Mr. Speaker, I am pleased to have this opportunity to express my concerns about the shortfall of funding for the Canadian Air Transport Security Authority to provide security services at Canada's airports.
Of particular concern to me is the Thunder Bay International Airport in my riding of Thunder Bay—Rainy River. This airport serves nearly 600,000 passengers each year. It is the only airport in Canada that does not charge an airport improvement fee to its passengers. In fact, it is the lowest cost NAS airport in Canada. However, this notable achievement has recently been put at risk.
The airport has just been advised that CATSA will not be paying for the full operating costs of the hold baggage screening system that was installed earlier this year. Annual operating costs for the baggage screening system are expected to be $250,000 per year. However, CATSA has indicated that it can only afford to pay $70,000 per year of the costs.
This shortfall of funds has left the airport holding the bag. As a result, the airport will be stuck with the expenses, despite the fact that airports are not supposed to be responsible for security expenses.
CATSA was set up in 2002 to provide air transport security. An air security tax was implemented to pay for these much needed services to ensure security for air travellers in the post-9/11 reality. The government has raised hundreds of millions of dollars from this fee. Revenues for the 2006-07 year are projected to reach $365 million.
In addition, there are currently $375 million in excess revenues in the fund, money that is no doubt collecting a tidy sum in interest revenues.
The way I figure it, at a minimum of 3% interest, the government is earning an additional $11,250,000 this year alone on that fund, but it will not give the Thunder Bay airport $180,000 to pay its bills.
I am very distressed that the government is downloading air security costs to our airports. In the case of Thunder Bay airport, this extra expense will require a 24% increase to raise the funds required to cover the cost. That increase will result in higher travel costs for Thunder Bay passengers, passengers who are already paying the air travellers security charge for their tickets. In essence, this is a double tax. This is more than shameful, I am sure the hon. member will agree with me.
But wait, it gets worse. As a not for profit organization, the Thunder Bay International Airport Authority must charge its customers, the airlines, in order to make money to pay operating expenses.
I am sure the government understands the basic principles of finance. In order to pay expenses, we must raise the money to do so. Spending more money than we make is not good fiscal policy.
The airport is now facing an increase of its expenses and, therefore, it must increase its revenues to pay those bills. The catch is this: the government charges rent to the airport authority based on its gross revenues each year. That is right, gross revenues. Therefore, by adding $180,000 to the airport's expenses, the government has also forced the airport to add that amount to its revenues.
Each dollar of increased revenue effectively carries a 1% surcharge to Transport Canada. and that surcharge is as high as 12% at Canada's largest airports, like Toronto Pearson International Airport.
This situation is absolutely hideous. The government shortchanges the airports by sticking them with the bill for security costs and that funding shortfall results in a windfall for the government.