Madam Speaker, it is a pleasure to rise today in the House to speak to the bill.
I like Air Canada. I fly it whenever I can. I generally support what it has done. Therefore, I am not just any Air Canada person up here speaking.
How did we get to this point? Many roads and paths have brought us to this point. However, one of the biggest impacts to Air Canada in recent times, certainly in the last decade, and we do not need to go too much further than back to 2008-09, was when we saw sky-high fuel prices in the midst of an economic downturn. That caused many problems for Air Canada, and many other corporations as well in North America. Pension solvency was a huge issue, as were massive debt load, and many other issues.
If we take a look back almost 10 years now, that really put Air Canada in a make-or-break situation. I give it full credit for what it has done in the last decade. It has turned a company that is over 70 years old around and has a 40% top-line revenue growth. Therefore, it is obviously doing many things correctly, and I congratulate it on that.
There is one thing that would be tremendously helpful. We have heard this today and have heard it in the past. When I was at the technical briefing some weeks ago, I was not quite sure if this bill passed all of the litmus or smell tests that we would like to see in a bill. It would be great if the minister would turn over the correspondence he has had with Air Canada, Bombardier, and the Government of Quebec, so we can understand the timelines we are now looking at. I do not know if it is coincidence, but certainly many things have happened in a very short period of time that have caused the raising of a Spockian eyebrow.
I give full credit to Air Canada for turning around its finances. Its 2015 annual finances were reported a little while ago. It showed record profits of $1.22 billion in net income for 2015. In 2014, its previous record, it showed $531 million of net income. Therefore, many things have fallen into place for that to occur.
Another accounting and reporting term Air Canada uses is EBITDAR. I always refer to it as EBITDA, which is earnings before interest, taxes, depreciation, and amortization. I guess the aviation industry adds an “R” to its reporting for restructuring. That was also a record $2.5 billion.
Another great number that is working in Air Canada's favour is the cost per available seat mile, which was another record.
In addition to that is the average projected fuel cost, which plays a huge part in the success or failure of an airline's finances. I believe Air Canada is projecting about 52¢ a litre, if memory serves me correctly, compared to last year which was over 60¢ a litre. If we compare that to 2008-09, the numbers are really good.
Therefore, a lot of things are trending in the right direction for Air Canada and its finances. In fact, everything is going so well that it has also announced it will repurchase up to 10 million shares, with the option of repurchasing an additional 5 million shares. Those shares are close to $9 per share. Therefore, there is some available capital to Air Canada at this point in time.
I want to read directly from Air Canada's media room site with respect to its expense side and what it experienced in 2015. This highlights one of the points that I think many members are scratching their head over with respect to the argument of where, when and how we should perform maintenance.
It states, “Aircraft maintenance expense to increase $250 million from the full year 2015...”. If we read that on its own, we would think that it is making a point here. However, if we read further, it states, “...of which approximately $100 million is estimated to be due to the weaker Canadian dollar when compared to the U.S. dollar.” That means it is performing maintenance contracts around the world and when it brings all of those financials back home, there will be a $100 million negative impact on that, which would also raise an eyebrow.
In addition, the remaining increase is mainly due to higher end-of-lease maintenance provisions, which is due to fewer lease extensions in 2016 versus 2015, the impact of a higher number of operating leases, an increase to maintenance expenses to the Boeing 787 aircraft, and the fly-by-hour arrangements that they have.
My point is that in doing business in Canada, if the maintenance of Canadian labour were such a burden, we would have certainly seen this in the 2014 annual report and in the 2015 annual report, where the CEO or the CFO would have made explicit mention of these high costs. In addition to that, CEOs travel the country, go to conferences, and make presentations to investors and industry. I am not criticizing the CEO, because he has done a fine job of the economic and operational performance of the company, but I would think that the long-term concern for high labour costs would have to come up in a presentation or an official document that the company sends out in annual or quarterly reports. We do not see that, and I am not the first to mention this point. Today the narrative is certainly not being made for these high costs.
I go back to my time when I worked in the automotive parts sector. In 2000 we started seeing these problems on a competitive front, and 15 years later we are still seeing them. In annual reports we would see the CEO and the CFO always commenting about the lower labour rates in developing countries.
Also, today I have heard other members, mainly government members, saying that this would unshackle Air Canada, that it would now be able to become competitive around the world on maintenance, etc., which is fine. However, what I would say goes back to the review of the Canada Transportation Act. It is that we cannot do just one thing on competitiveness. This is just picking a low-hanging fruit while neglecting all the other issues that would allow the aviation industry here in Canada, and the airline industry more specifically, to be extremely successful.
One key component that is a long-standing issue is traffic rights—landing slots or spots—and the issues around the protectionist nature that we have in this country.
As an example, Air Canada flies to Dubai every day. It flies from Dubai back to Canada every day. We would think that reciprocity would be extended to the Emirates airline so that it would be able to fly every day into Pearson and every day from Pearson back to Dubai. My research indicates to me that it is only three days a week.
It is the same with the major airline out of Qatar. It has three flights a week from Qatar to Montreal and vice versa. Why not include landing slots? Why not make it available? Air Canada has increased the number of flights to Dubai. Why not reciprocate? This is all about competition. It is all about thinking about the consumers, the travellers, and letting them have choice. That is just one example.
The review act actually mentions that there should be seven days a week for flights to those countries, so I lay that out for consideration.
I have talked about timing. Others have talked about Aveos. I would be interested as well to hear if the union, which just ratified an agreement on behalf of 7,500 members, was aware of this legislation coming forward. I am sure they would have some interesting comments for the public on that point.
As for getting it cheaper elsewhere, I do not believe that. I know that the company I used to work for, Wescast, dealt with China, South Korea, and Mexico. We dealt with all these, but where do they go now to get world-class R and D work? Right in Ontario, because we have the know-how.