TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 9, 2000

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[English]

The Chair (Mr. Stan Keyes (Hamilton West, Lib.)): Good afternoon, colleagues.

Before we move to clause 13, I'm going to have to ask the unanimous consent of this committee to revisit the new clause we put in, 7.1, where we went through the air travel complaints commissioner, if you recall. We had some discussion with the commissioner, and he asked us to have a look again at proposed subsection 85.1(3) under new clause 7.1, where it says:

The Commissioner, or a person authorized to act on the Commissioner's behalf, shall review and attempt to resolve every complaint filed under subsection (2)...

He says, “Look, there may be other remedies out there that can accomplish the same thing, and if you're asking us to do it all, it seems unreasonable that we would be trying to remedy a situation if it can be remedied through another way.” So all he's asking is that after “subsection (2)” we insert the words “for which no other remedy exists”.

Is that a problem for anybody? That's in case complaints come forward for which there are other remedies, instead of waiting. Does anyone have a problem with adding that phrase after “subsection (2)”?

A voice: That makes sense.

The Chair: Then it's moved by unanimous consent that in proposed subsection 85.1(3) on the third line, after the words “filed under subsection (2)”, we add the words “for which no other remedy exists”.

(Amendment agreed to—See Minutes of Proceedings)

The Chair: Madame Dufour.

Ms. Valérie Dufour (Director General, Air Policy, Transport Canada): While I was talking about this to one person, Mr. Pigeon was speaking to the drafter, and he has two other minor word changes we would speak to you about, if that's okay.

The Chair: On the same one?

Ms. Valérie Dufour: On the same one that's open at the moment.

The Chair: Colleagues, do you want to look at it?

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): Sure.

Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance): We want the best legislation.

The Chair: Okay.

Make it short, Jacques.

Mr. Jacques Pigeon (General Counsel, Transport Canada): Yes. It's concerning proposed subsection 85.1(2). In discussions I've had with the drafters, they've suggested that the objective of the committee could be accomplished by leaving the words “may file”, striking the words “in writing”, and adding at the end of that proposed subsection “The complaint must be in writing.”

The Chair: No, Jacques, I don't think so.

Mr. Jacques Pigeon: No?

The Chair: The intention of changing “may” to “shall” had its debate, and we decided it should be “shall file in writing”.

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Mr. Roy Bailey: The reason we did it was for the exact purpose—and I agree with the chairman—that up front we say it's in writing. We don't want to have them filing complaints by telephone or by talking to somebody or telling somebody. We want it in writing right off the bat. If it's put at the end, with all due respect, sir, it may be omitted. They'd do their complaint, but they'd forget it had to be in writing.

The Chair: And I don't think this committee is disposed to changing the word “shall” back to “may”.

Mr. Roy Bailey: We'd want it in writing. Otherwise it's not valid.

The Chair: Is there any other change? Okay.

Thank you, colleagues. We've dealt with that issue.

(On clause 13)

The Chair: Now we move to the final clause, clause 13, and there is a government amendment.

Mr. Fontana.

Mr. Joe Fontana (London North Centre, Lib.): Thank you, Mr. Chair. I believe the amendment has been distributed. Let me just go over a few points as to the rationale for this.

I think committee members will recall that a number of witnesses expressed concern that they weren't getting from Air Canada the proper attention to their requirements for services. Some of the examples we could use are Air Alma, Régionnair, and British Airways. The proposal was put forward that there was some requirement to clarify the scope of the competition legislation to deal with the matter of refusal to deal and denial of access to facilities and services essential to providing a competitive air service.

This was clearly something all of us were very concerned about, and I wanted to address some text of my own, three amendments. But as the committee has learned, the Commissioner of Competition as well as the Minister of Transport also had similar concerns based on these interventions and have developed some wording that would change the effect of section 78 of the Competition Act for the purpose of making it clear that we intend to add refusal to deal and refusal to supply as behaviour that would be reviewable as anti-competitive acts. This is a very positive move.

Mr. Chair, I think you asked Mr. Milton specifically why negotiations were impossible. This refusal to deal and refusal to supply services and facilities is going to be very pertinent to ensuring that anti-competitive acts and behaviour will not be tolerated. It has the effect of making it clear that anti-competitive behaviour includes behaviour that has the effect of impeding the competitor's entry or expansion into a market.

The details of this would be provided in regulation, which is why the second part of the amendment is to add a regulation-making power to define the services and facilities that would be essential to the operation of an air service.

I believe this is an efficient and clear way to clarify what is covered. The details would be provided in future regulation, which is being developed at this time.

My three amendments—if anybody took the time to read them—would have in fact incorporated an awful lot of the regulatory things into legislation. I tend to think it probably should be in regulation, because that allows for change, flexibility, and being able to react, as opposed to putting them in legislation, which we all know sometimes takes far too long.

So I'm prepared to move G-9, Mr. Chairman, which I think, again, is going to be a very positive move for the Canadian airline industry and I hope will allow competitors to come into the market and hence even protect the consumer ultimately, by ensuring that uncompetitive acts on behalf of the dominant carrier will not be allowed. I'm prepared to move the amendment that replaces lines 36 to 42 on page 16 and adds paragraphs (k) and (b). It's a two-part amendment.

The Chair: Thank you, Mr. Fontana.

Gérard.

[Translation]

Mr. Gérard Asselin (Charlevoix, BQ): I have a two-part question for Mr. Fontana. You may recall that WestJet had requested landing slots and facilities, gates to serve its customers and counter space at the airport. The company's requests were turned down by ADM which informed it that it could not set up business in Dorval and recommended instead that it locate its operations in Mirabel, which probably suits Air Canada just fine.

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There's one other problem. Earlier, mention was made of Air Alma. However, we mustn't forget Régionair, which informed us that Air Canada and its affiliates Air Alliance and Air Nova had appropriated all of the space vacated when InterCanadian departed from the picture. This leaves very little room for a competitor like Régionair to move in and set up operations.

I would like to know if the airlines or the airports... for instance, if an airport, whether Hamilton or Dorval, decides not to make room for a new carrier, then we're no further ahead. This type of decision needs to be made jointly by the airline, the airport and the carrier.

[English]

The Chair: Okay. I'd say two things. One, I don't want to mix apples and oranges, and I'll let Ms. Dufour explain that for you. And the other is, when I asked about WestJet, because it was my question to the administrators at ADM, they made it quite clear that if WestJet wanted to come to Dorval, they were most welcome to come. So they did not tell WestJet to move to the other terminal.

But Ms. Dufour, do you want to explain why it's apples and oranges if we're dealing with airports versus what Mr. Fontana has moved for airline to airline?

[Translation]

Ms. Valérie Dufour: Mr. Asselin, this amendment concerns carriers that resort to anticompetitive practices. At a previous meeting, when discussing the behaviour of airports, we said that the minister intended to table in the very near future another piece of draft legislation, following on the heels of the review of port authorities. This particular bill would review the behaviour of airports.

The bill now on the table takes into consideration the concerns of Régionair, which claims to not have been heard by Air Canada. We won't resolve the WestJet issue, because this matter involves a particular airport. In the case of the Hamilton airport, where Air Canada had taken over much of the vacated space, the matter is reviewable, as they say. The issue here is defining types of behaviour subject to review after complaints have been filed.

[English]

The Chair: And Gérard, I'd like to add one more thing I was hoping we'd get in that recent explanation. There is an agreement between Air Canada—the offerer, the numbered company—and the competition commissioner, and on page 11, number 8, for example, “Surrender of Airport Facilities”, it talks specifically about Dorval Airport, Winnipeg Airport, Halifax Airport, and Lester B. Pearson Airport. So I believe your concern is addressed and has been carried through within the agreement, and that agreement of course is part of the legislation.

Are there any other comments on Mr. Fontana's amendment? Seeing none, I call the vote on amendment G-9.

(Amendment agreed to on division—See Minutes of Proceedings)

The Chair: Thank you, colleagues.

Do you have other interventions on clause 13, Mr. Fontana?

Mr. Joe Fontana: No.

The Chair: No? Are there any other interventions on clause 13? Seeing none, I call the vote on clause 13 as amended.

(Clause 13 as amended agreed to on division)

The Chair: Colleagues, we'll go now to the end of the list.

Oh, Mr. Fontana, do you have something to add?

Mr. Joe Fontana: Before you go to the end of the list, and therefore the title and move to report the bill to the House as amended, I wonder if I could just...

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I can't remember which clause it was where we were talking about pricing notification and pricing practices. Outside the bill, the committee is going to take it upon itself, by asking either the CTA or Transport Canada, because I believe they have the capability, to require air carriers to submit in six months their price increases on basic fares, probably as we develop twenty or thirty pairings, to be able to notify the public or at least have the public understand why there may have been some price increases. And we'll probably call in the airlines, if we have to, in six months to get from them the reasons they may have had to increase their prices and so on.

That puts airlines on notice, and again it's to protect the consumer from any potential price-gouging. We've protected the monopoly routes through legislation, as you know, but this committee has undertaken to look at that. That's going to be done by way of a special letter to either the minister or the CTA, saying this committee wants and expects this pricing issue to be dealt with in six months.

Something that's also very supportable, because you even heard in Question Period today that some of the issues that have been raised may or may not revolve around pricing but may revolve around capacity, is this. At the same time as we're asking the airlines to report on why they may have had to increase their prices on basic fares between certain pairings, which we will tell them, it's important to also find out from them what kinds of capacity changes there have been on particular routes throughout those pairings. This would be just to see whether or not in fact they are answering to the needs of the communities and consumers.

We all know that the merging of two airlines... Maybe there was overcapacity in the system before. We might be hearing in some cases there's undercapacity now, and therefore that's why we're getting some of the complaints from the communities in western Canada and eastern Canada. The premiers brought it up with the Prime Minister yesterday. In fact it may be from certain communities, small and even larger.

I don't intend to put it in legislation, because that would be going back to the reregulation days, but I wonder if we could just add the words “capacity figures” to those pricing figures, so that when this committee meets in six months, everybody knows what to expect.

Transport Canada and the CTA obviously have the information on capacity and prices. That information is going to be provided to us. I think Roy indicated that information would be also useful for us to see whether or not we needed to do certain other things as a committee or make recommendations to the government. We could also ask for the report to include capacity figures, so that we can truly see whether or not communities and customers are being—

Mr. Roy Bailey: Are you talking about the size of the planes they're using?

Mr. Joe Fontana: Well, that's the capacity. That's the number of seats.

Ms. Val Meredith: That was a very long, drawn-out explanation of what you were thinking.

Some hon. members: Oh, oh!

Mr. Joe Fontana: Typical of a salesman, I probably oversell it sometimes, but...

The Chair: Okay, well, unlike the issue of pricing, which we liked—and that's why we endorsed your idea, Joe—the issue of capacity—and you can argue this out—will arise if there are complaints. The complainant will complain in writing to the CTA complaints commissioner. The complaints commissioner will file a report with us in six months, and he or she will outline all the complaints he or she has received, which will include the number of complaints that may have dealt with capacity.

When we understand there is a capacity complaint, we also understand the complaints commissioner can go to the airline and demand the documentation to show whether or not in fact indeed there is a capacity problem. Once that person has received the documents that demonstrate whether there is or is not a capacity problem, or what their agenda was on capacity on a given route, then that would be part of that person's report. That report of course flows through the minister and is made public and then adoptable or reviewable by this committee whenever it chooses to do so.

So the capacity issue is looked at through the complaints commissioner. The price I can understand, because the price is a different matter, and we can deal with the prices directly.

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Mr. Joe Fontana: I'd just add one thing. I don't disagree. The complaints commissioner is a reactive tool. He will report based on the complaints he gets, and they may very well be on pricing. What this committee has chosen to do on the pricing side, because it knows this issue is very serious, is to be proactive by itself, as a committee, wanting to review the pricing information. All I'm saying is the capacity may or may not be a function of a particular airline doing something.

My first choice would have been for the airlines to have to notify the public of price increases and to have to justify those price increases. I lost that battle; that's not a problem. But the second most important issue to Canadians is capacity, based on the testimony and questions that were asked.

I want the committee to be more proactive. If in six months we're going to be reviewing what's happened in the airline industry with prices, what is wrong with talking a little bit about whether or not the airlines have been able to respond to the capacity concerns that have been raised by regions, mayors, and communities? Rather than waiting for a complaint, I'm just saying maybe this committee ought to be a little more proactive.

I can tell you the minister, when I talked to him this afternoon, had absolutely no problem whatsoever. In fact he welcomes the opportunity for Transport Canada and the minister, upon request by the committee, to ask for those capacity numbers and those pricing issues. In fact—

The Chair: All those in favour? I might as well nip this in the bud.

Some hon. members: Oh, oh!

The Chair: Do you have something to add, Mr. Dromisky?

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): I was just going to make a suggestion. I would like to support Joe, believe it or not.

Some hon. members: Oh, oh!

The Chair: I suppose, as a PS, you heard the trigger word, “minister”, and that probably sealed it.

Mr. Stan Dromisky: No, no, because this is outside the realm of what we're dealing with right now. This is a bill, a legislative piece of work that we're working on.

I think we could expect and invite the dominant carrier to come forth with information—and they'll have no problem compiling this—on capacity prior to April 1 on the major routes and capacity after all the changes took place on April 2. In other words, say the number of seats on flights from Thunder Bay to Toronto went from 61 a week down to 40. Six months after this bill is passed and becomes law, we'd ask, what is the capacity situation? And in that period of time, they could point out to us the kinds of adjustments they made to deal with capacity problems. That's the kind of information we should have.

The Chair: Sure. Those are the details we can get into as a committee too in six months' time.

So the motion is that we add capacity to pricing in the committee note that will accompany the legislation to the minister. I call the vote.

(Motion agreed to—See Minutes of Proceedings)

Mr. Roy Bailey: The capacity is going to show up anyway in overbooking, so...

The Chair: Shall the title carry?

Some hon. members: Agreed.

The Chair: Shall the bill carry?

Some hon. members: Agreed.

The Chair: On division.

Shall I report the bill, with amendments, to the House?

Some hon. members: Agreed.

The Chair: Shall the committee order a reprint for use at report stage?

Some hon. members: Agreed.

The Chair: Do you need a number, Madam Clerk, or is there a standard number?

The Clerk of the Committee: There's a standard number.

The Chair: Colleagues, that completes our work on Bill C-26.

Some hon. members: Hear, hear!

An hon. member: Well done, Chair.

The Chair: No, not Chair; committee members.

Before we break, I have a couple of things to say. One, we owe it to the work of our committee clerk, Guyanne, and our researchers, John and June, for the work they've done in helping us get through this process, both for the six weeks prior to Christmas and for the duration of the work on this bill.

Thank you.

Some hon. members: Hear, hear!

Mr. Joe Fontana: And even to the Transport Canada officials who helped out.

The Chair: Imagine that! That came from Fontana!

Some hon. members: Oh, oh!

The Chair: I was going to say it, but Joe Fontana thanks the Transport Canada officials for all their diligent work behind the scenes to make this transition to Bill C-26 a reality.

Ms. Valérie Dufour: All the little people behind this.

The Chair: That's right.

Mr. Dromisky.

Mr. Stan Dromisky: Thank you very much.

While we're providing accolades for everyone, I have been under the leadership of several chairmen over the past years—

The Chair: Thank you very much, Mr. Dromisky.

Some hon. members: Oh, oh!

• 1555

Mr. Stan Dromisky: I would like to point out that a lot of credit is due to our chairman for the way he handled some of the very emotional and crucial issues that came before this committee, and also to the members of this committee for how, in a very rational way, they dealt with those issues. I really—

The Chair: Stan, you're putting us to sleep here.

Some hon. members: Oh, oh!

The Chair: That's agreed on division.

Mr. Ovid L. Jackson (Bruce—Grey, Lib.): I remind you there's a difference of six inches between a pat on the back and a kick on the bum.

Some hon. members: Oh, oh!

The Chair: Colleagues, order.

I'd just remind you we'll cancel tomorrow's and Thursday's meetings.

An hon. member: Oh, what a shame.

Some hon. members: Oh, oh!

The Chair: I'll report the bill to the House probably Thursday morning at 10 o'clock. Our next meeting is May 16, when the minister will be before us on estimates. That's at 3:30 on Tuesday, May 16 in West Block.

Colleagues, again, thank you very much. We'll see you on May 16. The meeting is adjourned.