Thank you.
Good morning, Mr. Chairman, committee members, ladies and gentlemen.
I believe you have our brief in front of you. I won't bore everyone by reading the brief, but I will speak to our recommendations that are in the brief.
I'd like to thank you for this opportunity to meet with the committee and present the recommendations of the Atlantic Canada Airports Association for budget 2007.
The Atlantic Canada Airports Association represents 14 airports in total, with members in each of the Atlantic provinces. Each provincial government and Transport Canada's Atlantic Region belong to our association. Most of our association and our airports are also members of the Canadian Airports Council, which you heard from last week.
ACA airports vary in size and cover a broad range in terms of passengers served from our largest airport, which serves 3.25 million passengers per year, to our smallest, which services about 15,000 passengers per year. But regardless of size, our airports play an integral role in the economies and the quality of life in the communities served by these airports.
Our recommendations to the committee today relate to the competitiveness of our airports and, by extension, to the businesses and communities that they serve. Each area that I will speak about is directly impacted on by Government of Canada policy and specifically by the choices the government makes in its investment priorities.
Our first recommendation concerns the Canada Border Services Agency, which has a significant impact on the ability of our airports to grow by attracting transborder and international air service. The problem is that CBSA's customs services at airports don't meet the demands.
At some airports, CBSA offers customs service at only certain hours, and at other airports there are none at all. In our region, for example, customs services are offered 24/7 at Saint John, New Brunswick. There are none at all at Deer Lake, and there are services only until midnight at Halifax, which is one of the country's eight largest airports.
If an international flight arrives outside the regular working hours of CBSA, the airport or the airline must cover the costs of having passengers from the flight clear customs and enter our country. As such, Fredericton airport pays $200,000 annually to cover seven Delta Airlines flights that arrive outside CBSA's regular working hours.
When an airport has to contract with CBSA for additional service, the airport may end up losing money because the customs fees paid for customs service may be greater than the revenue from the landing fees. If the airport passes the costs on to the airline, the airline may choose to land at an airport where there are no customs costs. Ultimately, the airport's ability to attract new air service to the community suffers.
The council of ministers responsible for transportation and highway safety agrees that the CBSA cost recovery policy causes a competitiveness problem for Canada's airports and as such have written to the Minister of Public Safety to ask him to address this issue and consider elimination of the policy as one option.
The ACA recommends, because customs is a federal responsibility, that the government allocate increased funding to the CBSA so the agency can provide sufficient customs service to meet the demands of the travelling public at all Canadian airports at no extra cost for after-hour service.
I would next like to address the need for adequate and predictable federal funding for the infrastructure needs at small airports in Atlantic Canada and across the country.
Small airports are those serving fewer than 200,000 passengers. These airports play an important role in the overall transportation system and make significant contributions to local and regional economies. By their nature, airports require extensive and ongoing safety-related capital improvements, for example, for lighting and snow removal.
Accessing capital from operational sources is unrealistic for airports with operational deficits. The airports capital assistance program was created to provide for the infrastructure needs of small airports and was meant to be funded by lease revenue from the airports in the national airports system.
Our recommendation is that the Government of Canada recognize the vital role played by small airports, increase the funding to the airport capital assistance program to a sustainable level, and create a infrastructure program for small airports.
I would finally like to talk about airport rent. Essentially, ACA echoes what the Canadian Airports Council said last week. As an industry, we don't believe in the rent in principle and we believe it should be eliminated.
Our recommendation is that the federal government eliminate airport rents, or at a minimum see the rent tax decline over the life of the leases. As an interim measure, we also support the recommendation that revenues raised by airports to cover debt servicing costs be excluded from the total revenue used to calculate rents, and in particular—