed. I think the support that was given to Air Canada was needed. We needed to reconnect our communities at a really dire time, and our aviation sector has taken on a lot of debt. I think we needed the partnership of government to get through that time. We're grateful for the support that was received.

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

Yes. I agree with you that certainly the sector was hard hit by the pandemic and that there was a role for government to play.

Looking beyond the pandemic, really what we're talking about is the structure by which we finance airports in Canada and the question of whether there is an inordinate amount of regulation that is driving up costs.

Could it be possible that simply the cost of flying domestically in Canada is greater due to geography and population densities? It seems to be one of the main differences between us and the other jurisdictions we're competing with.

[Monette Pasher]

I think our city—

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach. That was a fabulous question. Unfortunately, you're going to have to wait until the next round to get an answer.

Next we have Mr. Jeneroux.

The floor is yours for five minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair.

I'll take a few quick seconds before I begin to commend the translators today. There have been a few very fast speakers and I think they've done a remarkably good job, at least from my perspective. I wanted to take my time to do that.

I want to direct some of my questions to you, Ms. Pasher. Welcome back to the transport committee.

Some of the pictures out of Pearson, for example, over the course of the last week or so have been wild in the number of people waiting in lines. You ask the airlines, and they say it's the airports and staffing. The airports say it goes to the bigger picture of the backlog through COVID. The minister, probably the first of his kind, blames Canadian travellers for this.

I'm curious if there's any sort of immediate action that can be taken by the government, airlines or airports to help speed some of this up a bit more.

[Monette Pasher]

Thank you for the question. There are absolutely immediate measures that can be taken. One is that we're seeing the staff shortage at CATSA. The government, our airports and CATSA are working very hard immediately and have been for some time to address those staffing challenges.

Systemically, we need to improve security screening in Canada. This was an issue prepandemic. We need to look at risk-based screening similar to what you see in the U.S. with PreCheck and trusted traveller programs. We've been—

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

On PreCheck, Ms. Pasher, is that something that you, as the airports, could do alone, or does that need government support similar to the NEXUS program?

[Monette Pasher]

It needs government support and government approval. Security screening is completed by government.

In addition to that and in addition to CATSA, there are a number of things that need to be done at the border. There are legacy public health protocols that are in place here that need to be removed. We're still testing 4,000 passengers per day coming into Canada for COVID. Other countries have moved beyond this. We need our testing out of our airports. Pearson is moving 30,000 international passengers a day. It's ramped up quickly. It's going to be up to 45,000 come this summer.

We cannot continue with the same health protocol measures and [Technical difficulty—Editor] dire impacts at our airports in terms of bottlenecks, and we need to move things more quickly. We need Public Health Canada to remove some of these measures.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

That's something the government could do immediately—today, if it so chose.

I want to quickly move on to Mr. Guy, if you don't mind.

You also mentioned the staff shortages. You touched on passports and NEXUS also hurting the bottom line. I'm hoping you can expand on that.

I don't have a ton of time, but I was also hoping we could get some of your analysis in writing for the committee, because I think you provide a strong position on what can be done to help some of these shortages.

I'll turn it over to you, Mr. Guy.

[Robin Guy]

Thank you very much.

The bottlenecks we're seeing are hurting the Canadian economy and they're hurting our international reputation. I think that a review of pandemic regulations to remove those that are not needed is one step that could be immediately done. If we're looking a little bit more mid-term, it's reviewing all transportation regulations and making sure that we're putting an economic lens to some of these. It's working with partners to address the labour shortage.

Again, I want to say that we should be doing everything that we can to help facilitate travel. That's an important thing. The more quickly we solve the passport issue, the more quickly our sector can recover and the more quickly our economy can grow.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

On the passport issue, this wasn't a surprise. As the end of COVID started to come near, we recognized that people wanted to travel again. It's a bit of a shock to me that this is still going on.

Again, you've done some analysis and I have just a few seconds left, but I'm hoping that you will be able to share some of that with the committee. As we go through this study, that will be important stuff to fall back on if you're able to share that.

[Robin Guy]

We would be happy to have that conversation.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Jeneroux.

Next we have Mr. Rogers.

Mr. Rogers, the floor is yours. You have five minutes.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Chair.

Thank you to all of the witnesses who are with us today. It's good to hear your testimony.

I've been around this committee for a number of years now, and I appreciate the many challenges that are facing the aviation industry today. I recall in 2019, prior to COVID, we were studying issues like staff shortages or the pilot shortage, in particular, and meeting with airlines and the airline industry about training the many needed pilots required, particularly in northern Canada and for regional airlines and so on. Some of that we've heard today.

Of course, then COVID struck, and we all know the consequences of that. We've given a lot of financial support to the air sector and to airports, about $11 billion over the course of this pandemic—at least the billion is identified for airports—and recently, another $150 million to the GTAA. I realize that these contributions are significant, and I wonder, during the period of this pandemic for the last couple of years, what federal programs some or all of you were able to get access to and if these programs were helpful in keeping the industry afloat.

Maybe Mr. Priestley could comment on that, and then Ms. Pasher.

[Glenn Priestley]

I was hoping that you would ask what we would have done differently than what we did during COVID, but you asked this question.

The federal help for funding was very helpful. We had two tranches. The federal funding went to the territories and was disbursed. In all three of the territorial governments, it was done with awareness, sensitivity and communication. That's what we got. What we asked for and what we continue to ask for.... As one of my directors said, thank you for the help but just remove the restrictions. Let us get to work and we'll do the business.

We've done a very good job of maintaining the northern aviation society system safety, and we're proud of that.

I think that's the biggest thing as far as a benefit from the federal government goes.

Thank you.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Mr. Priestley.

Go ahead, Ms. Pasher.

[Monette Pasher]

Yes, the funding provided to our airports for pandemic relief announced in the FES in 2020 has been so beneficial. The program RATI, the regional air transportation initiative, provided liquidity support to help restore some of the regional routes across the country. The airport capital assistance program, which is normally funded at $38 million, was funded at $186 million over two years, and that was really helpful for a number of airports to do things like runway rehabilitation and to afford new airport emergency safety vehicles for their fire trucks.

Projects from coast to coast really needed to have that support to get through the pandemic. There was also ACIP, which was the critical infrastructure program for large airports where the government helped fund projects at 50¢ dollars with our airports. We saw that Pearson got that for their runway rehabilitation projects. These were very important programs. For the first year, most airports in Canada also received rent relief. The four largest received a deferral on rent.

It was a very critical time, and our airports needed this. They were down to a 90% decline in traffic, and all of our funding, as you know, comes from passengers as a user-based system, so I think we really needed this to get through the pandemic, as our airports had to stay open. It was very beneficial. I think some of these programs could even be looked at to continue, because I think it was a great way to support our airports and our infrastructure in Canada moving forward.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you so much for that response.

I appreciate the challenges that we went through. I remember the many meetings we had as a transport committee to meet with small regional airports like Gander, Newfoundland, for example. It was small airports like in Moncton, New Brunswick, in northern Canada and in the west and the many challenges they were facing, plus the larger airports like Toronto, Montreal and so on.

I remember lobbying on behalf of some of your groups to our government to ensure that we helped the airline industry survive, because we know the value of that industry to this country.

You're right. I understand that some of these programs were very timely. Some were a bit delayed, but nevertheless they were very timely and important.

Of the ones that you've identified, Ms. Pasher, what are the top one, two or three that you would suggest we retain or implement for the long term?