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• The federal government is taking positive steps to bring Canada's transportation system in line with our nation's needs as we move into the 21st century. These actions are designed to promote safety, efficiency, affordability, service integration, innovation and commercialization.
• Two initiatives are being taken to bring the air transportation system into the next century. One initiative involves changes to Canada's air navigation system. By exploring options for commercialization, by taking advantage of new technologies, and through structural changes to air traffic services facilities, Transport Canada will develop an efficient and up-to-date air navigation system that maintains high safety standards and benefits all Canadians.
• The second initiative is the National Airports Policy. This commercialization initiative represents a vision for airports that will ensure a safe, secure and viable National Airports System that will serve Canada in the 21st century.
• The National Airports Policy, for the first time, provides Canada with acomprehensive framework that clearly defines the federal government's role regarding airports.
• The National Airports Policy will enable the federal government to structure an air transportation system that supports and promotes Canada's competitiveness and meets the needs of all Canadians taxpayers, the travelling public, shippers, carriers and those who earn their living either directly or indirectly from the aviation industry.
• This backgrounder outlines the main elements of the National Airports Policy.

• There are 726 certified airports in Canada.
• Transport Canada currently owns, operates or subsidizes 150 of these certified airports, which range from Toronto - Lester B. Pearson International Airport to grass strips. (The majority of airports in Canada are locally-owned and operated).
• 94 per cent of all air passengers and cargo are handled at 26 airports.
• There is no statutory, regulatory or policy framework that defines a clear role for the federal government in the operation of airports in Canada.
• The absence of a clearly-defined policy for the operation and/or funding of airports has led to ad hoc decisions. It has led the federal.government to assume increased responsibility for airports over more than 60 years with no consistency or focus on a clearly-defined system or role to guide these decisions.
• It has also led the government to assume a wide variety of roles related to airport operations, including direct operator, financier, landlord, regulator, and advisor. However, the federal government is not ideally suited to all of these roles. Federal policies, applied nationally, are at times inconsistent with the needs of communities served by local airports.
• As a result, national and regional imbalances have developed with respect to facilities and funding. The 26 airports that handle 94 per cent of the travelling public and cargo cover their operating expenses with earned revenue, while considerable federal resources are used to support a large network of airports that serve only six per cent of air passengers.
• Expenditures on under-used facilities have unfairly burdened both taxpayers and users.

• Canada requires a national airport system comprised of airports that are safe, commercially oriented and cost-effective. These airports must meet the needs of users and the communities they serve, while those who benefit most directly from the services or facilities provided must pay a fair share of the cost.
• To develop such a system and ensure its ongoing viability, the government has introduced the National Airports Policy (NAP). Under the NAP, the federal government will maintain its role as regulator but will change its current role from airport owner and operator, to that of owner and landlord.
• The federal government will retain ownership of the 26 airports identified as part of the National Airports System. However, under the NAP they will be leased to Canadian airport authorities. These local operators will be responsible for financial and operational management.
• Ownership of regional/local and other smaller airports will be transferred to regional interests.
• Remote airports which provide exclusive, reliable year-round access to isolated communities and which currently receive federal assistance will continue to be supported.
• The federal government will continue to be responsible for all aspects of aviation safety.
• Locally-owned and operated airports are able to function in a more commercial and cost-efficient manner, are more responsive to local needs and are better able to match levels of service to local demands. Recent experiences of the four existing airport authorities and the numerous airports that have existed without federal support since their inception clearly demonstrate these realities.
• To facilitate the changes proposed under the NAP for the national airport system and regional/local airports, the federal government will introduce measures to make its airports more cost-efficient and thus make local operation and ownership more attractive.
• Among other things, current levels of service will be adjusted to meet demand and existing user fees and charges will be applied more widely. New user fees for specific capital projects at larger airports as well as for capital and operating requirements at regional/local airports may be introduced by the federal government or the new operators. These measures will be necessary to assist airports in becoming self sufficient and in remaining viable in the longer term.

• The 26 airports that currently handle 94 per cent of air travellers in Canada comprise a core network known as the National Airports System (NAS). NAS airports include those in the national and provincial and territorial capitals as well as airports that handle at least 200,000 passengers each year. These airports link the country coast to coast as well as internationally, and are considered essential to Canada's domestic prosperity and international competitiveness.
• By retaining legal ownership of NAS airports, the federal government will be able to guarantee the integrity and long-term viability of the vital NAS system.
• The federal government will transfer the airports it currently operates to Canadian airport authorities under new, enhanced accountability principles. (Although airport authorities were incorporated at Toronto and Winnipeg, transfer negotiations have not taken place. New authorities will have to be constituted in accordance with the refined CAA principles.)
• Local operation and commercialization of the e airports will promote cost-efficiency and the provision of services matched to user needs. This commercialization of the NAS will begin immediately. As soon as CAAs are incorporated in accordance with the new public accountability principles, transfer negotiations will commence.
• Although NAS airports are self-sufficient as a group, some individual sites are not. Efficiency measures will ensure these airports are viable and operationally self sufficient within five years.

• Regional and local airports serve scheduled passenger traffic but handle fewer than 200,000 passengers each year.
• Ownership of these airports will be offered to provincial and local governments, airport commissions, private businesses or other interests, in that order. New owners will be free to establish ownership and management arrangements best suited to community needs.
• The federal government will remove its operating subsidies from these airports over a five-year period beginning April 1, 1995. If a case can be made by a new operator that a continued subsidy may be required for a period slightly longer than the five years, it will be considered. At the same time, measures will be taken to help these airports move toward self-sufficiency.
• An Airport Capital Assistance Program (ACAP) will be introduced for regional/local airports. This program will provide financial assistance for safety-related airside capital projects, such as runways and taxiways. It will be funded, in part, by lease revenues from NAS airports, since they benefit from passengers and cargo passing to and from the regional and local airports.
• Local ownership and operation will enable these airports to provide services that are tailored specifically to local community needs. Local interests will be able to make operational decisions based on local needs.
• If the proposed operator can demonstrate that the airport can be self-sufficient and serves interprovincial or international flights, and is prepared to forgo access to the Airports Capital Assistance Program, application can be made for inclusion in the National Airports System.

• In addition to the regional and local airports described above, the federal government owns 31 small airports that do not have scheduled passenger service. Many of these are used for recreational flying.
• These airports will be transferred to local interests through appropriate government processes within the next two years. Local interests will be able to purchase and operate these facilities according to their own needs.
• Federal funding for these airports will cease March 31, 1997, or upon transfer of title, whichever comes first.
• Small airports that are satellites of international airports may be transferred to the airport authority that operates the international airport. Operational assistance will be phased out over five years.

• Remote airports provide the only reliable, year-round transportation link to isolated communities. Those that currently receive federal assistance will, in the short term, continue to be supported by the federal government. Measures will be taken at these sites to increase operating efficiencies.
• During the next few years, the federal government will review its long-term role at remote airports.

• Federal airports in the Arctic will continue to be offered to the respective territorial governments for operation as a system under the existing Arctic Airports transfer program.

• The federal government will continue to set safety and security standards for allCanadian airports. The means to accomplish this are already in place and include policy-setting, airport transfer agreements, airport certification and regulation.

• The National Airports Policy clearly defines the federal role in airports.
• Changes proposed under the policy establish a national airport system that is safe, effective, efficient, secure and viable for the long term.
• The National Airports Policy will shift the cost of running Canada's airports from taxpayers to those who actually use the facilities.
• The policy will impose market discipline on the development and operation of airports and make all airports more responsive to the needs of their customers and communities.
• It will ensure that Canadian air travellers continue to be protected by appropriate federal safety and security standards.