TRAN Committee Report

Supplementary opinion

Report on reducing red tape and costs at Canadian airports

By the office of Xavier Barsalou-Duval

Prsented to the Standing Committee on Transport, Infrastructure and Communities

February 9th 2023

Introduction

First, the Bloc Québécois salutes the members of the Committee as well as the committee staff for the professionalism they have shown and the work they have accomplished during this study. We thank all the witnesses and citizens who shared their perspective on the targeted investments that must be made in infrastructure.

However, it is the opinion of the Bloc Québécois that this is still a report that does not address the original sin of costs and red tape in regional air transport: the financing structure of regional airports.

Luxury or essential services?

The financing structure of Canadian airports has changed since their privatization to a user-pay system. That is, a system where the airports and the communities around them are responsible for raising the funds necessary for the operation of the infrastructure. The pandemic and the revenue challenges that have hit airports hard with the drastic reduction in the number of passengers have highlighted the dangers associated with this method of financing. However, the problem is broader for airports in remote and northern regions. This problem is highlighted in the summary of the report:

‘’ Air travel is critical to connecting remote and Northern communities and should not be considered a luxury. While most witnesses were appreciative of the various federal funding programs to support air travel, they said this funding was insufficient to ensure the viability of Canada’s entire air network.’’

The committee chose to adopt a recommendation aimed at investing the rents collected by the federal government for the use of airport infrastructure in the airports themselves. It is a step forward that we do support. However, airports in remote and northern regions are often owned directly by communities, and therefore do not pay rent to the federal government. They are, however, required to follow federal regulations and find the funds to upgrade their infrastructure to be able to keep their airport up to date. Their passengers must also pay federal fees and taxes, which add a heavy burden to ticket prices:

‘’ Julian Roberts, President and Chief Executive Officer of Pascan Inc., said that up to 40% of the ticket value goes to taxes and fees.’’

Our proposal

We therefore propose to change the administrative structure of remote and northern airports so that they are considered as public services, and that their funding is treated as such. This means putting an end to the user-pays principle and considering that the return on investment is made indirectly in increasing accessibility to communities rather than in costs to travelers. We are also proposing that CATSA security costs and NAV Canada navigation costs should be covered by the federal government, in addition to exempting plane tickets to remote and northern airports from GST, like other essential goods and services.

Final thoughts

If a service is considered essential, it must be accessible to the population without establishing a prohibitive financial barrier that exceeds the users' ability to pay. It is also important to consider that airports in remote and northern regions are not only those that are inaccessible by road. Communities in the Bas-Saint-Laurent (01), Abitibi-Témiscamingue (08), Côte-Nord (09), Nord-du-Québec (10) and Gaspésie-Îles-la-Madeleine (11) regions depend on airport infrastructures to ensure a reliable and fast connection with major centers, for the transport of patients in need of more specialized care for example. As the report mentions:

‘’ Some witnesses encouraged the federal government to view air transport not as a luxury, but as an important way to connect the Canadian population, particularly in Northern and remote areas.7 According to Mr. Sparling, air transport should be viewed as a public service, especially in remote regions’’

It is therefore time to listen to the voices raised across Quebec and Canada asking that regional air transport be truly considered a public service. It is therefore time to put an end to the user-pays system, to consider the positive externalities of regional air transport and to start thinking about a new financing model.