TRAN Committee Report

CONSUMER PROTECTION

The demise of Jetsgo has brought the subject of consumer protection to the forefront of debate and the Committee heard testimony regarding possible remedies to deal with this issue. Proposals that were put forward included:

• establishing a financial fitness test for airlines (perhaps having at least six months cash on hand), overseen by the Canadian Transportation Agency (CTA) to ensure adequate funding before granting an operating certificate to a start-up carrier;
  
  
• mandating the CTA to require periodic financial tests of a carrier’s cash on hand to ensure economic viability; and
  
  
• requiring start up carriers to establish a trust fund and/or post bonds as security until flights are completed.

The Committee recognizes that consumer interests are sometimes lost when we speak of air liberalization and the competitiveness of the Canadian airline industry. The question arises as to how far regulatory oversight should go in protecting the consumer and whether we should go back to some form of regulatory regime before airlines can enter the market.

While the proposals noted above may provide some guidelines in this area, it is the Committee’s opinion that more study is required on this subject to assess the impact on the competitive environment in the aviation industry as well as the effectiveness of such proposals in protecting the consumer.

OFFICIAL LANGUAGES

Throughout our hearings, concerns were raised as to the level of usage of both official languages by air carriers operating in Canada. While Air Canada, under the Official Languages Act, must provide services to the public in both official languages this requirement does not apply to other air carriers, either domestic or foreign, operating in Canada.

The Committee recognizes this discrepancy and intends to carry out more study on this subject. It is our intention to examine what takes place in other jurisdictions (e.g., France, Belgium) and find out how these countries handle service to the public in more than one language before making a firm recommendation in this area.

FUTURE COMMITTEE STUDY

As it’s noted throughout this interim report the Committee requires more time to complete its work and release a final report and recommendations. The subjects of Canada-U.S. Open Skies, international air bilaterals, cargo co-terminalization, airport governance, right of establishment, official languages and airport governance among others, requires us to conduct studies in jurisdictions other than Canada to ensure that Canada remains competitive in the global aviation market. While some of this input can be obtained through the review of studies outlining what is taking place in other countries the clearest and most up to date information can only be obtained by hearing directly from the stakeholders in other countries.

It is clear from our hearings across Canada that this is only one part of the equation. We must now seek input from stakeholders in other countries as their actions have a critical impact on Canada’s aviation policies. As many witnesses have stated to the Committee, Canada’s competitiveness and growth in the aviation market lies in the cross – border and international arenas.

The three largest aviation markets, markets in which Canada must compete if it is to grow and we are to have access to cost-efficient international air transportation, are China, India and the European Union. Our major competitor, the United States is currently in negotiations with China, India and countries within the EU (i.e., the UK and France) to expand their air bilateral agreements. In addition, Japan is seeking expanded service into the United States.

It is critically important that Canada be part of this process and that it ensure that it is up to date with policy directions and elements of negotiations that are taking place in these countries. Therefore it will be necessary for the Committee, in fulfilling its mandate, to hear from stakeholders (e.g., governments, airport authorities, airlines, unions, etc.) in the United States and from other countries that are in the process of negotiating new bilateral agreements with the U.S. to complete the second phase of its study and to make a final report.