The Vancouver 'Experience'

Airport Rent - An Ongoing Call for Relief

Since Transport Canada transferred the operation of its major airports to local semi-private authorities in the 1990s, an ongoing issue has been the amount of rent paid by airports to the federal government. It’s an issue that continues to remain a competitive challenge for Canadian airport operators, says YVR CEO and president Larry Berg.

In 2005, the federal government reduced the amount of rent being paid by the nation’s major airports. Yet, the Canadian Airports Council estimates that they continue to pay some $300 million annually to Canada’s general fund.

Comments Berg, “At YVR, we were paying the most onerous rent of any airport authority, including Toronto. So, we have since enjoyed a greater benefit, and we passed that along to the airlines in the proportion that they were paying rent. It was about a 60 percent reduction in the rate they were paying.

“It’s certainly an improvement; it has helped us to have the lowest landing fees of any major airport in Canada. In fact, the landing fees of the large aircraft are $200 less than what the federal government charged in 1992 — and we built all this infrastructure.

“Does that mean I’m satisfied with the rent regime? No, I am not. With the challenges facing the airline and aviation industry today, I think it is unconscionable for the Canadian government to continue to drain rent from these assets for which they have been paid back several times since it devolved to the airport authorities. This airport had a book value of $176 million the day the airport authority took it over. We’ve paid over a billion dollars in rent. So, I think the policy is ill-advised and needs to be reconsidered, especially at this time when the airlines are getting these tremendous pressures because of fuel.”