Order No. 2000-A-436

November 7, 2000

November 7, 2000

IN THE MATTER OF an application by Pem-Air Limited also carrying on business as Trillium Air for a reduction in the period of notice requirement set out in subsection 64(2) of the Canada Transportation Act, S.C., 1996, c. 10, with respect to the proposed discontinuance of its service at Pembroke, Ontario, effective November 18, 2000.

File No. M4210/T284-1

Pem-Air Limited also carrying on business as Trillium Air (hereinafter Pem-Air) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title. The application was received on November 1, 2000.

Under Licence No. 962293, Pem-Air is authorized to operate a domestic service, small aircraft.

In its application, Pem-Air indicates that the President of the company had consulted with elected officials involved and placed an article in the daily local newspaper, the Pembroke Observer, informing that if there was not a drastic turnaround in the traffic for Pembroke-Toronto, it would have to discontinue the service. Pem-Air submits that 75 percent of its traffic was made up of employees of its major client, Atomic Energy of Canada Limited (hereinafter AECL). Pem-Air states that since AECL cut its travel budget and downsizing, its employees now use rental cars and drive to Toronto.

Pem-Air adds that it endeavoured to make some kind of deal with AECL, but to no avail. As a result, Pem-Air maintains that it is left with no choice but to close down its Pembroke-Toronto service as it cannot meet the payroll after November 17, 2000. Accordingly, Pem-Air requests that it not be bound by the 120-day notice requirement set out in section 64 of the Canada Transportation Act (hereinafter the CTA).

Subsection 64(1) of the CTA provides that where a licensee proposes to discontinue a domestic service or to reduce the frequency of such a service to a point to less than one flight per week and, as a result of the proposed discontinuance or reduction, there will be only one licensee or no licensee offering at least one flight per week to that point, the licensee shall give notice of the proposal in prescribed form and manner to such persons as are prescribed.

Pursuant to subsection 64(1.1) of the CTA, if a licensee proposes to discontinue its year-round non-stop scheduled air service between two points in Canada and that discontinuance would result in a reduction, as compared to the week before the proposal is to take effect, of at least 50 percent of the weekly passenger-carrying capacity of all licensees operating year-round non-stop scheduled air services between those two points, the licensee shall give notice of the proposal in the prescribed form and manner to the prescribed persons.

Subsections 64(1.2) and 64(2) of the CTA state, inter alia, that upon giving notice, an opportunity must be given to elected officials of the municipal or local government of the community to meet and discuss the impact of the proposed discontinuance, and the proposal to discontinue the service must not be implemented until the expiry of 120 days, or 30 days if the service referred to in that subsection has been in operation for less than one year, after the notice is given or until the expiry of any shorter period that the Agency may, on application by the licensee, specify by order. In this case, because the service was provided by Pem-Air at Pembroke for a period of 30 years, Pem-Air would have to provide the service at this point for 120 days after notice is duly given unless the Agency, acting under subsection 64(2) of the CTA, specified otherwise.

The Agency finds that as a result of the discontinuance of service at Pembroke, there will be no other carriers offering air service at this point. Therefore, the Agency finds that section 64 of the CTA applies.

Section 14 of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR) states that, for the purposes of section 64 of the CTA, a licensee shall give notice of a proposal to discontinue or reduce the frequency of a service to the Agency, the Minister of Transport, and to the minister responsible for transportation in the applicable province. Additionally, the licensee is required to advise holders of domestic licences operating in the area to be affected by the proposal and the persons resident therein in local newspapers.

The Agency notes that the major source of Pem-Air's traffic, AECL, is no longer using this service at the same level as in the past which has affected the viability of its service. The Agency also notes that Pem-Air, in publishing its intention to discontinue service if the low traffic continued as well as its attempts to negotiate business with AECL, indicate that the carrier attempted to be able to continue to offer the service. However, due to financial losses, it can no longer operate this service.

The Agency has also considered alternate services available and notes that passengers can travel to Ottawa (2 hours) by bus or car and then connect with air service to Toronto.

The Agency finds that notice of the proposed discontinuance of service at Pembroke should be given. However, in light of the particular circumstances of Pem-Air's case, the Agency, pursuant to subsection 64(2) of the CTA, hereby orders Pem-Air to only implement its proposal to discontinue its service at Pembroke effective November 18, 2000, following notification to all the parties as set out below.

  1. Pem-Air is required to advise the following of its proposed discontinuance of service:
    • the Minister of Transport of Canada;
    • the Minister of Transportation of the Province of Ontario;
    • elected officials of the municipal or local governments of Pembroke, Petawawa and Deep River. Pem-Air shall provide them an opportunity to meet and discuss the impact of the discontinuance of service; and
    • the local communities of Pembroke, Petawawa and Deep River, through the local media.
  2. Pem-Air shall provide the Agency with copies of the notice sent to the parties as set out above and confirmation that an opportunity was provided to the elected officials to meet.

This Order takes effect as of November 3, 2000, the date on which its content was verbally communicated to Pem-Air.

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