Airports Agree: “Make Transportation a North American Advantage”

Thursday, May 8, 2008 -

Airports Agree:
“Make Transportation a North American Advantage”

OTTAWA (May 8, 2008) – The Canadian Airports Council support the Minister of Industry’s pledge this week to “make transportation a North American advantage,” To that end, the federal government can make some policy changes for this to become a priority and a Canadian reality.

The Industry Minister’s comments came in a speech Wednesday before The Council of the Americas in Washington.

“Minister Prentice says we need to make progress on measures to cut costs, reduce barriers and ensure that people and goods move more smoothly within North America.  We agree; with some changes in policy and the right fiscal framework in place to support these changes, Canada has the unilateral ability to make some of this progress today,” said CAC President and CEO Jim Facette. 

In particular, the CAC cited four broad areas of policy change needed to further Canada’s role in “the North American advantage” through aviation:

• A Stronger, More Flexible CBSA - The provision of resources for the border services of Canada Border Services Agency (CBSA) at airports has been insufficient to meet Canada’s growing trade and tourism needs.  There are projected to be 22.1 million passengers travelling between Canada and the U.S. in 2008 – an increase of more than 30 per cent over five years ago. Yet none of the funding announced in the federal budget is expected to enhance levels of service at Canada’s airports.
  
  At the same time as it needs more resources, CBSA needs to be able to apply its resources more flexibly.  More needs to be done to take advantage of technology programs such as NEXUS – which automates Canada-U.S. border crossings for pre-registered members – to ensure Canada is part of global initiatives such as the U.S. Global Entry program.
  
  
• A Coordinated Clearance and Point of Departure Determination Strategy for Cross Border – Canada and the U.S. are long-time friends and trading partners. An approach to cross—border trade based on point-of-departure would focus risk management resources on people and goods before they arrive in Canada or the U.S.  This would greatly improve the flow of people and goods across the border by focusing security resources where there is the most risk.
  
  To implement such an approach requires government commitment to continue developing programs for travellers and cargo that pre-access and pre-manage risk.
  
  
• A Globally Cost Competitive Approach to Aviation in Canada – Federal policy has long treated aviation as a “cash cow” in Canada, seriously impacting Canada’s ability to be competitive with the U.S. and the rest of the world.  Canadian airports lose more than 2 million passengers each year to U.S. airports due to higher Canadian taxes such as airport rent and the fuel excise tax.
  
  At the same time, Canadian airports must compete with airports around the world for new passenger and cargo services to their communities and must offer cost-competitive alternatives.
  
  
• Open Access to International Markets – Being competitive requires not only a cost competitive environment, but the ability, through more liberalized air agreements, for companies to open new air services.   Canada has tremendous potential to serve as a hub for passenger and cargo traffic from the world to North America, but costs and market access are hindering this potential.
  
  The House of Commons Standing Committee on International Trade endorsed such an approach last May when it called on the federal government to negotiate more international air service agreements as one of its Ten Steps to a Better Trade Policy.

“Canada’s ability to prosper through the “North American advantage” is not just about highways and bridges, railways and sea ports.  Aviation is an increasingly important facilitator of tourism and trade between Canada and the U.S. and also need the right framework to help us prosper,” said Mr. Facette.  “Increasing the competitiveness of our businesses and economies, making our borders smarter and more secure – these commitments reiterated by Minister Prentice yesterday are achievable.  Progress can be made today.”

About the Canadian Airports Council

The Canadian Airports Council (CAC) is the voice for Canada’s airports.  Its 49 members represent more than 180 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 in excess of $45 billion in economic activity in the communities they serve.  And more than 200,000 jobs are directly associated with CAC member airports, generating a payroll of more than $8 billion annually. 

Background: Seven Steps to Improve Canada’s Place
in “The North American Advantage”

There are immediate steps that the federal government could take to improve Canada’s place in “the North American advantage” through aviation:

1. Increase Border Resources to CBSA – CBSA’s resources today are inadequate to handle the increase in travel and trade experienced in recent years.  As a result, passengers experience long lines and cargo faces delays.  Smaller communities with growing trans-border service are forced to pay for enhanced border services.
   
   
2. Integrate NEXUS, CANPASS into Global Entry and Other International Trusted Traveller Programs – NEXUS and CANPASS represent uses of technology that enable us to concentrate security resources on travellers who represent the most risk.  Expansion of these programs, including integration with international programs, will allow border resources to be applied more intelligently.
   
   
3. Implement Transit without Visa and In-Transit Departure Facility Programs – Canada is a logical hub for passengers travelling between Asia and Europe and the Americas.  These programs improve the attractiveness of Canadian airports as transiting hubs.
   
   
4. Modern and Enhanced Passenger Screening – The Canadian Air Transportation Security Authority (CATSA) needs more resources, but more importantly the flexibility and regulatory environment that will allow for new approaches such as trusted traveller programs to improve screening of passengers at Canada’s airports.
   
   
5. Eliminate the Re-screening of Connecting Bags – Passenger baggage from Canada’s pre-clearance airports that transit through a U.S. airport currently is re-screened in the U.S.  This is a huge waste of resources and often delays baggage delivery to the traveller’s final destination. This was cited as a priority at the summer 2007 Canada-U.S.-Mexico talks, but to date there has been no progress on this issue.
   
   
6. Eliminate Airport Rent – Airport rent is a cost that airports must pass on to air carriers and their passengers and goods.  It is a $300 million a year cost that puts Canada at a significant competitive disadvantage to airports in the U.S. and around the world.
   
   
7. Allow Arrivals Duty Free – Canadian duty free operators currently are restricted to selling their products when a traveller leaves Canada.  An estimated $50 million in revenue currently going to over seas duty free stores could be repatriated if travellers could buy duty free when they arrive in Canada.