Rose pursuant to notice of December 14, 2020:

That she will call the attention of the Senate to the pandemic-related fiscal crisis facing NAV CANADA and its impact on levels of air traffic control and public safety services at regional airports across Canada.

She said: Honourable senators, I wish to draw the attention of the Senate to the extraordinary challenges facing NAV CANADA, the private company that runs Canada’s highly respected air traffic control system, and to the impact of NAV CANADA’s financial situation on the long-term future of regional air service in this country.

NAV CANADA is a not-for-profit private company. Where once air traffic control in Canada was operated by Transport Canada, in November 1996 those traffic control assets were sold by the government for $1.5 billion and NAV CANADA was established as a private entity.

The company employs Canada’s air traffic controllers and air traffic specialists who ensure that our airports, large and small, run safely and smoothly. NAV CANADA provides weather data to Environment Canada as well as weather briefings and aeronautical information for more than 18 million square kilometres of Canadian domestic and international airspace. This is a service essential to our safety, our economy and our national sovereignty. It is an internationally respected service noted for its safety record, technological innovation and sound economic management. Spinning off NAV CANADA as a private company has saved the government millions and provided Canada with decades of excellent safety services. Up until now, NAV CANADA has done well too, with annual revenues of about $1.4 billion per year.

However, the COVID-19 pandemic has been particularly and extraordinarily difficult for NAV CANADA, and that is because of the nature of the company’s revenue model. NAV CANADA makes its money by charging fees based on the passage of airplanes through Canadian airspace. Of course, NAV CANADA charges a fee for every flight between Moncton and Hamilton or Calgary to Kelowna, but it makes even more money because it also charges fees to every international carrier that shortcuts over Northern Canada.

The Earth is, well, round, and that trick of geography means that many international flights cross our northern airspace as a way to shorten their trips. The polar route is not just for Santa Claus. NAV CANADA charges a service fee to every flight that overflies Canada, even if that flight is en route from Los Angeles to London, Beijing to New York, or Dubai to Seattle. The larger the plane, the higher the fee. NAV CANADA is also responsible for air traffic control over the entire western half of the North Atlantic, so even flights from the American Eastern Seaboard to Europe and the Middle East often pay fees to NAV CANADA even if they don’t cross actual Canadian airspace.

In the 2017-18 fiscal year, NAV CANADA collected $404 million in fees from domestic flights within Canada. It made $389 million from international flights in and out of Canada, but it made $420 million from international overflights. The company uses those fees collected from international carriers and international cargo planes to keep Canada’s domestic airports running, to keep our air traffic controllers in their towers and to keep our air traffic specialists on the ground monitoring the weather and runway conditions. Imagine the shock to the system when COVID grounded tens of thousands of planes, when all those fees kept global travellers on the ground, when flight volumes fell by 75%, and those shock waves were still reverberating.

In the second quarter of the 2021 fiscal year, flights were down 56% from the year before. NAV CANADA revenues in the second quarter of fiscal 2021 were $179 million, down from $322 million a year earlier.

Despite availing itself of the Canada Emergency Wage Subsidy and paying its senior executives bonuses of $7 million, the company laid off 720 staff in the first year of the crisis, with 14% of its workforce gone. Late last year, the company announced that it would be conducting level-of-service reviews at a number of mid-sized Canadian airports in Saint John, Windsor, Sault Ste. Marie, Regina, Fort McMurray, Prince George and Whitehorse, with an eye to completely closing down air traffic control towers in some or all of those six cities.

To be clear, that wouldn’t have meant closing airports altogether. It would, though, have meant downgrading services, leaving those communities to rely on the services of air traffic specialists who assist pilots with information and ground support but who do not control airspace.

That, of course, was when I first served notice of this inquiry last December, when it was -40 degrees in Edmonton and not +40. Alas, it took this long for the item to finally be called to the attention of the Senate.

On April 15, I’m relieved to say, NAV CANADA announced it was suspending those service reviews and that it would leave all those towers open. I applaud that decision. Yes, COVID has had a terrible impact on domestic and international air travel, but it would have made no sense to lay off highly specialized staff and shutter towers to deal with a temporary crisis. Many smaller airports do function quite safely without air traffic controllers. Still, it’s probable that closing towers could have meant a loss of flights, especially international flights for those communities. So I’m very glad indeed that NAV CANADA has belayed its plans to close those towers, including the tower at the Fort McMurray International Airport.

Those seven airports weren’t the only ones up for review. NAV CANADA was also conducting studies of completely eliminating air service stations at a number of other northwestern airports, among them Churchill, Lloydminster, Peace River, High Level and Castlegar. Cuts such as those would have been devastating. Those airports don’t have air traffic control towers. They rely on air-traffic specialists on the ground to monitor flights, ensure runways are clear and provide weather reports to pilots.

I got as far as I could.