May 30, 1939 (18th Parliament, 4th Session)

LIB

Clarence Decatur Howe (Minister of Transport)

Liberal

Mr. HOWE:

Too much emphasis is perhaps being placed on air mail rates in the north. The air mail represents only about five per cent of the poundage that is carried by planes in the north. The difficulty there is, first, that too many companies have competed in the same territory. That is the fundamental difficulty. A second difficulty is that as mining becomes more settled the traffic tends to drop. The construction period in a mining [DOT]development is usually the busiest for air 'transport. As they get down to normal operations there is some slackening off in the .tonnage of freight moved by air.
We are endeavouring to straighten out that situation. A year ago we included in the Transport Act regulation of the assigning of routes in the north, the granting of licences for routes, and, second, the regulation of rates. Under the law the rates do not apply to air mail routes covered by the Post Office Act. But we are attempting to cut down the number of operators in the field, lessening the number operating over a particular route, and providing that no new operator will be licensed for that route or territory unless he can show need and public convenience, which will be very difficult to show for a couple of years. That is, he will have to show that the route is not adequately served by existing facilities.
In the matter of rates a study is now being made by the transport commission with the operators as to rates prepared for publication in the northern area. When these rates are published, it is the intention to enforce them and require the operator to charge the rates he publishes. This plan does not immediately eliminate competition. Under the section, if two air lines are operating over the route each is entitled to a licence, but it will at least prevent more operators from entering the field.
So far as air mail rates are concerned, they are, of course, the rates the operator offers for the performance of the service. No doubt it seemed like a good bargain at the time; if he is a little tired of it now, it is not the fault of the Post Office Department, because that department has not forced any air mail rate on any operator. However, as the contracts fall in, the competition will not be as intense as before, because in order to compete

the operator must have a licence for the route; in other words, an operator cannot compete for an air mail route unless he holds a licence to fly that route. In one contract that fell in recently, the Post Office Department asked the advice of the transport board as to a reasonable rate for its renewal. I dare say that policy will be followed in the future if it works out to the satisfaction of the Post Office Department.
In any event more has been done in the last year to straighten out the situation of the northern flyer than has ever been undertaken before, and I think that another year of operation will improve the situation greatly. But we cannot get away from the fundamental condition that there are. too many companies operating in the north on the same routes, and that as mining becomes more settled there is apt to be a falling off of traffic.

Topic:   DEPARTMENT OP TRANSPORT
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