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Objections raised to idea of selling airports, making them for-profit

The Capital Regional District is expected to wade into the debate over privatizing Canada’s airports when it meets today. CRD director and Saanich Coun.

The Capital Regional District is expected to wade into the debate over privatizing Canada’s airports when it meets today.

CRD director and Saanich Coun. Judy Brownoff intends to table a motion to have the CRD push the Federation of Canadian Municipalities to call on the federal government to stop what it sees as a push to privatize the nation’s airports.

Brownoff’s motion will also ask for Ottawa to consult with stakeholders on a transportation policy that reflects the needs of all Canadian communities.

In an interview, Brownoff said there are too many unknowns in the debate over the selling of airport assets. “We don’t know, but I’d rather be in front on this than behind and trying to catch up,” she said.

Following an 18-month review of the Canada Transportation Act, the federal government is considering recommendations on airport governance that it received from a panel led by former cabinet minister David Emerson.

According to Transport Canada officials, the panel considered a variety of issues, including whether current governance and service delivery models for airports could be improved.

“The government has taken no decision about selling the airports currently operated by private, not-for-profit, non-share capital airport authorities,” said Transport Canada spokesperson Marie-Anyk Côté. “This is a complex issue that warrants thoughtful and detailed analysis, as well as consultations with stakeholders that would be impacted by any change in airport governance.”

Officials at some of the country’s major airports share Brownoff’s concerns. This month, Vancouver, Calgary and Ottawa airports launched an information website to get the public on their side as they lobby the federal government to leave things the way they are.

The website offers their perspective on a potential sale of Canada’s major airports. The trio of airports suggest a selloff to private investors would establish the airports as for-profit enterprises that would result in increased cost for airlines and passengers alike and undermine Canada’s economic competitiveness.

The consortium of airports suggest the country’s airports are a success story. Having been privatized by the federal government in the 1990s, they argue the new model, run by not-for-profit airport authorities, have a mandate to advance economic growth and promote development in the communities in which they operate.

They also point out Canada’s major airports do not receive any funding from the federal government, yet pay more than $1 billion a year in rents and other fees to the federal government.

Brownoff said cashing in on the sale of Canada’s major airports is probably appealing to a federal government that has made major infrastructure investment commitments.

However, she believes that would be shortsighted.

“Much of the potential [one-time] revenue such as a sale might generate seems to miss the very real long-term risks to Canadians of a selloff,” she wrote in her submission to the CRD board. “When it was tried in the U.K. and Australia, the sale of their airports did not produce the promised returns to the government and did not deliver the anticipated tax revenues.

“What did happen is that the customer fees increased and service levels for passengers declined.”

Brownoff said while the federal government is currently only looking at the major airports, it may not be long before smaller airports such as Victoria’s could be caught up in the mix.

“This could have a terrible impact on some of the northern communities around service delivery and consumer service,” she said. “And right now the one voice not at the table is local government. We are saying we need to get [that voice] to the table.”

When asked about the issue, Victoria International Airport chief executive Geoff Dickson would only say consultation on this kind of issue is important. “I think it’s always important to have discussions at all levels,” he said. “This is an incredibly complex issue that many people will need to be consulted on.”

The chief executive of the National Airlines Council of Canada, who was in Victoria this week, applauded the CRD’s decision to take on the issue.

“What makes the CRD initiative different, from my perspective, is the fact the CRD, if adopted, will be asking [municipalities] to urge the government of Canada to stop the process and consult communities and other stakeholders and open up the process,” said Massimo Bergamini. “That’s very important. The CRD has taken a Lower Mainland issue and is turning it not only into a provincial and regional issue, but a national one, which is how it should be looked at.”

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