Registration
SOR/98-110 6 February, 1998

AERONAUTICS ACT

Regulations Amending the Air Services Charges Regulations

The Minister of Transport, pursuant to subsection 4.4(2) (see footnote a) of the Aeronautics Act and section 2 of the Ministerial Regulations Authorization Order, made by Order in Council P.C. 1986-1348 of June 5, 1986 (see footnote b), hereby makes the annexed Regulations Amending the Air Services Charges Regulations.

Ottawa, February 5, 1998

David M. Collenette
Minister of Transport

REGULATIONS AMENDING THE AIR SERVICES CHARGES REGULATIONS

AMENDMENTS

1. The portion of section 9 (see footnote 1) of the English version of the Air Services Charges Regulations (see footnote 2) before the heading "TABLE" is replaced by the following:

9. Where the officer set out in column II of an item of the table to this section has approved the use of an airport set out in column I of the item for the landing, by any Canadian air carrier licensed under Part II of the Canada Transportation Act, of an aircraft on a flight conducted exclusively for the purpose of improving the skill and knowledge of the aircrew personnel of that air carrier and, where arrangements are made in advance with the officer in charge of the airport where the landing takes place, the landing charge for each such landing is 20 per cent of the applicable charge prescribed in section 4.

2. Part 6 (see footnote 3) of Schedule I to the Regulations is repealed.

3. Part 30 (see footnote 4) of Schedule I to the Regulations is repealed.

4. Part 7 (see footnote 5) of Schedule IV to the Regulations is repealed.

5. Part 14 (see footnote 6) of Schedule IV to the Regulations is repealed by the following:

PART 14

HALIFAX INTERNATIONAL AIRPORT

Item	Column I Seating Capacity	Column II Domestic Flight General Terminal Charge, per Aircraft ($)	Column III International Flight, and Domestic Flight with Customs Presentation, General Terminal Charge, per Aircraft ($)
1.	0-9	11.91	24.08
2.	10-15	23.80	48.14
3.	16-25	36.65	74.09
4.	26-45	64.26	129.78
5.	46-60	91.78	185.41
6.	61-89	146.90	296.73
7.	90-125	202.09	408.06
8.	126-150	238.84	482.23
9.	151-200	330.68	667.72
10.	201-250	431.81	871.83
11.	251-300	532.86	1,075.78
12.	301-400	633.90	1,279.83
13.	401 or more	780.86	1,576.57

6. Part 31 (see footnote 7) of Schedule IV to the Regulations is repealed.

7. Item 6 (see footnote 8) of Schedule VI to the Regulations is repealed.

8. Item 31 (see footnote 9) of Schedule VI to the Regulations is repealed.

COMING INTO FORCE

9. These Regulations come into force on March 1, 1998.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The Air Services Charges Regulations (ASCR) are made by the Minister of Transport to impose charges for the use of air facilities or services provided by or on behalf of the Minister.

On April 16, 1996, the Solicitor General announced that effective July 1, 1997, the responsibility for on-site protective policing and security services at Canada's international airports would be transferred from the Royal Canadian Mounted Police (RCMP) to local airport operators.

The security requirements for Halifax International Airport have been reviewed and the costs associated with the provision of these services are estimated at $1.2 million on an annual basis. It was proposed to recover these additional costs through a 29.01 percent increase in the general terminal charge. This percentage increase was subsequently revised in response to concerns raised by the air industry during consultation on the proposal. The revision is outlined in the Consultation section below.

The recovery of the costs of protective policing and security services at the airport is consistent with the National Airports Policy (NAP). Under this policy, announced by the Minister of Transport on July 13, 1994, the Government will maintain its role as regulator but will change its current role from airport owner and operator to that of owner and landlord. To facilitate the changes under the NAP, the Department is continuing with cost reduction initiatives and changes to existing user charges in order to make the national airports system and regional/local airports financially self-sufficient no later than March 31, 2000.

With this amendment, the Department is continuing within a framework that gradually brings local revenues in line with local costs over the next three years. These local costs are also the subject of local consultations in which the airport sizing and levels of service provided are determined by local demands.

In addition to the general terminal charges increase mentioned above, the following changes are also effected with this amendment:

(a) References to Earlton and Sarnia airports are removed from the regulations as the airports are now under local control and as such are no longer subject to these Regulations.

(b) Correction of a typographical error in the English version of section 9 of the regulations, which was inadvertently included in the previous amendment to these Regulations.

The changes are effective March 1, 1998.

The last amendment to these Regulations became effective June 1, 1997 with SOR/97-258. That amendment effected increases in landing, general terminal and aircraft parking charges at most airports operated by the Department. The impact of the 5 percent increase in landing and general terminal charges at Halifax International Airport was expected to be about $0.19 per enplaned/deplaned passenger.

Alternatives

Under the National Airports Policy (NAP) announced by the Minister of Transport on July 13, 1994, airports are to be transferred to other authorities within the next three years. The NAP recognizes that there will be a need to adjust levels of service, improve operating efficiencies and increase revenues to meet the target of self-sufficiency laid out in the policy.

A number of alternatives were considered in developing this amendment. Given the need to fund the costs associated with the provision of on-site protective policing and security services at the airport, smaller increases would not be reasonable.

Benefits and Costs

The increased revenue resulting from the implementation of this amendment was expected to recover the operating and maintenance costs of protective security services which have been estimated at $1.2 million for a full year. However, with the revision (outlined below) to the international general terminal charge rates, the increased revenue has been estimated at $1.0 million for a full year.

The amendment will result in an increased cost to the aviation industry using facilities and services at Halifax International Airport. As originally estimated, the impact was approximately $0.46 per enplaned/deplaned passenger. However, with the revision to the international general terminal charge rates, the impact is estimated at approximately $0.40 per enplaned/deplaned passenger.

Consultation

Air industry associations, such as the Air Transport Association of Canada, the International Air Transport Association, the Air Transport Association of America, l'Association québécoise des transporteurs aériens inc., the Canadian Business Aircraft Association, and the Canadian Owners and Pilots Association, were advised by letter of the proposed changes and invited to give their comments. Stakeholders wishing to discuss the amendment were invited to contact department representatives.

In addition, the staff at Halifax International Airport conducted local consultations with airport stakeholders regarding the proposed increase to general terminal charges at that site.

The amendment was prepublished in the Canada Gazette Part I, on November 1, 1997. Three letters were received.

Two of the letters suggested that applying the same percentage increase to both the domestic and international general terminal charge rates discriminates against foreign carriers and is contrary to the bilateral air services agreement. The writers expressed the view that there is no difference in cost for security between a domestic and an international flight.

While the rate for the use of the air terminal building is higher for international flights than for domestic flights, the Department is of the view that this differential rate does not contravene the bilateral agreement. Also, there is a generally accepted understanding that rates for international flights should be higher as there are more costs associated with serving international flights, such as providing space for inspection services and dedicated holding rooms.

Nonetheless, after reviewing the concerns expressed by the industry, the Department accepts the premise that there is no substantial difference in the cost of security provided to an international or a domestic flight.

The other letter suggested that a hold should be put on all fee increases at Halifax International Airport and at any airport in the Atlantic Region until such time as the airports have been transferred to Airport Authorities or other interest groups. The writer indicated that Halifax International Airport is the hub of the Atlantic Region and that the survival of economic development initiatives for the region is dependent upon the air transportation system. The writer further suggested that the Department redefine the National Airport Policy and focus on the system approach to air transportation.

Many airports have already been transferred under the NAP which was announced in July 1994, while transfer negotiations are ongoing at many others. Under the NAP, the national airports system and regional/local airports are expected to be financially self-sufficient no later than March 31, 2000. The recovery of costs of protective policing and security services at Halifax International Airport is consistent with NAP.

After careful consideration of all the comments received, and balancing the need to recover the costs associated with the provision of protective policing and security services with the concerns expressed by the industry, it was decided to reduce the amount of the increase for the international general terminal charge. The increase to the international general terminal charge has been limited to the equivalent dollar value increase for each seating range in the domestic general terminal charge. This equates to an approximate increase of 12.5 percent for the international general terminal charge rates instead of the original proposal of 29.01 percent. The original 29.01 percent increase has been retained for the domestic general terminal charge.

Compliance and Enforcement

Charges payable under these Regulations will be recovered through the Department's current administrative collection procedures. Collection of outstanding debts due to the Crown may, through the provisions set out in sections 4.4 and 4.5 of the Aeronautics Act, be recovered in any court of competent jurisdiction.

Contact

Dan Cogliati, Director
Cost Recovery
Department of Transport
Place de Ville
Tower C, 22nd Floor
Ottawa, Ontario
K1A 0N5
Telephone: (613) 993-5769
FAX: (613) 991-4410

Footnote a

R.S., c. 33 (1st Supp.), s. 1

Footnote b

SOR/86-631

Footnote 1

SOR/97-258

Footnote 2

SOR/85-414

Footnote 3

SOR/97-258

Footnote 4

SOR/97-258

Footnote 5

SOR/97-258

Footnote 6

SOR/97-258

Footnote 7

SOR/97-258

Footnote 8

SOR/97-258

Footnote 9

SOR/97-258

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