SHORT-TERM FINANCIAL RELIEF FOR
NATIONAL AIRPORTS SYSTEM AIRPORTS

The air transportation sector was significantly impacted by various events in 2001 including the downturn of the economy, the September 11 attacks, and military action in Iraq. The 2003 outbreak of SARS also resulted in further significant short-term decreases in travel and tourism.

As a means of providing short-term financial relief to the air sector, the Government of Canada announced that National Airports System airports that pay rent would receive a deferral of a minimum of 10 per cent of their rents for a two-year period starting on July 1, 2003, with larger deferrals depending on the decline in passenger levels they have experienced between April 2002 and April 2003. In addition, those leased airports that did not yet pay rent would have their next two years of payments on other property, such as fire trucks and snow blowers (known as chattels) deferred to the end of their repayment schedules, an estimated deferral of more than $7 million.

The deferred rent payments will be paid back to the Government of Canada, interest-free, over a 10-year period beginning in 2006.

Below are estimates of the rent/chattel deferral. These figures will be adjusted to reflect the updated traffic forecast and reported passenger traffic.

The National Airports System comprises 26 airports that link the country from coast to coast and internationally. The system includes those airports that are considered essential to Canada’s air transportation system, supporting both domestic prosperity and international competitiveness.

In May 2005, the Government of Canada announced a new rent policy for federally-owned airports. This new policy is expected to result in close to $8 billion in rent relief for Canada’s airport authorities over the course of their existing leases. The policy will also address inequities in the system.

January 2006