Good afternoon, everyone. Welcome. It's good to see all of you again after Tuesday's meeting.
I welcome all of you to meeting number 13 of the House of Commons Standing Committee on Transport, Infrastructure and Communities. Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021. The proceedings will be made available via the House of Commons website. So you are aware, the webcast will always show the person speaking rather than the entirety of the committee.
To ensure an orderly meeting, I would like to outline a few rules to follow. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this particular meeting. You have the choice, at the bottom of your screen, of floor, English or French.
For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.
Before speaking, please wait until I recognize you by name. If you are on video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. I remind you that all comments by members and witnesses should be addressed through the chair. When you are not speaking, your mike should be on mute.
With regard to a speakers list, the committee clerk and I will do the best we can to maintain the order of speaking for all members, whether they are participating virtually or in person. We do have a new icon at the bottom of the screen for hands raised. As I can only see so many per screen, please bear with me as I go through the screens to see if there's a raised hand.
Pursuant to Standing Order 108(2), the committee is meeting today to continue its study on the impact of COVID-19 on the aviation sector.
Before I introduce the witnesses, I will note that many of you have received some attachments from the clerk today with respect to the study budgets. They were all distributed to each and every one of you. I would like to request consent from the members to accept the study budgets—not only to accept them but to adopt those budgets as they have been presented to you. Do I have consent from the members of the committee? Can I see your hands raised? That's the best I can do right now.
Some hon. members: Agreed.
The Chair: Okay. I do have consent, Mr. Clerk. Those study budgets are accepted and adopted by members of the committee.
Now it's my pleasure to introduce the witnesses we have before us today. We have, from the Aerospace Industries Association of Canada, Mr. Mike Mueller, senior vice-president; from the Air Canada Pilots Association, Robert Giguere, chief executive officer; from the Atlantic Canada Airports Association, Derrick Stanford, president, as well as Monette Pasher, executive director; from the Canadian Air Traffic Control Association, Doug Best, president and chief executive officer; from the International Association of Machinists and Aerospace Workers in Canada, Derek Ferguson, representative, Grand Lodge; and, from the Vancouver Airport Authority, Mr. Gerry Bruno, executive adviser to the president, and chief executive officer of Future Borders Coalition.
With that, we will start with our witnesses.
I will start with Mr. Mueller, senior vice-president of the Aerospace Industries Association of Canada.
Mr. Mueller, welcome. I'll give you the floor for five minutes.
Good afternoon, everyone.
It's a pleasure to be here on behalf of the Aerospace Industries Association of Canada. As most of you will know, our members represent over 95% of aerospace activity in Canada, covering the civil, defence and space sectors.
Aerospace has been a driving contributor to Canadian prosperity for decades, providing nearly 235,000 jobs and over $28 billion annually to our nation's economy. This hasn't happened by accident.
Eighty years ago, our political and industrial leaders made strategic decisions. They recognized the potential of this great industry to shrink our vast geography, facilitate global trade and commerce, help secure our borders, and raise our quality of life. These political leaders were keenly aware that smart policy decisions and key investments would build Canada into a global aerospace leader. They knew that the investments we made as a country would yield significant dividends, and their vision was correct. Canada became the fifth-largest aerospace industry on the planet and a true source of pride.
However, in recent years, that vision, investment and support has been slipping, and so has Canada's global positioning. The impacts of COVID-19 have meant further challenges, and we’ve fallen even further behind. The industry is reporting losses in revenue of over 40%; 95% of companies are reporting various levels of shutdowns, and over 50% have laid off employees. Support is needed, and it is needed immediately.
While the government's emergency measures have been appreciated and helpful, they're just not enough, not when aviation and aerospace are facing unprecedented challenges, and not when other leading aerospace countries, our competitors, began taking action early on. For example, France invested $26 billion. The U.S. invested $80 billion. Hong Kong invested $5.2 billion. Germany invested $9.8 billion, and on and on. These countries, our competitors, have positioned their sectors for the future. Canada needs to do the same. The future is bleak for aerospace if its customers, the airlines, can't buy its products and services.
The effects of COVID-19 have cascaded throughout the supply chain and throughout the country. Our members are located in every region, and no one has been immune, regardless of the size. Data from leading global aerospace and defence experts warn of the consequences if no action is taken or no long-term strategy developed. The need to protect our highly skilled, well-paying jobs is now.
This industry’s competitive advantage has been our skilled workforce. In the context of COVID-19, this is our strength and our challenge. We need government investment in aerospace so that we can be part of the economic recovery, and post-recovery we can once again be global leaders. But we can't do it alone. We need a partner in the government and, indeed, all parties in the House of Commons.
Finally, I want to touch on innovation, a hallmark of this industry.
Great strides are already being taken by aerospace companies to ensure a greener, more sustainable future. We're ready to help with elements of the government's green agenda. The industry is committed to this. We’re fully committed to working in partnership with you on a national aerospace strategy that takes into account civil, defence and space. This is critical. As I said, every one of our competitor countries has a strategy.
We are also seeking support from government to partner with us to help us transition to new technologies and products, a transition that will keep people employed and ensure that we remain a skilled workforce. With over 80% of what we produce being exported, there are opportunities to build more efficiency and transparency into export market opportunities. There is also an opportunity for the government to support our industry by accelerating planned spends on the defence and space sides.
I'll conclude today by saying that there are tremendous opportunities. Let's ensure that Canadians can continue to take pride in our Canadian aerospace industry, to continue Canada's leadership in R and D and in training, and to protect our skilled workers and good-paying jobs from coast to coast to coast, all while putting aviation and aerospace on a path to a greener future.
We can't be naive. Other countries are, as we speak, actively soliciting Canadian firms to shut down and move to their jurisdictions. Aerospace exists in a fierce, globally competitive marketplace. Once these jobs leave, they don't come back.
It's no accident that a country of just 35 million has such a thriving aerospace sector. On behalf of our industry, we urge all of you to continue the tradition. Stand by this industry. Grow it for the future. Protect its legacy and its jobs.
Thank you very much, and thanks to the committee for inviting me here today.
I've been a pilot and, in the later half of my career, have worked in senior and executive roles in the airline industry. I've seen 9/11 and SARS, which were terrible. The current challenge far exceeds anything we've ever seen before.
Our association today represents 3,800 active pilots. Before COVID hit, we had 4,500 active pilots and we were in the process of hiring another 900. Through a combination of cancelled hiring, furloughs, early retirements, leaves of absence and surplus pilots over 1,800 positions are gone, for a net reduction of 35%. Our remaining pilots are currently at about 65% of their normal salary as part of a mitigation agreement to limit reductions.
Since March 2020, passenger traffic has been down to around 10% of pre-pandemic levels. That has dropped even further in the past couple of weeks.
We would urge the government to take a thoughtful approach to any further restrictions, so they don't have any unintended consequences. While our pilots can tell you that most of the flights they operate have very few passengers, the cargo holds are full. Last week, on an extremely limited flight schedule, our pilots operated flights that carried millions of kilos of essential goods into and across Canada. If you turn off the tap on aviation, you don't want to unintentionally turn off the supply chain of vital goods to Canadians, including mail, personal protective equipment, pharmaceuticals and other goods.
While public health measures may be required to fight the pandemic, further restrictions without direct government financial aid are sure to take an already precarious airline industry and further devastate it. As a reminder, Air Canada is estimated to be burning through $15 million every single day this quarter. That's after the dramatic capacity reductions and layoffs of more than 20,000 employees. The airline is smaller today than it was when I started my career as a pilot in the 1970s.
Other countries are now in their second and third round of direct financial support for their airlines. We're the only G7 country that has not received specific industry aid. While we appreciate the Canada emergency wage subsidy, so many jobs have been lost and some of those losses may never be recovered. If we don't receive assistance soon, Canada may not have an airline industry by the time the recovery comes. The routes that have been cancelled may never return, airlines may not be able to recover costs, and the cargo that needs to get to where it needs to go may not go. Our industry touches in some way virtually every Canadian and every sector of this economy.
While the COVID crisis has hit many industries, airlines are unique in two ways.
First, unlike businesses with traditional offices or warehouses, airlines' most significant investment is in aircraft. Airline fleets are either owned, financed or leased. Airlines have slashed operations to manage these massive costs. Hundreds of planes are parked in the desert—many permanently. Some of the new aircraft are being sold outright or sold and leased back so airlines can generate liquidity to provide cash as they burn through their reserves.
Some might think that if airlines sell assets to create cash, they don't need any help. Selling aircraft one by one is like ripping apart your house, board by board, to keep the fire burning to heat it. Eventually the assets are gone and you have nothing left but a pile of ash and nowhere to live. Airlines cannot just give up their entire fleet and wait for the economy to improve. Government relief for aircraft rent or financing would assist airlines with an expense that is unique to them.
Second, our highly trained workers have skills that are critical, not just to the airline industry, but to the functioning of our economy. Pilots, mechanics and air traffic controllers have essential skills developed through significant investments of money and time. Before their first commercial pilot job, they will have invested years and well over $100,000 to become qualified. Furloughed and inactive pilots have no way to maintain their skills. We can't just bring them back safely if those skills atrophy.
As this committee heard in 2019, a wave of retirements is anticipated over the next five to 10 years. In today's context, young people will not commit to a career that requires upwards of $100,000 and years of training to get qualified, with few or no job prospects. A skilled worker retention program to support inactive pilots would help ensure that we keep these highly skilled workers when we need them for recovery.
In conclusion, Canada's airlines represent a critical infrastructure, like our electrical grid or our highway network. We're a large country, a widely dispersed population and a trading nation. We rely on airlines to carry goods, services and people within and outside of Canada. Canada cannot survive and thrive in the years ahead without a robust aviation sector.
I'll wrap up my remarks here. I look forward to answering any questions the honourable members may have.
I'll start, and then I'll turn it over to Derrick.
Mr. Chair and members of the committee, thank you for the invitation to speak to you today.
There are 12 airports in Atlantic Canada that are part of our association. It is all of the airports in the region with commercial traffic—or should I now say, the ones that used to have passenger traffic prior to the pandemic, because sadly that is the situation we are in. Seven airports in our region have seen their Air Canada service be indefinitely suspended: in communities like Gander, Newfoundland; Goose Bay and Wabush in Labrador; Bathurst, Saint John and the capital city, Fredericton, in New Brunswick; and Sydney, Nova Scotia.
Pre-pandemic, these were well-managed, profitable and fiscally responsible small airports. They have now gone through 10 months of using their cash reserves—accumulated over two decades and normally earmarked for safety infrastructure projects. These airports have cut staff, and they've cut expenses, but they can only cut so far, as our airport runways must stay open for medevac and essential community services.
The impact of COVID has been great, seeing air service that has been in place since 1942 severed, cutting off entire communities and regions. For Gander, Newfoundland, Air Canada has served that market since it was Trans-Canada Airlines, before Newfoundland was even part of Canada.
In Sydney's case, it is cutting the economy there off from the rest of the country. It is five hours from the next nearest airport in Halifax. Think about that for a minute. This is Nova Scotia's second-largest city entirely without air access. It's an economy that relies on tourism, mobile workers moving to the oil fields, and immigration.
We know that government does not want people to travel right now. We are here to serve the essential movement of people and goods, but our infrastructure expenses do not scale, and our revenue model is entirely based on passengers. This government has recognized the need for support for the air sector in the fiscal economic statement, and we look forward to those programs rolling out. The support is urgently needed.
I'll turn it over to my colleague, Derrick.
With COVID cases on the rise in the rest of Canada, new variants, and vaccines just beginning to roll out, the recovery line for the restart of travel is getting further and further out of reach, while our financial losses grow. Atlantic Canada's airports lost over six million passengers in 2020, and $140 million in revenue. Even after all of the cost-cutting, there was a net loss of over $80 million.
The unemployment rate in the Atlantic aviation sector is now over 50%. These were well-paying and secure jobs. The year 2021 is not looking much better. We are down from over 140 routes to just 29, with only nine of those connecting us to the rest of Canada. Our airports have asked for rent relief until this sector recovers. In a good year, Canada's airports have paid $415 million to the federal government in rent. Now, our airports need government support as revenue has completely dried up.
What was announced was a good first step, but it does not go far enough to help Canada's medium-sized and large airports recover. Airports like Halifax Stanfield and St. John's will only receive rent relief for one more year. To put this into perspective, in the case of St. John's, with projected revenues down substantially again in 2021, the airport is forecasting a savings of approximately $450,000 from federal rent relief. By comparison, its borrowing to get through the pandemic is currently anticipated to peak at $30 million. Much more needs to be done.
Our airports have also asked for operational support. We look forward to the details and the rollout of the $206 million in the RATI program. This will be required to help stabilize the losses for our regional airports in Atlantic Canada so that we can get—
Mr. Chair and all honourable members, on behalf of the Canadian Air Traffic Control Association, I truly appreciate the opportunity to appear before your committee.
CATCA is a Unifor local trade union representing all air traffic controllers in Canada. It conducts collective bargaining with Transport Canada, Serco and Nav Canada on behalf of more than 1,800 members. Aviation safety and ensuring responsible working conditions for our members is our number one mission.
Before the pandemic hit, our members were responsible for the safety of three million flights per year. Air traffic controllers were short-staffed by 13% and Nav Canada's overtime bill was $100 million. We had 200 trainees in our system, and Transport Canada had ordered Nav Canada to overhaul its fatigue management system, as the had recognized safety was being compromised.
Since the pandemic hit, we've been working 50% fewer airplanes. By June 2021, we could be more than 20% short-staffed, and Nav Canada has terminated almost every trainee in our system. We understand that Nav Canada has seen a precipitous drop in their revenue due to the pandemic and needs to find efficiencies, but this cannot come at the cost of safety for air transportation. While Nav Canada is technically a private entity, it is in a unique position in that it is the only civil air navigation service provider in Canada. Their monopoly status allows them to raise fees, utilize government programs and, of course, petition the government for additional financial support to ultimately promote a sector recovery.
As you will have seen in the media, our union has raised grave concerns over Nav Canada issuing layoff notices to more than 100 air traffic controllers. This includes a level-of-service review of air traffic control towers at seven cities, as well as four area control centres. The Gander area control centre has been the hardest hit. Services provided in Gander are critical to Canada's historic role in providing air traffic control services to half of the North Atlantic Ocean airspace, which handles the busiest international oceanic airspace in the world, connecting Europe and North America. The potential layoffs in Gander will affect the North Atlantic as 40% of the more than 60 air traffic controllers who work the airspace have been served layoff notices.
During the level-of-service reviews for the seven affected towers, Nav Canada committed to a fair and transparent process and said the outcome would consider all stakeholders' concerns, review each situation on its own merits and ultimately produce a report in the spring of this year, should it wish to materially modify service at any of our towers. We've been further assured that there was no predetermined outcome as this process ran its course. Actions would only be taken if warranted, but not before the full process was concluded, including concurrence from the on any proposed changes.
Unfortunately, all of the tower sites undergoing a review of air traffic control service have already issued letters to their employees that clearly state that they intend to close the respective air traffic control towers. It is not acceptable for Nav Canada to issue terms of reference on each engagement and yet have a different behind-the-scenes strategy when not facing hundreds of concerned stakeholders across the country, including what should be their most valuable source—their employees.
These letters confirm our early concerns that the outcome of these reviews was already decided before they began. Our association is calling on Transport Canada to discontinue the service review, due to Nav Canada's failure to act reasonably and in good faith. We are calling on the to clarify their obligations under the Civil Air Navigation Services Commercialization Act on what it means when a party does not act reasonably and in good faith.
It is the opinion of CATCA that Nav Canada is moving with uncontrolled haste and has not been genuine or forthcoming with its motives. Every one of us understands that safety is being impacted. In addition, Nav Canada management received bonuses in December worth approximately $7 million and unionized members got layoff notices.
Good afternoon. I appreciate the opportunity to present to the committee the views of the International Association of Machinists and Aerospace Workers.
The International Association of Machinists and Aerospace Workers is the leading union in the aerospace sector and the air transportation industry. The IAMAW represents over 55,000 members across Canada, of which 22,000 work in the aviation, aerospace and air transportation sector.
As the hardest-hit sector, air transportation is also a sector that is expected to experience a slow recovery, as well as fundamental change. Direct funding is necessary.
It has been a full year since COVID-19 became a reality in Canada, yet to date there has not been any targeted support for this industry. With a full recovery not expected until 2025, it is unrealistic to expect that aviation and air transportation will survive on raising funds independently. Without a planned sector-specific strategy, several industries face decimation.
The Canadian government was quick in responding to the economic crisis triggered by the pandemic and made available the CEWS, although most employers did not top up the 25% of workers' wages and would only use the subsidy for active employees. This went against the original intent of the program, which was to reduce layoffs and to help employers maintain workers on the payroll.
The pandemic has had a broad effect on many industries, not just the airlines. Operation of airports, pre-boarding screening services and aerospace, aircraft and component manufacturing are just some of the industries that have been impacted by the decline in air transportation.
For workers, the decline in the industry has translated into massive layoffs. In the air transportation sector alone, 10,000 of our members are currently laid off. Laid-off workers lose more than just a job. They lose their health benefits, and their pension contributions cease. Many of these laid-off workers will not be able to find comparable jobs in the current labour market. Many more will face the grim economic reality and rely on an overburdened, ill-equipped public services system for assistance.
Passenger capacity is down by more than 90% and 28 domestic stations are closed. Station closures of regional airports impact not only workers who depend on those jobs, but entire communities that are now disconnected from the large urban centres.
We urge the federal government to recognize the true impact of the pandemic by acknowledging that this is a sector-specific issue that requires an urgent sector-specific response.
In terms of recommendations, to facilitate policy development, the IAMAW recommends the establishment of a sector council working group consisting of government, industry and union representation. Support for smaller air carriers and fostering regional air networks are essential. A comprehensive and sound policy will ensure the long-term viability of Canadian air carriers, large and regional. The IAMAW has been advocating for a national labour strategy in both aerospace and air transportation. Now is the time to enhance education and training of the next generation of workers.
We also recommend a repatriation plan that secures the jobs of the Canadian aircraft maintenance and technical operations workers. The IAMAW represents members in aircraft technical operations classifications across the country, and their main concern is that the work that should have been done by our members is now being done out of country. Seventy-nine aircraft have been grounded permanently and 200 aircraft have been grounded outside the country. This is what our members can and should be doing here in Canada.
The IAMAW is committed to working with all relevant stakeholders. Ultimately, we call for the development of a sector-specific action plan with goals that will stimulate and rebuild the industry. However, the health and safety of the travelling public and our members are at the forefront of any plan and strategy. Clear boundaries must be set on how public money is used, to prevent paying out bonuses, share buybacks and any other scheme that does not directly benefit the industry.
Good afternoon, Mr. Chair and members of the committee. Thank you for the invitation to speak to you today.
I am Gerry Bruno, executive adviser to the president and CEO of the Vancouver Airport Authority, Tamara Vrooman. The Vancouver Airport Authority is the private, non-share capital corporation that operates the Vancouver airport—or, as we are more commonly known, YVR.
Since our time together is limited, I will jump right in.
The impacts to our industry run deep. You received detailed accounts back in December from our colleagues at the Canadian Airports Council and the National Airlines Council of Canada, and you also heard distressing stories from my industry colleagues here today. YVR is no exception.
Our passenger numbers dropped 88% last year, our year-over-year revenues declined 63%, and 2021 is looking to be even more severe. We took drastic measures to reduce expenses, consolidating our operations and eliminating all but essential spending on capital projects, and had to secure an additional $600-million loan to allow us to operate with limited revenue for the next couple of years. We're basically operating on borrowed money.
We recognize that we need to fight this pandemic together. As was the case at airports across the country, YVR proactively introduced new measures in our terminals to ensure a safe and healthy environment for passengers and employees. We also partnered with government and invested in a testing pilot to gather scientific data that will help inform policy decisions. Our trial with UBC, Providence Health Care and WestJet explores the use of pre-departure rapid antigen testing, focusing on cutting off risk at the point of origin. We turned our empty parking lots into one of the largest drive-through COVID-19 testing sites in British Columbia. We continue to offer our infrastructure, technology and resources to assist the vaccine distribution of our nation.
However, our industry continues to be in peril and our airports need assistance today. The reality is that 2021 is shaping up to be even harder for our industry than 2020. Recovery is expected to take many years, and experts anticipate that we will not reach mass global vaccination for some time. The aviation industry simply cannot afford to rely on vaccines alone as the solution to this health emergency for the foreseeable future.
You have heard from our industry on the financial assistance we desperately need. We are also extremely concerned about the competitiveness of our transportation systems vis-à-vis the U.S., whose airlines and airports have received tens of billions of dollars in government support. The competitive gap we were experiencing in the past is going to be even greater as we emerge from this pandemic.
Today, I want to focus on the measures we need for a safe and orderly return of travel once the immediate public health concerns have been dealt with.
We require careful planning and coordination by governments and industry today to ensure we are well prepared for the resumption of travel. We need a comprehensive, layered testing framework in place—a national approach and standard that ensures safety in air travel and helps rebuild trust and confidence in our sector. Even with the vaccines in place, travellers will still require testing. There is a lot that is still unknown about the vaccine.
As our borders reopen, governments will need to be confident in the accuracy of passengers' health status, including testing results and vaccination records. This will require government investment in technology that will enable a touchless journey, biometric identity confirmation, collection of verifiable health records, and strong privacy protection.
Not all support measures require significant dollar investments. When the time comes to reopen travel, countries around the world will be competing for [Technical difficulty—Editor]. How can we compete?
One way is by expanding the electronic travel authorization to additional countries. That will stimulate international passenger traffic to and through Canada. Also, the movement of goods will be equally important in Canada's economic recovery and competitiveness. Introducing real free trade zones will contribute to Canada's economic recovery by repatriating and attracting manufacturing, particularly for industries like pharmaceuticals, PPE, and critical emergency supplies. Removing restrictions on value-added manufacturing within those zones, as is done in the U.S. and other countries, could stimulate domestic production and create up to 44,000 middle-class jobs across Canada.
Thank you for your time. I am happy to take your questions.
I assume that's in response to our Vision 2025 document. Members may be familiar with the Vision 2025 exercise that we undertook in 2018. At that time, we were concerned about the state of our industry vis-à-vis our international competitors. We had the Honourable Jean Charest join with us. We did consultations across the country.
We identified several different areas of a potential strategy, dedicated to working with the government, small businesses—the skilled labour portion of them—our space industry and our defence industry, as well as ensuring that Transport Canada is a world-class leader.
We went through that exercise. We had some very good discussions with government, but the one thing we're struggling to understand is the hesitancy to join with our industry in developing that strategy, especially in light of COVID-19 when we see that every single one of our competitor countries has a strategy in place. They have sector-specific support in place.
Having listened to the other witnesses here, I think there are some common threads that seem to make a lot of sense. We're really looking forward to working with the government on some sort of a sector strategy.
Yes. We heard the support being announced in November. That's what was going to come, sector-specific support, and here we are at the end of January still waiting, and still wondering what's going to be there for our region and for the sector across the country.
Yes, I think there's a lot of concern. I'm starting to wonder if we're on mute. We really have said what our sector needs to recover. For our larger airports, it's rent relief until the sector recovers, not for one more year.
We really do need operational support for our essential transportation infrastructure right now, and our air carriers need funding. We need our routes restored. We have been very clear on what we require and have said time and time again that it's urgent.
Yes, I think our residents are feeling it as well.
Mr. Bruno, I was very fortunate to meet with Tamara Vrooman in December. I was very impressed with her idea, and the idea behind YVR, of confidence through science, which is an idea that I know is the core of YVR's path forward.
With that, I have two questions.
First, can you comment on the government failing of not implementing rapid testing, testing on arrival, pre-departure testing? Do you think this would have made a difference in terms of traffic flow, market share, etc. at YVR?
Second, this government seems to have continued the narrative of travel shaming, which doesn't accurately portray the data of transmission location. Again, these ideas support the idea of your CEO, Tamara Vrooman, of confidence through science.
Can you comment on those two questions, please?
We have been pushing for the idea of testing before departure probably for the last nine months, and we're disappointed that it has taken so long. Measures were introduced just recently because of this new variant of the COVID virus. Now people coming in internationally have to be tested, and they have to get a PCR test, not a rapid test, before departure.
Our view is that we need to test the test, and this is what we're doing at Vancouver today. This should have been done by government early on, so that we know what we're talking about and what we're dealing with.
We were always of the view that, much like with security, it's layered. It's a two-layer test, one 72 hours before departure and one on departure at the airport. That helps screen passengers who could be carrying the virus.
That's always been our position and that's why we do the tests we're doing, but we're in a reactive mode rather than a proactive mode [Technical difficulty—Editor].
First of all, I'd like to say to all the witnesses today that you've made your positions incredibly clear. You've communicated your anxiety and your frustration, particularly about the length of time it's taking to get you the assistance package that our government has committed to.
One thing I've learned as a member of this committee is how complex the aviation sector is. We have so many representatives here today, and we had many on Tuesday as well. We really want to make sure the concerns of all parties are addressed in that assistance package, and you have made absolutely clear the devastating effect that the pandemic has had on you.
My first question is for Mr. Best.
Mr Best, you've talked about service-level changes being proposed by Nav Canada, and I was wondering what kind of role Transport Canada has when service levels are proposed to be changed. Could you elaborate on how the process works?
Thank you for the question. We definitely appreciate the support of your colleague on our aerospace caucus.
I would say that we have been asking for that sector-specific approach and sector-specific strategy, working in close collaboration with our colleagues in Quebec. We understood before that it wasn't a priority of the government and that it was a policy option. We didn't agree with that, but we understood that it was a policy option. What we can't understand now, even just hearing from all the other witnesses and seeing the COVID-19-related challenges facing our industry, is why that isn't an option, especially when our competitor countries are also doubling down on these types of strategies.
The one thing I will say is that the jobs that we employ are well-paying jobs, with wages that are 25% higher than in average manufacturing jobs. This is absolutely critical. As I mentioned in my opening remarks, the competitive advantage that we have here in Canada and in Quebec is our skilled workforce. Without that support, I'm worried we're going to lose that competitive advantage. We have a real opportunity to contribute to the economic recovery through a sector like this.
Thank you, Mr. Barsalou-Duval.
We're now going to move on to the NDP, with Mr. Cannings.
Mr. Cannings, welcome. I see you're taking over for Mr. Bachrach. I also want to mention, before I get to you, that we have Ms. Elizabeth May with us.
Ms. May, welcome. It's great to have you around the horseshoe here. We are going to be allotting you some time in the third round. Mr. Bittle has been kind enough to give you his five minutes.
I'd like to start by prefacing my questions and remarks with thanking all the witnesses here for coming. I hear your message about the situation of the industry.
My riding has three regional airports that have all been hit hard. I know that if were here, he would have the same message. I think he has five regional airports in his riding. I have Penticton, Castlegar and Trail. Air Canada has completely pulled out of my riding. It used to have multiple flights per day. It's been a huge issue for my riding in regard to people being able to move. As people have been mentioning, there are the cargo issues as well.
I'd also like to point out to the Atlantic airports people that the Sydney airport, which you mentioned, is named after my grandmother's cousin, J.A.D. McCurdy, a real family hero, so I have a personal stake in that airport as well, in that sense.
We're all concerned about the viability of the industry, especially with regard to regional routes. In early December, I talked face to face with about the sector-specific supports that were apparently being negotiated at the time. He told me this was ongoing.
I'd like to start by asking Mr. Ferguson about those negotiations: whether his union has been engaged by the government in those talks and whether or not they have what he would be pushing for to shape those supports in regard to the workers he represents.
Thanks. I may come back to you on this if I have time later, but I want to touch on the Nav Canada and air traffic control situation, especially with regard to Castlegar, which serves quite a large area. It would take someone four hours to drive to the next airport, if they couldn't fly in and out of Castlegar. It has always had issues during the winter about reliability because of weather, and they've been working hard, spending a lot of money, to fix those issues.
Now they're very concerned, because they're on the list of Nav Canada studies to see whether their tower would be closed. If it is closed, of course, it would make all that effort really moot. It might be very difficult to resume service in any meaningful way.
I'd like to start with Mr. Best about the issue of safety at airports like that, especially Castlegar, where you're in a mountainous situation. If you had an automated tower, what are some of the issues that would make it very difficult to service that airport?
Thank you for the question.
With regard to Castlegar, it used to be an air traffic control tower. Now it's an airport advisory service. It is on Nav Canada's list to stop providing service there. This is where flight service specialists work. They provide a weather advisory and advise pilots and airport users on what's going on at a specific time.
Air traffic control is a different service. We provide actual separation to all airplanes. We make the decision for the pilot, more or less, allowing them to worry about flying the airplane and not what's going on around them.
With regard to how difficult it is to fly into places such as Castlegar, Whitehorse and mountainous areas, without the services provided by flight services and air traffic control, it makes it extremely difficult. I believe that Mr. Giguere, a very experienced pilot, can answer this all for himself, but it absolutely makes...safety is paramount.
Thank you to each of the presenters for coming today.
My first question will go to Mr. Mueller and Mr. Giguere.
I can't help but think that every time we've had someone come to our committee, they talk about the wage subsidy program as what's only really been offered to support the industry. That is almost what they're guaranteeing, that somehow you guys would get the 75% subsidy, the industry is just going to keep going as normal, everything is going to be fine and they don't need to do anything more. That's the impression I'm getting from all the presenters.
My question for you two is, when you have met with government and you've said that we need to have more, are they listening to you, or are they just patting you on the head and thanking you for coming today? What are they saying, and are they trying to assist you in any way?
I'll start with Mr. Mueller.
Just on the issue of the wage subsidy, it's been an absolute lifeline for our industry. One of the things we would be looking for on that piece, moving forward, is an extension beyond when they have already indicated it wrapping up, for sectors like ours that are being harder hit.
With respect to the broader question on sector-specific support, I believe they are listening, but now is the time for action. When you look at our competitor countries like France, just for the aerospace sector alone there's $1.7 billion for innovation, green technology. When we look at what's going on internationally, I would agree with the other witnesses here that now is the time to act, now is the time for that support.
The wage subsidy is barely keeping some folks afloat, and we've seen 20% layoffs across the board on the defence side. That's bad, but if you look at the civil side, it's up to 50% layoffs. I know some of the other witnesses can talk about that, too. It is dire. We do need the support.
To your original question, which is whether I think they're listening, I think they're listening, but we need some action now.
Thanks to all the witnesses today who are here outlining the many challenges they're facing for their organizations, their membership and their employees.
I particularly want to speak to the Atlantic Canada Airports Association's Mr. Stanford and Ms. Pasher. I find myself in a very conflicted position, because back here in Newfoundland and Labrador and Atlantic Canada, many people are of the view that we should continue to be very restrictive towards allowing travel. People often complain that the only cases we see arising in Newfoundland and Labrador are from people who are travelling. As you know, of course, the Atlantic bubble has been there and it's placed many restrictions around travel through Atlantic Canada and I'm sure in some other parts of rural Canada.
The loss of regional routes and the impact on the airports like the one in Gander, and on Nav Canada, next door to me—an hour's drive away—has been very stressful. It's distressing, actually. Despite the measures we as a government have announced, we still find ourselves in a very difficult position. Like you, I want to see a resolution as quickly as possible.
I just want to give both of you an opportunity to comment on the Atlantic bubble and whether or not that's been the real reason for the successful health perspective that we share in Atlantic Canada of having very few cases.
I'll speak with Mr. Ferguson, the IAMAW representative.
In your presentation, you spoke about the fact that aircraft, particularly Air Canada aircraft, were being serviced abroad or parked in the desert abroad.
I don't know whether you brought this up, but I've also heard complaints from workers. For example, they said that there was a desire to convert certain aircraft to cargo aircraft, but that the contracts weren't being awarded here in Canada. Others told me about the Canada emergency wage subsidy, which wasn't being used to retain employees.
I want to know whether you believe that these factors should be considered before assistance is provided to an airline such as Air Canada. At the end of the day, our goal is to get people working here.
Yes, I would certainly agree with you. Our aim is also that if there's work that should be done in Canada, our workers are skilled and able to do that work.
It was our understanding earlier that there were quite a few planes that were overseas and parked. Some of them required basic maintenance, etc. while they were parked. We feel that any of the maintenance required to put the planes back into active service should be done here in Canada. Our members have the skills.
Right now, for example, with our technical operations, there are approximately 1,200 laid off. These are members with skills. Where are they going to find a job right now that fits their skill set? We feel that the opportunity is there to service these planes and to do the maintenance for these planes in Canada. We feel that, before Air Canada is part of any subsidy or plan, any work that can be done by our members should be done here.
Well, hopefully they will still be around, if they are laid off. If they're not around and have been scooped up by many other air navigation service providers around the world.... As I said before, all trainees, with the exception of a handful, were terminated in September.
With regard to our staffing prior to COVID, if you go back to March 12—that's a day we like to use—we were a bit more than 13% short-staffed. The previous year, Nav Canada spent $100 million on overtime, and with all the retirement incentives that have now been given and the potential layoffs, we could be more than 20% short.
If the expectation is for the airlines and the services to come back—and that's everybody on this call—and if the expectation is for us to be there without any delays, as we have been in the past, or for the most part without delays, it is just not going to be there. It will take years to recover.
Thank you for that, Mr. Bruno.
Mr. Giguere, in your opening statement you mentioned cargo holds being full; however, passenger traffic is down on those same aircraft. I think this is a very important point, because as the government looks at further restrictions to protect all Canadians against new variants, we also cannot forget about the critical cargo that comes in through our airports.
I've had many conversations with constituents in regard to aircraft and flights, and many did not know the full extent of how much cargo such as PPE, vaccines and other critical supplies arrives in Canada on passenger aircraft.
Mr. Giguere, as public health needs change and the threat of new variants arises, do you see the need for government to introduce even stricter travel restrictions?
Thank you to all of the witnesses for being here today.
My first line of questioning is predominantly going to be for Mr. Giguere, so thank you, Mr. Giguere.
We're talking a lot about airlines and airplanes. That's all the metal, the engines and that type of stuff. I would like to talk about the human toll of this.
Today is Bell Let's Talk Day, which means we're talking about some mental health issues. I reviewed a stack of letters. I didn't read every single one, and I'm not going to say I did. We had a large pile of them, mainly from pilots, not all from your line, but many different lines in Canada. They were heartbreaking, quite frankly, just devastating letters. I can only imagine what some of your employees are going through.
I want to know how your employees are dealing with their mental health these days. Are there programs being offered to them right now to deal with this?
I'm sorry. Thank you for the opportunity.
We have a significant number of our members laid off. For pilots, it's more than just a job. It's a profession; it's an avocation. To have that taken away from you when you have a career in front of you with a tremendous opportunity.... The network that our airline flies is remarkable, the connectivity that a small country like Canada provides. The airline industry, the aviation industry, the air sector in Canada has safety standards, technical expertise and customer service that are recognized worldwide. This is what we are all passionate about, and we need to make sure that we protect that and take care of it so that on the other side of this pandemic we can take our rightful place at the top of the industry and not be disadvantaged against others who have been in a position where they've kept their industry going.
In terms of the health of our members, we're very sensitive to it and we watch it carefully. Of course, we feel every day for those of our members who are on furlough, and of course those who are waiting to see what's around the next corner for the airline industry. We're anxious and hopeful that the government will make a move and put forward the aid that we've heard about for some time.
Thank you, Mr. Chair. That was very fair.
Thank you for that answer, Mr. Giguere. As I said, we can talk about all the things, but really it comes down to the fact that people are the important thing here and we want to make sure they're looked after, so thank you for that.
You can tell your members that we're fighting for them, and hopefully we'll all get through it together. I know everybody is getting tired of hearing that, but it's not just lip service. We mean that, so you could pass that message along.
I want to talk a little more about your employees. In their training—and it's been touched on a little today—do pilots not have to fly a certain number of hours a year to keep up their certification—I don't want to use the word “licence”—or whatever it is? How are they maintaining that if they're not working?
Yes, they do. There are requirements that are stated by Transport Canada and enabled through our various training programs. With the reduced flying, we have many pilots who have been put on idle, essentially, so although we have the 600 furloughed, we have others who have not flown in some time and are waiting for an opportunity. Of course, they don't fly until they're fully trained and fully qualified, which requires the retraining program: back to simulator, back to line indoctrination with a training and check captain, and then they can be put back into service.
This is why we talk about keeping the industry alive, to make sure that those highly skilled individuals maintain their skills, keep their skills, so that when this pandemic is over, Canada can be proud of its aviation sector and we can take our rightful place in the world as we have in the past and connect the world to Canada and Canada to the world. This applies as well to all the regional airports in Canada that feed into those international networks. They're all vitally important.
You've seen me having trouble today with connectivity. That's what the airline is about—it's about connectivity, connecting people together, people to industry, people to families, people to their neighbourhoods, people to their loved ones around the world, connecting communities and cultures together.
I want to welcome our witnesses.
I have a special welcome for Ms. Elizabeth May, my dear friend.
Before I begin, I want to talk about something. Yesterday, I watched an interview with Mr. Mueller that really impressed me. I was pleased to learn that Canada's aerospace industry ranks fifth in the world. Canada also leads the world in terms of quality of life, in part because of its economic stability. We're also pioneers in preferential market access. All these factors combined provide hope that efforts will be made to change, improve and promote our great industry.
My first question is for you, Mr. Mueller. Do you think that financial assistance for airlines should depend on the airlines' compliance with their contracts with your members?
My question is for Ms. Pasher and Mr. Stanford from the Atlantic Canada Airports Association.
In Quebec, we have a major regional air transportation issue. We want to ensure that all regions are served. The situation in eastern Quebec may look, to some extent, like the issue encountered in Atlantic Canada.
A number of concerns have been raised in eastern Quebec. In particular, we want to ensure that, when business resumes, the government's assistance and policies will primarily allow for a regional service, but also for competition among carriers. We often end up in a situation where Air Canada holds a monopoly, even though other small carriers can provide good service.
Do you share this concern in Atlantic Canada?
Probably the first challenge we'd have is to have any air carriers. We're currently without service to a lot of our stations in Atlantic Canada. I'd love to be able to imagine a situation where we have competition, but first we need some service.
The federal government did announce a plan called the regional air transportation initiative, which we are working on with our economic development agency in Atlantic Canada, which is ACOA. We are exploring different kinds of options. Again, due to provincial restrictions, it's actually even difficult to travel intra-Atlantic Canada at this time as well. As an example, if I were to go to Nova Scotia, I would be required to quarantine for two weeks when I got back to New Brunswick.
We're going to explore these ideas. We are looking at it, but right now, because of the pandemic, we don't have a lot of options with regard to potential carriers.
Thank you very, very much.
Again, I'd like to thank Parliamentary Secretary Bittle for this opportunity.
I would want to ask all of you questions. I have to confess that I am bicoastal. I am from Cape Breton Island originally, and now I live on Vancouver Island. As much as I love Cape Breton, I don't want to ever live anywhere but Vancouver Island.
Getting back to Richard Cannings having a relationship to J.A.D McCurdy, the Silver Dart took off in front of our former home in Baddeck, off Baddeck Bay, so I feel very close to all of Ms. Pasher's regions. When we talk about connectivity, from Cape Breton to Halifax we used to have Via Rail. Then we had the bus line. Both of them are gone. People are really dependent on the Sydney airport.
I want to focus my questions, if I can, to Mr. Best about air traffic control.
I have some stressed-out constituents on stress leave from being at Nav Can, being air traffic controllers, and my impression is that it's not new that NavCan puts finances ahead of safety. I don't want to be too blunt, but the constituents with whom I've spoken have relayed—and I was alarmed to hear it—that the elimination of the supervisor position in air traffic control towers across Canada might have had an effect on safety. This is years before COVID.
I want to get a comment from you, Mr. Best, before I ask my next question. Am I recalling this correctly, that we lost a whole category of supervisors of air traffic control towers?
Ms. May has frozen. We will give you a second, Elizabeth.
Ms. May has frozen up, and she pretty well did that right on time. It's 5:30, so we will conclude our meeting.
To all of you on the committee, as well as to Ms. May as our guest, I thank you for the questions that you asked our witnesses. To the witnesses, more importantly, I thank you for your time today. It was very kind of you to come out and give us a lot of the input for this study. It's very valuable and we expect it to be reflected in the analysts' report that comes back to committee. For that reason, once again, I thank you very much for your time today.
To all members, once again, thank you. We will see you on Tuesday.
This meeting is adjourned.