Aviation Issues in Ontario Kevin Psutka

President & CEO

Canadian Owners and Pilots Association

COPA’s Mission

The Canadian Owners and Pilots Association promotes and protects Personal Aviation as a valued, integral and sustainable part of the Canadian community.

Some Definitions

Personal Aviation is that sector of General Aviation where aircraft are flown for personal transportation and recreation, and where aircraft operation does not require a commercial or higher pilot license.

General Aviation is that sector of aviation where aircraft are not used for airline or military activities.

Current sources of funding for smaller airports

Federal: Airport Capital Assistance Program (ACAP) - Available only to airports with scheduled airline service.Provincial: none in southern Ontario that we are aware of.Municipal: a variety of arrangements from none to partial support.User fees: landing, parking, fuel fee, tie-downs and hangar rent, municipal taxes.

Quotes from Study

“There are currently 18 Airports Capital Assistance Program (ACAP) eligible municipal airports within the 85 …”

ACAP serves the needs of very few.“…the impact of the federal government’s withdrawal from airports has had a neutral to negative impact on municipal airports in Ontario.”

The National Airports Policy abandoned smaller airports.

Quotes from Study

“The Province of Ontario became involved in airports in the late 1960s (Municipal Airports Program) when it was felt that federal policies were not supporting the development of local community/municipal airports to support social service needs or for economic development purposes.”

Quotes from Study

“the Province no longer has a role in funding of municipal airports or the coordination of airport development in Ontario.”

As a result of federal actions in the past ten years, a Municipal Airports Program is again needed.

Quotes from Study

“Many studies have been completed in the past five years, dealing with small airports issues... All of these reports came to similar conclusions – that small airports have exhausted the opportunities for efficiencies and are in need of external financial support if they are to continue to operate.”

How much more proof is needed?Do we need key airports to fail before

politicians will take notice?

Quotes from Study“Ontario differs from several other provinces in support for airports, particularly British Columbia, Alberta and Quebec which have programs specifically for airports and/or transportation. Similar to airports in Northern Ontario, airports in other provinces also have access to various federal funding through several geographically focused agencies (e.g., Western Economic Diversification, and Atlantic Canada Opportunities Agency).”

Ontario airports are distant poor cousins to airports in other provinces and yet Ontario has the most aviation activity.

Quotes from Study“The (aviation fuel tax) revenue ($58.5 million) is credited to Ontario’s Consolidated Revenue Fund and helps contribute to other needs such as health care and education. It is not re-invested in the provincial airports system in the same way that a portion of the vehicle fuel tax is reinvested in the roads system.”

This is a classic cash cow scenario – you milk a cash cow dry, with expectations that it will eventually die, in favour of a rising star.

Quotes from Study

“Transport Canada predicts that carriers will transfer non-profitable routes to small independent operators operating smaller aircraft, and that the number of markets with direct air service will increase.”

This is a rising star scenario that should be supported.

Quotes from Study“74% of the responding airports consider themselves financially not self-sustaining (i.e. insufficient cash flows to cover operating costs).”“The operating requirement for all 85 municipal airports is estimated to be in the range of $5.1 to $5.9 million a year… the annual estimated airside capital requirements for the non-ACAP eligible airports are in the order of $5.5 million.”

This is only a small percentage of the funds that are taken out of aviation ($58M in fuel tax)

Quotes from Study

“total output (from employment)… is estimated to be $1.7 billion.”

“This wage income translates into $10.7 million in provincial income tax revenue from direct employment activities at the airport, and $23.4 million from total employment activities.”

Quotes from Study

“airports generate in the order of $6.3 million in direct property tax revenue for Ontario communities.”

These statistics prove that airports and those who work there contribute to the community far in excess of the cost of running the airports. This has been proven in all other studies across Canada.

Ontario is starving a major economic generator.

Who should pay?

Should users pay more to cover the deficit?

GA’s Ability to Pay More

As highlighted in COPA’s Guide to Public Airports, pilots consider fees as a disincentive especially when they spend hundreds of dollars at each stop on services such as fuel, which many times includes fuel concession fees, and in the local economy for taxis, rental cars food, hotels and other purchases.

COPA Guide to Public Airports

“Capital infrastructure investments are often difficult to justify to local Council who may not recognize the importance of airports in the economic value chain.”

The focus is too often on airport tenants and users’ ability to pay rather than on what economic benefits the airport brings to the community as a transportation mode and hence worthy of the community’s financial support.

This is a recipe for disaster

Some More Statistics

Perhaps General Aviation is in decline in Ontario and therefore does not need as much infrastructure.

There are 31,000 aircraft in Canada and over 9,000 are in Ontario.

Ontario-based Aircraft

This weighs 12,500 pounds

The role of small airports is changing

Demand is shifting, due in part to the security delays and rising costs at large airports.

Very Light Jets (VLJs) are coming - aimed at personal travel and air taxi charters to avoid large airports and increasing security delays and costs.

Ontario is perfectly positioned, geographically, to take advantage of this emerging mode of transportation.

VLJs

Eclipse 500 Cessna Mustang

VLJs

There are over 2000 on order, with first deliveries planned for early 2007.

It remains to be seen how VLJs will be used but it is already clear that the demand will be for smaller airports, closer to final destinations such as branch plants, head offices, business meetings etc.

ConclusionsThe number of small aircraft is increasing.Demand for small airports is increasing from new markets such as VLJs.Ontario remains the lead province for GA.Ontario stands out from other major GA provinces for its lack of support for its airports.The feds have backed away from smaller airports.Ontario airports are in decline just at a time when there is increasing demand.

GA in the GTA

A conservative estimate from Transport Canada statistics indicates that there are 1,600 small aircraft in the GTA.

How does Toronto compare with other Canadian cities?

Villeneuve

Cooking Lake

Pitt Meadows

A General Aviation policy is needed for the GTA, Ontario and across Canada to ensure that airports are available to serve the public.

RecommendationsAt the Federal level:

Review National Airports Policy.Air Policy to include GA.ACAP funding expansion to include relaxed

qualification criteria and increased size of fund.

At the Provincial level:Allocate fuel tax to aviation. Restore previous support through

Municipal Airports Program.Get involved in the Pickering due diligence

exercise.

Kevin Psutka

613-236-4901 (ext 102)

KPsutka@copanational.org

www.copanational.org