- While the Government recognizes the importance of ensuring air connectivity for smaller communities, Canadian air carriers are private-sector companies, and, as such, make their own business decisions in order to remain viable and competitive.
- In the recent past, the Government has taken steps to encourage competition to stimulate connectivity through easing foreign ownership restrictions for airlines and streamlining the process for airlines to enter into joint ventures.
- The Government has implemented several programs over recent years to address the aforementioned issues. Regarding improving regional airports, the Government has invested over a $1 billion into improving regional airports since 1995 through the ACAP. Additionally, the RATI also provided support to eligible regional businesses, including airlines, and airports that directly contribute to boosting regional air transportation. For example, support was provided smaller regional air carriers to improve IT infrastructures so as to be better equipped to interline with larger air carriers.
SUPPLEMENTARY MESSAGES
- In Canada, the frequency of flights, the services offered, and the prices charged by airlines are determined based on market forces.
- During the COVID-19 pandemic when the risk of many remote and regional communities being cut off from the rest of the country was heightened, the Government of Canada provided support through the Remote Air Service Program (RASP) and the Regional Air Transportation Initiative (RATI).
- However, there is no specific authority under which the government could oblige air carriers to service particular routes, even when demand levels are lacking.
BACKGROUND
Given Canada’s large size and sparse population, air service is important to keep Canadians connected, enable the movement of goods, and facilitate economic activity for industries such as tourism. Canada’s small, remote, and northern communities remain heavily dependent on the air industry to sustain connectivity within the region, within Canada, and internationally. However, there are currently many smaller regional centers without easy access to airports, let alone major hub airports, which are also highly dependent upon air transportation for leisure and business travel.
Reductions in Canada’s regional connectivity have been occurring for many years, however the COVID-19 pandemic caused significant disruptions to the global air sector. In Canada major air carriers such as Air Canada and WestJet had to cease operations on several routes, especially those to and from regional and remote communities. Even with the gradual recovery in air travel demand, Canadian network carriers have opted to not restore service on these less profitable routes which were cut during the pandemic. These smaller regional communities are now feeling cut off from the rest of the country and the world as their air access has been significantly reduced. This will have a negative impact on tourism, business travel and connectivity for the inhabitants of these regional communities. Thus, restoring air connectivity in Canada is important to support the social and economic recovery in all regions of the country, whilst enabling passenger flows and trade.
Canada has implemented several programs since the pandemic to address the issue of declining regional connectivity. These include:
- Regional Air Transportation Initiative: Developed to lessen the negative financial effects of COVID-19 on regional stakeholders involved in regional air transportation. This two-year program made $206M available in repayable contributions to regional airports, airlines, and businesses for projects related to improving infrastructure and equipment. For example, support was provided smaller regional air carriers to improve IT infrastructures so as to be better equipped to interline with larger air carriers.
- Remote Air Services Program: Provided $146.6M to support essential air access to approximately 140 remote communities.
Despite these efforts there remains the potential that the situation could worsen in the future should no action be taken. A Transport Canada analysis of regional airports suggests that there are a total of 11 domestic airports where only one major carrier (Air Canada or WestJet) is operating, and no other regional scheduled services operating at those airports.
[ Redacted ]
- [ Redacted ]
- [ Redacted ]
- [ Redacted ]
- [ Redacted ]