Thanks, Mr. Easter.
Good morning. Thank you for the invitation to appear before you as part of the pre-budget consultations.
In 1914, one of the early English pioneers of aviation, Claude Grahame-White, forecasted this:
First Europe, and then the globe, will be linked by flight, and nations [will be] so knit together that they will grow to be next-door neighbours.... What railways have done for nations, airways will do for the world.
Fast-forward a hundred years, and I think truer words were never spoken. Aviation has created a much more global world. Airport runways have quickly become the main streets of many of our towns and cities throughout Canada. Airports and air travel are so important to trade and economic growth here in Atlantic Canada, and I'd like to touch on that as well as discuss some of the challenges that our region faces.
First, let me start by saying thank you to this committee for your support for our 2017 budget submission. Our region's airports are very pleased that progress was made, particularly on the infrastructure funding file for eligibility for small national system airports across Canada. The Government of Canada's new national trade and transportation corridors program allows all airports to apply for funding, which is a big win for us. For several years, six of our small national airport system airports, four of which are located here in Atlantic Canada, were not able to apply for any form of federal funding support. They are now finally eligible to access federal funds to improve safety at their airports.
Our region's airports move nearly eight million passengers per year. That's three times the population of our region. That number has grown by about 22% over the last decade, and this year that growth has continued. We're already seeing an increase of about 3%. With that growth, it's imperative that we continue to maintain, improve, and invest in infrastructure at our airports.
The creation of the national airports policy back in 1994 resulted in the transfer of financial responsibility for airports from the Government of Canada to the community. This financial model has resulted in a net transfer of funds from aviation to the Government of Canada, which in 2016, for example, was $344 million in the form of airport rent.
Only a small fraction of those funds contributed to government go back into the aviation system. In fact, in 2016 approximately 10% or $38 million was invested through the airport capital assistance program, which is set up to support 200 small airports across Canada. Since 2000, the funding in this program has not changed, while the cost of doing business over those last 15 years, as you can imagine, has risen considerably. The airport capital assistance program needs a dramatic increase in funding support for small airports across this country.
As I mentioned, Canada's airports pay $344 million a year to the federal government in airport rent. Our Canadian airports are recommending that the government eliminate rent for all airports with fewer than three million passengers, which would amount to approximately $11 million of the $344 million paid to the federal government last year. In addition, we would like to see a cap on rent for other airports, so that it no longer continues its upward climb. Airports are closed-loop systems, and any reduction in rent would be passed on through lower airport charges and debt requirements.
Lastly, one of the main issues travellers are faced with in Canada today is increased wait times. There is a need to raise service level standards for screening and reduce wait times without increasing fees charged to air travellers. This can be accomplished through a more productive system and improved service standards and by expanding the adoption of new innovations, which do exist. We are pleased to see that some progress has been made.
Just under a year ago, Minister of Transport Marc Garneau committed to look at the CATSA governance model to make its funding more nimble for growing demand and more accountable to service standards. It is our understanding that governance changes for CATSA are now being discussed this fall. We would like to caution you that one size does not fit all across this country for the various sizes of airports.
CATSA currently targets to process 85% of passengers in under 15 minutes, which means that about 10 million travellers are waiting anywhere from 16 minutes up to an hour, and even this target is inadequate from a global competitiveness standpoint. Yet we understand from our Canadian airports that CATSA is not even consistently meeting that target.
Canada's largest airports are already having to spend millions of dollars to top up a service that travellers are already paying for through the air travellers security charge. These customers should not have to pay twice.
While CATSA's future governance is being evaluated, we need to ensure that in 2018, CATSA is sufficiently funded to support demand. Allocating all revenue from the air travellers security charge to CATSA screening would be a very good place to start. In addition, we need to move forward on innovation. CATSA-plus is a program that adopts technology and procedural innovations proven in other parts of the world. To date, the program has only been partially deployed at some checkpoints at the four largest airports. CATSA-plus is already helping airports manage summer travel volumes, but deployment to additional checkpoints at these and other airports is stalled pending additional funding.
Thank you for your support in recognizing the important role airports play by allowing national system airports to be eligible for national trade corridors funding. Seven airports in our region have already submitted projects. We look forward to working together on furthering the economic prosperity of our region and this country.
Thank you.