Transport Committee on June 2nd, 2022

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

You're ahead of the five-year projection that some people made.

[Andy Gibbons]

Some said five, some said seven, and some said three. I think it's a testament to our employees and the work they've done.

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

What do you see as the improvements we've seen just over the past few weeks? Is there a particular trend? Are things getting better or worse? What are your thoughts?

[Andy Gibbons]

I've seen statistics from the government that suggest that things are getting better. We have to determine how we measure success and what the goal is. I think the extreme tarmac delays we have seen are less frequent than they have been, but we need that trend to continue.

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

Are we heading in the right direction?

[Andy Gibbons]

We're seeing some progress. I think we can conclude that, but the gravity of the situation and crisis is really something.

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

Mr. Rheault, would you agree with that assessment?

[David Rheault]

There has been some progress, I agree, but we definitely need to continue to improve, increase resources and review and streamline the processes. We will soon go into the peak summer season, and traveller volume will increase, so I think all agencies involved in the transportation sector also need to be prepared for this.

They all have a plan, and there was an announcement last week, so there is definitely still some work to do to improve the traveller experience.

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

I can say that the flights in and out of Gander have vastly improved in the last few weeks. Thank you very much for that.

[David Rheault]

We are very pleased for your community, sir.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Rogers.

That concludes the first round of testimony for today. I'd like to thank all of our witnesses for joining us and providing their testimony.

I would now ask that they log off and that my colleagues stay on. We will be suspending for approximately three minutes.

This meeting stands suspended.

[The Chair, Liberal, Peter Schiefke]

This meeting has now resumed.

Colleagues and members of the committee, here are the witnesses appearing before us for the second half of today's meeting.

We have Serge Larivière with us. He's the director general of the Coopérative de transport régional du Québec and president of the Mont‑Tremblant International Airport.

From the Town of Smithers, we have Mayor Gladys Atrill.

We will begin with opening remarks. I will turn the floor over to Mayor Atrill. You have five minutes.

[Gladys Atrill, Mayor, Town of Smithers]

Thanks for the invitation to speak to you today about this. I'm going to focus, particularly, on our airport, which is the Smithers Regional Airport, or YYD. It's owned by the Town of Smithers, which is a community of about 5,400 people, with a service area of about 20,000, including many other small communities and indigenous communities.

Before the pandemic, YYD was run like a business, and it essentially it paid for itself. We had 68,000 passengers in 2019. Last year, in 2021, we had 37,000, which was at about 50-60% of revenues. Prepandemic, scheduled passenger service was provided by two airlines: Air Canada and Central Mountain Air. There were four flights per day. Today, there is one flight, provided by Air Canada in a Q400 with a 78-passenger capacity.

The airport provides a base for charters to remote camps and tourism lodges for fishing, hunting, etc. Our hospital also receives patients from across northwest B.C., with about 260 air medevacs per year. The airport plays a role during emergencies. During recent extraordinary wildfires, the airport was a base for wildfire crews, aircraft and military personnel. Of course, residents choose where they want to live based on amenities.

In the last few years, we've made many improvements to the airport, terminal modernization and runway. Coming up next will be runway lights, etc. We are very much a grant-dependent airport. We're grateful for those grants, as well as for COVID money and money from the regional air transportation initiative.

Research shows that the Smithers Regional Airport is one of the lowest-cost airports for an airline to land a Q400—that is the aircraft currently being used by Air Canada—so it's not the fees that we charge that deter flights. That said, we do have a passenger fee to help with revenues.

The question is whether government red tape makes airports more expensive. Probably, but some regulations can be difficult. Some safety regulations, I suggest, are well accepted.

I want to suggest, though, that there may be a different view on regulations that could help airports in communities like ours, which are reliant on one airline. During the pandemic, the Canadian government offered support to airlines. I support that, and I think it's time to offer that to small and medium-sized airports.

Consider regulation that might link miles flown to the price charged. For example, in our area, flying from Terrace to Vancouver and Smithers to Vancouver are about the same mileage, and the same aircraft is often used. However, it is often way more expensive to fly from Smithers. People comment that you can buy a ticket to other parts of Canada—other parts of the world sometimes, for less—and that unfair pricing hurts small communities. It's not just Smithers.

Don't get me wrong. I am happy to have Air Canada serve our community. I flew with them yesterday and I'll fly home from Regina on Air Canada. However, if there isn't competition, there needs to be a reasonable way to regulate it so that one community isn't paying a higher price than its neighbour for the same service, the same aircraft and the same distance.

Residents choose to drive, sometimes on very dangerous winter roads, to save money. Businesses and industries choose to locate themselves at and operate from other bases.

A lack of consultation on scheduling hurts too. Last year, ski operators had to scramble after a late-season schedule change affected their clients, driving them to other airports. I'm hearing the same from guide outfitters in our community who are finding their clients are being driven away because the current one flight per day on an early morning schedule doesn't suit them.

Air Canada has too big an influence on the health and future of our community. Its use of third party contractors at the airport further reduces the quality of experience for passengers when a flight's delayed or bags are lost. The people behind the counter don't work for the airline. They work for a contractor who can't offer them help. They're told instead to phone the airline, and we all know that phoning an airline, especially when a whole planeload of people are trying to phone, doesn't help.

Customers don't understand the nuance of who works for whom, and our airport gets the blame. Air Canada's going to get those passengers anyway, especially if people have to drive down the road simply to fly from Terrace or Prince George. It doesn't provide a reason for them to work with us. I suggest reasonable regulation could create a path toward an equitable system for small airports like YYD, which is so critical to our community, as the airport is such a significant cultural and economic driver.

I have one other area, and I might not get through it in time. It's about transport or landing systems, but I want to focus on this piece about the regulation for airlines when we have one airline with no competition. We really can't afford to have more and more people leaving small towns because of a lack of opportunity. Our cities can't support more people, and citizens want to live in different parts of our province and country. In this day and age, though, we can't thrive without adequate air access.

I understand the need to review regulations and to remove those that no longer serve a purpose. I urge you, though, to consider the upside of regulation, which is to create fairness. We at the Town of Smithers do not have a lot of clout with Air Canada, yet our economic health is tied to the decision-making of that airline. We are ready to be part of a successful network of regional airports, serving our residents and our neighbours and jumping into provincial emergencies when we need to, but reliable, fairly priced, quality air service is essential to our community.

I'll stop there to make way for questions.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mayor Atrill.

We'll now go to you, Mr. Larivière. You have five minutes for your opening remarks.

[Serge Larivière, President of Mont-Tremblant International Airport and Director General, Coopérative de transport régional du Québec]

I'd like to thank the committee for having me today. I will make my remarks in French.

The subject of airport costs is broad and complex, and we could talk at length about the negative consequences of the federal government's withdrawal from the airline industry. The representatives from Air Canada, WestJet and Air Transat made this point very well earlier.

My remarks today will be more focused on the cost recovery implications of the two federal agencies, the Canada Border Services Agency, CBSA, and the Canadian Air Transport Security Authority, CATSA.

Although I am indeed involved in regional air transportation as the head of the Coopérative de transport régional du Québec, as the chair of the committee mentioned, it is as president of the Mont‑Tremblant International Airport that I would like to speak today.

The Mont‑Tremblant International Airport, which has been in operation for 20 years, is a tourist airport, and 80% of its general aviation revenues come from international flights. Commercial domestic flights at the airport are operated by Porter Airlines and Air Canada.

So it's on behalf of my airport, but also on behalf of several other regional airports in Canada, that I would like to talk to you about a major inconsistency.

In the 1990s and earlier, when the federal government designated an airport as an airport of entry, or AOE, the cost of customs services was borne by Ottawa. However, a new practice has been in place for several years, that of providing a service, but on a cost‑recovery basis. The CBSA was the first to do this, and I think our airport was one of the first to experience the effects.

In 2006, due to the real demand for international air traffic to our airport, the federal government designated it an airport of entry. The CBSA then informed us that, despite this designation, it would only be able to provide customs clearance services there if we agreed to pay for them. We then understood that the operating budget from the federal government had not been increased to take into account the new services to be provided to our airport.

So we were faced with an impossible choice: to be treated differently from other airports or not to have customs clearance services. Since the viability of our airport is directly related to international flights, a refusal would have meant its closure. Since the fee at that time was only $275 per aircraft, we decided to stick to our principles and accept this practice. However, 15 years later, the clearance of a 4‑ to 15‑seat aircraft at the Mont‑Tremblant airport has increased from $275 to $1200.

There is a fundamental question as to why some regions of Canada pay their customs services out of the taxes paid to the federal government, while others, such as ours and Charlevoix, have to pay their customs services in addition to the taxes they pay to the federal government. A fundamental principle of our democracy is therefore being flouted.

In English, one says, “No taxation without representation.”

We must note that the Canada Border Services Agency, by invoking the cost recovery principle, has given itself the power to tax and, as an agency, it is not accountable to the public.

As a result, this creates two classes of citizens in Canada: those in cost‑recovery regions and those who are not.

As if that weren't enough, in light of the absence of government leadership, the Canadian Air Transport Security Authority has also recently decided to recover the costs for the services it provides.

Therefore, the federal government must regain control of the situation. Since it is the federal government that has the choice of whether or not to designate an airport of entry or a screening point, it must provide these agencies with the budget they need to carry out their mandate. It should also put an end to these agencies' practice of recovering their costs.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Larivière.

Mr. Dowdall will begin the question period.

Go ahead, Mr. Dowdall. You have six minutes.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

Thank you, Mr. Chair, but I will cede my time to Mr. Joël Godin.

[The Chair, Liberal, Peter Schiefke]

Over to you, Mr. Godin.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here this afternoon.

My questions are mainly for Mr. Larivière, since I represent a riding in Quebec and he heads an airport in Quebec.

Mr. Larivière, what I gather from your opening statement is that small airports are treated one way and big airports are treated another way. Why do you think there are two realities, two types of treatment and two bills? As I understand it, you are being forced to pass the bill on to customers. Otherwise, from a numbers standpoint, it seems to me that an airport like yours wouldn't be able to cover its costs. Is that an accurate description of the situation?

[Serge Larivière]

It's accurate, except for one thing. It's not small airports versus large airports. It's new airports versus old ones.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

It's as though they are grandfathered in.

[Serge Larivière]

Precisely, and it applies to every airport that was designated an airport of entry, or AOE, before 2006. In fact, I think we were the catalyst for the terrible practice. All airports added to the AOE list after that date were told that they had to pay the fees or they wouldn't receive clearance services from CBSA, even though the federal government had given them the AOE designation.

I should also say, Mr. Godin, that this has had serious repercussions for Quebec because, historically, the province has had fewer airports with clearance services than other provinces. Back when I started, Quebec had a third of the AOE airports Ontario had. Ontario had nine or 12 AOE airports for commercial international flights. My airport was the third in Quebec. Mont-Tremblant's little airport got its designation after Quebec City's airport and Montreal's airport got theirs. Quebec is really trailing behind. Bagotville and Charlevoix come to mind, not to mention all the other locations in need of clearance services. They submitted their requests after 2006, and so, they aren't grandfathered in. Across the board, we are served on a cost recovery basis.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Don't you have an association that lobbies the federal government on your behalf to put an end to the practice? Let's be honest: it's unfair competition. Your oxygen tube is being squeezed as you die a slow death.

Does it have to do with the competition?

[Serge Larivière]

No.

I had an informal discussion with the director general at CBSA, and he admitted that the federal government had not adjusted the agency's funding. Even though the federal government gave us the AOE designation, it did not top up the funding the agency needed to provide the service at our airport.

In that case, we have to pay or CBSA cannot serve our airport.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Mr. Larivière, I'm not trying to incite civil disobedience, here, but if you got together with the other airports in the same boat and you all decided to stop operating tomorrow, what impact would it have on air traffic?