More Canadians are choosing to fly these days, as many airports across the country are seeing record levels of passengers. Airports embrace growth by making responsible investments in their infrastructure, non-aeronautical revenues and the Canadian economy.
They have been doing this largely on their own. Most airports were transferred from the federal government to local airport authorities in the 1990s. Since then, they have become more responsive to community needs and better able to match service levels to local demands and resources.
However, some airports are having challenges meeting this demand due to federal policies. Below are a number of simple changes the Government of Canada can make to reduce costs, increase connectivity and improve service for travellers:
Passengers should be screened in 10 minutes, with no one waiting more than 20 minutes. The high Air Travellers Security Charge (ATSC) passengers pay should also be fully dedicated to cover CATSA’s mandate. Deploying existing and new technologies and processes, such as CATSA+, would also help to improve the flow of passengers while lowering operating costs.
Canada Border Services Agency resources must be strengthened to support growing demand on service as well as continued innovation through technology, such as the Primary Inspection Kiosk.
Capital Funding for Small Airport Infrastructure
National Airport System (NAS) Airports located on federal land are not eligible for funding from federal infrastructure programs such as the Airport Capital Assistance Program (ACAP). Small airports also face challenges raising the revenue needed to make improvements to their infrastructure to enhance safety. An infrastructure funding vehicle should be developed, and changes need to be made to ensure equal access to funding and improve program accessibility.
Cost of Air Travel/Airport Rent
Reforms are needed to reduce the rent and taxes airports pay to the Government of Canada. Even though the federal government transferred ownership of most Canadian airports to local airport authorities 25 years ago, airports paid the government nearly $5 billion in rent since 1992. Changes are needed to the rent formula to better incent revenue diversification and lower the cost of air travel.
Arrivals Duty Free
Arrivals Duty Free (ADF) should be introduced in Canada to help Canadian duty free operators compete more effectively with their foreign counterparts. It would allow Canada’s airports to repatriate about $100 million in overseas sales, generate close to 600 new direct and indirect jobs across Canada and deliver some $9 million in new tax revenue to the federal government.