LOCATION: National
ISSUE/SOURCE: Regional Connectivity
DATE: May 2025
SUGGESTED RESPONSES
- Canadians rely on air transport to conduct business and connect with friends and family. In many cases, air services are critical, providing essential goods and services to regional and remote communities.
- The vast distances between communities in Canada can present challenges for regional connectivity, as air carriers cannot always make these routes viable.
- The federal government is working with provinces, territories, municipalities and Indigenous groups to improve the air transportation system by making it more efficient and affordable.
- The federal government is also investing in critical air transportation infrastructure to enhance safety and encourage greater regional connectivity. Through the Airports Capital Assistance Program, the Government has invested over $1.2 billion in more than 200 small, regional and remote airports, enhancing the safety of air operations in regional communities from coast to coast to coast.
BACKGROUND INFORMATION
- The regional air connectivity problem is complex, challenging to resolve, and exacerbated by issues including:
- Canada’s vast geography and low population density which is a unique operating environment;
- A slower return of demand for air travel in smaller communities;
- Fewer regional aircraft in service; and
- A significant pilot shortage, as available pilots tend to be placed on higher-value routes on larger aircraft by larger carriers.
- Canada’s domestic air market is a deregulated, user-pay system. Air carriers are private-sector companies and make their own business decisions to remain viable and competitive. The frequency of flights, the services offered, and the prices charged by airlines are based on market forces.
- The business strategies of major airlines in Canada impact the air access that certain communities enjoy. For instance, Air Canada has retired their aging fleet of smaller aircrafts (e.g. Dash-8 300s) in 2021 and focused their Jazz subsidiary’s operations with larger aircrafts.
- The Airports Capital Assistance Program (ACAP) provides funding to support safety-related capital infrastructure and equipment investments at Canada’s local and regional airports with the objective of ensuring the continued safety of the Canadian traveling public. Since the ACAP’s creation in 1995, the program has provided more than $1.2B for approximately 1,271 projects across Canada, and currently has an annual budget of $38 million.
- Transport Canada has contributed to a number of programs and efforts to ensure regional connectivity is maintained, particularly during the pandemic. These include:
- The Remote Air Services Program, which provided more than $140 million during the Covid-19 pandemic to ensure remote communities retained air service;
- The Regional Air Transportation Initiative during the Covid-19 pandemic which provided $206 million over two years to eligible regional businesses and airports that directly contribute to regional air transportation; and
- Ongoing participation in the Atlantic Working Group on air travel, which deals directly with the issue of regional connectivity. Atlantic provinces are developing a program to financially support increased intra-Atlantic flights from their regional airlines. In March 2025, Atlantic Canada Opportunities Agency announced that they will provide up to $6M over 3 years to support the initiative.
- Provincial governments are also taking action to support regional connectivity. For example, Quebec implemented its Regional Air Access Program, which offers discounted air travel within the province to Quebec residents (between 50-85%). The program was recently extended until March 31, 2027.
- Transport Canada keeps a close eye on the aviation landscape of the North, and monitors metrics regularly.
- The approval of the merger between Canadian North and First Air in 2019, as well as modification of the terms and conditions (2023) aims to ensure continued air service in the north through minimal levels of affordable air services to both Northwest Territories and Nunavut.
On February 24, 2025, Exchange Income Corporation (EIC) and Canadian North announced that an agreement was reached for EIC to acquire all of the issued and outstanding shares of Bradley Air Services Limited (BDASL), the company that owns Canadian North.