9

TRANSPORTATION INFRASTRUCTURE

Air Transportation Infrastructure

Air Navigation System

NAV Canada, which became the owner and operator of Canada's Air Navigation System (ANS) when the system was transferred from the federal government on November 1, 1996, is a private, non-share capital corporation. The system comprises seven Area Control Centres (ACC), one terminal control unit, 43 control towers, 77 flight service stations and 67 maintenance centres, as well as more than 1,400 ground-based navigational aids. NAV Canada provides air traffic control services, flight information, weather briefings, airport advisories and electronic aids to navigation.

System Improvements

Since 1996, NAV Canada has invested $600 million in system improvements. NAV Canada introduced a variety of initiatives to enhance safety in 2000/01. Some of the more notable projects include:

• NAV Canada formed an action team with Transport Canada to oversee the implementation of recommendations prepared by both groups to reduce runway incursions. One of the recommendations involved a heightened awareness program for pilots and for airport and NAV Canada employees.
• NAV Canada invested $27 million in Flight Information Centres (FIC) to improve customer service and safety through the provision of faster and better-quality weather information. Customers will be able to access this information through toll-free numbers and pilot information kiosks. The first FICs were installed in Halifax and Edmonton, and work continues on FICs in Quebec City, London, Winnipeg and Kamloops.
• The radar system in northern Canada is being expanded and improved with the installation of new state-of-the-art radar facilities. Work to further improve the system was completed in Yellowknife and Kuujjuaq and construction is proceeding in La Ronge, Iqaluit, Chisasibi and Stony Rapids, with several other new sites under consideration.
• In March 2001, NAV Canada began operations at its new air traffic control tower in Saskatoon. This tower accommodates NAV Canada's Saskatoon Flight Service Station and incorporates technology to better manage electronic flight data. Saskatoon is the fifth tower to be opened since NAV Canada's inception. Two other new towers were also opened in late 2001, in Springbank, Alberta and Kelowna, British Columbia.
• NAV Canada continues to operate one of the safest air navigation services in the world, with just over two operating irregularities per 100,000 flight movements.

Financial Performance

For the fiscal year ending August 31, 2001, NAV Canada reported $916 million in revenues, $717 million in operating expenses, and $198 million in interest, depreciation and restructuring expenses. This resulted in no excess revenues over expenses. In 2000, however, fiscal results of $909 million in total revenues, $703 million in operating expenses, and $204 million in interest, depreciation and restructuring expenses resulted in $2 million in excess revenues over expenses. Table 9-28 compares NAV Canada financial results in 2000 and 2001.

Due to a drastic decline in air traffic around the world, NAV Canada has forecast a $145 million shortfall compared with its original budget for fiscal year 2001/02. As a result, NAV Canada's Board of Directors has approved an action plan aimed at lowering costs and increasing revenues. Employees, suppliers and customers are contributing to this plan.

Airports

Canada's approximately 1,700 aerodromes are divided into three categories: water bases for float planes, heliports for helicopters and land airports for fixed wing aircraft. Aerodromes refer to facilities registered with Transport Canada as aircraft landing and take-off sites.

Most of Canada's commercial activity takes place at certified land airports, sites that because of their level of activity or location are required to meet Transport Canada's airport certification standards.

At the close of 2001, the Canada Flight Supplement and the Canada Water Aerodrome Supplement listed 1,716 certified or regulated sites. Table 9-29 shows the number of airports for fixed-wing aircraft.

A total of 264 land airports offered scheduled passenger service, while the other 1,113 were available for other public and private uses.

While many aerodromes are privately owned, the majority of certified airports are publicly owned. Since the introduction of the National Airports Program (NAP) in 1994, the federal government has been reducing its role in the management, operation and ownership of airports. This process of devolution has been largely completed, and the current state of transfer is posted monthly on the Internet at www.tc.gc.ca/programs/airports/status/menu.htm.

The October 2000 Report of the Auditor General noted that overall the operation of NAS airports by local interests has been successful. It also noted that there were policy gaps in the areas of ancillary activities, Airport Improvement Fees and contracting out. The report recommended that Transport Canada's lease monitoring role be enhanced. As a result, the department has instituted a more formal lease review process for leased NAS airports, including a national training component.

Airport Improvement Fees

Airport Improvement Fees (AIFs) have been introduced in recent years by a number of NAS airport authorities and Non-NAS airports. On average, AIFs now represent approximately 20 percent of total NAS airport revenues and this percentage continues to grow. The AIF rates currently vary from $5.00 to $28.00 per passenger. The majority of AIFs are collected through the air carriers' ticket systems, yet some are still collected directly by the respective airport. The two most notable developments in this area were Fredericton airport authority's introduction of a Passenger Facility Fee to subsidize airport operations and the Thunder Bay airport authority's decision to eliminate the AIF in November 2001. AIFs totalled $183.4 million or 15 per cent of total NAS revenues in 2001. However, on average, the AIF accounted for 28 per cent of total revenues generated by the 15 airport authorities collecting such fees throughout 2001.

AIFs are not directly comparable between airports as they have been put in place to cover the cost of financing airport improvements seen to be necessary at the local level, and have to be assessed with regard to other fees and charges affecting the overall cost of travel to the passenger. The challenges for airports and governments are to ensure that travellers and carriers are more aware of the charges and the expenses they cover and that travellers are adequately consulted on fees directly charged to them by airports across Canada.

Airport Authority Revenues and Expenses

Airport authorities operate the majority of federally owned NAS airports under long-term leases, with the exception of the three territorial NAS airports that are owned and operated by territorial governments. The airport authorities are incorporated as not-for-profit, non-share capital corporations, with independent Boards of Directors. Their financial statements for the year ending in 2000 are shown in Table 9-32.

Airport Capital Assistance Program

Since April 1995, Transport Canada has administered the Airport Capital Assistance Program (ACAP) to help eligible non-National Airports System 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 passengers annually, meet airport certification requirements, and not be owned by the federal government. In 2001, the program approved 24 projects at 21 airports for funding at an estimated total of $37.5 million. Table 9-33 shows by province the allocation of funding approved since the inception of the program.

The projects approved in 2001 under the ACAP program are listed in Appendix 9-1.

TRANSPORTATION INFRASTRUCTURE

Rail Transportation Infrastructure

Road Transportation Infrastructure

Marine Transportation Infrastructure

Air Transportation Infrastructure

Appendix 9-1 Airports Capital Assistance Program ­ Projects Approved in 2001