Monday, December 19, 2016

Canadian Federal Government needs to invest more in airports

Business leaders and officials from major Canadian airports have joined forces to urge Ottawa to invest more in airports to make air travel smoother and make them more competitive.

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The Canadian Global Cities Council released a report Thursday asking the Liberal government to invest in the growth of airports which it claimed are economic powerhouses helping the growth of the country. The Council represents 8 large chambers of commerce and boards of trade from across Canada. Adam Legge, president of the Calgary Chamber of Commerce said that policy-makers have overlooked the economic benefits and employment potential of airports saying during a discussion at the Economic Club of Canada:“Our concern is that the federal government uses airports as a cash cow and not as that enabler of global trade, global commerce, global connectivity.”
Howard Eng CEO of Greater Toronto Airports Authority that manages Pearson International Airport agreed: “Airports today are economic generators for their region. They are also economic generators for the country. We are in a competitive environment. We need to trade globally but in order to trade globally we need to get there . . . the way to get there is by air travel. I think it’s a huge economic issue if we don’t get our flow, our processes right.” However, the Liberal government is considering the privatization of some airports, using them even more as a cash cow to provide a one time bonanza that will help them fund the government through privatization. This will also guarantee donations from buyers in gratitude for allowing the private sector to receive the profits from the airports rather than the government.
The Council also wants Ottawa to act immediately to lessen wait times in security lines that cause frustration to air travelers Michel Leblanc. CEO of the Board of Trade of Metropolitan Montreal said: “When people enter the country, those lines are unacceptable. Those lines create this impression that Canada, perhaps, is not that efficient.” The Council also suggests that visa requirements for passengers transiting through Canada from countries that are low risk should be eased. As well there should be better integration with ground transportation hubs.
Officials at Pearson International Airport in Toronto are asking the government to provide it more funding to help ease the backlogs at security and customs checkpoints. Delays have left thousands of passengers fuming. On October 7th even Gerald Butts,Justin Trudeau's principal secretary tweeted: “Friday of Thanksgiving weekend and half the security lines are closed at Pearson. #fail.”
The Council's call for action comes as several departments are waiting for a report by Credit Suisse on the options for management of Canadian airports. As discussed in a recent Digital Journal article the bank is known for its role in privatizations. It is not unlikely that it will note the favorable aspects of privatization as an option. Airport officials claim that they are already operating under a private sector model.
One would think that airports would be concerned more with service to the public as a model rather than the for-profit private sector model, especially since many smaller airports or those in remote areas are essential services. Yet Eng praises Pearson as a cash cow noting that Ottawa receives $120 million a year in rent from the airport: “We’ve made that transition to run it like a business, as a commercial enterprise." Eng encouraged the government to consult widely on the best management model for airports and to have a thorough discussion of the issues, to find the best way of unlocking the value of airports over the long term.
Jan de Silva CEO of the Toronto Region Board of Trade said that airports were critically important to the business community, particularly when the Canadian economy needed to find ways to grow. De Silva said: “Our ability to get out to those growth markets is critical as is our ability to attract foreign companies.” We should soon know if the Liberals will decide on more public investment in our airports or if instead they will sell them off to raise funds and provide new sources of profit for their business supporters.

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