Before devolution of Canada’s airports to local control, they represented a significant financial burden to the federal government. The government was subsidising the nation’s airports at an annual taxpayer cost of more than $80 million a year.

At the same time, Canada’s airports were in drastic need of capital improvements to replace deteriorating infrastructure and to keep pace with traffic growth. The National Airports Policy was a way for the federal government to transfer its financial responsibility for the nation’s airports – By shouldering local authorities with the financial burden of both operating and upgrading their airports.

As the landlord of what are considered federal assets, the federal government maintained it had a right to charge local authorities rent for these airport properties. On airport assets valued at about $2 billion at the time of transfer, Canada’s airports have paid nearly  $2.5 billion in rent – charges that are scheduled to continue for decades to come.

By introducing efficiencies into the operation of Canada’s airports, diversifying their revenue bases, and levying Airport Improvement Fees, many of Canada’s airports have been able to improve their facilities for passengers and commit to more than $9.5 billion in capital improvements. But airport rents remain a heavy financial burden that NAS airports are forced to pass on to airlines and passengers.

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For Canada’s smaller airports, the challenge of raising adequate revenue on limited traffic has made many of the nation’s smaller airports unviable. The federal government’s Airports Capital Assistance Program for small non-NAS airports – another product of Canada’s National Airports Policy – is supposed to assist with safety-related infrastructure needs, but the fund is under-funded and over-subscribed.