Thursday, April 28, 2011

Air travelers should be weary of the NDP's de-facto airline policies

With the very real prospect on an NDP lead Federal government, Canadians who have hitherto paid little attention to the details of the party’s economic plans are now scrambling to piece together the NDP’s vision for Canada. Unfortunately, their platform is silent on many important issues. Among these issues are airline regulations, which have been a hobbyhorse for many influential New Democrats over the last few years. Canada’s airline regulations rank among the most backwards in the developed world. If statements from people like Peggy Nash, Olivia Chow, and Jim Maloway are indeed representative of the NDP’s intentions for the airline industry, Canadian travelers may be in for a shakedown under a Jack Layton government.

Three specific policies championed by the aforementioned New Democrats come to mind. First, Peggy Nash, a current CAW employee and President of the New Democratic Party, has advocated for a partial nationalization of the Air Canada, and regulations that would hamstring discount carriers. Her rational is that discount carriers flood the market with supply in order to eat away at Air Canada’s market share. Even if true, it is hard to fathom how this is a bad thing from the perspective of anyone other than a unionized airline employee. Discount carries save consumers a substantial amount of money, especially low income travelers, who might not be able to afford to fly with Air Canada. They also save businesses money, which helps make them more competitive with US companies, who have access to cheaper airfare (this is especially important for small businesses). As it is, we need more competition—foreign or otherwise—not less. Our airline policies shouldn’t be about keeping Air Canada’s unionized employees happy.

The second worrisome policy is contained in Winnipeg MP Jim Maloway’s 2009 private member’s bill, which called for the creation of a “passenger’s bill of rights” for air travellers. This included such gems as compensation of $500 per hour (after the first hour) to customers experiencing flight delays, and up to $1200 for being bumped from a flight. The four largest airlines implemented a watered down version of this bill of rights. While the intention behind this legislation was reasonable, the impact would have been devastating to the airline industry, and bad for consumers. After all, if the cost associated with delays was rendered higher than the expected revenue from many flights, the industry would reduce the number of flights. This could be devastating for companies like Porter and WestJet, where a large percentage of flights are under $500. For instance, a quick search reveals that a flight from Toronto to Chicago on April 30th (booked April 28th) would cost $60 plus tax. Porter would gross $4200 on this flight if it is filled to capacity. If this flight were to be delayed by two hours—which often happens due to circumstances beyond the control of airlines—Porter would be fined $35,000. Given that Porter operates on low margins, the loss from this one flight would be well over $30,000. It’s hard to imagine Porter operating in this environment. In other words, no more $60 airfare to Chicago (Air Canada would charge $139).

The last policy that the NDP has to answer for is their opposition to expansion of the Toronto Island airport. While this issue is specific to Toronto, the mentality behind the party’s opposition should worry air travellers throughout the country. This is the beachhead for Porter Airlines, and Olivia Chow is on record as wanting to shut it down. Her opposition stems from the not in my backyard sentiment against the airport from certain local constituents. This lobby was powerful enough to propel former Mayor David Miller to power, so it seems like a wise political move for Chow, whose riding includes the airport. When opposing airport expansion in the House of Commons, she claimed that “operating an airport is contrary to the vision of a clean, green and vibrant waterfront.” It’s hard to imagine how forcing the 700,000 plus passengers travelling through the Island Airport to instead travel all the way to Mississauga to fly via Pearson would mesh with her stated environmental goals. After all, only 7% of passengers, and 11% of employees travelling to Pearson use public transit. One valid concern she raises is that the airport is subsidized to the tune of $6 million annually. This should be addressed by shifting the burden of financing the airport to the airlines. The $45 million Porter spent on their new terminal is a great start. Nevertheless, it seems odd that Chow is so concerned about a $6 million dollar subsidy, but unfazed by the annual $400 million plus operating subsidy to the Toronto Transit Commission.

If the New Democratic Party is serious about governing, they will have to explain their positions on important issues like airline regulations. One of the reasons why the Conservative Party has been able to build a competitive national party is that they dropped many of their most controversial policy ideas when they were within striking distance of power. Will the NDP make the same prudent decision, or will they govern like an opposition party? This is the question that Jack Layton will have to answer in the closing days of the campaign.

Wednesday, April 20, 2011

My latest column on why the Feds shouldn't pay for infrastructure

Here is a column I was invited to write for Post Media for their series "The Real Agenda," which highlights issues that are not being focussed on during the Federal election, but should be. I argue that having senior levels of government funding infrastructure projects is bad for everyone, including the recipient municipalities.

US Air Traffic Control System Comes Under Fire, Privatized Canadian System Wins Awards

In the last few days there has been shocking news about US air traffic controllers sleeping on the job, watching movies at work, and showing up late for work. Today the issue has been exacerbated by a close call experienced by First Lady Michelle Obama.

It may come as a shock to critics on the left that while the US government's government run air traffic control system is violating safety regulations, Canada's privatized system is far more efficient, and safer.

Have a look at these two videos on privatizing air traffic control:

Monday, April 11, 2011

Canadian journalist detained in China, dissident artist nowhere to be found

While most of you are bogged down in the election campaign, I hope you can take a minute to observe what is happening in China right now. Today, Canadian journalist Bill Schiller was detained and questioned for documenting the oppression of Chinese Christians. Meanwhile, dissident artist Ai Weiwei, who was detained last week, is nowhere to be found. I encourage you to Google his name, since Google will actually permit you to do so in Canada.

While many people will inevitably be disappointed by the outcome of our election, at least we live in a country where we don't face indefinite detainment for expressing political opinions.