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Results: 1 - 7 of 7
Mike McNaney
View Mike McNaney Profile
Mike McNaney
2020-12-03 16:57
Thank you, Mr. Chair, and I will get this in at four minutes and 45 seconds.
The National Airlines Council of Canada represents Canada's largest air carriers: Air Canada, Air Transat, Jazz Aviation, and WestJet. That represents approximately 90% of domestic capacity and about 60% of international capacity.
In 2019, our members carried over 80 million passengers to communities across the country and the world. They employed over 60,000 Canadians directly, and over the past decade they built a level of connectivity and service regionally, domestically and internationally that supported more than 630,000 jobs in the overall transport, tourism and aerospace economy.
However, as we are all brutally aware, none of these numbers reflect current reality. Today, tens of thousands of employees have lost their jobs, billions in dollars of aircraft are parked, 80% of capacity is shut down and passenger numbers have crumbled to 10% of typical levels, with no line of sight on when things may begin to recover.
However, the path to stabilizing the aviation sector is actually quite clear. It is clear because basically every other country in the world has already started down this path and did so months ago. Canada is indeed an outlier. There have been some measures instituted and others announced this week, but almost one year into the crisis—and my members started to be impacted in January—we are still talking about a process for establishing financial assistance.
Meanwhile, countries around the world have already provided $173 billion U.S. in support to their aviation sectors, precisely because of the critical role aviation must play in their respective economic recoveries. While this support has taken various forms, at its most basic it consists of financial measures to stabilize the industry, promotion of rapid testing within aviation and travel, and taking a science-based approach to quarantine in conjunction with testing.
Since the spring, we've been asking the government to provide low-interest loans and loan guarantees. We have also asked the government to address liquidity challenges within the broader sector, including airports and government service providers such as Nav Canada. As astounding as it may seem, in the midst of this pandemic and its incredible destruction of demand, airlines were hit with a 29.5% tax increase in September for air navigation services as Nav Canada tries to address its own financial shortfall, with the government refusing to provide assistance.
Though our requests for liquidity support have not been addressed, we have not stood still and simply waited for government action. Over the past few months, airports and Air Canada and WestJet have led the development and implementation of testing projects at Toronto Pearson airport, Calgary International Airport and Vancouver International Airport in order to provide government with further data to enable science-based decisions concerning quarantine. As members of the committee heard on Tuesday, federal departments are being fully engaged in these projects, and we are hopeful that the Calgary initiative in particular, given the extensive involvement of the Alberta government, will provide a model for implementation in other provinces.
As we continue our work to drive further action on testing and data-based decision-making and continue to implement the myriad of measures required by Transport Canada to protect passenger and employee health, which again members also heard about on Tuesday, we are very appreciative of the statements made recently by Dr. Tam that the risk of transmission of COVID-19 on aircraft is low.
However, while we try to move Canada down the clear path presented by other governments, the economic situation continues to deteriorate. Canada has now lost approximately 85% of its connectivity, with flights significantly reduced or service eliminated across every region in the country as carriers try to preserve liquidity and some semblance of operation.
My members have spent years and invested billions of dollars building regional and international networks to create the level of connectivity our economy enjoyed at the end of 2019 and the level of connectivity that will be required to ensure our overall economic recovery across every region of Canada, but that investment—and much more importantly, the tens of thousands of direct jobs it entails—is being systematically eroded. In addition, we have now begun to see foreign carriers that have received liquidity support from their governments taking international market share from Canadian operators. This is a direct threat to the future competitiveness of the sector and may roll back years of successful international expansion.
In closing, over the past several weeks we have seen heartfelt demonstrations by aviation workers who have lost their jobs, and appeals by aviation unions for government action. We have also seen the government statement concerning refunds as a condition for financial assistance, as well as statements by ministers that they realize the industry will not be able to move forward without government assistance.
The objective here is not just to have the sector survive; it's to have a competitive, thriving industry that drives jobs and investment and quality of life in every region of the country and in every community, large and small.
The overall path ahead is very difficult, but it is clear. The rest of the world is on it. We need to join them.
Thank you, Mr. Chair.
View Chris Bittle Profile
Lib. (ON)
I'd like to clarify something that you said. You talked about a tax increase with respect to Nav Canada. You agree with me that the government did not raise taxes and that Nav Canada is an independent agency.
Mike McNaney
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Mike McNaney
2020-12-03 17:19
I would take a look at Nav Canada's press release from May. They did state in there that they had engaged the government to try to get support so that they would not have to follow through with the increase in navigational fees, and the government said no to that request.
View Chris Bittle Profile
Lib. (ON)
My question was about a tax increase. It's not a tax increase.
Mike McNaney
View Mike McNaney Profile
Mike McNaney
2020-12-03 17:19
To be mildly direct, I think within the context of Ottawa's debate, the fee and the tax are two different things, but has it increased the cost of aviation and flying in Canada? Yes, it has. Whether you wish to call it a fee or a tax, to us in the industry it's somewhat immaterial.
View Chris Bittle Profile
Lib. (ON)
Well, when you're calling it a tax, you're suggesting it's the government levying it, not an independent agency. I'm just surprised at the language used.
Mike McNaney
View Mike McNaney Profile
Mike McNaney
2020-12-03 17:20
It's an independent agency, sir, that derives its mandate from the statute of Parliament as a monopoly on the service provision of navigational services for safety purposes. Its entire mandate flows from the federal government, and the federal government has representation with Nav Canada.
Again, for the industry, honestly, whether it's a fee or a tax, Nav Canada went to the government and did not receive support in the midst of this crisis, so they brought in a 29.5% increase. That only represents a third of the budget shortfall they are projecting. That is all in the public realm through the release in the summer.
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