Transport Committee on April 20th, 2023

[The Chair, Liberal, Peter Schiefke]

I call this meeting to order.

Welcome to meeting number 63 of the House of Commons Standing Committee on Transport, Infrastructure and Communities.

Pursuant to Standing Order 81(4) and the motion adopted by the committee on Thursday, February 16, 2023, the committee is meeting to discuss the main estimates 2023-24 and the subject matter of supplementary estimates (C), 2022-23.

Today’s meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

Colleagues, appearing before us today for the first hour is the Honourable Minister of Transport Omar Alghabra. He will be joined by Arun Thangaraj, deputy minister, and Ryan Pilgrim, chief financial officer and assistant deputy minister.

For the second hour, we will also have Mr. Thangaraj and Mr. Pilgrim. They will be joined by Stephanie Hébert, assistant deputy minister, programs; Vincent Robitaille, assistant deputy minister, high-frequency rail; Nicholas Robinson, associate assistant deputy minister, safety and security; and Craig Hutton, associate ADM for policy.

Minister, on behalf of all members, I would like to welcome you to committee. It is always a pleasure to welcome you here. We will begin with your five-minute opening remarks.

The floor is yours.

[Omar Alghabra, Liberal, Minister of Transport]

Thank you very much, Mr. Chair.

Good morning. It's a pleasure to be back with you at this committee today to discuss Transport Canada's main estimates and supplementary estimates (C).

I thank the committee for inviting me to take part in its work.

I'm joined today by representatives from Transport Canada. Here for the first time as deputy minister is Arun Thangaraj. Ryan Pilgrim is chief financial officer and assistant deputy minister of corporate services.

I'm happy to be here today because it gives me an opportunity to discuss the important work Transport Canada has been undertaking on behalf of Canadians.

As much as I would like to never mention the word “COVID-19” again, we continue to live through some of its lingering impacts. The extraordinary disruptions to travel and supply chains we witnessed over the last two years are, fortunately, improving. We remain focused on addressing these challenges and are determined to learn from many of the lessons learned during that period.

Budget 2023 outlines several initiatives that will fundamentally transform and improve our supply chain. While I'm happy to discuss budget 2023 with you today, you invited me here to talk about the main and supplementary estimates.

Let me go over some of the ambitious actions the estimates are funding: introducing Bill C-33, the strengthening the port system and railway safety in Canada act; making sure Canada's air transport sector is reliable and safe for travellers; taking strong steps to meet our climate commitments; and continuing to strengthen Canada's rail system.

In the supplementary estimates (C) for fiscal year 2022-23, the main estimates for fiscal year 2023-24 and budget 2023, you will find many examples of how committed our government is to ensuring Canadians have a safe, secure and sustainable transportation system.

In my opening remarks, I will highlight a few of those examples.

In the main estimates for Transport Canada, you will see grant funding for the very successful program for incentives for zero-emission vehicles. Our plan to accelerate the deployment of medium- and heavy-duty zero-emission vehicles was detailed in budget 2022.

By making zero-emission vehicles more affordable, we are helping to reduce pollution, create more well-paid jobs, and build a cleaner world for generations to come.

The main estimates also include a $270-million increase in funding, when compared to the previous main estimates, for work toward high-frequency rail, a project that I know this committee is very much interested in.

On February 17, I was in Montreal to announce the launch of the request for qualifications phase for the HFR project, in order to identify and qualify up to three top candidates to build a new, dedicated intercity passenger rail network connecting Toronto, Peterborough, Ottawa, Montreal, Trois-Rivières and Quebec City. The new dedicated rail line will complement and build on Via Rail's current services, driving transformation in the populated corridor. This is the biggest investment in passenger rail in Canada in a generation, and the largest transportation infrastructure project Canada has seen.

You will also notice that Via HFR, a new subsidiary of Via Rail, is included in this year's estimates. Via HFR was created in November 2022 to advance the HFR project. As a wholly owned subsidiary of Via Rail, it will operate in close collaboration with Via Rail but at arm's length. This will allow Via Rail to focus on its core responsibilities while Via HFR will develop the world-class expertise necessary for designing and advancing the HFR project.

In the main estimates for Via Rail, there is funding to support Via Rail capital projects. Also, budget 2023 announced funding for maintenance on trains on Via Rail routes outside of the Quebec City-Windsor corridor.

Our government will also continue to work with all Crown corporations to ensure they have the resources needed to continue to properly deliver their essential services. For example, in the main estimates, there is funding for the Federal Bridge Corporation Limited to help offset the impact of pandemic-related reductions in revenue. Just last month, I announced $75.9 million for the Canadian Transportation Agency to ensure they have the resources they need to address passenger complaints.

Our government was the first in our history to implement the air passenger bill of rights. We have strengthened it since 2019, and we will continue to do so. That's why in budget 2023 we announced proposed changes to the Canada Transportation Act to strengthen airline obligations to compensate passengers for delays and cancellations.

Finally, in the supplementary estimates, you will see funds for eastern Canada ferry services. These funds would help to address increased fuel and labour costs amidst lower revenues due to lingering effects of the global pandemic.

I'm confident that the investments in the supplementary estimates (C) and the main estimates will keep people and goods moving efficiently and effectively and advance a safe, competitive and clean transportation system.

Mr. Chair, that concludes my remarks. I'm happy to answer any questions you and our colleagues may have.

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Minister.

We will begin our line of questioning today with Mr. Strahl.

Mr. Strahl, the floor is yours. You have six minutes.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

Thank you, Mr. Minister, for being here again.

You mentioned the Canadian Transportation Agency in your remarks. I want to focus my comments there to start with.

In the last budget, the government added $11 million to the CTA. Following that, we saw the CTA's passenger complaint backlog more than triple to 42,000 complaints from passengers who have been impacted by our broken air transportation system. We saw that your government has more than doubled the number of senior managers at the CTA over the last five years and has given them performance bonuses every single year while passenger complaint backlogs have grown to over 40,000.

Why would you give bonuses to senior managers at the CTA when they have so clearly failed to deliver for Canadian passengers who are looking for action from that agency?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Mr. Chair, thank you to my colleague for the question.

Let me start off by saying that with the recovery of the air sector last summer, we witnessed a significant increase in volume, causing significant challenges not only here in Canada but around the world. Those delays and cancellations were extremely frustrating for passengers and for me personally. We worked closely with the sector—with airlines, with airports—on addressing these challenges, and I'm relieved to see that things are improving.

The CTA is an agency that is empowered by the federal government to be a quasi-judicial body to adjudicate complaints. We saw, I admit, an avalanche of complaints based on the challenges we saw last summer. The CTA works at arm's length from government to fulfill its mandate. We've provided resources so that they are able to deal with that unprecedented avalanche of complaints. We will continue to work with the CTA on fulfilling its mandate to deal with customer complaints.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

I note that you didn't answer the question about giving bonuses when there has been a tripling of wait times, with now 18 months to get an answer from the CTA.

You gave them $11 million in the last budget. The complaints backlog tripled. It's now 18 months to get a response. If giving $11 million in additional funds in the last budget resulted in that level of performance, why then would you now have added another $76 million in this budget? If more money would have solved the problem, would not the $11 million have made a dent instead of things getting so much worse, as they did over the last number of months?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Mr. Chair, I answered the first question by saying that the CTA works at arm's length, and when it comes to human resources decisions, these decisions are made by the CTA.

Second, my colleague understands—and I know he knows—that the challenges that we saw last summer happened because of the air sector's quick recovery from COVID. In fact, we saw those around the world. If his point is that the way to address these challenges is by reducing investment in the CTA, I disagree with him. What we saw was unprecedented challenges and an unprecedented number of complaints. We will be there to help passengers. We will be there to work with the CTA to address this unprecedented avalanche of complaints, and that's why we're providing resources.

It's not only financial resources, Mr. Chair. We're also working with them on streamlining the complaint process so that the CTA is able to deal with these complaints much more quickly and efficiently.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Minister, our goal or our suggestion has been to have you, actually, insist on service standards that are transparent and publicly available and to insist that there are penalties when those are not met, instead of bonuses, which is what your government has done instead.

I want to talk a bit more about the budget. You increased the air travellers security charge by 33%. We've seen, certainly in my region, a leakage of passengers. When the fee structure becomes so uncompetitive, instead of flying out of the Vancouver or Abbotsford international airports, people are choosing to travel across the border and fly out of Bellingham or Seattle. I know the same happens in Buffalo, for instance, with regard to passengers from Ontario.

How do you justify increasing the cost of Canadian travellers' fees and increasing the cost of an airline ticket for Canadian travellers? Are you not at all worried that this will continue to drive passengers out of our country to use airports and buy tickets in the United States?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Mr. Chair, I remain focused on ensuring that we have a competitive, accessible and safe air transportation system in Canada. We saw challenges that occurred last summer that exposed some vulnerabilities in our system. Our system is based on a user-pay model. We know, based on the challenges that we saw, that CATSA needs investment. We have not seen new investments in CATSA, in fact—an increase in these fees—since 2010. We know that CATSA needs to be modernized and needs to be improved in order to expedite and improve the passenger experience. This is a necessary investment to modernize CATSA to ensure that it's more efficient and that it's faster. We will continue to work with CATSA and the airline sector to have a competitive and safe air transportation sector.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister.

Thank you, Mr. Strahl.

Next we have Mr. Rogers.

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

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

Thank you, Mr. Chair.

Minister, welcome back to the committee. You've been here a number of times over the years, and it's always a pleasure to get an opportunity to ask you some questions.

First of all, I see some dollars assigned for the east coast ferry system. When we look at the supplementary estimates (C), we see the funds there.

The question I have for you is this: Why is this the case? Is it difficult to predict how much funding will be needed for ferries from year to year?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Mr. Chair, I want to thank my colleague, Mr. Rogers, for that question and for his advocacy. I know he's been a champion of the services that the ferry services provide to his constituents and the region.

Atlantic ferry services are incredibly important, not only for the residents of Newfoundland and the Atlantic provinces but also for our nation-building initiatives to make sure that our communities are connected.

It was very hard to predict anything during COVID, with the significant disruptions to travel and supply chains, with the significant increase in costs and with labour shortages. We certainly saw unprecedented changes to travel patterns and costs, but we are committed to working with ferry services to ensure that they maintain these essential services that Canadians expect. That's why we provided additional support so that we're able to maintain those services for Canadians.

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

Mr. Minister, I've ridden the ferries many times between Port aux Basques and North Sydney, and I realize the difficulties and the challenges they had during the COVID-19 period. I witnessed what was happening, but they continued to operate.

I know we have a new ferry being built for that service for Newfoundland and Labrador and Nova Scotia. I'm just wondering if there's an update that you can provide about where that ship currently is and when it might be operational on the new service.

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Mr. Rogers, again, our commitment to that ferry service for the people of Newfoundland, Nova Scotia, P.E.I. and New Brunswick is deeply rooted because we understand the importance of that service. We are committed to modernizing and providing the assets necessary for that service. Indeed, we are committed to building the new ferries that are needed.

I can provide you with an update on where we are right now, but I am optimistic that we'll have good news soon for the people of Newfoundland about the status of that ferry.

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

That's great. I know it's going to be an ultramodern boat, and it's going to provide some great services for Atlantic Canada—for Newfoundland and Labrador, of course, and for the rest of the provinces, especially Nova Scotia.

Minister, supplementary estimates (C) include $10.9 million “for the maintenance of Crown owned airports and the Port of Cap-aux-Meules”. Why is this funding needed, and how does it fit into the larger plan to improve the transportation infrastructure in Îles de la Madeleine?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Indeed, Mr. Rogers, the estimates have made a significant commitment to invest in our supply chains and in our transportation infrastructure, whether it is the national trade corridors fund, the airport capital incentive infrastructure program, or the projects at Cap-aux-Meules, for the wharf there, or the airport on the Magdalen Islands. The islands depend significantly on the wharf and the airport for tourism and commercial activities. Our government is committed to investing in these two infrastructure facilities to continue to support tourism and economic activities in the region, which depends on them significantly for jobs that are important to our communities there.

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

Thank you very much.

Turning, Minister, to new funding for ZEVs to include medium- and heavy-duty vehicles, what is the significance of this policy? How much do medium- and heavy-duty vehicles account for overall transportation-related emissions?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

I think the debate about having to do something to reduce emissions is over. All Canadians understand that we have to cut down our pollution from transportation. The transportation sector makes up almost 25% of all of our emissions. Half of those emissions come from light-duty vehicles, and about 25% to 30% of those emissions come from medium- and heavy-duty vehicles.

If we are serious about reducing pollution, we need to tackle the emissions that are coming from medium- and heavy-duty vehicles. This program is meant to provide incentives for businesses, so that they can find alternative technologies to cut emissions from their operations.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Rogers.

Thank you, Minister.

Mr. Garon, you have the floor for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Chair.

Thank you, Minister, for being with us today.

Last week, we met with people in the Megantic area who expressed some concerns about the new rail line. I'm thinking in particular of the farmers whose land is cut in half by the new track. Essentially, they are asking for a perpetual right of way to be able to access their land, particularly for farming.

Is the government willing to grant them this perpetual right of way?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Thank you for the question, Mr. Garon.

The Lac-Mégantic bypass project is incredibly important for our government. I know it is in the public interest. I know the Province of Quebec supports it. I know Quebeckers overall support it. It was 10 years ago that we lost 47 Quebeckers in a tragic accident, and our government made a commitment in 2018 to build that bypass.

Now I understand when you build a bypass, when you build a rail project, there needs to be incredible sensitivities in how—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Mr. Chair, I'm going to take the liberty of asking the question again, because time is valuable.

Minister, we are going to use time effectively. Is the government willing to grant the farmers a perpetual right of way on their land?

You can answer yes, no or maybe.

[Omar Alghabra, Liberal, Mississauga Centre, ON]

We're open to discussing with landlords, and we've been engaging with landlords for the last couple of years on finding the best way to build this bypass in a thoughtful way, so we're always willing to have these discussions with landlords.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Have you spoken specifically to Canadian Pacific about this issue?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

We're in regular contact with CP—