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2000 October Report of the Auditor General of Canada

October 2000 Report—Chapter 10

Exhibit 10.5—The Rationale for NAS Airport Transfers

The government's decision to get out of the airport business in the late 1980s was predicated on three realities.

First, only a few of the largest airports were operating at a profit or at least breaking even, and most airports had large and growing deficits, which represented a significant financial drain on the federal government.

Second, the significant funding to carry out much-needed expansions and upgrades to Canada's airports was not available, and undercapacity was becoming a problem. The government was not charging airport improvement fees.

Third, Transport Canada's approach to operating airports was national in focus, rather than local. Government ownership and control of airports thus meant that, in general, federal airports may not always have been operated in a way that reflected the specific economic needs and priorities of regions and local municipalities.

Transferring the management and operation of airports to airport authorities was intended to enable airports to operate as self-sustaining businesses that would contribute to developing local economies. This approach to operating airports was not always possible when the government managed them because various legal, policy and other constraints hindered its ability to both take advantage of the commercial potential of its airports and introduce efficiencies.

Source: Transport Canada