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Toronto Island Airport: The Financial Playing Field

Further to debate over the expansion of the Toronto Island Airport, I'd suggest considering this comparison...

The Pearson Airport situation:

A new airport rent policy, announced by Transport Minister Lapierre in May 2005, discriminates severely against Toronto Pearson International Airport. Unless a more sound rent structure is introduced by the federal government, the airportís potential to generate future economic benefits for communities and businesses across the GTA and Canada will be seriously undermined.

  • Ottawa has collected nearly $1 billion in rent from Toronto Pearson since 1996
  • Toronto Pearson carries 1/3 of Canadaís air traffic yet is expected to pay 2/3 of the national rent
  • Toronto Pearsonís rent declines only 6%, while the next largest airport rents decline by an average of 52%
  • 34% of the landing fee paid by airlines at Toronto Pearson goes directly to Ottawa to pay airport rent
  • Ottawa charges twice as much rent per passenger at Toronto Pearson than at any other Canadian airport

These federal government rents drove Pearson to become the most expensive airport in the world.

Now, consider recent events in the Toronto Island Airport situation:

  • It is a violation of the Canada Marine Act for the federal government to provide a subsidy to a port authority
  • The federal government gave the Toronto Port Authority $35-million to cancel a $22-million bridge that was never started, and had never obtained all legal approvals. Some of this money went to Deluce's Porter Airlines, but nearly $8-million of it went straight into the TPA's balance sheet

How can this be anything but a stealth subsidy to a Port Authority and airport that has done nothing but lose money since Day 1?

More importantly, how competitive would Porter Airlines be without these government interferences? If the island airport had to pay its own way, or if the federal government wasn't milking Pearson for millions, would the island have any chance? We may get a chance to find out as the Conservatives talked a lot about Pearson's plight prior to the election, and promised rent reductions.

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