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Transportation in Canada 1998 |
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12
Transportation Infrastructure
Air Transportation Infrastructure
Air Navigation System
The Canadian Air Navigation System (ANS) consists of seven
area control centres (ACC) and over 100 airport control towers
and flight service stations. These facilities are supported by
a network of 1,400 navigational and landing aids. One of the safest
and most extensive networks of air infrastructure in the world,
this system delivers air traffic control, flight information,
weather briefings, airport advisory services and electronic aids
to navigation.
NAV Canada, a private, non-share capital corporation, assumed
responsibility for all civil air navigation services in Canada
on November 1, 1996. NAV Canada shares responsibility for air
navigation safety with the Minister of Transport. The Minister
retains the mandate to oversee the safety of NAV Canada's operations
by ensuring that the corporation continues to meet all safety
and regulatory requirements.
Air Navigation Operations
NAV Canada continued to fine-tune its operations in 1998 by
reducing duplication and administrative costs. During the fiscal
year, the corporation consolidated its Central and Western Region
administrations. It is continuing with additional consolidations
in regional offices and area control centres.
The air navigation system supported some 7.6 million aircraft
arrivals and departures at Canadian Airports in 1998.
Figure 12-11 shows the distribution of aircraft movements by
category of airport from 1993 to 1998.
Figure 12-12 charts the number of aircraft flights per traffic
controller from 1994 to 1998.
The data indicates a slight shift from airports with towers
to those with flight service stations and other airports. The
annual number of controlled flights has risen from 4.9 million
in 1994 to 5.5 million in 1998, an increase of 13.2 per cent (see
Table 12-23). Flights per air traffic controller have risen slightly
more by 13.5 per cent over the five-year period. Note, however,
that the latter is a broad indicator only, and that to truly reflect
workloads, calculations must be done on a site-by-site basis.
System Improvements
NAV Canada has invested approximately $300 million since November
1996, with many projects coming on stream in the fiscal year 1997/98.
These projects include
- new air traffic control towers in Halifax and Toronto;
- extensive work on navigational facilities associated with
the expansion of Lester B. Pearson International Airport, in
conjunction with the Greater Toronto Airport Authority;
- implementing reduced vertical-separation criteria over the
North Atlantic to permit increased traffic flow at the same levels
of safety;
- installing new power systems and computer display technology
at all Area Control Centres;
- installing new Instrument Landing Systems (ILS) at major
locations such as Vancouver International Airport;
- expanding the Technical Systems Centre in Ottawa, now the
main focus of NAV Canada's national engineering activities; and
- making significant progress on a major addition to our Area
Control Centre in Montreal, in conjunction with the Department
of National Defence.
NAV Canada's major capital project, the Canadian Automated
Air Traffic System (CAATS), also reached a milestone. 83 per cent
of the CAATS system software has been delivered. Factory acceptance
testing will take place early in 1999, with pilot sites in Western
Canada to follow. It is expected that once CAATS becomes operational,
it will be among the most advanced and comprehensive air traffic
control systems in the world.
Financial Performance
Proposed Service Fees
Since November 1998, NAV Canada has been a self-funded organization
that charges fees for services provided to its customers. In 1998,
the corporation developed:
- a new billing system;
- a fee structure in consultation with users and other stakeholders,
combined with a new system for charging new terminal and en-route
fees beginning March 1998;
- a pricing policy that permits exemptions, with the vast majority
of general aviation users to pay a $60 annual fee;
- deferral of the implementation of the Phase II fee schedule
to March 1, 1999, from November 1998, resulting in an estimated
$72 million in savings to the flying public; and
- a rate-stabilization reserve account to minimize the impact
of unforeseen fluctuations in air traffic volumes.
As a not-for-profit corporation, NAV Canada prices its services
to recover all costs from users, including any debt-servicing
costs. Before the creation of NAV Canada, air navigation services
were funded mainly through the Air Transportation Tax (ATT). As
of November 1, 1998, NAV Canada must recover its costs through
user fees only. During the year, the corporation introduced new
user charges for en route and terminal control services and increased
existing oceanic and overflight fees. These fees received statutory
approval from the Minister of Transport, under the guiding principles
of the Civil Air Navigation Services Commercialization Act, and
the ATT was repealed. Together, the overflight fee and terminal
charges contribute 80 per cent of NAV Canada's revenues.
Figure 12-13 shows the fee sources of NAV Canada in percentage
terms for 1998.
Table 12-24 compares financial results for 1997 and 1998 ending
August 31, 1998.
For the year ending August 31, 1998, NAV Canada reported
$892 million in revenues and $715 million in operating expenses.
Other items, such as a total $171 million in interest payments,
depreciation and restructuring expenses, resulted in a net income
of $5.9 million.
Compared with the ten-month period in the previous year, revenues
increased by 15 per cent, while expenses rose 22 per cent. This
resulted in an elevated operating ratio of 80 per cent. Increases
in interest and depreciation charges also contributed to a reduction
in net income of 55 per cent.
Airports
Canada has approximately 1,800 aerodromes (the generic name
for facilities registered with Transport Canada as aircraft landing
and take-off sites), of which 631 are certified (as either airports
for fixed-wing aircraft, heliports for helicopters, or water-ice
bases for float- and ski-planes).Note 10
The majority of certified airports are owned by municipalities,
provincial or territorial governments, or the federal government.
Most of Canada's commercial aviation activity takes place at certified
airports.
The federal government's 1994 National Airports Policy (NAP)
announced its intent to commercialize most federally owned airports
by March 31, 2000. This policy shifts the costs of operating Canada's
airports from all federal taxpayers to only those people who use
the facilities.
Under the new policy, the federal government continues to own
the airports that make up the National Airport System (NAS), but
will divest the airports' operations to not-for-profit airport
authorities under long-term leases (with the exception of Yellowknife
and Whitehorse, which have been transferred to the territorial
governments). Ownership of regional, local and small airports
is being transferred to local interests by way of sale. Those
remote airportsNote
11 providing year-round access to isolated communities
will continue to receive federal assistance.
Figures 12-14, 12-15 and 12-16 show the location of each airport
considered under the NAP, the airport's designation (whether
NAS, Regional/local, Small, Arctic, or Remote), and its divestiture
status as of December 31, 1998.
Table 12-25 illustrates how the airport-divestiture program
has evolved. Of the 136 airports designated for divestiture under
the NAP, only 39 remain to be transferred at the end of 1998.
In 1998, airports in London, Ontario, and St. John's, Newfoundland,
were transferred to Canadian Airport Authorities, bringing the
total number of NAS airports transferred to 15. Ninety-five
per cent of commercial air travel passes through airports run
by independent airport authorities or operators.
Major Developments
Over the past year, airport authorities actively pursued improvements
to the infrastructure, operations and customer service at their
airports.
- Vancouver Airport Authority has undertaken extensive renovations
to the domestic terminal and has begun work on a major expansion
of the international terminal.
- The Victoria Airport Authority announced plans to expand
the airport's cargo capacity.
- Calgary Airport Authority's 10-year capital expansion program
is advancing. Projects currently underway include an extension
to parking facilities, the addition of four new aircraft positions,
and additional aircraft parking and taxiways. Additional projects
are in the design stage.
- Edmonton Regional Airports Authority commenced work on a
new parking facility at the Edmonton International Airport. The
facility will be connected by an enclosed walkway to the terminal
building's departures level and by covered walkways on the arrivals
level.
- The Winnipeg Airports Authority announced planned improvements
ranging from the installation of new elevators and construction
of covered walkways to aircraft, to various upgrades at the terminal
building. The authority opened a new observation lounge and replaced
the previous food and beverage services with nine new concessions
throughout the air terminal building.
- The Greater Toronto Airport Authority is moving forward with
a major redevelopment plan that proposes such work as a new terminal,
a new infield cargo area, improved de-icing capacity, two additional
runways, fuel tank facilities and road improvements. New fire-fighting
and fire-training facilities were opened, and additional emergency-response
vehicles and fire fighters were added to the airport's Emergency
Services department.
- The Ottawa Macdonald-Cartier International Airport Authority
has also completed upgrades to the air terminal building, restaurants,
bookstore, newsstand and gift shops. Other work undertaken in
1998 included a new gate to accommodate more passenger jets and
a new baggage carousel to increase capacity by 33 per cent.
- Aéroports de Montréal continued to renovate
and improve its facilities at the Dorval Airport.
A new international concourse is planned.
- At Moncton, major runway reconstruction work began and will
be completed in 1999.
- Halifax International Airport, the largest of the airports
still operated by Transport Canada, is also undergoing major
renovations and expansion. This includes centralized and expanded
ticket counter space, improved baggage handling areas, and barrier-free
access. The work will complement renovations undertaken by the
airlines for check-in, second-level departure and covered walkways.
Financial Performance
In 1997/98, Transport Canada spent $227.6 million on the operation
of airports, including operating costs, subsidies and capital,
while taking in revenues of $84.4 million. It received an additional
$69.2 million in rent from the airport authorities. For fiscal
year 1998/99, Transport Canada forecasts $179 million in spending,
$78.3 million in revenues and $191.1 million in rent.
Airport Authorities Revenues and Expenses
The federal government expects National Airports System (NAS)
airports to be financially self-sufficient. Consequently, airport
authorities, incorporated as not-for-profit organizations with
no equity shareholders, fund their operations and any expansions
or improvements with revenues derived from airport users, such
as airlines, concessionaires, passengers, and private investors.
Rent is paid by the airport authorities to the federal government,
as the owner of the airport.
In recent years, AIFs have become an important and growing
source of funds for major airport improvements. Vancouver was
the only airport to have charged the AIF for all of 1997.
The Calgary and Winnipeg airport authorities have reached agreements
with the Air Transportation Association of Canada whereby the
airlines include the AIFs in their ticket prices. The other airport
authorities use a different process, collecting the fees directly
from passengers as they leave the terminal.
Table 12-27 lists the airports having AIFs, when they were
started and the amount collected in 1997.
The divested NAS airports that issued annual reports for a
full year in 1998 included Calgary, Edmonton, Montreal, Toronto
(Pearson), Vancouver and Winnipeg. The Ottawa Airport Authority
also issued an annual report, but one that covered only 11 months.
In 1997, these seven airport authorities generated total revenues
of $755.5 million, with total expenses (before interest) of $594.8
million. The operating ratio of the group as a whole was 78.7 per
cent, with individual ratios ranging from 66.4 to 89.1 per
cent. Revenues from aeronautical sources of $336.9 million
represented 44.6 per cent of their total revenues as a group.
Individually, the percentage of total revenues generated from
aeronautical sources ranged from 33.2 to 55.9 per cent.
Non-aeronautical revenues (excluding airport improvement fees)
totaled $349.5 million, or 46.3 per cent of all revenues generated
by these airport authorities. On a site-by-site basis, the percentages
ranged from 37.0 per cent in Edmonton to 56.2 per cent
in Montreal.
Airport improvement fees (AIFs) generated $69.1 million, or
9.2 per cent of total revenues in 1997, with Vancouver contributing
75 per cent of the AIF total.
The seven airport authorities spent $1.2 billion in 1997 on
the acquisition of capital assets. The Greater Toronto Airports
Authority represented 77 per cent of this total, which includes
the purchase of Terminal 3 at Lester B. Pearson International
Airport. Other major expansion projects continued at Montreal,
Calgary and Edmonton. Vancouver Airport Authority invested mainly
in airport infrastructure, renovating facilities, enhancing the
level of service and expanding the existing facilities to meet
increasing demand.
With 64.6 million enplaned/ deplaned passengers in total, these
airport authorities generated on average $11.70 per passenger
in revenues and incurred expenses of $9.21 per passenger.
Table 12-26 summarizes these airports' financial results for
the calendar year 1997, the latest year for which figures are
currently available.
Review of Airport Authority Leases
Transport Canada is presently conducting a comprehensive five-year
review of the first four Local Airport Authorities (LAAs): Vancouver,
Montreal (Dorval and Mirabel), Calgary and Edmonton. As public
institutions, the LAAs are held to a high standard of public accountability,
and the review will assess the extent to which the public interest
is being served and protected. The review is expected to be completed
in 1999.
Airport Capital Assistance Program
An integral part of the National Airports Policy is the Airport
Capital Assistance Program (ACAP). Transport Canada established
this contribution program in April 1995 to help eligible airports
finance capital projects related to safety, asset protection and
operating-cost reduction. To be eligible, the airports must receive
a minimum of 1,000 regularly scheduled passengers annually, meet
airport certification requirements and not be owned by the federal
government.
In 1998, 36 projects at 25 airports were approved for
funding. The total approved funding for 1998 was $20.9 million.
Approved projects included the rehabilitation of runway, taxiway
and apron pavements; the purchase of mobile equipment, such as
runway sweepers and snow blowers; the purchase and installation
of visual aids; and the installation of security fencing.
Table 12-28 lists the projects receiving funding approval under
the Airport Capital Assistance Program, by site and province,
in 1998.
A total of $32.3 million has been spent since the program's
inception, with 55 per cent being spent at Ontario sites up to
1997/98.
Transport Canada is evaluating the ACAP to meet the Treasury
Board's requirement to assess and report on the program's performance.
Table 12-29 summarizes ACAP expenditures in each of the last
three fiscal years by province. (Appendix
12-1 provides additional site-specific information for the
latter period.)
Air Transportation Infrastructure
- Annex 12-1 Airports Capital
Assistance Program, Expenditures by Site and Province
NOTES:
10
This represents the latest count for 1998. Figures for the number
of certified airports in Canada are dynamic due to the changes
or clarification in the criteria for certified airports as established
in the Canadian Aviation Regulation (CAR), Part III - Aerodromes
and Airports (October 1996). Application of the new regulations
has resulted in a decline of certified airports due to the elimination
of the criteria "main base for flight training unit"
while the number increases due in part to a clarification of
the criteria "within a built-up area" premise and the
new criteria where the Minister determines that an airport certificate
would be in the public interest and for safety reasons.
11
The 1997 report mistakenly indicated 12 remote airports. There
are 13. They are Sandspit, B.C.; Fort Chipewyan, Alta.; Churchill,
Man.; Norway House, Man.; Moosonee, Ont.; Iles-de-la-Madeleine,
Que.; Lourdes-de-Blanc-Sablon, Que.; Kuujjuaq, Que.; Waskaganish,
Que.; Chevery, Que.; Wemindji, Que.; Schefferville, Que.; Eastmain
River, Que.
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