Leading By Example

Avatar for Ken PoleBy Ken Pole | October 12, 2011

Estimated reading time 12 minutes, 24 seconds.

The success of the unique public-private partnership that is Nav Canada has not only helped improve the safety, quality and efficiency of Canada’s air navigation services, it has created a successful model for other countries to follow.

It wouldn’t be overstating the case to say that as recently as a couple of decades ago, air navigation services (ANS) in Canada were between a blue sky and a hard place, with no prospect of a comfortable landing. Operating costs were outstripping revenues by hundreds of millions of dollars a year and more than one project at Transport Canada was over budget and behind schedule  among the most notable was the Canadian Automated Air Traffic System (CAATS), which was critical to safety in an increasingly crowded airspace. Additionally, much of the inherited infrastructure of facilities, equipment and systems was in dire need of upgrade or replacement. 
The Advent of Change
The situation with Canada ANS worried a number of key players, including the Air Transport Association of Canada (ATAC), which began agitating with Transport Canada to find a better way to deliver ANS and air traffic control (ATC) services. It wasn’t long before the controllers’ union and then the Canadian Air Line Pilots Association joined the formation, but it didn’t really get off the ground until after the 1993 federal general election that returned the Liberals to power after nine years of a Progressive Conservative government. 
The new prime minister, Jean Chretien, made it clear that his top priority was dealing with an inherited deficit and that it was up to his ministers to do the grunt work. At Transport Canada, that responsibility fell to New Brunswick MP Doug Young. By the time the Liberals were through, the department had been reduced to approximately 7,500 employees from more than 20,000! 
In his 1994 budget, then Finance Minister Paul Martin announced that the government proposed to study ANS commercialization; he followed through in his 1995 budget by confirming that Ottawa wanted out of most ANS-related services  except for safety oversight and some northern services  as early as possible in the 1996-97 fiscal year. 
Following this, an unprecedented private-sector corporation, Nav Canada, was incorporated in May 1995; Parliament passed the Civil Air Navigation Services Commercialization Act in 1996. In October of that year, Nav Canada handed the government $1.5 billion Cdn in return for a monopoly over civil ATC services and aeronautical information services. The monopoly can remain in perpetuity as long as Nav Canada continues to meet its legislated obligations under the act.
The result of all this was that Nav Canada became financially responsible for ANS operations, maintenance and capital requirements, including for the troubled CAATS project and other initiatives. The government freely acknowledged that it simply could not afford the investments that were going to be required, said Nav Canada president and chief executive officer John Crichton in an interview with Canadian Skies. They were in trouble on a number of major technology projects and there no reason to believe that wouldn’t have just gotten worse.  
One of Nav Canada earliest and unavoidable decisions was dealing with the revenue shortfall that had bedevilled Transport Canada. When the department ran the ANS, the main revenue sources were an air transportation tax (ATT), and, since November 1995, international overflight charges. Accordingly, by the end of the second year after the handover, Nav Canada introduced terminal charges and domestic en route charges, and raised international overflight charges. In the interim, the government provided for monthly grants roughly equivalent to the ATT revenues  to a maximum of $1.44 billion during the first two years  until Nav Canada had put its charges in place and the ATT was repealed. Today, all these service charges, with inflation taken into account, are some 25 per cent lower than they were when Transport Canada was losing money on the ANS.
Examples and Challenges
Other countries also have moved to separate ANS operations from their governments. Some, most notably Australia and New Zealand, have set up their ANS system operators in similar fashion to a Crown corporation. Britain, on the other hand, did set up a separate ANS organization, eventually partially privatizing it through a 51 per cent stock sale. But, the unique Canadian solution is a model that is still watched  and some say envied  worldwide.
There lots of interest, agreed Crichton, demurring, though, when asked whether Nav Canada preaches the privatization gospel. Other people do. There are lots of people who are observers of the air traffic control industry . . . who often cite us as an example of what other countries should do. And there are well-known people in the U.S. who say all the time that the U.S. should convert to what we’ve done. But, we leave it to them to say that. We don’t go around trying to promote our model, so as to avoid being accused of interfering in other countries.
One particular challenge for the new entity was the fact that it inherited some 6,300 employees from Transport Canada, the balance of which turned out to be managerially top-heavy. There are now 1,400 fewer personnel at Nav Canada. A large part of the reduction came through centralizing all the administrative functions, which previously were spread all over the country, said Crichton. Every region had its own mini-head office. It was through closing those all down and centralizing in one headquarters that a lot of that savings was realized. And, front-line service certainly benefitted because office consolidation enabled the hiring of more controllers.
As it was at the outset 15 years ago, Nav Canada continues to be a work in progress, thanks to ongoing capital upgrades and the emergence of new technologies. On the bricks and mortar side of the business, for example, new control towers are being built in Calgary and Edmonton, Alta., which follows $1.6 billion that was already just invested in new systems and installations elsewhere across the country.
Obsolescence and New Technologies
The inevitable obsolescence of current systems will of course necessitate more investment, including in technologies such as Automatic Dependent Surveillance-Broadcast (ADS-B). ADS-B has facilitated coverage of huge areas of Canada northern regions, where thousands of transpolar flights occur; these are regions which were previously limited to old-fashioned and inefficient procedural separation rules. 
While general aviation (GA) also is a potential market for ADS-B, Crichton said, We’re still a ways away from that. ADS-B costs are still relatively prohibitive for most GA pilots, but there is a real prospect of the units eventually being required. There is an equipage mandate in the U.S. now. It still a number of years away, but I think the mass production of these units will definitely bring the costs down at some point. 
Then, there is wide-area multilateration (WAM), which uses ground-based sensors to triangulate an aircraft transponder signal to give controllers a clearer picture of traffic in congested corridors. WAM, along with other surveillance technologies, such as video (currently undergoing trials in Ottawa, Ont.), should help to make the skies safer for all aircraft.
There always going to be a certain level of investment in new software and new systems, and integrating new ideas, said Crichton. We’re working now on video technology [for airport surface surveillance and remote monitoring], which I think is going to be a fairly revolutionary approach in ATC. But all of these things add value. . . . 
Of course, this added value requires capital. Our capital investment runs anywhere from $100 million to $150 million a year, and I would see that continuing. 
Those costs are partly defrayed by Nav Canada development of software that it markets globally. Sales of software generate about $10 million annually, but Crichton expects that this will increase significantly in the next few years. While admittedly still a small amount in the overall scheme of things, it nevertheless adds to the operation bottom line and helps to keep user charges in check.
What Ahead?
Asked to look ahead to what other technologies are on the horizon and what they might imply for ANS and ATC, Crichton said, One of the big things that coming fast is controller-pilot data-link communications (CPDLC). Voice radio is the standard communications mode between pilots and controllers, but the problem, which grows commensurately with the number of flights controllers handle, is that everyone is on the same frequency. As CPDLC name implies, communications are over a data link, with all voice messages displayed in the cockpit as real-time dialogue with no room for misinterpretation.
We’re going to see a lot more data-link communications in the system, predicted Crichton, adding that he expects the next-generation ADS-B to be a game changer, in the sense that pilots and controllers will have the same picture simultaneously. This, at some point, should introduce the concept of shared separation responsibilities.
That certainly could be very beneficial in certain airspace applications, he continued. If we look at, say, aircraft flying the oceanic track in the North Atlantic, for which we are responsible, if they [pilots] have a live picture of everybody around them  their altitudes, headings, airspeed, ground speed  that has obvious benefits for how you manage that traffic. And, it may even impact the separation standards that are used and may maximize the use of that airspace much more efficiently.
In the final analysis, that what it all about: more blue sky and fewer hard places.
Having never finished an engineering degree (probably a service to aviation, Ken says), Ken Pole has had a lifelong passion for things with wings. The longest-serving continuous member of the Parliamentary Press Gallery in Ottawa, Ont., he has written about aerospace in all its aspects for more than 30 years. When not writing, he an avid sailor, diver and photographer.

Notice a spelling mistake or typo?

Click on the button below to send an email to our team and we will get to it as soon as possible.

Report an error or typo

Have a story idea you would like to suggest?

Click on the button below to send an email to our team and we will get to it as soon as possible.

Suggest a story

Leave a comment

Your email address will not be published. Required fields are marked *