Thank you very much.
Good afternoon, and thank you to the members of the committee for granting us this hearing.
I'm here today on behalf of ACE Aviation and its corporate family, including Air Canada and Air Canada Jazz. As a collective, the ACE family of companies provides passenger and cargo service to 75 Canadian communities, 48 U.S. cities, and an additional 56 international destinations, with an ever-expanding fleet of 329 aircraft. Last year we transported over 30 million passengers and were ranked the best airline in North America by Skytrax, an award based on survey results collected from 12 million passengers.
We employ 32,000 people worldwide, the vast majority of those jobs located here in Canada and of the highly skilled variety. We have emerged confidently from CCAA protection with a reinvigorated business plan and a re-energized workforce, and we have begun to show modest profits over the last several reporting periods. In short, we are succeeding.
As it relates directly to your theme of economic competitiveness, despite all of our efforts, our gains in market share, our substantial year over year decreases in unit costs, our record load factors, and all of the huge strides forward we've made, we are not nearly as competitive today as we should be because of government policy.
The continued existence of ground rent obligations imposed by the federal government on Canadian airports is an outstanding example of a policy that limits not only the development of the aviation industry in Canada but also serves to discourage economic growth in communities across the country. By continuing to charge ground rents, as Fred mentioned, Canada joins just Peru and Ecuador as the only jurisdictions where airport ground rents continue to be collected. It is our firm belief that the previous government's decision to impose airport ground rents was short-sighted and ill-advised, and we would urge that this decision be revisited.
At the time of the federal government transfer of airports to local authorities by way of long-term lease arrangements, which included rent payments, the rationale for the imposition of those rents was that the government should receive fair value for the transferred assets, which were then valued at $2 billion. This value has, by any metric, been recouped; therefore, any further revenues accruing to the government in this regard are in fact taxes without legislative mandate. As a result, in accordance with intended government policy at the time of divestiture, airport ground rents should be eliminated entirely. In brief, there was never any intention for airports, and by extension airlines and airline customers, to be used in perpetuity as sources of incremental tax revenue by the federal treasury. Ground rents were to be a temporary measure to allow the Crown to obtain a reasonable return on its investment.
Now, Fred has already covered the situation at Toronto, but let me just say that I echo his sentiments and would wholly support any solutions specific to the situation at Pearson. As it is our hub, we bear the cost of that situation more than any other airline in the world.
Another business challenge for the Canadian aviation industry is the federal excise tax imposed on the domestic sale of jet fuel. Originally levied for the express purpose of fighting the federal deficit, the revenues from this tax are presently channelled into the consolidated revenue fund. This tax is imposed on an absolutely fundamental business input, which only serves to unfairly escalate costs and which in turn distorts market and erodes competitiveness. Moreover, this regressive tax places domestic operators at a distinct disadvantage in the global and North American markets, where, by contrast, U.S. carriers have a fuel tax burden approximately one-quarter the size of Canadian carriers. Eliminating the federal excise tax on jet fuel would represent a tangible step towards the reduction of the elevated cost base faced by domestic operators and help to fully unlock the potential of the Canadian aviation industry.
The last limiting factor I would like to address today is the air travellers security charge, which is widely acknowledged to be among the highest aviation security taxes in the world, as well as the panoply of new and ever-increasing security costs assumed directly or indirectly by air carriers, including airport policing, advanced passenger information access, and cabin searches.
As part of the national security mandate, all of these costs should be assumed by the government, not only because air travel is an important driver of our economy, and as such of direct benefit to all Canadians and to the communities in which we live, but also because the guiding principle of the Canadian Air Transport Security Authority Act was to protect the public and not simply protect airline passengers. The government should acknowledge this principle and assume its obligation to this important national security priority. Simply put, if aviation security is indeed a crucial component of our national security, it should be funded out of general revenues, and air travellers and airlines should not be forced to bear the full cost burden of Canadians at large.
These three glaring examples of short-sighted fiscal policy are even more egregious when viewed in the context of the Open Skies agreement Canada has signed with the United States. When implemented, that agreement will permit Canadian airlines unprecedented access to U.S. markets and will yield opportunities for growth that are truly impossible to calculate.
Although our airline is appropriately structured and positioned to compete in the North American market, our domestic taxation framework frankly is not. Only by addressing that inequity between ourselves and our counterparts in the U.S. can we hope to recognize the full potential of our airline and become the powerful economic engine that the ACE family of companies should be for all Canadian communities.
Thank you very much for your time.