28 April 2023
Transport Canada
Tower C, Place de Ville
330 Sparks St.
Ottawa ON K1A 0N5
Via email: airportspolicy-politiquedesaeroports@tc.gc.ca
Re: Air Sector Framework
Thank you for the opportunity to provide input on the future of Canada’s air transportation system through the current consultation process and the related discussion document dated 31 March 2023.
We are writing today as nominators of the Fredericton International Airport (YFC) board of directors and our submission relates to four key areas:
- Governance
- Regional Connectivity
- Data
- Controlling Costs
Governance
As nominators, we are satisfied with the current process for choosing board members of the Fredericton International Airport and would not support increased government involvement in this process. The current process is focused on input from local leaders and are a reflection of the communities they serve. This ensures that board members are non-politicized, knowledgeable about the local community and possess the full scope and depth of experience, expertise and business acumen necessary to ensure that the airport remains a vital engine for economic growth and prosperity. They are also in the best position to understand and proactively act on changing circumstances.
It is our understanding that one of the most challenging parts of the airport board nomination process is currently the federal government appointments. Federally appointed board seats are often vacant for extended periods awaiting approval – more government involvement will further exacerbate this issue. Airport authorities were deliberately not created to be Crown Corporations. They were intended to be external- arm’s length to government, mandated to serve their local communities rather than the federal government. The fundamental and appropriate role of the federal government remains in policy and regulation of airports.
Regional Connectivity
Regional connectivity is the key concern in Atlantic Canada (along with other regions of the country) – particularly in the post-pandemic environment. Regional and small airports have only returned to 67% of their 2019 capacity through Q2 2023, while the 30 largest airports are at 94%. It is an understandable business decision that major airlines have focused on their major hubs as the industry recovers from the effects of the pandemic. However, air access is equally important in areas outside of the main hubs and the government has a role to play in ensuring equitable air access throughout the country. In an increasingly connected world, regions in Canada will not be able to reach their full economic potential without effective and efficient air access.
We support the Canadian Airports Council’s four-point plan to address regional connectivity:
- Develop a funding program similar to the Regional Air Transportation Initiative (RATI) program that supports airports to return to financial viability in order to attract routes;
- Recapitalize the Airports Capital Assistance Program to $95 million annually and have the eligibility criteria be widened. Specifically, the funding levels and criteria changes made during the COVID-19 pandemic should be made permanent to ensure that the program meets the increased needs of smaller airports;
- Adopt recommendation 10 of the House of Commons Standing Committee on Transportation, Infrastructure and Communities report on Addressing Labour Shortages in Canadian Transportation Sector: “That the Government of Canada, while respecting provincial and territorial jurisdictions, collaborate with air pilot unions, industry, and community organisations to develop funding programs for the training of future airline pilots, including loan program for students.”
- The federal government should create a program aimed at subsidizing regional air connectivity. Two examples the government could examine with an aim at replicating are: Quebec’s Regional Air Access Program (RAAP) and the United States Small Community Air Service Development Program (SCASD).
Data
Improving the quality, accessibility and sharing of data is a priority where the federal government can and should clearly play a coordinating role. It is our understanding that currently data is produced and shared on a piecemeal basis without any standards for reporting or sharing data amongst key stakeholders.
Consultation and communication with stakeholders will be critical to developing a data sharing system that works for everyone. Organizations like airports, airlines and the government will have justifiable privacy and proprietary concerns that must be effectively addressed as a precursor for developing data standards. At a minimum, an information sharing agreement (ISA) between parties and government will need to be developed and verified for legal compliance.
An application programming interface (API) is needed to drive a common data structure and communications method and all stakeholders must agree upon an API definition that will cover all data that is defined/exchanged, be rooted in global standards in aviation (ICAO, IATA, ACI, others) and provide a pathway for Canadian-specific customization.
Controlling Costs
In our opinion, the airport not-for-profit model is working well overall and we caution the government on evaluating the effectiveness of this or any other model against the (hopefully once-in-a-lifetime) conditions during the pandemic. Of course, airports felt the effects of the pandemic more than most and incurred significant debt over the previous three years. That doesn’t mean the entire system needs to be revamped, but rather that airports need government support and policy to align to re-establish their financial footing.
Canadian airports follow the global standard through ICAO’s charging principles. This global standard is currently being updated to reflect the impacts of global events like the pandemic and all air sector stakeholders will consult and approve this global standard.
Airports need to be able to operate as a business to levy charges for fair market value. This can be accomplished effectively in an environment with light touch regulation with a focus on transparency and consultation. Policies regarding airport charges should ensure they meet the needs of the local community and the travelling public. Without this stream of revenue, small airports would be further disadvantaged as they do not qualify for many of the existing federal infrastructure funding programs.
The existing governance structure of Airport Improvement Fee/Passenger Facilitation Fee has strict language about consultations and voting for proposed capital expenditures requiring the use of funds. The legally binding agreement has provisions associated with voting by air carriers in order to have access to AIF/PFF funds. As a result, through this AIF process airports consult with air carriers on master planning and individual projects. Air carriers are provided with audited financial statements on the use of these funds and the applicability of them under the AIF agreement.
Summary
We appreciate the opportunity to provide input to Transport Canada regarding the future of air access in country. This is a critical industry that affects most other sectors in the economy in some regard and it is important that Canada’s air transportation system is shaped to reflect realities moving forward. Conversely, we urge the government not to overreact to time-limited conditions and/or public pressure caused by issues in the industry during the pandemic. The government’s immediate focus should be to implement policies that best help all areas of the country to return to pre-pandemic levels of air service and then to how we can retain what is working and change what isn’t – this will require patience and a thoughtful, intentional approach to consultation that includes all stakeholders.
Sincerely,
Robert Powell, Mayor, Town of Oromocto
Krista Ross, CEO, Fredericton Chamber of Commerce
Sarah Corey-Hollohan, CEO, Ignite Fredericton
David Seabrook, Director of Tourism and Community Engagement, City of Fredericton
cc: Jenica Atwin, MP, Fredericton
