Mr. Chair, ladies and gentlemen, thank you for this invitation to appear before you today as part of your pre-budget consultations.
My name is Daniel-Robert Gooch, and I am President of the Canadian Airports Council.
Let me start by thanking you for supporting the CAC's 2017 budget submission. Canada's airports were pleased that progress was made, particularly on infrastructure funding for small national airport system, NAS, airports across Canada.
The Government of Canada's national trade and transportation corridors initiative allows all major airports to apply for funding. For several years, six small NAS airports were barred from applying for these funds. They can now finally access funds to improve safety at their airports. This change is welcome. Over the last 10 years, passenger numbers have grown from 101 million to 141 million at Canadian airports. We are already seeing a 6.3% increase this year.
This growth supports our economy and tourism and trade and 141,000 direct jobs in air transport. The efficient movement of goods and people is essential to the productivity and competitiveness of Canadians and businesses across the country. But the growth also means longer wait times at security screening at a number of airports as well as at our air borders.
When we appeared before you last year, we proposed that the Government of Canada undertake an in-depth reform of the country's security screening process, including the establishment of service standards for pre-boarding screening and a financial mechanism to allow a better response to a growing demand.
There are promising signs. Just under a year ago, Transport Minister Marc Garneau committed to looking at the Canadian Air Transport Security Authority governance model to make its funding nimbler to growing demand and accountable to service standards. We understand that changes to CATSA will be considered this fall, and this is a good step. Some airports believe the best approach would be to allow airports a greater role in the delivery of screening at airports, as is the case in many other parts of the globe.
For such a fundamental part of airport operations though, it is important we get this right and that government, CATSA, and airports work together on any structural changes that may be made. Finding a long-term solution is essential for passengers who deserve predictability and value for the air travellers security charge they pay. But in the meantime, CATSA needs to be sufficiently funded next year to support demand and allocating all revenue from the ATAC to CATSA screening is a good place to start.
CATSA's current target to process 85% of passengers in under 15 minutes means that about 10 million travellers are waiting anywhere from 16 minutes to an hour or longer. We do not believe this target is adequate. Moreover, airports tell us it is not even being consistently met today.
Airports are also spending millions of dollars to top up the service that travellers are already paying for. This undermines the goal of reducing the cost of air travel in Canada, as airports have to recover costs from users. Government also should restart its stalled investment in CATSA Plus lanes, which are improving the traveller experience where they have been installed so far.
We are also requesting resources for the Canada Border Services Agency to support growing air service demands and continued innovation. International arriving passengers are our fastest growing segment, with 10% growth so far this year outpacing last year's numbers. Working with CBSA, airports have invested millions of dollars in infrastructure to speed up and improve the traveller experience. The agency is at the forefront of keeping Canada safe in an increasingly complex, fast-changing world. CBSA supports international traffic and trade and has worked tremendously hard with airports this summer to manage a heavy flow of travellers.
Toronto Pearson continues to see record growth, and this summer was particularly challenging for them as CBSA simply did not have the resources to keep up. With customs halls jammed, passengers were routinely held on aircraft or outside customs halls, resulting in passenger delays that we're all working as an industry to avoid. In addition to its security role, of course, CBSA has an important impact on business, trade, and tourism in this country.
We're pleased to say that Canada is going in the right direction on this file. Better technologies and processes are constantly being developed and Canada is, and should continue to be, at the forefront on this. But we also need to reinforce resources for border control officers in the field who do important work.
Another area of concern for Minister Garneau is reducing the cost of air travel. Our submission includes two recommendations on cost. On the revenue side, the introduction of duty-free stores upon arrival from an international flight would provide an additional service to travellers and additional funds for airports to offset aeronautical charges to airlines. It's a service that's already in place in many other parts of the world.
On the cost side, airports last year paid $344 million in rent to the federal government, as my colleague described. As a tax on gross revenue, this rent impacts the way airports evaluate business opportunities with low-margin financial returns. We propose rent be eliminated for all airports with fewer than three million passengers and at least capped for larger airports to stop the upward trajectory.
In conclusion, I would like to thank you again for your support of the CAC's budget submission last year. Our recommendations this year will enable Canada's airports to improve the competitiveness and productivity of business in the country. They will also improve the traveller experience.
I'm pleased to answer any questions you may have.