OTTAWA, Dec. 13 /CNW Telbec/ - The Air Transport Association of Canada (ATAC) is calling on the new Conservative government to reduce the airport rent burden at Toronto Pearson International or risk undermining the Minister of Transport's air liberalization and gateway agenda.
ATAC was responding to the latest fee increases at Toronto Pearson announced today. While the increases are lower than in past years, Pearson remains one of the most expensive airports to land a plane.
Sam Barone, President and CEO of ATAC, stated: "The good news is that the Greater Toronto Airports Authority made significant strides in addressing its cost structure, which we applaud. The bad news is that fees should be decreasing, not increasing. This fee increase could have been avoided if the federal government cut Pearson's sky-high rent as the Conservatives promised they would do in opposition."
Toronto Pearson will pay the federal government over $151 million in rent next year - eating up 27% of the airport's operating budget. The rent burden is single largest cause of the 2007 fee increase.
"The Conservatives supported a rent cut for Toronto Pearson when they were in opposition. They recognized that the existing rent formula is profoundly unfair to Toronto and a huge drain on the economic competitiveness of the region, the province and the country. We remain hopeful the Conservatives will act on their commitment no later than the next federal budget," stated Barone.
"Canada is the only industrialized country in the world that charges airport rent. This regressive policy is a direct threat to the competitiveness of Canadian air transportation, along with all the businesses that rely on it to move people and goods," added Barone. "It is not consistent with the government's focus on productivity and competitiveness."
The latest fee increases come at the same time the Minister of Transport is reviewing Canada's international air policy, with the ultimate goal of further liberalization. In making his "Blue Skies" announcement, Minister Cannon acknowledged the need to reduce fees and charges on the Canadian airline industry in order to ensure its competitiveness.
"I am pleased that Minister Cannon understands the importance of addressing the tax burden on Canada's air transportation industry in order to promote air liberalization and Toronto as a gateway. If the government wants lower costs for passengers and more competition, the simplest route is lowering industry-specific taxes, starting with airport rent at Pearson. High taxes otherwise threaten to undermine air liberalization efforts," stated Barone.
A proposal to reduce rent at Toronto Pearson has been presented to the Finance and Transport Ministers.
Notes for Editors:
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1. The Government now collects more than $151 million annually in
"Crown rent" from Pearson International, with little or none of it
re-invested in air transportation. Since the National Airports Policy
was introduced in 1994, Pearson has paid more than $1 billion in rent.
Another $3 billion will be collected by 2020.
2. When the government transferred control of Pearson to the
Greater Toronto Airports Authority (GTAA) the airport was in desperate
need of repair. The federal government at the time could not afford
those repairs. The GTAA has since invested $4 billion in airport
redevelopment. The government assumed none of that risk and has no
responsibility for the debt incurred. The redevelopment is being
completely paid for by airport uses through the fees and charges paid
by airlines and passengers.
3. On May 9 the government announced immediate rent cuts to all major
airports in Canada - except Pearson.
- In Vancouver, rent will drop by 63% by 2010.
- In Montreal, rent will drop by 20% by 2010.
- In Calgary, rent will drop by 60% by 2010.
- For Toronto Pearson, rent will only drop by 6% by 2010.
4. In 2006 the GTAA began paying back the rent that was deferred during
the SARS crisis (about $40 million). This means rent went up in 2006
at Pearson (and will again in 2007) while it goes down for every other
major airport in Canada. Pearson paid $134 million in rent in 2005.
5. Under the government's new rent formula, Pearson will pay two-thirds
of the national rent bill while handing only one-third of the traffic.
6. Rent reduction or elimination at Pearson is supported by:
- Mayor David Miller and Toronto City Council
- the Canadian Chamber of Commerce
- the Canadian Airports Council
- the Air Transport Association of Canada
- the American Air Transport Association
- the Association of Airline Representatives in Canada
- the Tourism Industry Association of Canada
- the Hotel Association of Canada
- the Toronto Board of Trade
- the Greater Toronto Hotel Association
- the Canadian Courier and Messenger Association
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For further information: Sam Barone, President and CEO, Air Transport Association of Canada, (613) 233-7727, extension 313
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