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37th PARLIAMENT, 2nd SESSION

Standing Committee on Transport

EVIDENCE

CONTENTS

Tuesday, December 3, 2002

1535

The Chair (Mr. Joe Comuzzi (Thunder Bay—Superior North, Lib.))

Mr. Jacques Duchesneau (Chief Executive Officer, Canadian Air Transport Security Authority)

1540

1545

The Chair

Mr. Mark Duncan (Vice-President, Operations, Canadian Air Transport Security Authority)

Mr. Mike Baker (Vice-President, Corporate Management, Canadian Air Transport Security Authority)

Mr. Jacques Duchesneau

The Chair

Mr. Ken Epp (Elk Island, Canadian Alliance)

Mr. Jacques Duchesneau

1550

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

1555

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

The Chair

Mr. Ken Epp

The Chair

Mr. Ken Epp

The Chair

Mr. John Cannis (Scarborough Centre, Lib.)

Mr. Jacques Duchesneau

1600

Mr. John Cannis

Mr. Mike Baker

Mr. John Cannis

Mr. Jacques Duchesneau

Mr. John Cannis

Mr. Jacques Duchesneau

Mr. Mark Duncan

Mr. John Cannis

Mr. Mark Duncan

Mr. John Cannis

Mr. Jacques Duchesneau

Mr. John Cannis

Mr. Jacques Duchesneau

Mr. John Cannis

Mr. Jacques Duchesneau

Mr. Mark Duncan

Mr. John Cannis

Mr. Mark Duncan

1605

The Chair

Mrs. Bev Desjarlais (Churchill, NDP)

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

1610

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mr. Jacques Duchesneau

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mr. Mike Baker

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

The Chair

Mr. Roger Gallaway (Sarnia—Lambton, Lib.)

Mr. Jacques Duchesneau

Mr. Roger Gallaway

1615

Mr. Jacques Duchesneau

Mr. Roger Gallaway

Mr. Mark Duncan

The Chair

Mr. Roger Gallaway

Mr. Jacques Duchesneau

The Chair

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Mike Baker

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Roger Gallaway

Mr. Jacques Duchesneau

Mr. Mike Baker

Mr. Roger Gallaway

Mr. Jacques Duchesneau

1620

Mr. Mike Baker

Mr. Roger Gallaway

The Chair

Mr. Stan Keyes (Hamilton West, Lib.)

Mr. Mark Duncan

Mr. Stan Keyes

Mr. Jacques Duchesneau

Mr. Stan Keyes

The Chair

Mr. Stan Keyes

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mr. Mike Baker

Mr. Stan Keyes

1625

Mr. Jacques Duchesneau

Mr. Stan Keyes

Mr. Jacques Duchesneau

Mr. Stan Keyes

The Chair

Mrs. Lynne Yelich (Blackstrap, Canadian Alliance)

Mr. Mark Duncan

The Chair

Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)

1630

Mr. Jacques Duchesneau

Mr. Ovid Jackson

Mr. Jacques Duchesneau

The Chair

Mr. Marcel Proulx (Hull—Aylmer, Lib.)

M. Jacques Duchesneau

Mr. Marcel Proulx

M. Jacques Duchesneau

Mr. Marcel Proulx

M. Jacques Duchesneau

Mr. Marcel Proulx

M. Jacques Duchesneau

Mr. Marcel Proulx

M. Jacques Duchesneau

1635

Mr. Marcel Proulx

M. Jacques Duchesneau

Mr. Marcel Proulx

The Chair

Mr. Marcel Proulx

The Chair

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

Mrs. Bev Desjarlais

The Chair

Mr. Mike Baker

Mrs. Bev Desjarlais

Mr. Mike Baker

The Chair

Mrs. Bev Desjarlais

Mr. Mike Baker

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Mark Duncan

Mrs. Bev Desjarlais

Mr. Jacques Duchesneau

The Chair

Mr. Ken Epp

1640

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Mike Baker

Mr. Jacques Duchesneau

Mr. Ken Epp

Mr. Jacques Duchesneau

Mr. Ken Epp

The Chair

Mr. Jacques Duchesneau

The Chair

Mr. Jacques Duchesneau

Mr. Ken Epp

The Chair

Mr. Stan Keyes

Mr. Mark Duncan

Mr. Stan Keyes

Mr. Jacques Duchesneau

Mr. Stan Keyes

Mr. Jacques Duchesneau

Mr. Stan Keyes

Mr. Jacques Duchesneau

The Chair

1645

Mr. Jacques Duchesneau

1650

The Chair

Mr. Jacques Duchesneau

The Chair

Mr. James C. Cherry (President and Chief Executive Officer, Aéroports de Montréal (Dorval and Mirabel), Canadian Airports Council))

The Chair

Mr. James Cherry

The Chair

Mr. Neil Raynor (Executive Director, Canadian Airports Council)

Mr. Stan Keyes

Mr. Neil Raynor

The Chair

Mr. Neil Raynor

1655

The Chair

Mr. Neil Raynor

The Chair

1700

Mr. Neil Raynor

The Chair

Mr. Neil Raynor

The Chair

Mr. Larry Berg (Chairman, Canadian Airports Council)

Mr. Ken Epp

Mr. Larry Berg

Mr. Ken Epp

Mr. Neil Raynor

Mr. Ken Epp

Mr. Larry Berg

Mr. Ken Epp

1705

Mr. James Cherry

Mr. Ken Epp

Mr. Larry Berg

Mr. Ken Epp

Mr. Larry Berg

The Chair

Mr. Ken Epp

Mr. Stan Keyes

Mr. Larry Berg

Mr. Stan Keyes

1710

Mr. Neil Raynor

Mr. Stan Keyes

Mr. Neil Raynor

Mr. Stan Keyes

Mr. Neil Raynor

Mr. Stan Keyes

Mr. Neil Raynor

Mr. Stan Keyes

Mr. Neil Raynor

Mr. Stan Keyes

Mr. Larry Berg

The Chair

Mr. Stan Keyes

The Chair

Mr. Neil Raynor

Mr. Stan Keyes

The Chair

Mr. Stan Keyes

The Chair

1715

Mr. Stan Keyes

The Chair

Mrs. Bev Desjarlais

Mr. Neil Raynor

Mrs. Bev Desjarlais

Mr. Neil Raynor

Mrs. Bev Desjarlais

Mr. Neil Raynor

Mrs. Bev Desjarlais

Mr. Neil Raynor

Mr. Larry Berg

Mrs. Bev Desjarlais

Mr. Larry Berg

Mrs. Bev Desjarlais

Mr. Stan Keyes

Mrs. Bev Desjarlais

The Chair

Mrs. Bev Desjarlais

The Chair

Mr. Roger Gallaway

Mr. Neil Raynor

Mr. Roger Gallaway

Mr. Neil Raynor

Mr. Roger Gallaway

Mr. Neil Raynor

1720

Mr. Larry Berg

Mr. Roger Gallaway

Mr. Stan Keyes

The Chair

Mr. Marcel Proulx

The Chair

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. James Cherry

Mr. Marcel Proulx

Mr. James Cherry

Mr. Marcel Proulx

Mr. James Cherry

Mr. Marcel Proulx

Mr. James Cherry

Mr. Marcel Proulx

Mr. James Cherry

Mr. Stan Keyes

1725

Mr. Neil Raynor

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Larry Berg

Mr. Marcel Proulx

Mr. Neil Raynor

The Chair

Mrs. Bev Desjarlais

Mr. Stan Keyes

The Chair

Mrs. Bev Desjarlais

The Chair

Mrs. Bev Desjarlais

The Chair

Mr. Ken Epp

The Chair

1730

Mr. Ken Epp

Mrs. Bev Desjarlais

Mr. Ken Epp

The Chair

Mr. Stan Keyes

The Chair

Mr. Stan Keyes

Mrs. Bev Desjarlais

The Chair

Mr. Neil Raynor

Mr. Larry Berg

The Chair

Mr. Larry Berg

The Chair

Mr. Larry Berg

Mr. Stan Keyes

Mr. Larry Berg

The Chair

Mr. Larry Berg

Mrs. Bev Desjarlais

Mr. Larry Berg

The Chair

Mr. Larry Berg

The Chair

Mr. Neil Raynor

The Chair

Mr. Stan Keyes

1735

The Chair

Mr. Ken Epp

The Chair

Mr. Ken Epp

The Chair

CANADA

Standing Committee on Transport

NUMBER 004

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, December 3, 2002

[Recorded by Electronic Apparatus]

¹ (1535)

[English]

The Chair (Mr. Joe Comuzzi (Thunder Bay—Superior North, Lib.)): Good afternoon, ladies and gentlemen. Pursuant to Standing Order 108(2), this is the transport hearing on aviation security fees.

We have Canadian Air Transport Security Authority members in front of us. I welcome the members, Mr. Duchesneau, Mr. Baker, and Mr. Duncan.

Our usual procedure, if you're not familiar with it because you're a new agent of the House, is that we'll take your submissions for the first ten minutes or so. There's no set time period. Then there will be questioning from the members of the opposition and members from the Liberal side.

Before you start, let me welcome the newest member of our group, Mr. Gallaway, who is replacing Mr. Szabo. Mr. Szabo has gone on to another committee.

Mr. Gallaway, you've chosen the transport committee as your first, favourite, and most loved committee in the House of Commons. Is that correct?

Go ahead, Mr. Duchesneau.

Mr. Jacques Duchesneau (Chief Executive Officer, Canadian Air Transport Security Authority): Thank you, Mr. Chair.

I would first like to thank you for this invitation. As you know, I was only appointed six weeks ago to this position of president and chief executive officer of CATSA--

The Chair: That's no excuse, now. I want you to know that.

Mr. Jacques Duchesneau: I know, but it's a good excuse for me to bring two of my colleagues with me, Mr. Mark Duncan, vice-president, operations, and Mr. Mike Baker, vice-president, corporate management.

The reason we're all here today is that air security is a national issue of concern to everyone and, I guess, regardless of party line. We are right now cooperating with various stakeholders, airport authorities, airlines and other government agencies to ensure that we maintain one of the best and most secure air transport systems in the world. We must understand, though, that certain information cannot be disclosed as it could jeopardize the security of our country. The security of travellers should always be our first priority, and obviously that's the main focus of our administration.

I would like to outline our mandate and financial requirements to implement the responsibilities placed on CATSA. First, our mandate: pre-board screening of passengers and their belongings at 89 Canadian airports. We will also be--we are already doing so--acquiring, deploying, operating, and maintaining explosive detection systems in airports. We have also signed an agreement with the RCMP for aircraft protective officers on board planes, and I'll be talking about that later on.

We've signed agreements with the airports to provide financial assistance for air security related airport policing. We're also in charge of a new mandate, that is, non-passenger screening at major airports. It is currently being developed in cooperation with Transport Canada.

Finally, we are working on an enhanced restricted area pass system currently being developed in cooperation with Transport Canada, airlines, and airport authorities.

I'll be repeating that because I firmly believe that the security of the Canadian travelling public is paramount to everything we do at CATSA. It's also the first recommendation of your committee that enabled the creation of CATSA in your report last year.

Our overall budget was allocated to us in the last federal budget. We were allocated $2.2 billion for the next five years, of which $1.9 billion precisely has been allocated to CATSA. For the years 2002 and 2003, it is estimated that CATSA will spend $323.4 million. Based on our current requirements, the yearly figures may fluctuate a little bit. But if we look at a broader picture, in a five-year period we're going to spend $1.9 billion.

The fee--and that's one of the reasons we're here today. Members of the committee should understand that CATSA does not set, administer, or collect a fee. We know the Minister of Finance is actually working on this matter now and I think he would be the best person to address any concerns this committee should have concerning the fee.

¹ (1540)

We talked about pre-board screening. It is important for you to know that CATSA will assume full responsibility as of December 31 of this year. Right now it is the airline companies that have the mandate of ensuring that passengers are fully screened before boarding a plane. The sum of $128.5 million is currently spent for pre-board screening, an increase of 78% over the amount spent during the last years by airline companies on pre-board screening. The total budget for pre-board screening, as I said, was $128 million.

It is important for you to know that we are now training 3,000 screeners. If we compare it to last year, the number of screeners has gone up from 2,200 to 3,000 in all of our airports. The additional funds mainly represent the hiring of 800 new screeners and also the increase in wages for pre-board screeners. The screeners have gone through a new multi-level training and certification program. By December 31, all 3,000 screeners should have been trained and certified.

For the screeners themselves, we decided to go with the existing companies. We're only rolling over the contracts that the 16 companies have signed prior to the creation of CATSA. We're rolling over the contracts for one year until November 2003.

On explosive detection systems, in addition to the deploying and installing of the initial $55 million worth of equipment already given by Transport Canada, CATSA is also deploying and installing another $50 million in EDS machines at all of our major airports. The initial investment of over $100 million is part of the Government of Canada's $1 billion commitment for explosive detection systems over the next five years.

One of the major programs that we're also managing is the air carrier protective program. Since last October, aircraft protective officers have been placed on all flights to the Reagan National Airport in Washington and on other selected flights. In cooperation with Transport Canada and the RCMP, CATSA has also been working on expanding the program to other domestic, transborder, or international flights. CATSA is responsible for auditing, evaluating, and reporting on this program.

Once again, we cannot go into many details about this program because we would not like our testimony to jeopardize, or compromise, the extent or nature of the program. Once again, the security and well-being of Canadian passengers is our main focus.

[Translation]

We are also looking after the police program at airports. The goal of this program is to assist airports with the additional costs of providing aviation security-related policing at airports. The program is on-going. We have several agreements currently underway with airport authorities and we keep working with these people to develop the program. Legislative changes are required before we can finalize agreements with some Canadian airports.

With regards to training and certification, I must honestly say that the Canadian Air Transport Security Authority have one of the most progressive, integrated training programs in the world. We have committed over $3 million for a new multi-level training program. We pride ourselves on continuous improvement of our agents and place emphasis on customer service. It is also necessary to have financial compensation in place to ensure we have and retain the best and most qualified employees at the Canadian Air Transport Security Authority.

The executive team of CATSA is committed to establishing Canada as a world leader in Pre-Boarding Services. I am confident we will reach our goal very quickly. We are currently soliciting bids and very soon CATSA employees will be visible in pre boarding zones, wearing new uniforms. This should be done in the New Year, within the next three months.

Lately, we where given two new responsibilities. The first one is controlling non-passengers. We are currently working with Transport Canada on establishing a framework and training standards for employees. This will apply to airport personnel entering restricted areas, such as flight crews, refuelers, caterers, aircraft groomers, maintenance personnel, airport baggage handlers and all other staff that may enter these areas as part of their work duties.

To support our first mandate, we where also asked to implement an enhanced restricted area pass system. We will build upon the efficient system already in place but we will be working with airport authorities and airline companies to implement an enhanced system. You know, about 150,000 passes will be created. The new system will include biometrics and a databank system to monitor the system daily and ensure quality control.

¹ (1545)

[English]

Mr. Chair, this is my testimony, and we're ready to answer all of your questions.

The Chair: Thank you, Mr. Duchesneau.

How about Mr. Baker and Mr. Duncan? Would they like to add something to your report?

Mr. Duncan.

Mr. Mark Duncan (Vice-President, Operations, Canadian Air Transport Security Authority): No, that's fine, thank you.

Mr. Mike Baker (Vice-President, Corporate Management, Canadian Air Transport Security Authority): That's fine.

Mr. Jacques Duchesneau: They're scared of me already.

The Chair: And you've only been here six weeks. I'd like to see you in three months.

Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): Thank you very much.

Thank you for being here, and, first of all, my apologies for not being here promptly. I was directed to the wrong room and with my gimpy old leg it took me a while to get here.

I'd like to start out by asking, for my own curiosity and also to assure the public that its safety is in good hands, what qualifications you bring to your position. How did you get chosen for your job?

Mr. Jacques Duchesneau: That's a very good question, sir.

My background is in police work. I was a police officer for 30 years, including five years as the chief of police of Montreal. I was involved with my colleagues in North America, and I was also the Canadian candidate to become secretary general of INTERPOL.

Back in 1999 I also did a bit of politics: I ran for mayor of Montreal. Luckily I was not elected, because then I would not be here today.

For the past four years I've been involved in the private sector as vice-president of a high-tech company in Montreal.

The selection process started sometime in May. There were 180 candidates, and I had to go through four interviews. I was chosen by the selection committee from the board of administrators of CATSA. The decision was taken on October 4 and I took office on October 15.

For me, I'm just the luckiest person in that I'm surrounded with people who have very lengthy experience in transportation, and I include the people surrounding me. Maybe I can ask Mark and Mike to tell you where they came from and you'll see that I'm a lucky guy, okay?

¹ (1550)

Mr. Ken Epp: Well, that's good. I just wanted that little introduction.

I have another question, one that will perhaps seem a little strange at first. When you get onto an airplane these days, if zero means you're scared spitless and ten means you have 100% confidence there's not going to be an incident, how confident are you getting onto an airplane these days?

Mr. Jacques Duchesneau: About 173%.

Mr. Ken Epp: Really? You feel that good about it.

Mr. Jacques Duchesneau: Yes, I feel very safe, and do you know what? I'm convinced of that. We're lucky to be in Canada because we already have a very good service. As I said in my testimony, my objective is to make it the best in the world. With the tools I have and the people surrounding me, I'm pretty sure we can achieve that.

Mr. Ken Epp: Now, in front of the Senate committee not very long ago, I think, a member of the airline flight attendants' association or some organization like that gave testimony that very recently there was found on board a Canadian airplane a box of box cutters. Now, that strikes fear into my heart. What's your reaction to that? You just said you were 173% confident, but there was obviously a very serious glitch there that happened recently. What's your response to that?

Mr. Jacques Duchesneau: My answer would remain the same. These things can happen, but fortunately nothing happened.

Can we improve the system? Of course, and we will. I want to inform you that we'll be putting a team in place who will try to infiltrate the system regularly to make sure that we're always on the edge.

Can things like that happen? Yes, of course they can, but what we're proposing is to have a multi-level system to prevent--and that's our job--people from boarding planes with such tools.

Mr. Ken Epp: I'm not trained in police work as you are, but I am a guy who likes to analyze things, and that's why I went into math and physics when I was a youngster. But when I think of a situation like that, it seems quite evident that the probability is very high that this did not get onto that airplane by passengers who come through the regular screening, because they would have never gotten through the screening nowadays--at least, I don't think they would have--but that it was brought on before. Are you people doing anything substantial to improve the security of aircraft against the intrusion of people who are not passengers?

Mr. Jacques Duchesneau: Those are the two mandates that were given to us by the minister recently. We're going to be screening all non-passengers.

Mr. Ken Epp: So you're not doing it yet.

Mr. Jacques Duchesneau: Not yet. We're not there yet because we're only taking control on December 31.

Mr. Ken Epp: Why don't you have a screening system at each airport to screen people as they enter the building rather than as they enter the airplane?

Mr. Jacques Duchesneau: Well, that's one thing we're going to be looking at with the airport authorities. Yesterday I was in Toronto, meeting with one of the leaders of airport authorities in Canada, Mr. Louis Turpin, and he had good ideas that we're going to table and discuss.

Our job is not to put a pre-boarding screening system in place and say, okay, that will prevent all problems. Our job is to set up the pre-boarding screening system and then move on. We need to evolve by having discussions with airline companies and airport authorities. I think we have an openness, and they've shown the same openness on their side. We want to make sure that people feel safe.

My job is to make sure people don't fear to board planes. How do we do it? I don't know. I know how we do it now, but six months from now I might come back to you and say that we've improved our system by adding this piece of equipment or this new training system we have put in place because we need to evolve with the threats. Threats will evolve as we go along, and we just want to make sure we have the best system.

¹ (1555)

Mr. Ken Epp: Not long ago there were some reports as well--and I believe they're authenticated, although you could correct me if they're not--that among the airport staff, baggage handlers, that type of thing, at Vancouver, Montreal, and Toronto there were employees who had criminal records and/or who were involved in organized crime. Again, it was reported in the newspapers--and I've learned in my career not to believe everything you read in the papers. However, if there is even just the suspicion of that, what are you doing to address that problem?

Mr. Jacques Duchesneau: I think that problem will be addressed with the new pass system that we're putting in place. First, we are going to be using biometrics, fingerprints or whatever, and we're going to do checks on every single employee; and at the same time, even though we have all this system, we're also going to be doing random checks of those employees at each airport.

Mr. Ken Epp: On the horrendous September 11 events, I am led to understand that none of those individuals had criminal records. As a police person, you must be really challenged by this, because I know your police operations in Canada, up until now, have been predicated on finding that you do a check on a person, he has a criminal record, you pick him for speeding and you check it out, and you may arrest him on the spot even though you caught him doing something that was not what was involved originally.

If you are dealing with people, and I'm thinking now of terrorists, people who are intent on causing disruption in our lives and in our society, they're going to put their guys in front who have no record. So you can do all the criminal check tests you want, and you may in fact still be letting the guys in who are intent on causing havoc.

Mr. Jacques Duchesneau: I like that question. That is a very good question, and I think it's the basis of our involvement in security. When a person has criminal intent, he acts differently. One of the recommendations made by the Air Security Advisory Committee to the minister was to have sort of a community policing system with the airline and airport employees. I'm pretty sure if someone tries to do something in an airport, his behaviour will be kind of strange. What we want to do is to make sure that all partners in this endeavour of bringing security will talk to each other.

I'm sure the guys who boarded the planes on September 11 acted strangely. People might have seen that. Who did they report that to? Nobody, because they didn't know. We need to be close to the employees that we're working with, and work with the RCMP.

Mr. Ken Epp: My problem is, I have been on airplanes where people have acted strangely. I didn't have the nerve to report them just because they were acting strangely. What's anybody going to do?

Mr. Jacques Duchesneau: First, with the training that we gave our pre-board screeners, I invite you all to speak with the screeners and ask them if they liked the training they received. I've been doing that for the last six weeks, and I'm impressed by the answers I'm receiving. You're going to be comforted after speaking with them, that these people can act and do something.

The only thing we don't want is any person with bad intent to board a plane, with any type of equipment that he might be using. So by talking with the employees that we're working with in an airport, I'm pretty sure we can prevent crime.

The Chair: Okay, thank you.

Mr. Ken Epp: Thank you, Mr. Chairman. Add me to the list for the next round, please.

The Chair: We have a tight schedule today, but I'll add you to the list anyway.

Mr. Ken Epp: Well, if I get on, then good.

The Chair: Ms. Desjarlais, you've indicated that you have another commitment. Will you be able to wait for Mr. Cannis'...? Thank you.

Mr. Cannis.

Mr. John Cannis (Scarborough Centre, Lib.): Thank you very much.

How many staff comprise CATSA now? I know it's a pretty new organization, but how many staff do you have?

Mr. Jacques Duchesneau: At headquarters, we have 85 people. Come December 31, we're going to add another 3,000 pre-board screeners, on contract. I'd say, by the end of 2003, we should be at around 3,500 altogether.

º (1600)

Mr. John Cannis: So the 3,000 are going to be on contract?

Mr. Mike Baker: The screeners are on contract. We have 85 direct employees.

Mr. John Cannis: I'll tell you what my concern is, and we brought this issue up when we were going through the committee hearings in the past. It's my observation that the pre-board screeners today are the same ones who were there before and after September 11. Am I correct there?

Mr. Jacques Duchesneau: No, we have new screeners.

Mr. John Cannis: New staff altogether?

Mr. Jacques Duchesneau: There were 2,200 screeners six months ago. We're now up to 3,000, that's another 800, and about 75% of those 2,200 were old screeners.

Mr. John Cannis: Do you recall that one of the reasons there was such high turnover was the salary these people were being paid? I remember discussing this with the presenters at that time. Obviously we were hiring them through a contracting agency that had to make a cut. I understand and I have nothing against that, but obviously that cut is taking away from the employee. How will the salaries of these employees increase, and what will entice them to stay on?

Mr. Jacques Duchesneau: The best person to respond, obviously, is Mark, but before he says anything, I would tell you I had a presentation last week on how this system will work and I'm impressed with the tool they've come up with.

Mr. Mark Duncan: That definitely was an issue, and the salaries did range right across the country, depending on the location. It was bid by the airlines, obviously. What we did was to actually take a look with a professional firm; we established a minimum base, to be adjusted by locality--

Mr. John Cannis: Minimum terms of salary.

Mr. Mark Duncan: Yes, minimum terms of salary. That will form part of the contract with our contractors that we're rolling over. So all the employees will be receiving a reasonable wage and will be based somewhat on the market across the country.

Mr. John Cannis: Mark, let me ask the question. I heard in the presentation that you're going to be spending x amount of dollars to train these people. If I go out and hire systems engineers to come and design a product for me, why would I train them to design a system for me? I'm supposedly hiring them because they're trained.

Mr. Jacques Duchesneau: But not trained according to our standards.

Mr. John Cannis: So why would you hire them?

Mr. Jacques Duchesneau: Because they can deliver good service.

Mr. John Cannis: Why don't you give them the standards and have them train them and deliver you a trained person?

Mr. Jacques Duchesneau: If we hire them after they're trained, we're going to pay more.That's the first thing. The second thing is that we will be training them according to our standards, and I think that's quite important. Not only will they receive basic training, but as we go on they will receive on-the-job training and certification. If people are not certified, they'll not be working for us.

Mr. Mark Duncan: I might add that part of the hiring process is security clearance. Canada has one of the best security clearances in the world to get an airport pass. They are trained. They have a first level. They can work outside the systems first. After they have a security clearance, we train them on the operation of the equipment. Obviously, you don't want that out in the general public. We're also using computer-based training now, which is a first in Canada and, I believe, pretty much first in the world, so we're very proud of our training.

Mr. John Cannis: My personal view is that we have one of the most secure systems in all the world. We can improve and I know we're going to, but of course we fall prey to the media in certain events and in one or two incidents that might occur. So I commend the people who are there today, and will be there tomorrow, in the work that they do.

In terms of the equipment that you want to bring in, has it been difficult getting the equipment? I know that when there were discussions about equipment for the U.S. and here, there was a shortage because there was such a demand. Have we made any progress in securing the necessary equipment?

Mr. Mark Duncan: Actually, Transport Canada acted very rapidly after September 11 and put in an initial order of 55 million--I think you're probably familiar with that. CATSA also ordered a further 50 million last June. We actually were able to place our orders in front of some of the U.S. orders, so we've been able to get our equipment to meet our deployment plan.

º (1605)

The Chair: Thank you, Mr. Cannis.

Ms. Desjarlais.

Mrs. Bev Desjarlais (Churchill, NDP): Following along a bit with what Mr. Cannis has been asking, the 85 staff are, I assume, full-time permanent positions at CATSA. What exactly do they do?

Mr. Jacques Duchesneau: They do administration, training. We have regional managers and we also have specialists in each domain, either corporate management or operations.

Mrs. Bev Desjarlais: And what would be the cost of the 85 staff out of the budget you have?

Mr. Jacques Duchesneau: Altogether we have a budget of $6.2 million.

Mrs. Bev Desjarlais: Is that for the staff who are there? Okay.

I'm taking it that 800 additional screeners are going to be put in place. Is the intent still to go by separate contracted firms throughout the country for the screeners, or is there going to be one group that also works under CATSA?

Mr. Jacques Duchesneau: It's a good question. That's what we're going to evaluate in the coming year. We rolled over the contracts that were there before. We had a meeting with all providers last week. We told them we are going to be evaluating as we go along. One thing is for sure, we want number-one quality service.

Mrs. Bev Desjarlais: What's the criteria for someone who's going to be doing the security?

Mr. Jacques Duchesneau: To become a screener?

Mrs. Bev Desjarlais: Yes. What is the criteria?

Mr. Mark Duncan: To become a screening officer, first of all, you have to have landed immigrant status. You have to have grade 12. We have a few other, basically, competency tests.

We have a three-level training process. The first two days of training are basically customer service, general crowd control types of things. If you don't survive that, obviously you're not in. Then we go to the second level, the “wanding”, etc., and the third level is the operation of the machines. It's basically a progressive training.

We've also integrated it with our certification process. There will be testing as you're doing your job. We've actually improved the certification process that was in place, where you were certified once every two years. We're going to have a continuous set of tests that lead up to certification.

Mrs. Bev Desjarlais: Okay. You also indicated there was training that, I believe, the airlines had in place for attendants and others. There has actually been an outright blatant statement from CUPE flight attendants that they've had absolutely no additional training for security.

Mr. Mark Duncan: Under Transport Canada, there was a training video that was delivered to all check-in staff this spring. I can't speak for further training beyond that. I think there was a total of about 4,000 check-in agents who actually had upgrade training through a course that was sponsored by Transport Canada.

Mrs. Bev Desjarlais: The course itself wouldn't necessarily be confidential material, would it? It's only on what you do and those kinds of things. There must be a manual out there that they refer to. I'm curious about what it entails, as far as the security training is concerned.

Mr. Mark Duncan: All of our security training is “unauthorized disclosure prohibited”. Obviously, because of the numbers, you can't put “confidential”.

Mrs. Bev Desjarlais: What would be the hours of additional training an individual would get to incorporate the course?

Mr. Mark Duncan: Which course is this?

Mrs. Bev Desjarlais: For the additional security training that people are going to get, what would be the length of the time that they would have to train? Is it an hour-long video, 20 hours a week, or that kind of thing?

Mr. Mark Duncan: For our screening officer staff, they receive 72 hours of classroom instruction and 120 hours of on-the-job training to become fully certified screening officers.

º (1610)

Mrs. Bev Desjarlais: Is that 72 hours prior to anything else?

Mr. Mark Duncan: No. As I said, after two days, we allow them to do crowd control functions. Then we give them another course and certify them to level three.

Mrs. Bev Desjarlais: When you say crowd control for screeners, I've been with these guys at the airport so I have an understanding.

Mr. Mark Duncan: I should probably call it customer service.

Mr. Jacques Duchesneau: It's not riot control.

Mr. Mark Duncan: Crowd control would be a poor terminology. There are many situations where people refuse to be screened, for example, so we have to actually give them situation analyses to assist them.

Mrs. Bev Desjarlais: Okay, you're right. Crowd control is not a good term.

For the companies that are currently doing the screening, my understanding is they're still being paid by the airlines. Are they, or is the money coming out of CATSA funding?

Mr. Jacques Duchesneau: It's coming out of CATSA.

Mrs. Bev Desjarlais: The airlines are responsible for them, but CATSA is paying for it.

Mr. Jacques Duchesneau: They're being reimbursed.

Mrs. Bev Desjarlais: They used to be paid by the airlines.

Mr. Jacques Duchesneau: Yes, but they are reimbursed by CATSA.

Mrs. Bev Desjarlais: And they are being reimbursed by CATSA.

Mr. Jacques Duchesneau: Upon receiving their invoices.

Mrs. Bev Desjarlais: And we all know there's been no decrease in the cost of the ticket because they're not paying for that. That's a given.

Now that individuals are paying for security, you said you feel 173% secure and you obviously want people to feel that way. If passengers are paying for that security, what happens if there's a bit of a screw-up and somebody gets killed because you let somebody through or something gets on the flight? Who's liable?

Mr. Jacques Duchesneau: I suppose I am. I feel like that. I don't have the legal answer, but I feel that I know that I would be called in--

Mrs. Bev Desjarlais: I'm curious as to the legal side of it, about who's in charge of this. Is it the corporate manager?

Mr. Jacques Duchesneau: No, but we have insurance.

Mr. Mike Baker: That would actually be a good legal question, but at the end of the day the liability would rest with a number of organizations, not just with CATSA. The minister would be involved, the Crown would be involved, the airline would be involved, and the airport authority would be involved, because we're all in it together. So I would imagine it would be a shared liability.

Mrs. Bev Desjarlais: At airports where passengers are being charged security as they leave from those airports but there is no security in place in those airports, are you responsible for providing security at those airports? Is that part of your mandate? If they're listed in the schedule, do you as CATSA have to provide security?

Mr. Mark Duncan: Yes, the new security screening order, which comes into effect on December 31--

Mrs. Bev Desjarlais: I find it really interesting given that we've all been paying since April 1, by the way, but go ahead.

Mr. Mark Duncan: There are some airports, you are quite correct, where carriers did not have to screen. You have to understand that security was required at 29 airports previously and they were screened at 89 airports as a convenience mechanism getting into the 29. With the expansion of screening, we went to a full 89 airports, and so there was a transition period allowed to be able to put everything in place to go to the full 89 airports. And you are correct, the collection didn't--

Mrs. Bev Desjarlais: Your argument about putting in place doesn't cut it either, because WestJet chose to provide the screening another carrier didn't, so it wasn't a matter that you had to put security in place. It was there; it's just that someone hasn't provided the screening. And so do you have a better answer for it?

Mr. Mark Duncan: The answer on Thompson Municipal Airport is that it will be there on December 31.

Mrs. Bev Desjarlais: I thought I'd check. That's it for now.

The Chair: Thank you, Ms. Desjarlais.

Mr. Gallaway.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): I want to follow up on what Mr. Cannis was talking about, that is, your employees. You say you have 3,000 of what you call “fully certified” screening officers and that you've rolled the contracts over since April 1.

Mr. Jacques Duchesneau: No, we're going to be rolling over for December 31.

Mr. Roger Gallaway: I thought you assumed responsibility as of April 1.

Mr. Duchesneau, you're in the business of risk assessment. I travel out of a lot of airports and I talk to these people, and while I'm not an expert on policing, I don't think it's an unreasonable assumption that when you start thinking about security risks, and there are people there--these are the people who you've been responsible for training--who are paid $6.95 an hour.... Are you not concerned that maybe they're a security risk?

º (1615)

Mr. Jacques Duchesneau: The question is so good that we've thought about it. We raised the salaries. They were given bonuses. That's the reason we made a jump from about $72 million to $128 million for screeners this year. The average salary--and I don't think it's private information-- would be around $11 to $11.50 an hour compared to $6 an hour before.

So not only do we have good candidates, but we have candidates who want to make sure they're going to be giving the best service there is.

Mr. Roger Gallaway: That's a very interesting answer, but last week I spoke to screeners at an airport in southwestern Ontario where there is one corporation, which I believe covers three airports, feeder airports to Pearson, and they've been promised raises three times this year but they're still making $6.95 an hour.

So would you like to comment on that.

Mr. Mark Duncan: Right now, all the screening officers are making the wages they had, plus we're giving them, on a quarterly basis, a week's pay. In the last two quarters we've given them two weeks' pay, which is the equivalent of basically a 14% raise.

Effective December 31, the new rates will kick in. As Jacques mentioned, that will be $11 plus the locality pay, which is a percentage based on the location.

The Chair: So the answer that was given earlier was not correct, and you've just given the correct answer. Is that right?

Mr. Roger Gallaway: I assume so. He's saying there's a supplementary based on a week's pay, but they're still being paid $6.95 an hour.

Mr. Jacques Duchesneau: On December 31, we're starting with the new salary. If that's not the way I said it, I'm sorry.

The Chair: It's all right, we just want to get it correct.

Mr. Roger Gallaway: For this fiscal year, your budget is about $323 million. How much of that is required for capital funding, equipment acquisition, or whatever?

Mr. Jacques Duchesneau: It's $107 million.

Mr. Roger Gallaway: I assume the balance is for operating expenses.

Mr. Jacques Duchesneau: There's $128 million for pre-board screeners, and the rest is for other programs.

Mr. Roger Gallaway: Can you give me some examples of other programs?

Mr. Jacques Duchesneau: That's the hardest part of the answer, because we have some covert operations, as you know. If I go into details--

Mr. Roger Gallaway: I'm not looking for details; I'm just looking for headings.

Mr. Jacques Duchesneau: That's why I'm saying $107 million for equipment, $128 million for pre-board screeners, and the rest for programs.

Mr. Roger Gallaway: Is your budget set by you, by Transport Canada, or by you in consultation?

Mr. Jacques Duchesneau: We presented a five-year corporate plan that we'll be revisiting for the next year. We're going to be presenting that to the minister.

Mr. Mike Baker: It goes to the minister. In a normal process, it goes to Treasury Board to get approved, and we get the funding.

Mr. Roger Gallaway: In your five-year plan, what is the capital portion for the next five years? Does it increase or decrease?

Mr. Jacques Duchesneau: I don't have the exact figures. It remains about the same for the second or third year, if I'm not mistaken. Then it goes down in the fourth and fifth years.

Mr. Roger Gallaway: What's the magnitude of the decrease in years forward from that?

Mr. Jacques Duchesneau: It's $107 million this year, $181 million in 2004, and $165 million in 2005. Then we start going down, with $98 million in 2006, and much less in 2007.

Mr. Mike Baker: I think it's important to note that we had to do a six-month corporate plan, so I'm sure when we revisit the numbers they will get tighter. They will reflect our plans as we go into future years, so they will probably be revised.

Mr. Roger Gallaway: Is it reasonable to assume that the operating costs of this agency at year six will decrease substantially because your capital acquisition costs will eventually be met?

Mr. Jacques Duchesneau: We'll need to maintain this equipment. Telling you what will happen in 2007 is kind of hard, because the price of this equipment may come down, like any other technology. That's why we have to bring back, on a yearly basis, a new corporate plan that reflects this new reality.

º (1620)

Mr. Mike Baker: We'll have replacement costs, because the lifespan of the equipment will vary. Now we're looking at maybe five to seven years. New technology will come out, and we'll have to bring that in as well. So our capital costs may not go down a lot. I don't know. We'll have to wait and see.

Mr. Roger Gallaway: Okay. Thank you, Mr. Chair.

The Chair: Thank you, Mr. Gallaway.

Mr. Keyes.

Mr. Stan Keyes (Hamilton West, Lib.): Thank you, Mr. Chairman.

Mr. Gallaway touched on the issue I wanted to broach with the capital costs, the comparison for the purchase of the equipment, the training, the additional screeners, and the additional wages. All this stuff is heaviest in your first two years, and then, once purchased, I would hope that maybe....

I was looking at the fluctuation you spoke of in maybe the second or third year, not at the outside in the seventh year, when you may have to purchase equipment with better technology, etc. You mentioned the figures from $107 million to $181 million. You'd almost expect that since your equipment has been purchased and your staff has been hired, with the exclusion of any additional upgrade training that might have to be done, your costs would fall more dramatically in the second or third year and then climb again in the fifth or seventh year, when you had to start buying new equipment. But I don't see how the numbers are fluctuating in that fashion.

Mr. Mark Duncan: Basically that's explained by our national deployment plan for whole baggage screening, which is a three- to four-year program as defined in the budget and in our corporate plan. Some of the installations require installation in airports and, as you can imagine, they must be integrated with the baggage systems, etc. So there are significant expenses and also there is significant design and implementation work around those installations.

Mr. Stan Keyes: You mentioned that the security of the Canadian travelling public is paramount with your organization, but it's safety that's the number one priority of Transport Canada, in particular, in all modes of transport. You talk to constituents who fly, who visit airports and who try to make their flight, etc., and they wonder, how far are we going to go? Where does it become a siege mentality when you arrive at an airport?

A suggestion has been put out there that perhaps we should start screening these passengers before they even enter the airport. Well, I can just imagine Toronto International Airport, with all its doors, and then you're going to put security equipment at only 5 or 6 of them, because you can't afford to put it in all 15 doors, or however many doors at each terminal. And then you're going to have people lined up outside Toronto or Ottawa airport in mid-winter trying to get through the front door to get inside where it's warm, with all their baggage, etc.

I don't want to be a nit-picker either, but when it comes to that kind of decision-making and when it comes to things like banning nail clippers at the security gate but then getting on board a plane and seeing wine being served from a real bottle on board that probably could be smashed by any terrorist and made use of far more effectively than a nail clipper.... Who makes these kinds of decisions? Your organization?

Mr. Jacques Duchesneau: Transport Canada.

Mr. Stan Keyes: Transport Canada decides on what is a weapon and what is not a weapon, and then you implement whatever it is Transport Canada.... Perhaps we need them before us as witnesses, Mr. Chairman. They set the regulations.

The Chair: Could you give us which division in Transport Canada...?

Mr. Stan Keyes: The deputy minister would probably wrap it up nicely for us, or security, and specifically Mr. Villeneuve.

Mrs. Bev Desjarlais: Or the claims and property section....

Mr. Jacques Duchesneau: There's a division on safety.

Mr. Mike Baker: It's headed by Mr. Elliott.

Mr. Stan Keyes: I'm not sure if you're prepared to answer this question. It might be somewhat unfair for you, but perhaps you even just discussed it. Just as some would believe that it's the air traveller who should pay for the safety and security of the system, which I think is an arguable point, shouldn't it also be fair that an air traveller flying, say, from Toronto to Vancouver would pay more than the individual who's flying from, say, Hamilton to Ottawa? At Toronto you have many security individuals and many machines, whereas at Hamilton you have two.

Do you have a comment at all on that kind of stand?

º (1625)

Mr. Jacques Duchesneau: That's the Minister of Finance's committee that will look at that. I'm in a bad position to give an answer to that.

Mr. Stan Keyes: You're going to get your money to do your job anyway, because we need you to do your job.

Mr. Jacques Duchesneau: As Mr. Churchill said during World War II, give us the tools and we'll do the job.

Mr. Stan Keyes: It's unfair of me to ask you that particular question, but I want to get that on the record, Mr. Chair. For the life of me, I don't understand that mentality.

Thank you, sir.

The Chair: Now we have Mrs. Yelich.

Mrs. Lynne Yelich (Blackstrap, Canadian Alliance): I was wondering whether the standards are the same across the country. I notice when going through airports that there's a significant difference. The one I find the easiest to go through would be the one that I would think the most terrorism would happen through. Do you have a level that they should go through?

Perhaps I'm spouting off here instead of really asking a question. I find the most annoying airport is the Ottawa one, and I'm sure they do it because the MPs go through it. Do they have a level that they have to meet, that they can't annoy you so that you don't become one of those crowd control...? It gets very annoying? When it's your watch that goes off four times, after a while you should figure it out. Things like that can become very annoying. Do you have some sort of a national standard, and why the differences from airport to airport? Toronto does not give me the grief Saskatoon or Ottawa does.

Mr. Mark Duncan: Now, that was one of the first issues we looked at on April 3 and this summer. One of the first issues we had to address was what was either apparent, perceived, or real differences in the way screening officers screen.

Before, the screening officers were trained through their individual companies, so the first thing we did was hire a professional screening company, which has now actually trained all the trainers; they work for one company. We have computer-based training that is the same throughout the country. We've established standard operating procedures that are now in place and will be in place with our rollover contracts, and we are training people through the same course right across this country. Right now we have 17 training centres across Canada, and we're training all 3,000 screening officers before December 31 with upgrade training and basically getting to the same standard and the same level.

We recognize it's a large issue. It's going to take us a while to get exactly the same standard across the country, but I think we're already seeing some difference. I hope you see some difference, and we hope that in the next six months to a year we will also address the issues of a common look and feel as you go through and all the procedures they follow in the event of any incident.

The Chair: Mr. Jackson.

Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.): Security is a culture, and part of what happens at airports is that some senators and some MPs don't like to be interrupted unless they see something happening, when there's a strip search or something like that. But to me, you want to keep the bad people away from airports and off planes. Once you've gotten there, then you don't have a problem.

Very clever people don't need very much. They can twist your head around with their hands, and they know the chemistry of what you have on board the aircraft; they can do all kinds of damage.

So the general objective is to find out about people and make sure they don't get anywhere near the airport or on the plane. Now you have a series of checks, whether you use dogs, pigs, people, or biometrics and all this other stuff. You have to have layers of checks, including your screeners, and they don't last for more than 15 minutes.

My question to you is, how are you doing in terms of coordinating with other agencies, because we have lots of layers? We keep paying more and more money for security, but we have all these layers. You have CSIS, you have the RCMP, you have your police authorities, and so on. How are you doing in terms of collaborating amongst yourselves to solve some of these problems? Some of the threats coming to aircraft include hand-held launchers, so you have to extend that perimeter to some degree. How are we doing it in a coordinated fashion so it does the job but doesn't cost a lot more money?

º (1630)

Mr. Jacques Duchesneau: I am convinced that CATSA cannot do the job by itself. We need to work in cooperation with other agencies. The RCMP and CSIS are our main partners in the quest to solve that problem. Two or three weeks ago I met with my American counterpart, Admiral Loy of the TSA, and we're meeting again in January in order to exchange information.

We cannot invent all these new ideas. They've gone through problems the same as we have, and we've agreed to have this exchange of information on a regular basis. It's the same thing with the RCMP, and I have been meeting with them. They are ex-colleagues of mine, so contacts are good. They just want to help us, to make sure we do this job properly.

Mr. Ovid Jackson: How about the Brits? Are you talking to them as well? I'm referring to the IRA and whatnot.

Mr. Jacques Duchesneau: Parliament in the U.K. just issued a new report on air security, the Wheeler report, and we've already made some contacts in order to get a copy of that. We don't want to keep reinventing the wheel; it's cheaper to cooperate, and I also think we're going to do a better job if we don't have to make all the mistakes ourselves.

The Chair: Mr. Proulx.

Mr. Marcel Proulx (Hull—Aylmer, Lib.) Thank you, Mr. Chair.

[Translation]

Hello Mr. Duchesneau. Let me congratulate you for winning the competition. It is good to see you heading this organization. We fell more secure knowing it is someone with your experience.

Mr. Duchesneau, there are two issues I want to discuss today. First I want to ask about the pre-boarding screening for passengers and their luggage. When we go to the airport, at one point, our luggage disappears and we don't see it being inspected. Meanwhile in Europe (I just came back from Istanbul), entering the airport, both passengers and luggage are screened. We don’t do this here. What actually happens to our luggage? I understand that you will not have such a responsibility prior to December 31, but as of January 1st, what will happen to our luggage once put on the conveyor belt? Will a screening be done?

M. Jacques Duchesneau: There is one now and it will be improved as we go forward. The rules of the OACI stipulate that the screening will start on January 1^st, 2006.

Mr. Marcel Proulx: That’s not for a while.

M. Jacques Duchesneau: You are right, but in the mean time, we are screening luggage with our current systems to detect explosive weapons and eventually all luggage we will start working on it in as of 2003 will go through an X-ray machine.

Mr. Marcel Proulx: But what will be done between now and 2003?

M. Jacques Duchesneau: We perform random screening of luggage but the Minister formally committed to improving the system as fast as possible.

Mr. Marcel Proulx: Are there lots of improvements planned?

M. Jacques Duchesneau: There is a need for improvements.

Mr. Marcel Proulx: Ma second question goes along the same lines as the question from my colleague, Mr. Jackson. It may come to you (like most people) as a surprise to know that we have security issues here, on parliament hill. There are different agencies; outside we have the RCMP and inside there are the House security service and the Senate security service. Will you have complete authority, or if you will, superseding authority, with regards to security of not only passengers and luggage, but also of people’s behaviors, employees, companies and administrators in the airport? Will you have different levels of security and different agencies in the airport? And if so, who will control these various levels? It concerns me quite a bit since having different levels leads to spending time going from one to another. Often, when information finally reaches the top, it has changed or it is no longer relevant. How many levels will there be?

M. Jacques Duchesneau: Right now our mandate is very clear: we are only responsible for pre-boarding search. The rest of the airport is controlled by the airport authorities and their security service and by local police services in most cases. The Minister has extended our mandate such that by 2003 we will be responsible for a national pass system as well as random searches of employees. But, as I was saying previously, if we want to be efficient, the system will need all its parts working together. That is why I was responding to Mr. Jackson that we need to build links. In fact we will create in our organization, a position for maintaining permanent links with federal, provincial, municipal and international security agencies, in order to have the required information to fulfill our mandate.

º (1635)

Mr. Marcel Proulx: I am sorry to stop you. All of this remains theoretical. It’s prevention. But in every day life, in the airport, will you have complete authority?

M. Jacques Duchesneau: No, it is not part of our mandate right now. I would like to add something. I had meetings with airport authorities and it is clear that, like you, they want this system to work. We will work together. I think the important thing here is not to focus on who is in charge but rather that the Canadian public will be safe flying. That can be achieved by working together. This approach is not new and not restricted to the airport. Today, Canada has a federal police force that is the RCMP, provincial agencies in Quebec and in Ontario as well as municipal agencies that all work together.

Mr. Marcel Proulx: Yes but in emergency cases like New York, the radio signals could not even communicate.

Mr. Chairman, thank you for your patience and generosity.

[English]

The Chair: Thank you for your questioning and all the ad libs, Mr. Proulx.

[Translation]

Mr. Marcel Proulx: I really appreciate it.

[English]

The Chair: We'll have one short question from Ms. Desjarlais.

Mrs. Bev Desjarlais: You've indicated your security checks were once done by Transport Canada but that you're now going to be taking over, that you're going to be responsible for that. I'm wondering if Transport Canada has given you additional funding since that was something they were doing before. I haven't seen them reduce their budget by any amount.

Mr. Jacques Duchesneau: For the new mandate?

Mrs. Bev Desjarlais: You're going to take on the new mandate of doing the screening of employees. I know the airport authorities haven't had their security budgets cut. They still have to cover a certain amount for security, so where does...?

Mr. Jacques Duchesneau: We took it from the airlines, but for the two new mandates we're going to do it within our budget.

Mrs. Bev Desjarlais: Okay. So Transport Canada off-loaded now to the $14 or $24 airport-security passenger fee. Would that be a fair statement?

The Chair: Thank you, Ms. Desjarlais.

Mr. Mike Baker: Maybe we should clarify something. I don't know if Transport Canada actually off-loaded it. It's a new activity that we're taking on.

Mrs. Bev Desjarlais: Were they doing it before?

Mr. Mike Baker: You've got to understand that--

Mrs. Bev Desjarlais: No, no. Transport Canada was, so it's my--

The Chair: Just a minute, just a minute.

Mrs. Bev Desjarlais: Transport Canada was doing a job before. They have now off-loaded that job onto you, so I don't think it's up to you to--

The Chair: Mr. Baker.

Mr. Mike Baker: I want to clarify that Transport Canada sets the regulations. We're the body that delivers; we're the delivery mechanism. Transport Canada had the responsibility for regulations. They still do. We're the ones who are delivering the mechanism and we've got funding for that.

Mrs. Bev Desjarlais: We're talking about the employee checks that were done before through Transport Canada that have now been off-loaded onto CATSA. Was that not a statement that was made here today?

Mr. Mark Duncan: If you're talking about the security check--

Mrs. Bev Desjarlais: The security and background checks on employees.

Mr. Mark Duncan: The background check. No, that remains with Transport Canada.

Mrs. Bev Desjarlais: Then we'll have to review the minutes, because that's certainly not the way it came out earlier and it's not what we were told previously by ATAC.

Mr. Jacques Duchesneau: Are you talking about the two new mandates?

The Chair: We're going to review the record. Thank you, Ms. Desjarlais. There's an inconsistency there, I agree with you.

Mr. Epp.

Mr. Ken Epp: I have a really quick question. I want to know what your relation is with the airports. Do you have a contract individually with the airports to provide their security on site, or is it a massive mandate you have from Transport Canada and the airports are going to have visits from you and your people whether they like it or not? If so, how do you choose which airports to include and which to exclude?

The reason I'm asking this is that, again, I'm not a policeman and I'm not trained in what you're doing, but it occurs to me that there are many opportunities for bad people to do bad things from airports that have no security at all.

º (1640)

Mr. Jacques Duchesneau: We're going to be doing pre-board screening in all 89 airports.

Mr. Ken Epp: In 89, but how many airports are there in Canada?

Mr. Jacques Duchesneau: We're covering--

Mr. Mike Baker: Ninety-nine percent.

Mr. Jacques Duchesneau: --99.9% of the Canadian traffic.

Mr. Ken Epp: Do you have pre-board screening in the Edmonton Municipal Airport? I don't think so.

Mr. Jacques Duchesneau: No, that's the exception.

Mr. Ken Epp: I shouldn't give anybody any ideas.

The Chair: You are making statements and then we keep getting exceptions all the time. There's a statement there. You say you're doing it in 99.9% of the airports. He asks you about Edmonton, which is a substantial airport, and now it's an exception.

Mr. Jacques Duchesneau: But it's a municipal airport. We're doing international airports, but municipal...it's for--

The Chair: Did you get an answer to your question, Mr. Epp?

Mr. Jacques Duchesneau: It's for small aircraft only, 19 passengers and less.

Mr. Ken Epp: As I said, I'm not trained in police thinking. However, it surely can't escape you people that a person could use a 19-passenger airplane for some pretty bad things in the Edmonton area. I don't want to say any more. Let me not give them any ideas. You know, you want some discretion here on what you can say and I have to be careful too, but think about it.

The Chair: Thank you, Mr. Epp.

Mr. Keyes.

Mr. Stan Keyes: Thank you, Mr. Chairman.

Can our witnesses tell me about the baggage handlers who arrive at work and put your bags on the plane, or the trucks that pull up and deliver the boxes of food that come on, are those baggage handlers or food deliverers pre-screened before they come into the airport to make their deliveries to the plane?

Mr. Mark Duncan: Before they have a security pass to get air-side, they have, as we were discussing earlier, a screening in terms of their record, etc., prior to getting a security pass. In the new program that the minister recently assigned, we will be doing random screening in conjunction with an improved biometric pass.

Mr. Stan Keyes: You know, Mr. Chairman, we're focusing on millions of grandmothers and taking away their knitting needles and ensuring that members of Parliament don't get on the plane with their nail clippers, but if I'm a terrorist and I want to put something on an airplane, whether it's a gun or, heaven forbid, a bomb, all I have to do is convince a baggage handler or a deliverer of food in one of those wheeled bins that goes to the other entrance of the plane, and plant it on that and on it goes. I mean, if I'm a terrorist, I don't give a damn about granny with her knitting needles or MPs with their nail clippers, I'm going to plant something with somebody that gets on through the food or some other way.

I don't understand why we're spending this kind of money to do what we're doing. Okay, there's an importance to it. Whether we're going way too far, I'm not sure. But if somebody wants to do damage, gentlemen--you're an ex-cop, you understand, Jacques--if you want to do something, you ain't going to do it through the front door. You can easily do it through the back door.

Mr. Jacques Duchesneau: Is that a question?

Mr. Stan Keyes: Would you agree with that statement?

Mr. Jacques Duchesneau: To have a 100% foolproof system, we would be in a police state. So we just need to--

Mr. Stan Keyes: You said, Jacques--I'll read it back to you--that “The security of the Canadian travelling public is paramount....” But you can't even come close to guaranteeing the security of the travelling public if baggage handlers and food deliverers aren't screened before going on with their bags or coming through the back door of the plane with their bins of food.

Mr. Jacques Duchesneau: That's why we received a mandate from the minister to look at that with our stakeholders, the airline companies and airport authorities, in order to solve that problem.

The Chair: I'll have to cut it off there. Thanks, Mr. Keyes, for that last round of questioning. I think that gives you the tone of what the committee is concerned about.

I want to add that in Mr. Keyes' remarks he should have included all of the taxis that have access right up to the front door of the airport, and who screens those cars as they come in, as they do in.... I don't want to name the airports I've visited where they screen the trunks of cars and so on before they're allowed on airport property.

But there's another concern I have, and I'll close with this. We've talked an awful lot today about security with regard to what people carry on an airplane, but we didn't spend any time on the luggage they check through, which is stored in the plane, or on what is being shipped in that same aircraft that is not part of what passengers put on the airplane. I got wind of that, but I don't think we discussed it as much as we should have. I think that's a very critical area we're going to have to bring you back to discuss. We never addressed the fundamental issue of how much stuff we're allowing people to carry on the airplane, which makes your job easier. That really has to be addressed if we're truly interested in security.

I thank you all very much for coming and making this submission.

º (1645)

Mr. Jacques Duchesneau: Thanks very much, Mr. Chairman.

º (1650)

The Chair: We'll be getting back to you very soon. As you gathered from the committee, we're not convinced yet that we're doing the right stuff.

Mr. Jacques Duchesneau: I'll return.

The Chair: We're 15 minutes late. It's pretty hard to manage this committee. They're out of control.

We'll break for two minutes.

º (1646)

º (1649)

The Chair: This is the continuation of the transport committee meeting.

In front of us we have the Canadian Airports Council: Mr. Berg, the chairman; Mr. Raynor, the executive director; and Mr. Cherry, the manager of the Montreal airport. Am I correct?

Mr. James C. Cherry (President and Chief Executive Officer, Aéroports de Montréal (Dorval and Mirabel), Canadian Airports Council)): That's correct.

The Chair: That's Dorval.

Mr. James Cherry: Both of them.

The Chair: We've lost some of the committee. Ms. Desjarlais had to leave.

I welcome you to the committee.

The usual procedure is that one of you makes some comments. Your associates can add or subtract from that. Then there will be questioning. Are you comfortable with that procedure?

Mr. Neil Raynor (Executive Director, Canadian Airports Council): We're very comfortable with that. It's very familiar.

Mr. Stan Keyes: Do they have an option, Mr. Chairman?

Some hon. members: Oh, oh!

Mr. Neil Raynor: At your call, Mr. Chairman.

The Chair: I'd like you to stay around after the meeting, Mr. Keyes. I'm going to talk to you personally.

Some hon. members: Oh, oh!

The Chair: I think you can begin, unless Mr. Gallaway or Mr. Epp has something to say. Go ahead, please.

Mr. Neil Raynor: We'll start.

Mr. Chairman, on behalf of my colleagues in the Canadian Airports Council, I'd like to thank you all for the opportunity to address the committee today.

In light of the short notice, we've not been able to revise these notes ahead of the meeting, but we'll leave it with the clerk for distribution.

I'd also like to take the opportunity to congratulate you on assuming leadership of the committee, and to congratulate all honourable members for their continuing commitment to transportation through their involvement in this committee.

My name is Neil Raynor and I am the executive director of the Canadian Airports Council. I have with me here today our chairman, Mr. Larry Berg, who is also president and CEO of the Vancouver Airport Authority, and Mr. James Cherry. Jim is the president and CEO of Aéroports de Montréal.

In my brief remarks today, understanding the time that we have, I want to raise airports' concerns vis-à-vis the air transport security charge. I think it's your main focus today. There are other economic issues that I can probably spend a few moments on, including the effect of the ATSC on small airport viability, the impact of federal rents when you throw it into the mix, and overall, the reality of airport charges. You've probably heard something of the issues in the last few days.

Let's start with the airport transport security charge. CAC members well understand the imperatives of security. Indeed, airport authorities have responsibility, including financial responsibility, for the majority of airport-related policing and security operations. Since its inception, we believe that the security tax would have a major impact on air travel. But we didn't only express our concern, we suggested constructive ways in which it could be made more equitable.

First, to ensure transparency and accountability, we suggested that the fee be levied by CATSA, collected by airlines, and remitted to CATSA directly. CATSA would then be required, under the act, to account for the funds to Parliament and thereby to Canadian travellers and Canadian taxpayers.

Secondly, we believe that a $24 per passenger charge will exceed CATSA's capital and non-recurring expenditures even on a cash accounting basis. Given CATSA's ability as a crown corporation to arrange financing for its capital purchases, it is this lower requirement that should be used in establishing any charge. We understand that the Auditor General of Canada supports this general approach. This would indeed reduce the level of the ATSC significantly.

Thirdly, if a tax is to be imposed, then there are a number of pricing options that should be considered, and should be considered as you review this issue in the finance committee, of course. CAC believes that the $24 round-trip fee has had a detrimental effect on regional and short-haul flights, and on those to remote areas, out of proportion to the security risk posed and the ability to pay. We believe the studies initiated by the Department of Finance show this reality. In fact, we would estimate that the security tax alone has put back passenger growth by about two years. We believe it's like having a two-year recession in the industry because of this effect.

There are other methodologies for applying a fee, if there is to be a fee, including distance or ticket price. We're trying not to be proscriptive. We only believe there are other ways and better ways than the way it's established at the moment.

Lastly, our overriding view is that acts of terrorism or acts against the state are such that the state bears a major responsibility to fund the essential cost of aviation policing and security. Canada's airports are concerned that air travellers are being asked to fund all the costs associated with the new security measures. These are costs that users of no other mode are required to bear. Air travellers should not be required to bear them.

What does this do to the issue, which I know is a concern to many on the committee, on the viability of our smaller airports? The continuing financial viability of the airports continues to be a concern. It has been a long-term concern of CAC. In fact, since 1997 we have been asking Transport Canada to get realistic about the capital assistance that our smaller airports need.

What is the effect of the ATSC? In the B.C. market, regional air traffic is estimated by one carrier to be down a staggering 27%.

º (1655)

How much of it can be directly laid at the door of the ATSC? It's very difficult to be sure. There are three things we know. The security tax represents the biggest single additional charge on the passenger. Secondly, we know that WestJet has empirical evidence that its most loyal customers will seek alternatives when WestJet increases its prices by $10 to $15. Obviously, that one-way ATSC fits right within that range. Third, we have evidence that particularly the regional carriers, like Jazz and WestJet, are pulling out of some marginal regional markets completely. I think that is clear evidence, in and of itself.

Briefly, before I end, there are a couple of issues that compound these problems. Federal rents represent the largest and fastest-growing uncontrollable cost that airports have to face. Today, airports are paying $240 million in federal rent. By 2010, in eight years, that will rise to half a billion dollars each and every year. By that same year, the Government of Canada will have extracted $4 billion from airports. That's three times the value of the properties when the operation of the airports was transferred to the airport authorities.

Federal rents don't reflect the financial burden taken on by those airport authorities. Devolution has transferred 100% of the airport operations, including security and capital expansion costs, to the airport authority, solving a major financial crisis for the Government of Canada. Airport rents need to be adjusted to reflect that reality.

The Canadian Airports Council has put a proposal forward. It is fair to Canadian taxpayers, air travellers, and those who depend on airports. We don't have time to go into it here, and that's not really the focus today, but we'd be very happy to answer any questions today or at any other time on that issue.

The Chair: I hope you'll come back and discuss that issue when it comes up, because I think we're very interested.

Mr. Neil Raynor: I'd be delighted to come back.

The Chair: Thank you.

» (1700)

Mr. Neil Raynor: Last but by no means least, there's one other comment I'd like to raise, because it was raised in committee last week. You may have heard comments about cash surpluses at airports. Aviation is being challenged on a number of fronts at present, but a huge airport cash surplus isn't one of them. The comments you heard may have left you with that impression. To be certain, ATAC's assertion that there's a cash surplus of $100 billion is simply untrue, and reveals an inability to read public audited financial statements.

The Chair: Did you say billion or million?

Mr. Neil Raynor: I meant to say $1 billion. There is a claim out there from the airlines that airports are sitting on $1 billion. I'll explain what that $1 billion represents.

Do Canadian airports generate surpluses? Yes, they do. Surpluses from those not-for-profit organizations are reinvested in the airport infrastructure. Airports do not bank their excess of revenues over expenditures--we can call those surpluses--and accumulate that amount of cash. Any surplus has to be reinvested. Air carriers have both supported and directly benefited from those capital investments in runways, passenger facilities, and essential safety infrastructure like fire trucks. They've enabled airports to safely accommodate the increasing levels of passengers.

We've acted prudently in the current difficult environment. Where capital projects could be slowed, they have been slowed. When they could be put off, where it made sense, and didn't cost more to put them off, projects have been put off.

Airport improvement fees--a direct charge on passengers for capital investments--were introduced to backstop the capital financing requirements. They enabled airports to get on with the job of providing safe and secure facilities, which I know is particularly important to this committee. They funded the investment, which means airports today support $34 billion in economic activity and over 300,000 jobs, and provide nearly $4 billion in tax benefits to the Canadian economy.

To wrap up, the ATSC is only one of the many significant financial impacts on the industry. We will be happy to answer your questions, in either language.

Thank you for your attention.

The Chair: Thank you, Mr. Raynor.

Mr. Berg or Mr. Cherry, do you want to add anything to what was said?

Mr. Larry Berg (Chairman, Canadian Airports Council): I think I would just like to take your questions. I have listened to the previous presentation.

The Chair: Mr. Epp.

Mr. Ken Epp: I would like to thank you first of all for being here.

I want to know a little bit about your council. It's my supposition that you represent the organization of all the airport authorities in the country that own and operate airports. Is this correct?

Mr. Larry Berg: That is correct.

Mr. Ken Epp: So you come to us here representing the sum total, or at least the way you have shaken down the main issues...?

Mr. Neil Raynor: If I can just explain, the Canadian Airports Council represents 40 airport authorities from coast to coast. Our smallest member is probably Port Alberni in British Columbia. Our largest member is Toronto, which is obviously very close by. These 40 airport authorities operate between them about 120 individual airport sites.

Mr. Ken Epp: If I were to comment as an ordinary observer, and not as a member of Parliament, on the work of the people who operate airports.... I am given to being kind, so how do I do this?

I have been very distressed by the lack of planning at a number of airports. Toronto is one that looks like a hodgepodge. I think also of Edmonton, where the new building isn't even finished, yet they are tearing it down and renovating it because they forgot to put in washrooms. This is incredible. This is an airport authority supposed to be running airports.

I wish we had witnesses here who were a little older—

Some hon. members: Oh, oh!

Mr. Ken Epp: —well, at least as old as I am.

Back in the old days, all of these airports were owned, operated, and run by the Government of Canada as a crown corporation, or that type of thing. Is it better or worse now compared to how it was in the old days?

Mr. Larry Berg: I would just comment that it is undeniably far better for Canada that airport authorities have taken over control of local community airports. There is close to $2 billion invested in new infrastructure. It hasn't cost the federal government a nickel to get this. We're handling up to 50% more passengers through the system. It has been a great economic generator. As a result of airport growth, the jobs created across this country number in the hundreds of thousands. This has been just a wonderful success story, and I compliment the federal government for the decision to devolve airports to local communities.

Mr. Ken Epp: Okay, good. That's the answer I expected you to give. Just because I'm asking a question doesn't mean I'm on one side of the issue or the other. That's my job as an interrogator here, to pose problems.

I'm glad to hear that. I hope you then learn how to run these airports. Obviously it's a learning experience. In some areas you have to learn from the mistakes of others too.

The next question I have is with respect to the air tax. Obviously it doesn't affect you directly, because you are not paying it directly, but indirectly, it cuts the business at your airport. The income from most airports is a combination of money they get from the taxpayers locally—at least, I think this is the case. There are local authorities that are run by local governments.

Mr. Larry Berg: No.

Mr. Ken Epp: Is this not true? Are they all independents?

» (1705)

Mr. James Cherry: Certainly the airports that we represent—except for one possible exception where there are some issues—are essentially run like private organizations. If you had analyzed the revenue statements of any one of the major airports in this country, about 95% of the revenues in Vancouver or Montreal, for example, are derived from passenger aviation activities. In other words, it's either landing fees charged to airlines or local improvement fees for users of the airport. The balance of revenues—which represents, in the case of Montreal, about 5%—are landing fees for cargo activities and certain real estate rents for surplus lands we have. Of course, included in the aviation and passenger charges are what we call concession revenues, which are paid by the passengers. It's our share of the parking revenues, the donuts, magazines, and duty-free goods they buy in the airport.

But there is no local money, in fact. In the case of Montreal, I can tell you we are a very large direct contributor in the form of taxes, or grants in lieu of taxes, to the extent this year of about $18 million. So it is quite the opposite. We don't get any local money at all, sir.

Mr. Ken Epp: Okay. Thanks for clarifying that.

So you get your money primarily from the airlines, then, so the passengers have a tax. There's an airport improvement tax at many airports. There's a usage fee. The airlines have to give you a per passenger fee for landing or taking off in most cases. That's your source of revenue.

Mr. Larry Berg: That's correct.

Mr. Ken Epp: Then I ask you this question. Why would you, at most airports, charge a dollar for 10 minutes of parking when I go there to pick up somebody who's coming to visit me? I find that particularly annoying, because I'm supposed to be a host. We want to be a friendly nation to people who visit this country, and yet when they come there and encounter parking charges like that and other things, they say, I'm not being treated here as a guest, I'm being treated as somebody to be ripped off. And a lot of airports do that.

Mr. Larry Berg: Yes, you're right, and it's not just Canada.

It's not a revenue generator for airports. Because we have very limited curb space with taxis, buses, limousines, and passengers, we want to dissuade you, if we can at all possible, from stopping your car in front of the terminal. We want you to go in the “parcade”, or we want you to take a bus, to go to the long-term parking lot and park your car, but we do want to dissuade you from parking temporarily in front of the terminal from a congestion perspective. And there are safety issues around passengers. The congestion issue in Vancouver is very severe in the departures level particularly, and so we put those in to dissuade people from using that as a temporary parking area.

The Chair: Thank you, Mr. Berg, and thank you, Mr. Epp.

Mr. Keyes.

Mr. Ken Epp: I would like to go back on if there's another round.

Mr. Stan Keyes: Our witness's answer to Mr. Epp's question about local money going into the airport isn't completely correct. For example, under some airport authorities the airport actually has the services of the municipal fire protection equipment, for example, that would have to respond to an emergency situation.

Mr. Larry Berg: We would pay for that through either grants in lieu of taxes or directly. For example, in Vancouver's case I pay the City of Richmond about $4 million a year to provide fire services to the airport. In addition, I pay grants in lieu of taxes and mine are $13 million. So there's nothing free from municipalities. Everything is on very attractive commercial terms, I would suggest, to the municipality.

Mr. Stan Keyes: Oh, I see. Okay. Good.

You may have been here a little earlier. First, when we're talking about the security tax of $24, I would agree with you. The $24 fee charged equally to everyone doesn't seem to be fair. I'm not one who favours the ad valorem system. I don't think that's fair either. We as a committee are trying to have some kind of a resolution on this to give to the minister prior to our breaking next Wednesday so that he has something for his budget.

I think the distance argument resonates with a lot of people. If you're flying from Hamilton to Ottawa, you shouldn't be paying the same amount of money that you're going to pay to travel from Toronto to Vancouver, for example, because of the quantity of equipment, say, at Hamilton airport as opposed to both Toronto and Vancouver.

I hope this is going to be a recurring theme with the witnesses who will appear before us up until next week, before we make up our letter.

You mentioned earlier in your remarks, Mr. Raynor, that given the money the previous organization was receiving, the CATSA, the Auditor General was also going to say that they have been taking in far more money than they needed to in order to pay for what it was they were going to supply in security. Am I correct in that?

» (1710)

Mr. Neil Raynor: You're correct to a point. I understand the Auditor General has no problems with crown corporations adopting a regular business approach to financing, to paying for their capital goods. That is, you finance them over a number of years instead of having to expense in the year of purchase. We know the amount of equipment and the cost of those individual pieces of equipment that CATSA is going to have to purchase is a major capital investment. If you have to expense that in the year of purchase, in the early years of their formation, that clearly is going to increase their costs, and hence, if it flows through, it is going to increase the burden on the traveller through the security tax.

The Auditor General indicates that she has no problem with this approach, that crown corporations can finance in a way a regular business would finance, and that is, you'd amortize and you'd then charge that amortized amount each year.

Mr. Stan Keyes: Didn't you say more specifically that they would be taking in more money than they were going to expense?

Mr. Neil Raynor: Yes, even on a cash basis I said that, but don't link that with what the Auditor General has said.

Mr. Stan Keyes: Then I'll separate the two.

Mr. Neil Raynor: Yes, there are two different issues there. In terms of what--

Mr. Stan Keyes: Sorry, Neil. On the one issue where they're taking in more than they're going to expend, we just heard from CATSA. They rounded out all of these numbers for us. They said that what they were taking in, they were going to be expending. Can you point to any specific where they are not going to be spending as much money and, therefore, receiving more than they are going to expend?

Mr. Neil Raynor: I didn't have the benefit of their analysis before I came in here. At the time of the federal budget, we simply looked at what the federal government anticipated would be collected this year and the subsequent years. Our view is that we don't believe that even in a year, on a cash basis, they can spend that amount of money on the equipment they're going to have to purchase.

Mr. Stan Keyes: If there's anything you can do to help us out in gaining their books--

Mr. Neil Raynor: I think certainly we could go back to that.

Mr. Stan Keyes: --and then telling us exactly where it is, it would be useful, because that's the crux of the matter for us. We're collecting $24 a person, and yet we're being told they need all of that money to do their job. If you can show us where they do not need all of that money to do the job, then we can start looking at relating the fee to distance, or whatever.

Mr. Larry Berg: Perhaps I could make a comment--

The Chair: Excuse me, Mr. Berg, on that very line of questioning, I understand that either the economics committee or the industry committee is also looking at that same issue. To be quite truthful, they have better information than we have before their committees. I looked at it last night. I suspect what we're hearing now is fairly accurate. I'd suspect, I'm not--

Mr. Stan Keyes: It may well be, but would we be able to see proof of that?

The Chair: I think you supplied some of the information to the industry committee. Can you get this committee that same information you supplied to them?

Mr. Neil Raynor: I haven't supplied that directly, but we'll supply what we have. We'll come back to you.

Mr. Stan Keyes: Maybe you can look at the witness list and see who provided that information--

The Chair: I'm going to get it.

Mr. Stan Keyes: --so we can get it. We don't need him as a witness, but if we had the information we could make a fair assessment.

The Chair: That information will be given to this committee by Thursday morning before we meet.

» (1715)

Mr. Stan Keyes: Thanks, Joe.

The Chair: Thank you, Mr. Keyes.

It's nice to have you back, Ms. Desjarlais.

Mrs. Bev Desjarlais: Yes. I just whipped up to the Bill C-17 committee.

On the issue of possibly charging the security fee based on distance, is there any reason to believe that because you're travelling a further distance your risk of security is greater, or is the initial risk the same? For the cost of the baggage checking and those kinds of things, the cost of the explosive equipment, in Toronto do you need, let's say, 10 times more than what you'd need in Winnipeg? Would the cost in Toronto be greater, or is there really an increase in security risk over distance?

Mr. Neil Raynor: I'm going to say there is.

Mrs. Bev Desjarlais: Before you go any further, flying from Thompson to Winnipeg, because I'm travelling further than, say, Hamilton to Toronto, that would be a greater security risk?

Mr. Neil Raynor: No. I think you have to go back to risk assessment and the many factors that feed into risk assessment.

Mrs. Bev Desjarlais: Good enough. So it didn't increase with the distance.

Mr. Neil Raynor: But you said it was a similar distance.

Mrs. Bev Desjarlais: No, I asked you if security risk increases with distance. Is there any proof that security risk would increase with distance as compared to the point of departure being the security risk?

Mr. Neil Raynor: I'll let Larry comment.

Mr. Larry Berg: I think it does increase with distance because you're in a larger aircraft. I would pose to you the proposition that--

Mrs. Bev Desjarlais: Do you fly between Winnipeg and Thompson?

Mr. Larry Berg: No. I fly within B.C., though, quite a bit. In fact, small aircraft, short-haul routes, pose a relatively low risk.

I heard the comment about the 19- or 20-passenger aircraft and the risk; I would put that in the same risk category as a bus. I think the risk is different with long-range aircraft. I think there is, in that sense, a factor.

Mrs. Bev Desjarlais: So it's not so much the distance as the fact that you're in a bigger plane with more people. I think we need to be clear on this. If we're going to base this on the fact that the risk.... And I agree with you, I have no problem with risk assessment. I have no problem with that. I don't necessarily think there has to be major security at every single airport in Canada.

But I think if we're going to have a security fee, then it should be done fairly on the basis of where the risk is. Flying from Thompson to Winnipeg--I use this example because it's easy for me to do it--is a long-distance flight, but I would question whether or not the security in that area would be a greater risk. If you're saying it is, then somebody's falling down on the job, because we don't have any security and haven't had it for a long period of time.

Mr. Stan Keyes: Yes, December 31.

Mrs. Bev Desjarlais: We'll see.

The Chair: Thank you, Mrs. Desjarlais. I assume that's the end of your questioning. Thank you.

Mrs. Bev Desjarlais: I will make it the end just for you.

The Chair: Thank you, Mrs. Desjarlais.

Mr. Gallaway.

Mr. Roger Gallaway: You said that acts of terrorism have a state component so some of the costs must be borne by the state. I don't disagree with you.

How do you quantify that?

Mr. Neil Raynor: It's a judgment call. I guess our starting position is that, in other modes, you don't ask the passenger or the driver to contribute at all. Why do we single out this mode?

I use the St. Clair Tunnel, and you don't ask me for a security charge to use the tunnel, or the bridges in Halifax. There is no security charge for using the tunnel. Clearly, there are targets of opportunity that terrorists will be looking at. I would start from that position. There are many targets and many modes that can be targeted. We choose not to levy a charge or a tax on those modes. Why do we do it in the air mode?

Mr. Roger Gallaway: I have another quick question. You started by laying out that we're talking about the fees collected by CATSA, having it directed to CATSA, and having them accountable. Who, in the end, made the decision on how this model will work?

Mr. Neil Raynor: I believe it was the Department of Finance.

Mr. Roger Gallaway: Did you have an opportunity to make suggestions?

Mr. Neil Raynor: We spoke about the establishment of the security authority. I think we would support the way the federal government has proceeded with the establishment of the authority.

In terms of its funding, we've had no input into how that was arrived at.

» (1720)

Mr. Larry Berg: We were not consulted on the Department of Finance's process.

I would be an advocate of setting up a committee that can be led by the Department of Finance. You would have to have members on it from the airline industry and the airport industry to give advice on how to properly structure this fee to provide the least damage, if you will, to the aviation industry and, at the same time, get the job done. To do this in isolation of dealing with the actual people who have to implement and live with this is a strategic error.

Mr. Roger Gallaway: Okay. Thank you.

Mr. Stan Keyes: It's a good quote.

The Chair: Are you finished? Thank you.

Mr. Proulx, you have one subordinate question, don't you?

Mr. Marcel Proulx: Yes, I have a quick one. Do you want me to go ahead?

The Chair: Yes, go ahead.

Mr. Marcel Proulx: Thank you.

I want to clearly understand what difference there would be cost-wise if I'm flying from Ottawa to Toronto instead of flying from Ottawa to Vancouver. You're not going to fly me to Toronto in a 17- or 19-passenger plane. I'm going to go through the same pre-board screening. Why should I pay more to go to Vancouver than to go to Toronto?

Mr. Larry Berg: It's the case for the flat tax. The cost of providing the security is the same, no matter if you're flying 100 miles or 10,000 miles. That's the case for the flat tax. It brought us to where we are today.

The impact on the industry has turned out to be rather startling. I don't attribute it to this alone, but it's definitely a factor. For example, in the case of Vancouver, short-haul regional traffic inside British Columbia is down 27%, year to date, this year, over 2000. I monitor this on a weekly basis. I know the numbers. It is not due to this factor alone, but this is a significant factor in the decline in traffic.

Mr. Marcel Proulx: What's the average cost for one of the flights that you're talking about?

Mr. Larry Berg: Do you mean within British Columbia?

Mr. Marcel Proulx: Yes.

Mr. Larry Berg: It can range to as much as $600 return to Prince George.

Mr. Marcel Proulx: Do you think that the $24 one way and the $24 return is a factor?

Mr. Larry Berg: I believe it is a big factor between Vancouver-Victoria, Vancouver-Kelowna, Vancouver-Kamloops, and Edmonton-Calgary.

Mr. Marcel Proulx: This is on a $600 ticket.

Mr. Larry Berg: It is for the short-haul market. The short-haul tickets are less than that.

Mr. Marcel Proulx: Okay. What's the average on the short haul?

Mr. Larry Berg: They would be in the $150 and under category.

Mr. Marcel Proulx: Okay. At $150, there's a big difference.

[Translation]

Mr. James Cherry: We experienced the same thing with the Quebec market, between Montreal, Quebec City and other cities. We went through the same thing as British Columbia. Although the percentage is a bit lower: 20 to 25% less.

Mr. Marcel Proulx: How do you determine precisely the number of miles or the number of hours of flight? We can’t simply talk about internal provincial flights since Montreal-Quebec City is the equivalent of Montreal-Ottawa. You will have to use the same scale.

Mr. James Cherry: Like my colleague mentioned, the difference is that between Montreal and Quebec City we use a 37 seater plane, a Dash 8, while between Ottawa and Toronto, we normally use…

Mr. Marcel Proulx: But between Montreal and Ottawa, it is the same type of flight.

Mr. James Cherry: Right.

Mr. Marcel Proulx: You can’t readily distinguish whether it is an inter-provincial flight. What criteria do you propose to differentiate the fee structure?

Mr. James Cherry: It could be the type of plane used. It could also be, like my colleague suggested, the size of the aircraft. Clearly, the threat varies depending on the type of plane used.

Mr. Marcel Proulx: The security services on the other hand would be the same on short haul flights and on long haul ones.

Mr. James Cherry: You are absolutely right. As Mr. Berg mentioned, that is why the flat tax of $12 applied on both ways is justified. The same type of equipment is used for offering the service.

[English]

Mr. Stan Keyes: This is just as a supplementary, Mr. Chairman. If I'm catching the 11 o'clock flight on Monday morning to come to Ottawa, they have the usual Airbus. I don't know how many passengers it has; it's a smaller Airbus. If they need a larger piece of equipment at Ottawa for a longer-haul flight, they will put me on an Airbus that is three times larger. Now, I'm going to be penalized with the tax because their schedule has put me on a larger plane. That's when you get into these kinds of nuances.

» (1725)

Mr. Neil Raynor: We have some choices to make, and I don't think you can be so specific as to the aircraft you happen to be flying on. I think you have to make some choices and say that on that route--

Mr. Marcel Proulx: That was my question. What would you use to determine the type of charges? Part of the answer was the type of carrier, but you're saying not necessarily. You're saying no. So what are you saying?

Mr. Larry Berg: In my mind it's fairly clear. I'd charge $5 for intraprovincial flights, those within the province--intra--though some people argue that this is a little low. I'd go to $7.50 for a regional flight, say from B.C. to Alberta or Saskatchewan, and keep $12, as we have it today, for long-haul domestic and transborder international flights. I'd take the current system and just rerub it.

Mr. Marcel Proulx: So if I fly from Montreal to Quebec City, it's one rate, but if I fly from Montreal to Ottawa, which is much the same distance, it's another rate because it's interprovincial. In fact, it's even shorter, but because I'm going from one province to another, it means I have more money and I can pay you more.

Mr. Larry Berg: My point was that we need to establish a committee of airlines and airports. Airlines would share the view I espoused, and we need to sit down and determine what is the best way to structure this fee.

Mr. Marcel Proulx: Mr. Raynor, do you agree with Mr. Berg?

Mr. Neil Raynor: Actually, you have demonstration of the fact that, as we are an association of many independent members, there are probably as many views as I have members.

Mr. Marcel Proulx: That's why I'm asking you.

Mr. Neil Raynor: You'll recall my statement in my submission that we don't have a view other than that the current flat tax is inappropriate, so we should find a solution. There are many ways, many solutions, and we have to find the best one.

The Chair: Mr. Berg, I wonder if I could impose on you. You made a statement 30 seconds ago or so that made some sense to us up here. If you could, please put that into some form of correspondence to our clerk and our researcher. Then, would you distribute that, Mr. Clerk, to the members of the committee. I'm very serious on that. We're looking for a solution to this.

Now I'm going to Ms. Desjarlais, who has a small question.

Mrs. Bev Desjarlais: Not a small question, but I think it's a much better solution.

Since the airport authorities are still paying for the security at the airports, still paying their costs as before, and since the airlines have been let off the hook of having to cover the cost of baggage security, and since we have constants that we absolutely know the cost of--that's the cost of the baggage handling; I mean, it's a set fee, CATSA gave us a fee that they roughly know it will take--and since we know what the equipment costs are going to be, wouldn't it be more logical to say we're going to take those costs and the airlines are going to pay a portion of it, again on the basis of the cost per airport of what that equipment costs for that airport and the baggage handling for that airport? You might end up with a different fee, but rather than having it collected through the auspices of the airport security tax, have it collected by, say, the airport authority at the time they collect from people going through anyway. The rest of the security could get paid for under the general revenue fund from the Government of Canada.

It makes a lot more sense, because we're looking at security for the entire country. That way, the user fee that was there before, I believe, to airport passengers is still there. There are some dollars to offset it, and then everybody pays and ensures it.

Mr. Stan Keyes: My mother never flies so--

The Chair: Is that a speech or--

Mrs. Bev Desjarlais: But she benefits from the security. She could be in Eatons the day the plane goes down.

The Chair: Excuse me, is there a question in there that you would like to put?

Mrs. Bev Desjarlais: No. I'm just telling you it's a much better system than what I think is not a good system.

The Chair: Thank you.

Mr. Epp.

Mr. Ken Epp: Thank you.

I actually have another proposal that I think is the best of them all, and that is--

The Chair: We're going judge you on this one.

» (1730)

Mr. Ken Epp: I think it's fairly straightforward. Make it like an ordinary algebraic linear function that has a fixed cost plus a proportional cost. I would charge $5 plus one-half of 1% of the value of the ticket before any other taxes. It's totally fair.

Mrs. Bev Desjarlais: That would leave us in the same place as the--

Mr. Ken Epp: Of course, my argument always is that the taxpayer should be funding a good portion of this because on September 11 most of the people who died weren't in airplanes, so it certainly is in the public interest to have airline security.

The Chair: Thank you, Mr. Epp.

Are there any other comments anyone would like to make?

Mr. Stan Keyes: I don't think it's fair that you're going to charge a percentage of the ticket. If I'm flying and have to take a last-minute flight from Toronto to Vancouver and I'm paying full-fare economy of $3,300, or I book a week in advance and pay $1,200 for the ticket, the guy sitting in the seat beside me is going to be paying a lot less for the security fee, yet we're on the same plane and have to go through the same security check.

The Chair: The only inequity is in the airlines and the way they charge for the tickets.

Mr. Stan Keyes: That's another--

Mrs. Bev Desjarlais: And in that regard it's much easier to tax the tax.

The Chair: Thank you, everyone. As you can appreciate, this is going to be the subject of much discussion.

Mr. Raynor, you'd like to comment.

Mr. Neil Raynor: Perhaps we may make one closing comment. Mr. Berg, my chairman, would like to speak for a moment.

Mr. Larry Berg: I would make the comment that the aviation industry needs all the help it can get right now. This industry is reeling. Last year it lost $18 billion and in 2003 it's predicted to lose $12 billion. That's more than the entire profits earned since the Wright brothers. United is teetering on bankruptcy. It is a very serious situation that we have here.

The Chair: Which airline are you talking about?

Mr. Larry Berg: North American airlines.

The Chair: Oh. Well, we're talking about the Canadian airlines.

Mr. Larry Berg: I was speaking of North America, though. Nonetheless, there's an awful lot of U.S. carriers that come and serve in our communities. We want to encourage that trade. They're paying this fee as well, so the implication is not purely domestic.

Mr. Stan Keyes: Given the problems, can Mr. Berg help us out by reducing the airport improvement tax of $15 each time a passenger leaves his airport?

Mr. Larry Berg: Actually, my fee is tiered $5 within B.C., $10 regionally and $15 internationally. That's why I'm in favour of the tiered CATSA fee, because I know it is appreciated by the short-haul travellers and by the air carriers that we have that tiered structure.

The Chair: That's not exactly true because the whole subject...it's not appreciated by the short-haul traveller. I'm not going to get into a debate about it--

Mr. Larry Berg: They appreciate $5 as opposed to a flat $10 across the system.

Mrs. Bev Desjarlais: Even if it cost $4, you're not getting your money's worth.

Mr. Larry Berg: Tiered versus flat, that's the issue.

The Chair: I'm going to close off with one question.

What is it that we're doing that has caused this tax, that you people in the airport business, running airports, were doing prior to the imposition of the tax? What is so different today that is being done--

Mr. Larry Berg: There's a higher standard of screening.

The Chair: Just a minute. What is so different today that necessitates a $24 tax? We have heard from the previous witnesses that they're going to spend $2.2 billion or something over the next five years. Where are we going? The question is simple. What were you guys doing and why couldn't you simply improve on what you were doing?

Mr. Neil Raynor: Mr. Chairman, perhaps I can answer that. In my current position with the airport association, I was part of the Transport Canada steering committee planning the implementation of explosive detection systems in airports. The time frame is what has changed. These systems were going to come, and we were going to pay for them when they came. But the debate on September 10, 2001, was whether we were going to implement this in 2008 or 2010. This was the debate, not whether or not we were going to do it.

They were already doing it in Europe, and were well in advance in the U.K. because of the IRA threat. The rest of Europe was catching up, and the U.S. was going this way. We were discussing this actively. It was not whether or not we were going to do it, but when we were going to do it.

We put all that together in a much tighter timeframe. But we haven't generated the level of expense.... If we deal with it in a normal, business-like way, even if we keep the current system, we don't need $24 out of the pockets of every passenger.

The Chair: I thank you all for coming.

Mr. Clerk, you complimented me because we're only four minutes over.

Thank you all.

Mr. Stan Keyes: Mr. Chairman, I just have a point of order. This isn't up for debate because it's just a submission I'm making. As a courtesy to my colleagues, I move that the Standing Committee on Transport strike a subcommittee to study marine transportation and that the subcommittee be chaired by Roger Gallaway, member of Parliament for Sarnia—Lambton.

This is a notice of motion, so it will be on the Notice Paper. Then I guess we will have our debate in 48 hours.

» (1735)

The Chair: Okay. Mr. Clerk, it will be voted on at the next meeting on Thursday.

And on Thursday we have—

Mr. Ken Epp: Do we have the 48-hour notice rule in the committee?

The Chair: Yes, 48 hours.

Mr. Ken Epp: It is less than 48 hours unless we wait until 6:30—or 5:30, I guess.

Mrs. Bev Desjarlais: [Editor's Note: Inaudible] ...on Thursday.

Mr. Ken Epp: You don't have 48 hours until next Thursday. You'll need unanimous consent to bend your own silly rules.

Some hon. members: Oh, oh!

The Chair: With that, I'd like to announce that our next guests will be Air Canada Jazz, Jetsgo, Pacific Coastal Airlines Limited, and WestJet Airlines on Thursday, December 5, from 11 to 1 o'clock.

The meeting is adjourned.