Thank you, Mr. Chair.
Members of the committee, on behalf of the Canadian Airports Council, thanks for the opportunity to join you today. It's a pleasure to speak with you about the ways in which our sector could benefit from reduced red tape and the steps that could be taken to ensure that Canadians, in both rural and urban parts of the country, will have access to affordable, competitive and modern air transportation into the future.
I'd like to start my remarks by putting the sector into perspective and providing a snapshot of where we stand. Canada's airports are crucial transportation hubs that drive economic development in communities across the country. They are gateways to trade, bridges for connecting people with colleagues or loved ones, and engines of economic activity in cities and towns in all corners of Canada.
It is also important to consider our model. Airports have paid more than $4 billion in rent to the federal government since our structure was created back in 1992. That rent is a significant contribution to government, but only a fraction of those funds contributed to government are going back into the aviation system.
In many ways, Canada's model empowers airports with the tools to chart their own paths. By operating as not-for-profits and relying on passenger traffic for 90% of our revenue, airports can create cash flow tailor-based on the users, reflecting the services that are needed and the travellers who use them the most. Our corporate structure also means that, as opposed to delivering dividends to investors, airports reinvest their profits directly into the communities where they operate. This means that, in more ways than one might think, airports serve as the engines of the local communities they call home.
The pandemic has been very hard on our sector. It has been for everyone, of course, but because airports are the hubs in an ecosystem of smaller businesses, there's been a cascading effect. For months the number of commercial flights was tightly constrained. The economic benefits airports typically deliver to their surrounding communities virtually disappeared. As a sector, we lost out on more than $4.6 billion in revenue and took on an additional $3 billion in new debt just to get throughout the pandemic.
We are starting to climb back, but the disappearance of so many routes during the pandemic and the pressure of new debt means that airports of all sizes will need to carefully weigh which services they can support to reinstate as we move forward. The federal government can play a critical role in helping airports navigate that path ahead by making refinements to the tools they've already created.
Two of those stand out for us. One is the airports capital assistance program, ACAP, which was designed to help Canada's 200 smaller airports. The other is the regional air transportation initiative, RATI, which is a newer program delivered by the regional development agencies across the country. These are essential programs, but they need refinements if they're going to deliver on their respective purposes.
In the case of ACAP, for 20 years of the program's 27-year lifespan, its annual funding has been frozen at $38 million annually. We estimate that, before the pandemic, ACAP would have needed $95 million more annually just to keep pace with inflation and the regulatory requirements at small airports. The 2020 fall economic statement injected an additional $186 million in this program over two years starting in 2021. It also expanded that program eligibility to support the NAS airports with fewer than one million passengers.
With respect to RATI, the program was created for COVID recovery, with $206 million over two years. It was distributed from the six RDAs across the country. We propose that the program be reinstated, capitalized and extended for five years so it will have a meaningful impact and achieve its goal of helping the sector recover with regional connections.
Canada's economy and people need a competitive and economically resilient aviation sector.
I hope this gives committee members a helpful perspective. We're grateful for the opportunity to discuss it further today.
Thank you.