*Tabled in the House of Commons by unanimous consent

 

BILINGUAL SERVICES OFFERED BY AIR CANADA

 

DISSENTING REPORT

of Canadian Alliance members of the Standing Joint Committee on Official Languages

 

February 21, 2002

___________________________________________

 

Some of the specific recommendations made by the committee are quite reasonable. However, there is something fundamentally wrong with the very subject-matter of this report. It is inappropriate that issues of the internal management of a single private company are being reviewed by a committee of Parliament. And in a country whose foundational principle is that all laws must be laws of general application, it is inappropriate that there exists legislation governing the internal management of a single private company.

 

It is a fundamental rule of law that all persons should be subject to, and bound by, the same laws. Indeed, the greatest student of our legal traditions, Albert Venn Dicey, insisted that the term, “Rule of Law” be defined as meaning that all participants in a society were bound by the same laws, with special privileges for none and special obligations for none, except for those who had specifically and knowingly engaged such obligations by entering voluntarily into some form of special service, such as the military.

 

Air Canada alone, among Canadian airlines, is bound by the legal obligations laid out in the Air Canada Public Participation Act. These rules---some of which relate to special obligations in the area of official languages, and others of which relate to special obligations in other fields---do not apply to any other airline. These obligations became law in 1988, when the airline was privatized. Prior to this time, Air Canada had been a state-owned carrier, and as an arm of the government, it was entirely reasonable to expect that it would be subject to special obligations and to enjoy special privileges. It was not intended to be a participant in the competitive mainstream of the Canadian economy, but rather to be the provider of what the lawmakers of the day judged to be an important public service.

 

The Air Canada Public Participation Act signalled that the lawmakers of a later time had come to believe that the airline was no longer the provider of an essential public service, and that it could therefore be safely turned over to the private sector. This ought to have signalled the commencement of a new era in which the airline would be a private carrier with no special status, albeit with a distinguished and unique history. But the Act, like so much Canadian privatization legislation, attempted to merge aspect of public regulation and private ownership in a mix that would ultimately prove to be economically unsustainable, because they are borne by one business, but not by its competitors.

 

In the area of official languages, the law currently requires Air Canada to advertise in both English and French in certain markets, to adjust its hiring practices so that its staffing make-up will more precisely reflect the linguistic breakdown of Canadian society (at least insofar as the two official languages are concerned), and to offer services in both official languages in a large number of markets.

 

The exact cost of a full compliance with all of these requirements is not clear---not least because of the fact that the airline has never come close to full compliance, as numerous witnesses before this committee made clear. However, one witness did provide a detailed breakdown of the costs to the airline of seven categories of services. In his September 9, 2001 written presentation to the committee, Jean-Marc Trottier estimates that it costs Air Canada a total of $9,265,000 per annum to provide the following services in both languages:

·        Issuing official communications;

·        Printing newsletters, Aeroplan communications, etc. in both languages;

·        Duplicating telephone messaging systems in all parts of the country;

·        Maintaining and updating all procedures manuals in both languages;

·        Providing second-language training for approximately 300 employees each year;

·        Advertising that is not justified on commercial grounds;

·        Training to allow employees to obtain technical and general information from the RESIII reservation system in either official language.

 

He further estimates that “If Air Canada did not have to incur the additional $9 million in expenses … its operating income would increase approximately 2.5% to 3.5% annually. With a profit margin of approximately 5%, Air Canada must generate some $185 million in additional sales to cover these additional costs.”[1]

 

To be sure, such costs represent only a small element in the financial problems of Air Canada. Less than a month after Mr. Trottier submitted his report, the Montreal Gazette reported that “The Montreal-based airline revealed it has burned through $10 million cash every day since October 4 ….”[2]

 

As a matter of principle, there are three possible methods of dealing with this problem (which for the purposes of this dissenting report will be assumed to relate only to questions of language-related obligations, and not to the other non-language obligations imposed by the Air Canada Public Participation Act)

1.      The law could continue to treat Air Canada differently than other carriers, thereby imposing continued costs on the airline and ensuring that it can never be fully competitive. In order to allow the airline to survive, it would then have to be subsidized in some manner. Such subsidies could take the form of special privileges, of de facto monopoly status on certain routes, or of direct cash supplements. In practice, the costs currently borne by Air Canada would thus be moved from the airline to its passengers in some cases (in the form of higher ticket costs for monopoly routes), from the airline to its employees in other cases (in the form of suspensions of collective agreements) and from the airline to taxpayers in other cases.

2.      The Official Languages Act could be amended in order to impose the same obligations on all airlines operating in Canada. This would have the effect of setting a level playing field for all participants in the airline industry, but would impose significant costs on all airline passengers, regardless of the airline of their choice.

3.      The Air Canada Public Participation Act could be amended to remove from Air Canada any specific obligations in the area of official languages that are not imposed upon its competitors. Services would be provided based upon the demands of consumers.

 

The first of these three methods is clearly the preferred choice of the majority on this Committee. For example:

·        Recommendation 11 calls for the seniority rule to be abrogated for Air Canada employees, where the rule conflicts with the airline providing certain services.

·        Recommendation 14 calls for federal financial assistance to assist Air Canada to provide language training for unilingual employees acquired by the company when it acquired Canadian Airlines. 

 

And other recommendations take a similar tack.

 

The third method is the one favoured by the Canadian Alliance. It is our belief that in many parts of the country, there is a significant and meaningful demand for services in both official languages. In these parts of the country, a free and competitive airline system would give passengers the ability to select an airline that offers services in both languages over a competitor that fails to be responsive to such services. FirstAir, Air Transat and Westjet currently provides service in both French and English on routes where they are under no legal obligation to do so, because this is what their customers demand.

 

Similarly, there can be no doubt that Air Canada would continue to offer services in both official languages on routes where its customers are prepared to “vote with their feet,” if it faced real competition on these routes.

 

For this reason, Canadian Alliance MPs on this committee recommend greater openness, freedom and competition in Canada’s airline industry, and the elimination of special rules that treat one airline differently than another. If this were to be done, we are confident that air fares would drop, the quality of service would improve (including bilingual services on routes where a genuine demand exists), and the end result would be a greater net use of such services by both French-speaking and English-speaking Canadians.