A report from the parliamentary Transport Committee is recommending Ottawa restructure a user-pay system that is holding airports back from necessary upgrades and improvements to operations.
Under the current system, the Globe reports, passenger fees added to fares provide the funds for airports to both operate and pay rent to the government.
That funding structure collapsed during the pandemic when travel came to a virtual stand-still.
A new report from the Transport Committee falls in line with the request of the Canadian Airports Council (CAC), and recommends that the government return rent payments to Canada’s airports. The move would give airports additional funding to “upgrade terminals and runways without charging passengers ever-increasing amounts,” the report says.
It adds that airports pay about $400 million in rent every year to Ottawa. During the pandemic, airports were forced to borrow billions - and stop improvements. Once travel restarted, weaknesses created by reduced investments were exposed and operations struggled to cope.
The CAC isn’t asking for rent relief forever. It says it wants rents to be reversed and reinvested for the next decade “to allow airports to make improvements to runways, terminals and technology systems, including better check-in procedures.”
The Transport Committee’s report now goes to the Transport minister and his department for review and a determination to adopt or reject the recommendations.
Experts and the industry support a change to the user-pay model.
Monette Pasher, president of the Canadian Airports Council, told the Globe, “Financially, we need more tools in the tool box.”
John Gradek teaches aviation leadership at McGill University, and told the Globe that Canada’s airports are financially in “dire straits,” with only two viable options to avoid continuously increasing fees for pax and airlines to unsustainable levels. He said Ottawa would need to either make airports fully supported by the government via the taxpayers, or open them to private investment.
