Transport Committee on June 16th, 2022

[The Chair, Liberal, Peter Schiefke]

I call this meeting to order.

Welcome to meeting No. 25 of the Standing Committee on Transport, Infrastructure and Communities.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 3, 2022, the committee is meeting to study Reducing Red Tape and Costs on Rural and Urban Canadian Airports.

Today's meeting is taking place in a hybrid format, pursuant to the House Order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application.

Per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask, except for members who are at their place during the proceedings.

I'd like to take a moment to make a few comments for the benefit of the witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking.

For interpretation, for those joining us on Zoom, you have the choice at the bottom of your screen of either floor, English or French audio. Those in the room can use the earpiece and select the desired channel.

All comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can, and we appreciate your patient understanding in this regard.

Appearing before the committee today, we have the following witnesses. From the Department of Transport, Colin Stacey, director general of air policy; Craig Hutton, associate assistant deputy minister for policy; Aaron McCrorie, associate assistant deputy minister, safety and security; and Stephanie Hébert, assistant deputy minister of programs.

From the Canada Border Services Agency, we have Denis Vinette, vice-president, travellers branch.

From the Canadian Air Transport Security Authority, joining us in person today, we have Nancy Fitchett, vice-president, corporate affairs and chief financial officer; as well as Mr. Neil Parry, vice-president, operations.

From Nav Canada, we have Mr. Jonathan Bagg, director, stakeholder and industry relations; and Leigh Ann Kirby, vice-president, chief legal officer and corporate secretary.

From the Public Health Agency of Canada, we have Kimby Barton, acting vice-president, health security and regional operations branch.

Thank you all very much for joining us either in person or virtually.

Before I turn it over to Transport Canada for opening remarks, if my colleagues will permit, I just want to say on behalf of this committee, on behalf of all members of the House of Commons and, of course, on behalf of all Canadians, thank you, all, for the incredible and diligent work that you've done over the last two years to support Canadians and keep them safe.

With that, I want to turn it over now to Transport Canada for your opening remarks.

You have five minutes.

[Craig Hutton, Associate Assistant Deputy Minister, Policy, Department of Transport]

Thank you, Mr. Chair, for inviting us to speak with the committee today.

The Government of Canada recognizes the impact that significant wait times at some Canadian airports are having on travellers.

Transport Canada is working with federal partners, including the Canadian Air Transport Security Authority, the Canada Border Services Agency and the Public Health Agency of Canada, as well as industry, including air carriers and airports, to implement solutions to reduce delays as we approach the summer peak season.

Our goal is to streamline services for inbound and outbound passengers, so Canadians can travel efficiently and safely as the sector recovers from the COVID‑19 pandemic.

Air transport was affected more severely by COVID-19 than most sectors. Traffic levels dropped by more than 90% from prepandemic levels for more than a year.

As COVID-19 measures are easing at home and around the world, the air sector is seeing a surge in demand. In January 2022, air traffic was less than 40% of 2019 levels. By May, that grew to almost 80%. The surge in air travel is positive for the recovery of the air sector; however, increased volumes have also placed pressure on all aspects of the transport system.

Canada's not alone in facing the challenge of airport congestion. We are witnessing similar phenomena at other airports around the world and, given the global nature of the aviation industry, delays and congestion overseas contribute to delays and congestion also in Canada.

Some travellers have been experiencing delays during the outbound security screening process that happens before a traveller boards a plane. The challenges have been most prevalent at Toronto-Pearson and Vancouver airports, which are Canada’s busiest.

The biggest source of outbound delays has been staffing shortages at CATSA. While 75% of screening officers were retained during the pandemic, labour market shortages have made it difficult to recruit back up to 100% of what is needed. When traveller delays became evident, the Minister of Transport instructed his officials to bring together CATSA, the major air carriers and the top four airports to understand the challenges and implement immediate solutions.

Actions to date, since the creation of the new airport operations recovery committee, include the accelerated hiring and training of new screen officers by CATSA and their deployment to where they are most needed. In fact, since April 1, CATSA screening contractors have recruited almost 900 new employees. CATSA is now over its 100% target in Toronto and Vancouver to meet its national standard of 85% of passengers screened in 15 minutes, which was actually exceeded in some cases over the past week.

Operators in CATSA are also working together to improve the screening process for passengers. In addition, all partners are improving communication and information sharing, including messaging to passengers to help them plan and avoid delays.

The concrete action we have taken together is having an impact. We have seen significant improvements in wait times over the past month, with fewer passengers waiting in long lineups.

During the week of June 3 to 9, an average of 10% of passengers were waiting more than 15 minutes at Pearson, which was down from 23% the week of May 9 to 15. At Vancouver, this number improved to 13% from 26% over the same period.

In addition to delays when boarding a flight in Canada, there have been delays for international travellers returning to Canada, primarily at Toronto Pearson. These delays are due to a number of compounding factors, including overall staffing levels in the system, infrastructure limitations and delays overseas, leading to a convergence of flights and public health measures.

Presently, there are infrastructure and capacity limitations in the customs hall that restrict passenger offloading, which has resulted in travellers being held on aircrafts.

In addition, travellers are also experiencing delays due to other airport services—including baggage handling. Ground crew labour shortages are also having significant impacts.

To resolve these issues, over the past month, Transport Canada has been actively working with CBSA, PHAC and the industry to identify efficiencies through the travel journey to streamline processes of reduced wait times.

Changes are being made. For example, new kiosks to process more passengers are being installed, and the Government of Canada announced the suspension of mandatory random testing until June 30 to streamline the border arrivals process and relieve congestion.

Mr. Chair, congestion and delays are frustrating for travellers. As noted, they are due to a variety of factors. That is why Transport Canada continues to work with federal and industry partners to address these challenges and support the recovery of the air sector while maintaining safety and security for Canadians.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Next, we will go to the Canada Border Services Agency.

The floor is yours. You have five minutes.

[Denis Vinette, Vice-President, Travellers Branch, Canada Border Services Agency]

Thank you, Mr. Chair. Many thanks for the recognition in your opening remarks. I truly appreciate it. We've had some great staff working diligently for the last two and a half years, doing all they can to protect at the border.

It is a pleasure for me to appear and speak with you today about the Canada Border Services Agency and what we are doing to improve the overall traveller experience at our airports. I would like to begin by noting that the CBSA is fully aware that Canadians are more eager than ever to resume their regular travel after more than two years of restrictions, as evidenced by the current volumes at our airports.

During the month of May, we gradually resumed border services at select airports affected by the temporary measures put in place as a result of the pandemic. Travellers are returning to a border that is being managed very differently this summer, with evolving COVID-19 requirements.

We recognize the impact that significant wait times at some airports are currently having on travellers, as stated by my colleague from Transport Canada. We are working with airports, air carriers, baggage handlers, other government departments and all partners to implement solutions to reduce delays as we approach the summer peak period.

The CBSA continuously monitors volumes and wait times to allocate resources and adjust staffing levels accordingly. We have increased officer availability at major airports, and student border services officers are now at work across the country.

There are also things that travellers can do to make the process easier for themselves and other travellers. Travellers can help reduce wait times at the border by coming prepared and by completing their mandatory ArriveCAN submission within 72 hours before arriving at the border.

ArriveCAN collects contact, health and travel information to protect the health and safety of travellers and expedite processing at the border. It is the fastest, easiest and most secure way for travellers to show they meet public health requirements.

The CBSA is constantly looking for innovative ways to facilitate and expedite border processing, without compromising health and safety. Over the coming months and years, the CBSA will undertake a series of major improvements as part of our traveller modernization initiative. The various components of this initiative will position Canada to manage future travel volumes without compromising public health priorities or economic recovery.

We are modernizing the border processing experience through the use of new digital tools and technologies to create a more streamlined process for travellers. One of these new tools is the advance CBSA declaration.

One of these new tools is the CBSA advance declaration. This is a feature within the ArriveCAN online application currently that gives air travellers the option to prepare their customs and immigration declaration 72 hours in advance of their arrival in Canada. This feature will be expanded to the ArriveCAN mobile app later this month.

In addition, over the next year, the CBSA plans to launch the CBSA advance declaration feature nationally at all airports with primary inspection kiosks. Travellers who use the advance CBSA declaration feature of ArriveCAN online will greatly reduce their processing time when they enter Canada through airports. On average, travellers using this new platform will complete their processing using the primary inspection kiosk in just over one minute—in as little as 68 seconds.

With the increased volume of travellers at our points of entry, there have been increased pressures on the government and industry to keep up. We trust that the traveller modernization initiative is steering us in the right direction.

I hope you have found this information beneficial, and I look forward to providing you with more insight on these important initiatives. I am happy to respond to questions from the committee.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Next we have the Canadian Air Transport Security Authority.

You have five minutes. The floor is yours.

[Neil Parry, Vice-President, Operations, Canadian Air Transport Security Authority]

Thank you, Mr. Chair.

Good afternoon, honourable members.

This year marks CATSA’s 20th anniversary of operations. As you're likely aware, CATSA is a Crown corporation responsible for security screening services within Canada’s civil aviation system. We're regulated by Transport Canada. CATSA is accountable to Parliament through the Minister of Transport, and we're funded by parliamentary appropriations.

We operate our mandate through a third party screening contractor model. The contractors employ the screening officers directly, while CATSA, together with the screening contractors, ensures that critical elements of the transportation system are secure, from passenger and hold baggage screening to the screening of non-passengers at designated airports in Canada.

We've recently seen the pent-up demand for air travel materialize at airports much earlier than I think many anticipated. As such, there were some challenges in servicing demand, particularly in early May. This follows two tumultuous years for the civil aviation industry.

CATSA and its screening contractors have been targeting the hiring of 1,000 screening officers this year, in addition to the over 1,200 screening officers who were recalled in the fall of 2021. I'm pleased to report that despite those challenges in May, and despite the labour market challenges that continue to persist, we are on track to meet those targets.

I'm also happy to report that over the last three weeks CATSA has met its government-funded service level target of screening 85% of passengers in 15 minutes or less across the system. We've exceeded that over the last three weeks, but we still have work to do.

While screening contractors have been working to increase staffing levels, they're not immune to the recruitment challenges experienced by the broader commercial aviation industry and, indeed, by many industries across Canada. CATSA aims to achieve or exceed the wait times service level as established by the funding provided by the Government of Canada, where, as I mentioned, 85% of all passengers wait 15 minutes or less at class I airports.

Thank you once again for the opportunity to speak to you today.

Ms. Fitchett and I are available to answer questions from committee members.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Parry, and thank you very much, Ms. Fitchett. Thanks for being here once again.

Next we have Nav Canada.

The floor is yours. You have five minutes.

[Leigh Ann Kirby, Vice-President, Chief Legal Officer and Corporate Secretary, NAV CANADA]

Thank you, Mr. Chair.

Nav Canada is the not-for-profit corporation that owns and operates the world's first privatized air navigation system, ensuring the safest, most efficient movement of aircraft from the Pacific to the Arctic to the mid-Atlantic, 24 hours a day, seven days a week. Nav Canada operates the world's second-largest air navigation system. To support our 45,000 customers, we employ 4,000 people and are deploying groundbreaking technologies to keep the skies safe. Safety is why we exist, and our safety record is one of the best in the world.

Nav Canada is a critical part of the supply chain infrastructure, which keeps people, goods and services moving by air to and from communities large and small across Canada and around the world.

NAV CANADA would like to thank the committee for its invitation to discuss reducing red tape and costs on Canadian airports.

Nav Canada's customers are the airlines and private aircraft operators that fly in Canadian airspace. As a not-for-profit, we charge our customers using a fee-for-service model. We have delivered multiple decreases to our customers since our inception to help them reduce costs for air travel, while investing more than $2 billion to improve the air navigation system transferred to Nav Canada by the federal government in 1996.

Even with the latest rate increase in September 2021, our service charges and increases on average have run below the rate of inflation since our inception. Our cost structure is heavily weighted to fixed costs. For example, if the number of flights in Canadian airspace drops by 80%, Nav Canada must still maintain 100% service coverage in Canadian airspace. This weighting towards fixed costs is illustrated when you realize that labour costs make up approximately 70% of our operating costs.

During the pandemic, we saw passenger air traffic, as measured by revenue, drop significantly. In fiscal 2021, our revenues were down by 55.7% compared to those from prepandemic traffic. As most of our costs are fixed, our revenue model was put to the test. On the operational side, I'm very pleased to report that Nav Canada and its employees managed the pandemic without any airspace closures due to infection rates.

Nav Canada's model and favourable credit rating allowed us to borrow at record-low rates in the debt market to continue our seamless operations. Unfortunately, a rate increase was necessary to meet the covenants of our earlier bond issuance. As we understood that our customers were also dealing with challenging business realities, the 29.5% increase in fees was only to meet covenant requirements, not to recover Nav Canada's revenue shortfall. To further assist our customers, Nav Canada implemented a fee-deferral program for the next five years.

Nav Canada was pleased that the federal government brought in business assistance programs during the pandemic. The Canada emergency wage subsidy provided critical support. However, after two years of the pandemic, Nav Canada, similar to other industry organizations, such as airports and airlines, has increased its debt levels. Currently, we have a $600-million deficit in our rate stabilization account, which represents the amount that will need to be recovered over time and in consultation with our customers.

Nav Canada empathizes with air travellers who have seen an increase in delays over the past three months. Air service represents a complex ecosystem, with many different partners and factors influencing operations. We work actively to minimize impacts such as weather, equipment repairs and, at times, unplanned absences, including COVID-related absences. However, delays related to airport construction, COVID testing, customs, security processing, ground services or aircrew staffing are beyond the scope of our mandate.

Where we can have an impact, we will. Our long-term strategic direction will result in more efficient airspace use and reduced greenhouse gas emissions, and will drive significant savings for our airline customers through reduced fuel consumption.

I am happy to answer any questions the committee may have.

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

We'll begin our round of questioning today with Ms. Lantsman.

Ms. Lantsman, the floor is yours. You have six minutes.

[Melissa Lantsman, Conservative, Thornhill, ON]

Thank you to all the witnesses for their time.

A special thanks, of course, goes to the frontline workers, who have gone through a tumultuous two years and continue to be at the centre of what we deem a disastrous handling of the airports, as noted of late.

I'll start with Mr. Parry, at CATSA.

When did you first know about capacity issues at airports? The second, follow-up question is, with whom did you share that information?

[Neil Parry]

We have been planning for the recovery since the pandemic began. That was back in 2020, when we retained 75% of the workforce, despite over 95% of the passenger traffic disappearing almost overnight. We began a process to recall 1,250 screening officers over the summer of 2021. That was planning for the recovery.

The recovery, from a CATSA perspective, had two false starts. One was the delta variant and the next was the omicron variant over Christmas, when we ramped up, stopped, ramped up and stopped.

We work very closely with the airports, with the air carriers and with our colleagues at Transport Canada to forecast out demand. The forecasting process, on which we base the scheduling of required capacity, has been extremely volatile over the last two and a half years, making it very difficult to forecast with precision. We're seeing that improve. We have daily and weekly engagements with air carriers on what their load capacities will be.

We were planning for a busy July-August summer. I think the entire industry was focused on a July-August summer. We were working closely. We were part of Transport Canada's COVID recovery working group, with stakeholders, led by Transport Canada. We shared openly what our plans and strategies were for recovery. The demand that occurred in April and May was well above our forecasted demand. I would wager to say it was above industry's expected demand. There was a sudden surge—

[Melissa Lantsman, Conservative, Thornhill, ON]

I'm going to pipe in here.

Did you let the government know? Did you let the airports know? Did you let the airport authorities know? Who did you share the information on forecasting with?

[Neil Parry]

It was with all of the above. We shared this with our colleagues at Transport Canada. My CEO and I met with the Canadian Airports Council. We met regularly with airport CEOs and other air carrier executives.

[Melissa Lantsman, Conservative, Thornhill, ON]

I'll follow up with a question.

Mr. Parry, if you knew that air travel would see a sharp increase in June and July, and you've seen an even sharper increase.... The information from our supplementary estimates—that budgeting process—shows that over 25% of CATSA's budget went unspent last year.

Could you tell us why?

[Neil Parry]

Last year, the passenger volumes were extremely low, so we managed that budget based on the capacity we needed to serve the demand at that time. The passenger volumes did not start to recover last year. They remained very low right up until March of this year and then into April and May, when we saw the spike in passenger volumes.

We weren't going to spend a budget to have people stand in an airport and do nothing. We felt that would be an inefficient use of the parliamentary appropriations.

[Melissa Lantsman, Conservative, Thornhill, ON]

Despite forecasting for a larger travel season, you decided not to spend 25%.

Do you believe that letting those funds lapse is a reason for some of the delays we are seeing at airports?

[Neil Parry]

I believe the availability of the labour force to be able to meet that demand is a far bigger factor than the 75% of our budget that we spent.

As I mentioned earlier, we retained 75% of the workforce when there was no traffic at the airports. We will obviously reflect on whether we should have retained 100% of the workforce. I think, in hindsight, we might have been subject to some criticism, had we done that when everybody else was laying off. We thought it was a prudent strategy at the time.

[Melissa Lantsman, Conservative, Thornhill, ON]

To remind people who are watching this committee, I don't think this is a run-of-the-mill government agency. I know that Canadians pay some of the highest security fees, and it's a user-pay model.

I'd like to know how often CATSA collects the data on processing times at security. How many people can one CATSA employee process per hour? How much has that changed in the sense of how many they could process prepandemic?

[Neil Parry]

There are two parts to that question.

The first part is on how we collect and measure processing times. We do it in a number of ways.

We scan boarding passes as passengers arrive in the queue. We do that at the busiest 15 airports, which represent over 90% of passenger traffic. We use that information collected between the first scan and the second scan to derive a wait time. We do that 24-7 at those airports. We have one of the most accurate wait time measurement systems in the world, I would argue, because of that checking of the boarding pass.

In terms of processing on the line—

[Melissa Lantsman, Conservative, Thornhill, ON]

How many does a—

[Neil Parry]

I'll answer your question.

In terms of processing on the line, we don't look at it in terms of how many passengers one screening officer can process, but in terms of a line. Depending on the type of line and whether it is a CATSA Plus advance line, we can get up to 260 to 270 people an hour through on one of those lines.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Lantsman, and thank you very much, Mr. Parry.

Next we have Ms. Koutrakis.

The floor is yours. You have six minutes.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

I thank all of the witnesses for being with us this afternoon, along with their hard-working and dedicated teams.

My questions are for Transport Canada officials.

Prior to the pandemic, to what extent was Transport Canada involved in the day‑to‑day operational decisions of Canadian airports, such as work schedules and the number of employees assigned?

If Transport Canada or the minister wanted to micromanage these kinds of operational decisions, would they have the authority to do so?

[Craig Hutton]

Normally, Transport Canada would not be involved in operational issues among partners in the sector. As committee members know, we're a regulator, not an owner or operator of transportation services.

However, we acted quickly when it became clear that volumes were increasing sharply and in a way that was challenging the capacity of the system to cope. An approach that brings all partners in the system together allows for some better planning to get us through this period. It allows the targeting of specific problems—the identification of those problems and bringing the appropriate measures to address them—and the development of some innovative solutions at the same time.

We've very much been playing that facilitator role to improve the information sharing and planning that needs to go on in the system in order to address the volume challenges we're currently experiencing.

[Annie Koutrakis, Liberal, Vimy, QC]

Mr. Hutton, as far as you know, does the minister have that authority?