Transport Canada
recently released its Regional and Small Airports Study. However, TC staff who
conducted this study were instructed not to suggest future policy directions or
to make any recommendations on completion of the study. Having been involved in
reviewing both the draft study report and the final version, Kevin Psutka, COPA
president/CEO submitted COPA’s recommendations on the study to the Minister of
Transport Jean-C. Lapierre.
Dear Minister Lapierre:
I am writing to you today regarding the recently released Transport Canada Regional and Small Airports Study (TP 14283B 08/2004).
I would like to provide you feedback concerning the value of this report and our suggestions for further work to help ensure a future for regional and small airports as a crucial part of our national transportation infrastructure.
The decision to conduct this study was announced by your predecessor, David Collenette, in his transportation white paper, Straight Ahead – A Vision for Transportation in Canada dated Feb. 25, 2003, in response to industry concerns, including COPA, that the divestiture of smaller airports was resulting in severe financial hardship for many airports.
The study was carried out internally by the Transport Canada Airport Programs and Divestiture branch. When the Terms of Reference (ToRs) for this study were announced, we were pleased to see that they required the TC staff conducting the study to examine the current financial state of divested regional and small airports and to assess the impact that divestiture has had on the airports and the communities that they serve.
However, the ToRs were limited in scope because they directed the TC staff conducting this study to not suggest future policy directions or to make any recommendations. Consequently, there is now a risk that this lack of follow-up will likely relegate the study to a dusty shelf and give the whole exercise the appearance of merely paying lip service to the many calls for a policy change relative to smaller airports.
Having been involved in reviewing both the draft study report and the final version, COPA is submitting our own recommendations on the study to you. I hope that you will act on our recommendations for the good of our national transportation system, one that includes a sufficient number of healthy smaller airports.
COPA observations from & recommendations for follow-up to The Transport Canada Regional and Small Airports Study (TP 14283B 08/2004) report conclusion:
The Transport Canada Regional and Small Airports Study shows that the majority of airports (24 of 46 for which meaningful data was received) have not done well financially since being divested and are in a continuing deficit situation
Observations: It is clear that a significant number of smaller key divested airports are in financial trouble. The report also makes it clear that two consequences are unavoidable:
1. The greatest net effect of the National Airports Policy with regard to smaller airports has been “municipal downloading.” In other words, the federal government walked away from the national network of airports in Canada and left municipalities to pick up the bill for keeping this national transportation network functioning. Many municipalities are unable to shoulder this burden and the result has been a proliferation of user fees.
2. Canada is completely non-competitive with the USA when it comes to its approach to smaller airports and business travel. In the U.S. airports of all sizes are seen as necessary because they know that without them, business passes the communities by.
In the U.S. they are largely funded by various levels of government as transportation infrastructure on the same basis as other transportation infrastructure – highways, roads, sidewalks and sewers. In Canada, many smaller airports that have tried to increase fees to deal with the funding shortfall have come to the realization that price sensitivity is such that they cannot raise their fees high enough to raise sufficient revenue to meet their costs to maintain, let along improve, the condition of their airports.
Our research indicates that this problem is generally being experienced at most of the smaller airports in Canada. Transport Canada’s Airport Capital Assistance Program (ACAP), which has to this point in time been the Minister’s response to complaints regarding a lack of support for smaller airports, now suffers, as a consequence of the National Airports Policy, from two distinct drawbacks, as has been recently admitted by the program administrators:
1. It only provides support to airports that have scheduled airline service. This narrow criteria leaves the vast majority of airports and aerodromes without any access to federal funding for programs. And yet the entire industry agrees that the non-airline airports have a vital economic role to play as part of the national transportation infrastructure as well as to the communities that they serve.
For example, flight training, medevac, fire fighting and just-in-time parts supply are just a few of the functions these airports fulfill, nationally, regionally and locally.
2. It has proven to be vastly under-funded for the number of infrastructure projects that need federal funding in Canada, even for the small number of airports that qualify to apply for funding. Overall, the infrastructure is crumbling from a lack of funding.
The Canadian government’s transportation policy includes the statement: “Canadians are proud of their world-class transportation system and know that their quality of life depends on it. In recent years they have encouraged the government to show leadership in establishing a new vision for transportation in the 21st century”.
This is clearly not the case with respect to our national network of airports at the present time and the study indeed confirms that many are deteriorating due to under-funding.
Recommendations:
1. We recommend that Transport Canada commit to providing adequate and additional federal funding under ACAP and significantly expand the qualification criteria to include airports and aerodromes that do not have scheduled airline service in Canada.
2. We recommend that a thorough review of the National Airports Policy take place, with particular emphasis on reversing the current Policy’s “municipal downloading” effects.