Good morning. Thank you for allowing us the opportunity this morning to elaborate on the position put forward in our submission.
The Winnipeg Airports Authority put forward two requests: the creation of foreign trade zones in Canada and the elimination or reduction in airport rents.
With respect to the first point, we would like to acknowledge the recent advancements of this cause by Minister Day on October 8, when he announced here in Winnipeg the creation of the task force to study the implementation of foreign trade zone-type programs. We would like to recommend that this task force, the federal bureaucrats, be supplemented with industry expertise with respect to value-added activities, such as adding a representative from the Canadian Manufacturers and Exporters Association. What Canada really needs is to be competitive with the other G20 countries with the implementation of true foreign trade zones.
With respect to the second point, the payment of rent by Canadian airports to the federal government directly impedes airports' ability to compete, not only globally but in particular with the United States. In Canada, airports are paying rent to an absentee landlord while the airports are required to raise funds in the capital markets to fund infrastructure improvements. In contrast, the United States federal government contributes to infrastructure improvements while at the same time the airports are allowed to raise funds through tax advantaged municipal bonds. This has led to higher costs in Canada for airlines, which in turn results in higher air fares for travellers. This has caused a tremendous leakage of passengers to airports located just across the border from Canada. In addition, the revenue-based calculation of this rent is based on a formula that does not follow Canadian generally accepted accounting principles, and as such increases the burden to the host community.
For background information, you've all received copies of the press release from Minister Day regarding the task force, as well as article 4 of the Canadian airport leases that shows the rent calculation and the associated definitions.
Thank you.