Dollar Parity Highlights Competitive Challenges for Canada’s Airports

Monday, September 24, 2007 -

Dollar Parity Highlights Competitive
Challenges for Canada’s Airports

Canada’s airports recommend federal government tackle
policies sending passengers and cargo south of the border

OTTAWA (Sept. 24, 2007) – The Canadian Airports Council (CAC) today said parity of the Canadian and U.S. dollars serves to highlight competitive challenges hurting Canada’s airports.It called on the government to tackle several policies that are negatively impacting Canadian airports and causing Canadian passengers and cargo to choose U.S. airports instead.

“America’s gain is Canada’s loss,” said CAC President and CEO Jim Facette.“For quite some time we have been highlighting to the federal government the competitive disadvantage faced by Canada’s airports due to federal policy on the aviation sector.Parity of the Canadian and U.S. dollars is bringing this disadvantage out into the open.”

Canada’s airports are losing millions of passengers a year to nearby airports across the Canadian border, which do not pay rent like airports in Canada do and often benefit from government subsidies for infrastructure improvements and expansions. Similarly Canadian shippers are trucking hundreds of thousands of tons of freight across the border to U.S. airports each year.

“Competitive challenges are not new for Canada’s airports, which have invested billions in infrastructure investments in order to be well placed to take advantage of international growth opportunities,” said Mr. Facette.“It is time for the federal government to take a hard look at its policies impacting Canada’s aviation sector or risk losing more business and jobs to lucky U.S. border communities.”

The CAC noted a “wish list” of policy areas impacting airport competitiveness:

• A change to rent policy to end a penalization on airports that have prepared for growth through infrastructure expansion – or ideally the elimination of airport rent.Airports have committed to passing on the savings to air carriers and their passengers.
• More liberalized air service agreements for increased competition on international air routes so that passengers and shippers will have more options to fly through Canadian hubs instead of U.S. hubs.
• Elimination of the Air Travellers’ Security Charge.Aviation security is part of national security.
• An end to the practice of charging some airports for customs services when demand for service warrants.Border services are an important public service that facilitates increased international tourism and trade.
• An examination of other tax policies negatively impacting Canadian air carriers, which must pass these costs on to passengers.
  

“A more cost competitive environment for Canada’s airports doesn’t just make sense as a matter of good governance, it is consistent with the federal government’s efforts to make Canada a leading international gateway,” said Mr. Facette.“We couldn’t agree more with the government when it says that ‘in an increasingly connected world, the key will be an integrated approach to physical and policy infrastructure’…an approach that encompasses ‘other interconnected issues of public policy, regulation, and operational practice that directly impact how well the infrastructure works and how well Canada takes advantage of it’.”*

About the Canadian Airports Council

The Canadian Airports Council (CAC) is the voice for Canada’s airports.Its 47 members represent more than 150 airports, including all of the National Airports System (NAS) airports and most significant municipal airports in every province and territory. Together, CAC members handle virtually all of the nation’s air cargo and international passenger traffic and 95% of domestic passenger traffic.They create well in excess of $30 billion in economic activity in the communities they serve.And more than 150,000 jobs are directly associated with CAC member airports, generating a payroll of more than $8 billion annually.

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For more information:

Daniel-Robert Gooch,
Director of Communications
Canadian Airports Council
(613) 560-9302 ext 16
daniel.gooch@cacairports.ca