Photo courtesy of Vancouver International Airport

Canada’s air transport could be on the verge of major changes. That is if the Canadian government chooses to act upon recommendations made in a federal review of the nation’s transportation systems.

The review, commissioned in 2014, took a broad look at Canada’s entire transportation system, including freight rail, passenger rail, grain transport, air transport and marine transport networks. The results, released earlier this week in a detailed 500-plus page document, recommended significant changes in order to keep Canada's transportation network current and competitive.

In the chapter on air transport, the review applauded the current state of Canada's air travel industry. 

"Presently, Canada’s air transport system may be in the best shape that it has ever been. The largest airlines boast renewed fleets, record profits and aggressive growth strategies; the quality of our airport and air navigation infrastructure is among the best in the world; and traffic continues to grow faster than the economy.”

But, the review continued by making numerous suggestions for overhauling the industry in order to keep Canada competitive during the next two to three decades. If adopted, many of the measures will leave Canadian travellers cheering.

User Pay Policy & Airport Fees

Hardly surprising, Canada’s burdensome Air Travellers Security Charge was the first issue addressed by the review, which recommended the Government of Canada "act for the benefit of consumers to reform the user-pay policy for air transport and improve its cost competitiveness." 

Further, the review states:

“...industry and business groups have consistently called for airport rent and the Air Travellers Security Charge to be significantly reduced and restructured, or eliminated altogether, to help improve cost competitiveness for the air sector, and ultimately, for travellers and shippers,” according to the report. 

Airport Ownership & Governance

The review committee also heard testimony and made recommendations on revising Canada's "antiquated" airport ownership model. 

“The Canadian model where government retains ownership is unique in the world; elsewhere the dominant model is full or partial privatization,” said Aeroports de Montreal in a submission to the report.

In response, the review called for a move towards more private, for-profit airports, including moving toward a “share-capital” structure for larger airports. It also encouraged the federal government to divest itself of smaller federally owned airports while also increasing funding for regional and local airports.

Domestic Competition & Foreign Ownership Limits

Other recommendations include increasing foreign ownership limits to at least 49 per cent for commercial air service, which will bring airlines in line with other federally regulated sectors. 

"Our goal is to see Canada join most other large aviation markets in allowing significant (but not full) foreign ownership of passenger air carriers..." stated the review.

Additionally, the review said there should be clear and consistent regulations with respect to new and growing carriers.

Inconsistencies in these regulations came to a head earlier this year, when NewLeaf launched a new low-fare service. Although the airline’s fare structure proved to be immediately popular with Canadian travellers, the company had to halt ticket sales mid stream as the CTA called for a re-examination of its policies on indirect air service providers. The airline, which planned to begin service in February, still remains under review.

International Air Carrier Competition

Canada’s “restrictive international air access” was also addressed by the review, which found that while existing policies have benefitted Canadian carriers, they have proven to be detrimental to Canadian airports.

“One or two airlines cannot possibly connect Canadians to the world in a convenient way and still provide competitive fares to consumers,” stated Qatar Airways in a submission to the report. “Foreign airlines have an important role to play: providing new destinations, better connectivity through their networks, and competitive prices to Canadians.”

Among other recommendations, the review suggests Canada should commit to creating more open international air services agreements.

Increasing open skies agreements will not just benefit international carriers, but will also provide greater access for Canadian airlines in international markets. Earlier this year, Air Canada announced an expansion of its service to Australia, in response to a revised bilateral agreement.

Global Hub Strategy

To further stimulate economic growth, the review also recommends that the Canadian government harmonize its immigration and trusted traveller programs alongside those of the U.S., the United Kingdom, the European Union, Australia, and New Zealand, which will increase access for international travellers.

By increasing ease of access, Canada’s airports can compete on a more global level as international connection hubs. The resulting increase in volume of transiting passengers will create even more revenues for domestic airports, thereby further helping to drive down transportation fees for Canadian travellers.

Additionally, the review recommended that the Government of Canada should ensure that there is strategic synergy between priority tourism markets, immigration measures and international trade agreements.

Airport Security Screening

In what is likely to generate the biggest “hallelujah” from Canadian travellers, the review took a hard look at Canada’s airport security systems.

“The Review has heard near-universal condemnation of the existing state of security screening services at Canadian airports.”

To that end, the review encouraged the Government of Canada to overhaul its “regulatory, financing, and delivery models for airport security.”

The review used Heathrow Airport and Hong Kong International Airport as models, where airport standards mandate that 95 per cent of passengers have a screening wait time of less than five minutes. The review also recommended further growing trusted traveller programs such as NEXUS and CANPASS.

Consumer Protection

Canada’s lack of a comprehensive and uniform consumer protection plans — such as the Passenger Bill of Rights in the United States—was also noted by the review.

In a review of Canadian travellers by the Canadian Automobile Association (CAA), 90 per cent of respondents felt that it is somewhat or very important to have a national consumer code identifying passenger rights. Some 75 per cent of respondents want a uniform schedule of compensation, which applies to all airlines across the board.

The existing consumer code, “which offers a lack of consistency, transparency, and predictability for passengers” is also hampered by the fact that complaints can be made by “any person.” In other words, the system can be overloaded by complainants speaking on behalf of affected passengers.

The review recommends that the Government of Canada "enhance its existing consumer protection code for airline passengers, to include defining rights and remedies, which are harmonized with those mandated by the United States and the European Union."

World-Class Regulation

Finally, the review recommends that the Government of Canada commit to strengthening its reputation as a world leader in aviation regulation and certification, in particular by ensuring that Canadian certification continues to be a globally recognized and sought-after seal of approval.

So how likely is it that these recommendations will become a reality?

According to the Government of Canada website, the “Government is currently reviewing the Report and is looking forward to hearing from Canadians on the findings of the Review.”

To read the report in its entirety, visit the Government of Canada website.

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