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National Airports Policy

National airports system (NAS) implementation

• While the federal government is prepared to ensure the continued operation of airports in the National Airports System (NAS), this does not necessarily require direct operation or funding by the federal government. Local operation, management and development of these airports is preferable.
• The preferred strategy is to transfer responsibility for the operation, management and development of NAS airports to Canadian airport authorities (CAAs). This will be done through leasing arrangements. Existing local airport authorities (LAAs) have shown themselves better able to operate airports in a more commercial and cost efficient manner. They are more responsive to local needs, matching levels of service to local requirements.
• Community accountability is ensured through the enhanced principles of accountability under which CAAs must operate. These principles are reflected in the Articles of Incorporation and bylaws of the CAAs and, where applicable, in the airport transfer legal documentation. The principles include the following:
  • CAAs must be "not-for-profit" corporations, guided by a local board of directors;
  • the board members will be representative of the local community and will not include government employees or elected representatives;
  • there will be federal and provincial government representation on the board of directors;
  • the method of appointment and revocation of appointments to the board of directors will be specified;
  • the annual general meeting will be open to the public;
  • all contracts in excess of a total value of $75,000 will normally be awarded through a competitive bid process;
  • CAAs must establish community consultative committees;
  • the public will have access to the CAA's key business documents;
  • the CAA must have a performance review conducted by an outside reviewer at least once every five years.
• In the past, the federal government has responded to requests from communities interested in establishing LAAs. With the announcement of the NAP, the federal government will become proactive and encourage the transfer of NAS airports to CAAs.
• In all communities where NAS airports are situated but where no airport transfer has taken place, the Minister of Transport will be writing to his appropriate provincial counterpart, to local communities served by the airport and to the local board of trade or chamber of commerce to encourage them to respond positively to this federal initiative through the formation of transfer planning groups and, eventually, a CAA.
• Prior to the announcement of the NAP, five NAS airports had been transferred to LAAs Vancouver, Calgary, Edmonton, Dorval and Mirabel. In the summer of 1994, these airports will celebrate their second anniversary as LAAs. The federal government will honour its agreements with the LAAs for these airports, while inviting them to consider the recently-developed principles for enhanced public accountability as the current leasing agreements do not include these revised principles.
• The federal government will transfer the operation and management of Toronto - Lester B. Pearson International Airport (LBPIA) to a CAA. As in the case of all CAAs, the federal and provincial governments will have the opportunity to appoint directors to the board.
• The federal government and any future CAA for Toronto/LBPIA will work closely to determine the best way to address infrastructure development at LBPIA.
• Given the importance of NAS airports, ownership will remain with the federal government with long-term leasing arrangements being made with the CAAs.

The CAA Transfer Process

• The transfer process of an airport to a CAA is as follows:
  • A local transfer planning group is formed.
  • The administrations of the communities served by the airport endorse the group. (In many of the NAS communities local transfer planning groups have already been formed. It is quite conceivable that many of these groups may be re-endorsed by their local communities in accordance with the enhanced CAA principles.)
  • The local planning group is acknowledged by the Minister of Transport.
  • Preliminary discussions with federal officials begin.
  • Transport Canada develops "base case" information for the local planning group. This data provides revenue/expense information over a 20-year period, assuming continued federal government operation. The planning group uses this information to help it determine whether it intends to pursue airport transfer negotiations.
  • Transport Canada provides generic legal transfer documentation for review by the local planning group, along with an outline of the proposed lease rental formula.
  • Should the local planning group decide to proceed with a transfer, it incorporates itself as a Canadian airport authority and solicits resolutions of support from regional/local governments as well as a formal endorsement concerning nominations to its board of directors from the Minister of Transport.
  • The CAA is formally incorporated.
  • The CAA signs a letter of intent to enter into formal airport transfer negotiations with the Minister of Transport. The letter of intent is the framework under which transfer negotiations will take place.
  • Negotiations begin. The negotiator's two main concerns are the financial terms of the lease payments and employee benefits packages.
  • When negotiations have been completed, the CAA and Transport Canada sign an agreement to transfer.
  • A transition period begins when the following requirements have been met:
    • The agreement to transfer has been signed;
    • certain "condition precedents" are met;
    • each party obtains the necessary approvals to conclude the transfer agreement.
  • The ground lease and other legal documentation is signed and the operation of the airport is transferred to the CAA.

Date modified:

2010-02-03

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