Thank you for inviting me to appear before the committee, Mr. Chair.

Once again we are before this committee to discuss air travel in relation to rural, northern and remote communities.

First let me acknowledge that we are on the traditional territory of the Anishinabe peoples.

Canada's airlines are committed to providing service to communities large and small throughout the country. Although air travel is an undisputable force for good for all Canadians, it has particular relevance for people living in rural, remote and northern areas, given its vital link in the supply chains, its relevance for tourism, and that air travel of course is often the only viable link to the outside world.

NACC member airlines provide service to all provinces and operate over 50 airports in Canada outside the tier one, or top eight largest airports. Many of Canada's 24 domestic carriers also provide specialized regional service. I believe Mr. Stout will likely speak more to that.

As I said when I was here a few weeks ago, NACC's vision of a competitive air travel system is one in which all carriers, large and small, have the same opportunities to succeed. Having said that, I will reiterate some of the key challenges to competitiveness that I spoke of before this committee and what you've heard from other witnesses, including Mr. McKenna, in the context of rural, remote and northern service.

You've heard repeatedly about the negative impacts that the high cost of third party fees and charges inherent in Canada's user-pay system have on the competitiveness of Canada's air travel system, a fact that is exacerbated when seen through the lens of rural, remote and northern regions. With lower populations and lower margins, providing comprehensive and affordable service to regional and remote communities is an ongoing challenge, but, as our northern carrier colleagues expressed to you last week, this is compounded by such high user charges as airport rents, air navigation fees, fuel excise charges, the 33% increase in the air service charge implemented last month, and so forth.

By the way, this is not just the opinion of Canada's airlines. Our American counterpart, Airlines for America, has informed this committee that since 2019 there has been a 38% reduction in American carriers flying to tier two—or smaller—airports in Canada, with the high cost burden cited as the top reason.

Anecdotally, I just got back yesterday from the IATA annual general meeting in Dubai, and I can share with you that Canada's reputation as a high-cost jurisdiction is something that I heard more than once.

Airport infrastructure is another challenge disproportionately impacting rural, remote and northern communities. For example, aircraft may not be able to land at smaller airports in the case of inclement weather, because they may not have the required lighting requirements, which compounds potential disruptions. We heard at the recent accessibility summit that meeting the needs of passengers with accessibility challenges can be more challenging at smaller airports due to their inability to upgrade infrastructure.

You heard last week about the challenges northern airports face in meeting infrastructure and safety requirements within the confines of a strict user-pay system. As we've said before to this committee, can it really be considered user-pay when the federal government takes out over $400 million per year more in airport rents than it reinvests back into the system?

Another point is that many stakeholders, including many non-airline entities, have been clear that if the APPR regulations, as proposed by the CTA in July 2023, are implemented, they would have a negative impact on regional and remote connectivity. Canada's Atlantic premiers, rural airports, unions, smaller municipalities—including communities from my home region of northern Ontario, as represented by the Northern Ontario Large Urban Mayors caucus—have publicly expressed these concerns. Many of these concerns over regional connectivity have mostly been in response to the proposed regulations released in July 2023. They don't even yet focus on the cost recovery component of the APPR reform, which will drive costs even higher and put regional connectivity at even greater risk.

These concerns were well captured by the Atlantic Canada Airports Association, which said, “Increased regulatory demands including penalties, cost recovery mechanisms and other penalties will burden airlines with higher operational costs, potentially translating to escalated ticket prices for air travellers and reduced regional connectivity.”

Mr. Chair, since I last appeared before this committee just a few weeks ago, the Competition Bureau of Canada has launched a consultation on the terms of reference for an upcoming market study into air travel that it will undertake. We will propose that the Competition Bureau focus its study on the competitiveness of the overall air travel system and look at how we can better balance the user-pay principle so that the negative impacts of Canada's current approach, particularly those impacts disproportionately impacting rural and remote communities, can best be addressed.

Thank you, Mr. Chair.

I look forward to the conversation.