Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 7 - Evidence, March 14, 2012
OTTAWA, Wednesday, March 14, 2012
The Standing Senate Committee on Transport and Communications met this
day at 6:47 p.m. to continue its study of emergent issues related to the
Canadian airline industry.
Senator Dennis Dawson (Chair) in the chair.
The Chair: Welcome to this meeting of the Standing Senate
Committee on Transport and Communications.
This evening we are continuing our study on the Canadian airline
We have the pleasure of having Steve Desroches, Deputy Mayor of the City
We also have Mr. Scott Clements, President and Chief Executive Officer of
the Fort McMurray Airport Authority. Accompanying Mr. Desroches is Mr. Chris
Cope, from the City of Ottawa's economic development branch.
Gentlemen, thank you for taking the time to speak to us. Mr. Clements, I
understand you will begin. The floor is yours.
Scott Clements, President and Chief Executive Officer, Fort McMurray
Airport Authority: Honourable senators, I would like to say first that
this is the first time I have had this honour and pleasure and it may be the
last, so I am going to enjoy it.
I have 10 minutes of text which you have already received, and if you do
not mind, I will read most of that rather than try to wing it, and we will
get through that and then have time for questions.
I would first like to thank you for conducting this very timely and
important study of our industry and, second, for the opportunity to address
you personally. I have been in the aviation business and airport industry
for over 52 years. That sounds silly when I say it because I do not feel
that old, but I guess I am. Obviously, I have seen a lot and learned a lot
over those years.
While my remarks today will be from my current perspective as the
president and CEO of Canada's fastest growing and currently the nation's
fifteenth busiest airport in Fort McMurray, you will see from my background
that I have the experience that would permit questions on the broader state
of the air transportation business in Canada.
I understand that several of my colleagues have testified already, mostly
from the top eight airport authorities that represent the hubs in Canada's
network of airports. Since I was the President of Edmonton Regional Airports
Authority for 10 years, there is much that had been said by them that I
know, understand and agree with in terms of their praise for the national
airports system — as it has evolved over the last 20 years — and their
suggestions for improvements to lead to better competitiveness for airports
That ground has been covered well and I will not wander into that
territory. Rather, my remarks will talk generically about the vital regional
networks that serve Canadians by feeding the hubs and the issues that many
regional airports face in terms of support and competitiveness.
Fort McMurray is a great example and there are many broader conclusions
that may be drawn from looking at our region of Wood Buffalo. I will make
comments related to four categories: governance and the airports system, the
funding of regional and smaller airports, international access, and the
critical importance and unique nature of the air traffic in the Alberta oil
First I will talk about governance and the airports system. You are very
aware from witnesses that have already appeared of the 26 so-called national
airports that make up our National Airports System, or NAS. However, you may
not know it is really not a national airports system, per se, but rather a
land management tool for the government. In the early 1990s these 26
airports were identified as part of this system based on assumptions and
projections of the day and were all leased to airport authorities, over
time, under lease conditions that have become well known to you.
The rest of the federal airports in Canada, Fort McMurray included, were
transferred to municipalities or qualified airport management entities that
have had a mixed bag of governance overseeing the businesses of their
regional airports. They were classified as part of a new regional or local
system of airports; a sort of second tier.
Fort McMurray is a particularly interesting example. Upon transfer from
the federal government to the Regional Municipality of Wood Buffalo in 1999,
there was a relatively new federally built terminal in place, designed to
accommodate a quarter of a million people. At the time of transfer there was
102,000; a comfortable situation for the airport when it was transferred.
Obviously, it would not have met any standard to become a national airport.
Since that time, there has been an absolutely dramatic increase investment
in the oil sands, and together with that a growth in the last eight years
that is the highest percentage growth in North America. We have gone from
that 102,000 to 775,000 people at the end of last month going through that
little terminal designed for a quarter of a million. If you have been
through it recently, you know that something needs to be done.
As this growth occurred it became apparent that the municipal model of
governance was not working well to handle the growth pressures. It was
decided in 2009 to convert using the Alberta Regional Airport Authorities
Act to the airport authority model that was worked so well across Canada. I
believe we will hear from my colleague just how well it has worked in
The experience of the past two years has proven that this decision to
create an autonomous administration was wise and facilitated the critical
decisions required to undertake a new major project which will open in April
of 2014: an international terminal five times the size of the current one.
With growth like that experienced at Fort McMurray, and with similar
rapid growth at airports like Toronto City Centre and Abbotsford, it begs
the question of whether there needs to be a redefinition of the parameters
for determining what airports should constitute Canada's National Airport
System. It seems timely to redefine the National Airport System so that it
is more than just simply a way of managing federal land. I have raised this
point with senior executives in the transportation department and they have
acknowledged the situation. I just met with one today.
In summarizing the point on governance, I put to you that there should be
an easy way to allow airports managed with a municipal governance model to
convert to the airport authority model, with immediate clarity on equivalent
and fair treatment in relation to the other NAS airports. This includes
treatment in regard to federal taxation and access to other critical
I also suggest that it would be timely to restate the parameters of the
National Airport System to allow for the inclusion of airports on the basis
of traffic volumes and service offerings. In the case of Fort McMurray, we
should be seen as having the status, trappings and obligations of the
fifteenth busiest airport in the country.
My second issue relates to funding of regional and smaller airports. I
accept that the airport authority model has, in normal circumstances and
with the right things in place on transfer, all the tools it needs to do
what it needs to do. However, in reality these conditions vary dramatically
from one airport to another as has been explained to you by previous
witnesses. You are also aware that several exceptions have been made to the
original concept of financial autonomy to accommodate growth in economic
development situations in some communities by the granting of federal
dollars for specific projects. For example, there has been material federal
help for Quebec City, Halifax, Whitehorse and Prince George that I know of.
This form of help should be put in an expanded formal program with a
long-term planning horizon and eligibility criteria that would allow more of
us to benefit from it.
The help for special projects has been an addition to the Airports
Capital Assistance Program, or ACAP, that you know about, and this has
funded 678 projects at 171 airports for a total of $556 million over its 17
years of existence. While this is very helpful, the $38 million dollar per
year ceiling and low threshold for airport eligibility leaves many airports
without funding for critical projects. With the significant rent payments
coming into the national treasury from the larger airports, I believe it
would be in the public interest to materially increase ACAP funding so that
the overall air transportation system would benefit from resource inputs
from the industry.
Our airport at Fort McMurray needs financial support to build the air
terminal and related facilities required by its traffic levels and requests
have been put to all three levels of government. With the incredible growth
at our airport, the amount of money to complete the full project is beyond
the means of the airport authority. This has been acknowledged by the
regional municipality with a public grant of just under 10 per cent of the
$258 million total cost for the project.
We are engaged with both the provincial government and the federal
government for similar support in making the Fort McMurray airport
strategically what it needs to be, in order to support the critical growth
of the wealth generating activities and business in the oil sands region.
I have left a copy of the formal request that I have made to the federal
and provincial government so that your staff can review it later.
My third issue, honourable senators, is related to our quest to become an
international airport at Fort McMurray. With over 770,000 passengers per
year, an estimated immediate international passenger market of 50,000, a
very strong demand for international cargo to serve the huge industry
processes in the oil sands and a household income twice that of Calgary, it
is amazing that Fort McMurray — Canada's fifteenth busiest airport — is only
one of two airports in the top 32 without customs of any kind. We have been
in the process with the Canadian Border Security Agency for the last 18
months to get this changed, and there is some hope that this will happen
soon. I confirmed that with a meeting at the director general level in CBSA.
The point I would make is that the process for an airport like ours is
cumbersome and counterproductive to business case analysis. With the
knowledge that CBSA is a fairly new construct and still evolving, I would
suggest that there be another fundamental review the policies related to the
deployment of CBSA resources to make them more responsive to a demonstrated
requirement, and to create a better alignment with changing air service
traffic. This should include an examination of the process for new entrants,
like Fort McMurray.
My last point is an interesting and informative one that has caused some
concern. That is the unique nature of the air traffic situation as it has
developed in the region in the last 10 years or so.
In addition to the Fort McMurray airport, there are 17 other airports in
the region, several more in the municipality and several more in the region.
Obviously, air transportation is extremely important to the critical
businesses at Fort McMurray. Of these airports, most are privately held and
operated by oil companies. Four of these are very busy with flying workers
in and out from all over Canada on a regular basis directly into work camps
north of the city. We estimate that annually there are as many passengers
going and coming from the camp airstrips as passengers using the main
airport at Fort McMurray, in other words, a total of 1.5 million to 1.6
million per year.
My point in raising this issue is that the whole system of airports has
evolved in an ad hoc manner. The private airports are not certified. They
are in uncontrolled airspace using procedural control in an area that has a
heavy mix of instrument traffic and visual traffic, mainly helicopters.
I am happy to say that there is an agreement by all the users, owners and
regulators of the air transportation infrastructure in the region to conduct
a study of the situation with a view to identifying options to improve the
safety and effectiveness of the system in the region.
The Government of Alberta-led study is currently under way. Both
NAVCANADA and Transport Canada have agreed to be observers in the study.
In conclusion, we should indeed have a true national airport system
properly defined, one which would include a regional tier network whose
importance to the overall system would be recognized in policies that
promote the economic benefits that come from a robust and vibrant feeder
network for our principal hubs in Canada.
The Chair: Thank you very much, Mr. Clements.
We will have Mr. Desroches make his presentation and after that we will
have a period of questions.
Steve Desroches, Deputy Mayor, City of Ottawa: Thank you very
much. It is a pleasure for me to be here on behalf of the City of Ottawa. .
I will be keeping my remarks to the importance of the Ottawa airport to
the local economy and with the work we have been doing at the city to ensure
that it is a key part of our city's success.
I do not have a background in aviation. I am a passenger and can comment
from that perspective, but I will be talking about the work we have been
doing at the city to ensure that our airport is a success.
It is a great pleasure for me to be speaking to you this evening to
express the point of view of the City of Ottawa on the very important
economic relationship that exists between the city and Ottawa's
MacDonald-Cartier International Airport.
As we all know, Ottawa enjoys a unique place among Canadian cities as the
nation's capital. We are exceedingly proud of that position. We are also
very proud of our city's rich history, the vitality brought by the presence
of government and our beautiful natural scenic setting.
We are fortunate to be blessed with many cultural entertainment and
tourist attractions, four post-secondary institutions and the incredible
dedication, drive and inventiveness of our business, entrepreneur and
Our population is diverse and growing, and we are consistently rated
amongst the best places to live, work, visit, study and play.
We have recently renewed and reinvigorated our long-term economic and
Of particular note is the recent launch of an arm's length economic
development agency known as Invest Ottawa to put us on a more solid footing
to compete nationally and globally for investment and tourism.
In the context of its investment in economic development, the city has
committed to making the best use of Ottawa's strengths as a competitive
world hub and promoting Ottawa as a great place to live, work, visit, study
Against that background, with our renewed focus on the importance of
economic development in Ottawa, I would like to emphasize the vital economic
importance of the Ottawa International Airport to the City of Ottawa. The
airport is usually the first and last place a traveller sees when visiting
the city. More often than not, it is the place where the first impression is
Ottawa's ability to compete on the world stage and attract and retain
business, investment opportunities, major events, conferences and tourists
requires that this airport be impressive, modern, functional and convenient.
As the Ottawa International Airport Authority recently celebrated its
fifteenth anniversary, it was honoured with a series of prestigious awards
by the Airports Council International. Earlier this month, the council named
Ottawa International Airport the number one airport of all sizes in North
America, and the number two airport in the world serving between 2 million
and 5 million passengers annually. Both are significant recognitions.
In recent years, the Ottawa International Airport Authority had added new
routes, increased passenger volumes and cargo handling facilities and
undergone major facility upgrades, all the while maintaining itself as a
secure, efficient, and cost-effective organization that receives no
subsidies from government.
However, for Ottawa, the airport is much more than an attractive access
point for people and goods; it is a major public asset, a large employer and
a land developer, in addition to being a powerful stimulus for and an
essential driver of local economic growth.
The airport is responsive to the community, invests private money in
infrastructure that serves and supports the community and is an integral
component of our economic development.
The airport authority has a strong governance structure and has developed
and continues to cultivate positive relationships with the organizations
that appoint or nominate to its board, including the City of Ottawa.
I would like to share a few facts to underline the integral importance of
the Ottawa airport to the city of Ottawa.
In 2011, the airport authority injected $1.1 billion into the local
economy. When indirect and induced impacts are included, the total economic
impact of the airport exceeded $2.2 billion. Ottawa airport activities
generate approximately one quarter of a billion dollars in taxes for all
three levels of government.
The airport employs approximately 5,000 people directly and another 5,400
are indirectly employed as a result of its operations. The 5,000 people
directly employed earn approximately $271 million dollars in labour income.
Based on traffic forecast and estimates of growth in employment over the
next five years by organizations at the airport, there will be between 6,300
and 6,600 direct FTEs of employment at the airport, generating between $1.4
billion and $1.7 billion in economic output by 2017. By 2030, it is
estimated there will be between 8,400 and 8,800 direct FTEs generating
between $1.9 billion and $2.2 billion in direct output.
Between 2006 and 2010, passenger traffic at the airport grew by 17.5 per
cent, or an average annual rate of 4.1 per cent. This is double the average
growth among the eight largest airports in Canada. In 2011, passenger
traffic grew by a further 3.4 per cent.
It is estimated that 45 per cent of the passengers are business
travellers. Aircraft traffic at the airport grew by 18.4 per cent between
2006 and 2010, for an average annual rate of 4.3 per cent.
As a land developer, the airport has begun to develop its surrounding
employment lands. Recent examples include hotels, restaurants, a retail
complex, and a new CE centre, a world-class convention and trade show space
on Uplands Drive that, since its opening, has attracted many high profile
The City of Ottawa invested $8.5 million in this $39 million
public-private partnership with the Ottawa International Airport Authority
and the Shenkman Corporation. It has created the largest purpose-built
events space in eastern Ontario, has created 600 direct and indirect jobs,
and it is expected to inject $30 million annually into the local economy.
In 2011, the airport served 4.6 million passengers and supported 91,000
commercial aircraft movements, confirming the strength of the local market
and the airport's continuing status as an attractive option for carriers and
There are approximately 150 organizations operating at the airport,
including the airport authority, commercial operators, both aviation and
non-aviation, and government agencies.
All of these achievements and recognitions are remarkable and significant
for the airport's administration. They are also very important for the City
of Ottawa and its residents. That is why we want Ottawa's airport to
continue to grow and prosper.
In addition to facilitating access for the tourism industry, our local
economy depends on the airport to conduct business and sustain and grow
targeted sectors such as clean tech, photonics and life sciences.
These are all reasons why the City of Ottawa and the Ottawa
Macdonald-Cartier International Airport have recently collaborated on
developing a shared vision that recognizes the critical role of our world
class award-winning airport as a catalyst for economic growth and includes a
commitment for us to go forward together as partners. This shared vision
will go before council in two weeks and was recently approved by a committee
of council. It is intended to guide how the city and the airport can work
together to stimulate economic growth and optimize contributions to
employment and economy.
Some of the objectives of this vision include stimulating and targeting
economic growth, international business and foreign investment in key
industries and commerce; attracting major events and conventions;
strategically developing employment lands with a focus on attracting small,
medium and large multinational companies; proactively identifying route
expansion opportunities and targeted geographic regions; and augmenting
The city and a viable, profitable and competitive airport must work
together through a collaborative partnership to enhance economic
development. If this collaboration does not happen, we face a series of
possible risks: The loss of domestic and international travel connections
and the ability to stimulate tourism; a weakened ability to compete for
global services and new routes; increased competition from neighbouring
airports; a restricted ability to stimulate economic growth and develop
employment opportunities; increased vulnerability to an economic downturn;
and the inability to become a globally competitive city.
Honorable senators, the City of Ottawa is highly interested in supporting
an industry and a safe Canadian air transportation system that are healthy
and competitive, as well as the free and efficient flow of people and goods
through its airport.
At this point, on behalf of Mayor Jim Watson and the people of the city
of Ottawa, I would like to thank Mr. Paul Benoit, President and CEO of the
Ottawa International Airport. He announced today that after 16 years at the
helm, he will be retiring in February.
As the mayor noted today, he has been a tremendous catalyst for change at
the Ottawa airport, and under his leadership the airport has become the best
in North America and a global leader that drives economic and tourism growth
in the nation's capital. We are grateful to Paul for the vision, leadership
and energy he has brought to the Ottawa International Airport.
I thank you for the opportunity to speak to you this evening.
The Chair: Thank you. As the audience can see and hear, the scope
of our study is well represented in front of us today when we have different
issues and problems between these two airports. That makes our job that much
more of a challenge.
Senator Boisvenu: Mr. Desroches, please congratulate the people of
Ottawa's airport. I think they won a prize last year for being the number
Mr. Desroches: That is correct.
Senator Boisvenu: Bravo. I will speak to Mr. Clements first. Can
you hear the interpreter?
Mr. Clements: Yes.
Senator Boisvenu: I think you have quite a problem.
Mr. Clements: I am out of retirement for the third time, now.
Senator Boisvenu: How much will have to be invested to expand Fort
Mr. Clements: I did not hear the translation but I think you asked
how much the project would be. The project is $258 million total. We as an
airport authority have borrowed $198 million. We cannot borrow another
dollar. We are leveraged to the maximum and that is why we are coming to the
municipality, and to the provincial and federal government. Our appeal to
the federal government is to extend our runway; the runway is too short.
However, we could not afford to do that given all the other requirements.
The municipality has participated already with $25 million. That will
help with civil works. We had the build it on the other side of the runway.
We could not expand in place. No one imagined we would ever have this kind
Senator Boisvenu: I suppose it is a region that will continue to
grow. Will you have to do more work in five or ten years? How long will the
expansion meet your needs?
Mr. Clements: This kind of decision happens about every 25 years.
You need to have after 50-year vision when building this kind of facility.
Therefore, when my board sat down to look at the financial challenge of
doing what they needed to do, they wanted to be assured, through a
third-party analysis, of the kind of growth projected. Four separate studies
were done, and they assumed a medium line that was conservative. The more
likely outcome in the oil sands is that it will be aggressive. The
indication price of oil and the investments that have been announced in the
last couple of years will take us from 1.6 million barrels a day coming out
of the oil sands to 2.5 million barrels a day, guaranteed. Air traffic
exists in direct correlation to the investment in the oil sands.
We are pretty safe in making the projection of 2.5 per cent growth over
Senator Boisvenu: Does your airport qualify for federal government
Mr. Clements: We do not qualify for the Airports Capital
Assistance Program, ACAP, because the threshold is too low.
The big airports are fine on their own. I ran one for 10 years and we did
not ask for any money.
Senator Boisvenu: You are in the middle.
Mr. Clements: The smaller ones are also fine. We are caught in the
middle, along with another dozen airports. I asked for a redefinition of the
ACAP so this kind of critical infrastructure could be funded.
Senator Eaton: When you are talking about 17 airports around you,
most of them owned by the oil companies, could they not be coerced or gently
persuaded that it is in their interest to have a large, well-turned-out
international airport facility and to give you some money and consolidate
everything into one big international airport?
Mr. Clements: Two of my board members are oil sands executives and
one of them built one of those airports. It is a togetherness thing, I am
happy to say. The communication and cooperation is evident to me. They
agreed to help fund this study to identify the things we need to do going
forward to make the whole system of airports more efficient, more effective
Senator Eaton: I am sure our present Prime Minister wants Northern
Gateway to happen, and if Keystone happens, you will be very busy.
I would have thought it is in their interest to help finance a big
Mr. Clements: Their primary interest is in their own companies.
They built those airports because they did not have the infrastructure to
get their workers into the work area in an efficient way.
They are huge companies with lots of money. Building an airport is not
cheap but they built a number of them.
Senator Boisvenu: Mr. Clements, your airport is not considered an
international airport, but rather a regional airport. Are your fees higher
than those of an international airport? Will expanding lead you to review
your users' fees?
Mr. Clements: Unfortunately, our user fees are high; given the
amount of traffic and the amount of money we have had to borrow, we lead the
nation at $30 of the AIF — each passenger leaving has to pay $30. We did not
want to go there but we had to and we had to also raise the airline rates
and parking charges. It is the nature of the business model. If we can get
some help, we will be able to lower those rates and charges, which will make
us more competitive.
The international airport issue is not one of costs so much as providing
a service to 50,000 people who live in Fort McMurray who think that they
deserve to fly directly into the United States or Mexico, just like they do
in so many other parts of Canada.
Senator Verner: Mr. Clements, you say that the user fees are much
higher because you are a regional airport. Do you think that is one of the
reasons why private companies working in Fort McMurray have their own
Mr. Clements: No, that is not the reason at all. It is purely a
question of time is money, and the transportation infrastructure to get into
these difficult areas makes it very advantageous fly in.
Senator Verner: I have to say I am aware of the issue because my
son works in Alberta and he travels to Fort McMurray every week.
Senator Boisvenu: I have a question for Mr. Desroches. You seem to
know Ottawa's airport well. I would like to know what type of relationships
there are between the City of Ottawa and the administrators of Ottawa's
airport. Are they business relations?
Mr. Desroches: Currently, two representatives of the City of
Ottawa are members of the board of directors. We just approved an agreement
to work jointly with the airport. As you know, the success of the airport
will depend on its collaboration with the City of Ottawa on emergency
services, public transit and planning services, among others. That is why we
have a partnership agreement with the airport. Many services provided by the
City of Ottawa are very important for the airport.
Senator Greene: This question is for Mr. Clements. You appear to
want to join the National Airports System, but a number of witnesses have
given us testimony about their complaints about how the system operates,
particularly in the area of rents.
Could you outline the benefits for you of being part of that system and
talk about those rents?
Mr. Clements: I will avoid the question of rent because it has
been well covered. I lobbied very hard to reduce the amount of rent when I
was in Edmonton and we were successful.
We will leave it there. I think the federal government is taking too much
money out of the system.
Senator Greene: We would like to hear about that.
Mr. Clements: I will go there, but I will answer the other part of
your question first. The reason we would like to be part of a redefined
National Airports System is because the country should have one and it
should be clear what qualifications you need to become part of a recognized
National Airports System.
Airport number 15 in a critical economic area like Fort McMurray
obviously will make whatever the parameters are, but the way it is designed,
we cannot get in. It is a land management system. In looking again at
something called a National Airports System, let us redefine the
qualifications, assign the airports to it and then define the obligations
and benefits of the National Airports System.
One of the big benefits is clarity on taxation.
There is a special act called the Airport Transfer (Miscellaneous
Matters) Act, which covers a number of things, such as the Official
Languages Act, acknowledging that there is a rent situation as well, but it
says, for CRA, all of your airport revenues are tax exempt.
We are not in that club, so we are going to be in front of CRA without
that benefit and hopefully convince them that we are not-for-profit, which
we are, and therefore exempt under the separate act of the Income Tax Act.
It would be better and much clearer to treat airport number 15 in Canada the
same as airport number 26.
Senator Greene: Could you explain in point form why your current
situation puts you at a disadvantage?
Mr. Clements: We transferred from a municipal model, a municipally
owned airport, to kind of a federal model, an airport authority model, and
that model has worked so well.
We heard from one airport, Ottawa, how they have done, but I can assure
you, since I ran the Edmonton airport for 10 years, that it is just as good
there. It is just as good in Calgary, Vancouver and Montreal. Everywhere
where the airport authority model has been exercised, the economic benefit
and benefits to the customers and the users have been tremendous. We are the
envy of the world in terms of the airport authority model.
The benefit of going to that model is that it is run like a business. You
know the model. The board is independent and totally accountable for all
their decisions and that works much better than a government system.
Senator Greene: Part of that model is high rents, which get
transferred to consumers.
Mr. Clements: In 1999, when the airport had only 102,000 people
and was kind of out of sight, and so many other airports like it, the land
was transferred for a dollar to the municipal government. For 10 years, I
had to run it as a municipal entity. They transferred the land to us for one
dollar, so rent is a moot question because we own the land.
Senator Greene: I understand. You want to become part of the
National Airports System but maintain your position with rents as a dollar.
Mr. Clements: We do not want the redefined National Airports
System to be a land management system. Keep that separate.
Senator Greene: I understand where you are coming from.
Senator Eaton: I was in Fort McMurray in the early 1970s and it
was a lot of ATCO trailers.
Mr. Clements: There have been big changes.
Senator Eaton: I would have thought that given the importance of
Fort McMurray and the airport to Canada, and especially to the province of
Alberta, that the province would have given you any money you need to keep
on building your infrastructure. For instance, are you linked by rail or bus
lines out of Fort McMurray?
Mr. Clements: The province is involved in this project.
Senator Eaton: What is the percentage that they are involved?
Mr. Clements: What I am asking the province to do, since we have
built the project inside the fence, we have $25 million of help from the
municipality, we want the province to pay for the off-site levies that will
come to us because they had to build a sewer line to the airport, a new
water line; they have to change the roadway structure. Normally, as a
developer, we would be assessed our share of those levies. We are asking
them in this particular case, as it would make economic sense since we are
going to have a hard time raising the money.
Senator Eaton: I do not think you are being greedy enough.
Mr. Clements: Thank you. I think they agree with you. It is not
easy to get public money in support of a project like this.
Senator Eaton: I could not agree with you more. Here, in the
centre of Canada, we hear nothing but, and I firmly believe in the
importance of Alberta to the economic future of this country. I have trouble
thinking that Premier Redford or whoever will win your next election will
not see Fort McMurray as something important.
Mr. Clements: I have spoken with the premier personally and many
of the ministers. They absolutely agree with you. There is a 40-year
framework of development of infrastructure called the Comprehensive Regional
Infrastructure Sustainability Plan — CRISP — that is approved by cabinet in
Alberta. It has no money attached to it yet, but they have formed a
transportation coordination committee with the two key deputy ministers,
infrastructure and transportation. I sit on it representing air
transportation. The chief administration officer of the municipality sits on
it. We have in one meeting identified the spending and priorities for the
first five years. Those will be taken to the Treasury Board once the
election is done.
They are serious. In addition to that, since 2005, $2.5 billion has gone
into the Fort McMurray region from both the federal government and the
provincial government over and above what the municipality could do on its
own — new sewage, water, bridges, roads, schools, fire halls, prisons,
everything. They just forgot about the airport.
Senator Eaton: When you talk about a regional tiered network,
should it have something specific? One of the things we have been thinking
about on this committee is that the National Airports System encompasses
everything from Toronto International to the airport I land in to go fishing
in Labrador, which has the same security regulations.
Perhaps the larger airports should be one system and the smaller airports
with fewer passengers a different system.
Mr. Clements: In a redefined system, that is exactly what you
would come up with. It is a tier 1, with the parameters to join that, and a
tier 2 and maybe a tier 3 as well. As I say, it is a misnomer to call those
26 airports a National Airports System when it is just a land management
Senator Eaton: If you have any thoughts, would you submit them to
our committee as to what you would see in tier 1, 2 and 3? I do not want to
give you extra work, but as you already think about transportation and
obviously understand airports thoroughly, it would help in our deliberations
if you could recommend something.
Mr. Clements: Transport Canada has already defined tier 1 and tier
2, and it is unrelated to the National Airports System. Then there is tier
"other." Actually, Fort McMurray has not graduated from tier "other" to
tier 2 yet. We have grown so fast that we have lagged in terms of that
Senator Eaton: Let us hope you get that.
Senator Merchant: Thank you for your presentations. My questions
will also be directed to Mr. Clements.
I was in and out of Fort McMurray 25 years ago, so I am sure things have
changed since then. I am sure it is not the same airport I knew back then.
That was in the mid-1980s.
We have heard from a lot of airports, and they all have similar
complaints. You said half of the people going in and out are flown around by
the big oil companies. By my arithmetic, you would get about 2,000 people
coming through every day because you said you have 750,000 people in total
365 days a year.
You have seven different airlines, I believe, coming into your airport.
Are these airlines competing against one another or are they flying from
different parts of the country?
Mr. Clements: With the deregulation of airlines, they all compete,
absolutely, both in charters and scheduled service. They will fly into the
airports up North and they will fly into our airport. WestJet is involved;
Air Canada is involved. There are many charters, such as Canadian North,
which has a major part of its business in doing this. That is good for them.
They are doing good business up there.
Senator Merchant: Are the fares competitive? We have heard about a
lack of competition.
Mr. Clements: The fares at Fort McMurray suffer from a
competitiveness issue. Without WestJet having a regional service, they have
one size aircraft, so they can only serve us when it makes sense to them.
Air Canada, of course, with the broad spectrum of aircraft they have, is
able to have the majority of the market. On shift change days and weekends,
the fares skyrocket. They do not have the capacity.
As we grow bigger, there will be more competition and the fares should
start to lower, particularly with the announcement that WestJet will be
getting into the regional service business. That will benefit our community,
just as it will benefit many communities our size in Canada.
Senator Merchant: You also spoke about surcharges. When you fly
the smaller airlines like Transwest Air, flying from Regina, let us say, to
Saskatoon — I am from Regina — you bypass all security lineups. It is very
attractive to fly small airlines.
Mr. Clements: Indeed, that is true. The oil companies have their
own security, and they like it, obviously. However, I think Transport Canada
is looking at that. I know they are, especially when they are in larger
Senator Merchant: Of the 2,000 passengers that come through your
airport, they are not the workers that go to the —
Mr. Clements: Some are.
Senator Merchant: Some are?
Mr. Clements: Yes.
Senator Merchant: Where would they come from as opposed to those
who come through with special arrangements?
Mr. Clements: I am told Suncor is the fourth largest airline in
Canada. They are in the aviation business in a major way and have
reorganized to recognize that. They have 45,000 passengers per year coming
to our terminal, and they are mainly from Calgary and Edmonton, but mainly
Calgary. Syncrude has two flights a day back and forth to Calgary and
Edmonton, and they have had that for 30 years. They also fly up to Mildred
There is a significant amount of traffic identified on charters. In
addition to that, I do not know the actual percentage of scheduled traffic
that would be workers, but I have flown the routes many times, and these
people look like workers to me; they are very identifiable.
Senator Mercer: Mr. Clements, Senator Greene, Senator MacDonald,
Senator Doyle and I know your airport very well; it is the second largest
airport in Nova Scotia and Newfoundland and Labrador and a number of our
friends and neighbours and constituents work there.
I find it interesting that we have 17 other airports in the area and they
seem to have unregulated, uncontrolled airspace, using procedural control in
an area this heavy. Those are your words. It seems to me Senator Eaton has a
point; you have to get a bigger solution in here to fix this problem. It
seems that one of the easier fixes would be to impose some regulation on the
air traffic in the community.
Would it make more sense to have these other airlines landing at Fort
McMurray and then either via chopper or some other means ferry the people
out to the various sites from Fort McMurray? If we imposed that on them, it
would drive more traffic into your airport. It would also drive more
interest in your infrastructure into the minds of the companies that are
Mr. Clements: The oil companies would object, obviously, very
strongly to that. That kind of regulation is a slippery slope.
Rather than go that route, we should identify the ways we can actually
see the aircraft and make the control of the aircraft safer. In the outcome
of this study that is ongoing, which is led by the Government of Alberta, we
will identify parameters under which new airports will or will not be built.
In addition to that, this crisp Comprehensive Regional Infrastructure
Sustainability Plan, once funded, will drive ground transport right by the
airport up into the work area, and once that happens, it will make the
economics of flying in and flying out a lot less attractive. That will take
some years, but the wheels are in motion.
Senator Mercer: Mr. Desroches, my colleagues would be disappointed
if I did not ask questions of someone representing the City of Ottawa
airport. I wish Mr. Benoit well in his next endeavours. I for one will miss
our exchanges of emails, sometimes very late at night.
I did a little project before I came here tonight. I did a Google Maps
search of five different locations in Ottawa: Ottawa City Hall; the former
Nortel site, which will now be National Defence headquarters out in the
Moodie Drive area; Parliament Hill, which is an important one for us; the
Orléans shopping centre, which is another location; and then Scotiabank
Place. I searched the transport from there to the Ottawa airport just to see
what Google did for me. Google did exactly what I thought it would do. It
drove all the traffic on to Bronson and the Airport Parkway. The one from
Orléans was a slightly different route from the others. Cities like
Vancouver and Winnipeg have a problem with their airports because to get
from the airport downtown — Vancouver is a good example because it is one of
the largest airports and busiest airports — you have you to drive through
residential streets. In Winnipeg, you have to drive through residential and
industrial streets to get to downtown.
The difference is that all of those are four-lane streets. All of these
roads Google sent me on — if I were to take their route, which I do — would
force me into a two-lane problem at Hunt Club. The City of Ottawa, in its
wisdom, is building a pedestrian overpass over the highway. I have lived in
and around this city since about 1995. I do not remember seeing more than
three dozen pedestrians on that road. I would have thought that the City of
Ottawa would have done something a little more imaginative, like twinning
the rest of the road to the airport, since you allowed the construction of
the CE Centre. It is that building that we all see when we get to the
airport, off to the right. It is a major centre for business shows and some
entertainment things. It has not happened to me yet; however, I am waiting
for the day when I am on the way to the airport, and the traffic is tied up
because of people getting in and out of there, meaning that I cannot get
there. What are the plans of the City of Ottawa to rectify this problem, and
what are the long-term plans with respect to moving traffic from the airport
not just Parliament Hill but also to other parts of the National Capital
Mr. Desroches: Thank you for the question. It is something that I
am concerned about as well, as my constituency is in the south of Ottawa.
I do not disagree with you that the Airport Parkway needs to be upgraded
to accommodate not only the airport but also the tremendous residential
growth that we are seeing in south Ottawa. I am a strong advocate for
upgrades to that road as well as to the entire road network in the south end
so that it can carry some of the residential traffic and not have it further
add to the congestion reaching the airport. We also, of course, have to
invest in transit. This is a council that has been making transit
investments. As you know, we are poised to build a significant LRT project
through the downtown core, from Tunney's Pasture to Blair. We looking at an
option of extending the O-Train from the South Keys area, where it goes now,
to Leitrim and into the residential areas in the south, with the goal of not
necessarily serving the airport but of taking some of that residential
congestion and trying to direct transportation needs to public transit.
I agree with you; that is a project that we need to consider when we move
into updating our transportation master plan, which we will do starting in
2013. I know many councillors will be making a case that we need to make
upgrades to the Airport Parkway. The pedestrian bridge that you have seen
under construction is really aimed at connecting a community that does not
have access to our rapid transit system at South Keys and Greenboro, the
Hunt Club and Brookfield area. You can imagine the large number of people
who live in that community and really have limited access to the southwest
The pedestrian bridge is consistent with our goal of trying to create a
transit-friendly city to take some of the pressure off of our road network.
It is a piece of the puzzle, but it is certainly time that the parkway be
upgraded and widened so that it can accommodate both the airport and the
residential traffic that we are seeing in the south of Ottawa.
Senator Mercer: In my question, I may have emphasized leaving
Ottawa. In my previous lives, I have spent a lot of time coming to Ottawa.
One of the conveniences that I always enjoyed in business was to be able to
fly into Ottawa early in the morning, get downtown, do my business, and
then, if I chose, go home to wherever I was living at the time. That cannot
happen any more in Ottawa because of the traffic coming into the city. I do
not take an early flight from Halifax anymore because I know that I cannot
guarantee that I will make my early morning meeting. I have to come in the
night before if I have an early morning meeting. I wanted to make sure you
understood that I was not just talking about finding a quick way to get out
of the city. I would like to find a quick way to get into the city so that I
can conduct my business. My wife was in the high-tech business in this city
for 12 years, and it was always an issue for them to get people from the
airport in and out of town.
Now that Mr. Benoit is leaving, I assume there will be a search. Is there
a timeline? I understand it is early days.
Mr. Desroches: Unfortunately, I do not know what the timeline
would be for that. It was an announcement made today, which I think caught
some of us by surprise. We are grateful for his work. As you know, the
airport is an independent authority, and I expect that they will find a
replacement that will ensure that the airport continues to succeed.
Senator MacDonald: My questions are for City Hall. It is great to
have City Hall at the table. I had two questions. I really only have one now
because Senator Mercer spoke to something I always noticed in regard to the
access to the city. This is the national capital of the country. It is a
beautiful airport. We fly a lot; we fly all over the world. We have been in
a lot of airports. Most Canadian major airports are beautiful, but this
airport should have beautiful and efficient approaches to it. It does not.
Getting from the airport is part of transportation, too. I want to emphasize
what Senator Mercer raised.
As for the second question I have, the more you travel and experience
different things, the more you reflect on your own service. I want to speak
about taxi service to the airport. I am not denigrating people who work hard
for a living. They put a lot of time in; I know that. It is not a great job;
it is a difficult job. However, you can flip a coin sometimes as to whether
that car is going to rattle all the way in or be filthy. Not all are, but
many are. I cannot get over how many airports I have been to around the
world where, no matter who is being picked up by a taxi, it is a Volvo or a
Mercedes or a BMW, and you can eat off the floors. People come to Ottawa,
and they do not have that service. I mean, I assume that most of that, in
terms of the taxi service and the licensing, is controlled by City Hall.
What plans does City Hall have to get a higher quality taxi service at the
Mr. Desroches: Thank you for your questions. To answer your first
question, I agree with you completely that we need to ensure that we have
good, reliable, and timely access to the airport, so I will certainly be one
— and there will be other councillors — who will be advocating for
improvements to the Airport Parkway and to the other road network in south
Ottawa so that we can accommodate the residential growth that we are seeing.
Obviously, transit has to be part of that equation, and we are looking at
With respect to the taxi industry, it is regulated by the City of Ottawa.
We have made some progress over the years. I moved here in 1988, and both
the airport and the taxi industry were not what we see today. We rely, as I
said in my remarks, on tourism, and, obviously, the experience that someone
has with a taxi — the impression that is formed — is one that reflects on
the city and on the nation's capital.
I will take your feedback, senator so that when we are looking at the
standards and reviewing our bylaws around that we are considering the
impression that it has on the tourism industry and on the business
Senator MacDonald: It is the national capital. We are an advanced
country. We should have the option of the best of service at the airport.
Mr. Desroches: I agree with you. We have made some progress to
require a modern and safe fleet as well as courteous drivers. Again, I
certainly would counsel you and any resident of the City of Ottawa, if they
are unhappy with the service they receive, to report it to the City; and we
will make sure that there is an investigation. This is why we are working so
closely with the airport. This is why we have set up this framework with the
airport — an agreement on cooperation and collaboration. They are
independent but there are so many services that we regulate or provide that
we need to make sure the airport has a voice and that we are responding to
their needs. Certainly, that is one of them — the taxi industry and how it
serves the airport.
Senator Eaton: This is a commentary. I would disagree strongly
with my two colleagues. I think we are so lucky. I can get into a taxi at
quarter to four and get to the airport at 5 or 10 minutes past four. I think
we are so lucky. In the major capitals of world, such as London and Paris,
it takes an hour or more to get to the airport. In Montreal it takes 40
minutes and in Toronto it takes half an hour at rush hour, if I am lucky.
Ottawa is wonderful for airport access. I am sorry; I disagree because my
experience is very different from those two.
The Chair: The chair does not often participate in the question
period. but I would have to disagree with Senator Eaton and agree with my
two colleagues. It is not the time it takes — sometimes it does take 15
minutes. However, when you plan for 15 minutes and it takes 45 minutes, you
might miss your flight. If I were to poll the committee, you would probably
be in a minority, but I would not want to do that at this time.
I have a supplementary on taxis, which have improved. The committee
visited the airport, as you know, a few months ago. There were remarks made
about the taxi accommodations when you come out of the airport. There is
traffic and a bundle of people, and there is no discipline to get them cabs.
There are two cabs and they leave, and you have to wait to get the other
cabs. There has been improvement, but we were told there would be some
structural changes made to the front of the airport so that you could have
basically two lineups and increase the flow. Have there been any
negotiations with the city on that?
Mr. Desroches: In terms of the layout and the organization of the
airport, that would be a decision of the Ottawa International Airport. I am
certainly prepared to take back to them that there continues to be concerns
about that. The city's role would be in terms of the regulation of the
industry and the provisions of licence. The organization of the airport in
terms of how they pick up or drop off passengers would fall under their
purview; and I am happy to take those comments back.
Senator Unger: Mr. Clements, my comments are for you. You were in
charge of building the Edmonton International Airport. As an Edmontonian, I
feel it was somewhat at the expense of Edmonton's historical municipal
airport. Are you making any attempt to utilize the Edmonton airport, at
least temporarily, until your funding issues are resolved?
Mr. Clements: You know how sticky that question is for me.
Senator Unger: It is sticky for me.
Mr. Clements: In my 10 years of working for the board of Edmonton
airports and the appointers of the board, I followed the direction that
ensued from a referendum that you will remember in 1995, when 77 per cent of
Edmontonians voted to consolidate all commercial traffic at the
international airport, and run the downtown airport as best we could. For
the ten years I was there, I did exactly that.
Now that I have left, am I free to express an opinion? Absolutely, but it
has not changed. It was the right decision by Edmontonians, and ultimately
Albertans, to convert that property to a dream, which City Council is now
doing, and to take away what was harming Edmonton traffic for a long time —
splitting traffic in a small city, compared to Chicago or New York that need
two airports. Splitting traffic is anathema to economic development. It is a
density business. If you can put all your traffic in one place, you will
have much better air service. You can you see that that has indeed happened
I was responsible for building a new terminal that would handle under 6
million passengers, but we got to 6 million 10 years earlier than we had
planned; and it has expanded dramatically again. I do not think any of that
would have happened without that critical vote in 1995. Are we using it in
the interim? I flew into there a couple of times from Fort McMurray, and I
loved the convenience. Who would not? That was not the issue. I guess it was
the issue for people flying into Edmonton. Edmontonians own the airport.
They voted clearly to do what they have done to it, and I agree with them.
Senator Unger: Actually, there were two referendums. Some argue
that a referendum was held until there were two answers; however, that is
You say that that Fort McMurray is the fifteenth busiest airport. Where
does Edmonton rank?
Mr. Clements: Edmonton is fifth, after Toronto, Vancouver,
Senator Unger: Of the 17 airports in the municipality and region,
are you including Edmonton?
Mr. Clements: No. That is just in the municipality and, by the
region, just outside the municipality — in other words, where the oil
companies are working.
Senator Boisvenu: I flew to Toronto recently and I was surprised
to see few security agents, as opposed to the situation in Montreal's
airport. If there are many, they are very discreet.
Do you have a lot of vehicle and baggage theft, which was the case in
Montreal in the 1990s or 2000s? Do you have the same problem in Ottawa?
Mr. Desroches: Not to my knowledge. It is not a problem I have
heard of. It has not happened to me or my neighbours. As you know, the
security service is provided by the Ottawa Police. They have a contract with
the airport for these services.
Senator Boisvenu: Inside as well?
Mr. Desroches: Yes, inside. I have been a councillor since 2006
and I have never heard of problems with airport security.
Senator Verner: I would like to put another question to Mr.
Clements. I imagine that one of your wildest dreams would be to have a
luxury taxi problem at Fort McMurray's airport. I imagine that would be a
nice problem you would like to manage one day.
We know that many workers go through Fort McMurray's airport to head to
construction sites. These workers bring with them equipment that is,
obviously, highly specialized, and so forth. Does ensuring that everything
travels safely and that everything is handled with care generate additional
costs for Fort McMurray's airport?
Mr. Clements: Yes. CATSA screens you when you go on board. It is
not surprising the kinds of things that they find on the workers trying to
fly out of Fort McMurray. We do not have to buy any tools or wrenches — it
is just amazing what they will try to bring on the aircraft. They arrive
sometimes four hours ahead after being dumped off by a bus. They have all
their kit with them, but they forget to put the bad stuff in the other bag.
I do not think it is any extra cost to us, but I would comment on taxis.
At its first meeting, my board decided what they want it to be. They said,
"We want you to be the best regional airport in Canada." I said, "Gulp; we
are a long ways from that."
That is their vision and I tested them on it to ensure that they
understood what they told me to do. Taxi service is not in that category. I
know the Ottawa situation and the situation in Fort McMurray. Happily, we
are working closely with a chief administrative officer and council on
changing the bylaw so that it is enforceable and a high standard. Airports
have major contracts with taxis, and the leaders downtown all want the same
thing — a higher standard of taxi cabs.
The Chair: Thank you Mr. Clements and Mr. Desroches, and pass
along our best to Mr. Benoit. We have changed our terms of reference because
we will be tabling the report a little later than planned. We will probably
add taxi service to airlines and airports in our terms of reference because
it is a topic that has come up before.
Our next meeting will be Tuesday, March 27. On behalf of the Canadian
Airports Council, we will hear from Marilynne Day-Linton, Chair of Greater
Toronto Airports Authority.
We will hear from Réal Raymond, Chair of the Board of Aéroport de
We will also hear from Mary Jordan, Chair of Vancouver Airport Authority.
Thank you very much. See you next week.
(The committee adjourned.)