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Deputy Prime Minister and Minister of Finance, Chrystia Freeland, released the 2023 federal budget on March 28, which places emphasis on “an affordable economy” for Canadians.
Titled Budget 2023—A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future, this year’s budget did not focus as heavily on the aviation and aerospace sector as in previous years – which saw industry struggle with the effects of the Covid-19 pandemic. In its 2021 budget, the government introduced the Aerospace Regional Recovery Initiative, which would provide $250 million over three years to support businesses operating in the aerospace sector, and the organizations that support them through supply chains.
This year, the government has outlined planned support for the Canadian Air Transport Security Authority (CATSA), which saw a massive backlog in traveler complaints during the 2022 holiday season; Canada’s major airports and airlines were responsible for numerous delays and cancelations, long lineups, and mishandled baggage due to a combination of operational constraints and bad weather.
According to the budget, CATSA is to receive $1.8 billion over five years (starting this year) to “maintain and increase its level of service, improve screening wait times, and strengthen security measures at airports.”
This support, however, means that travelers will be paying a higher Air Travellers Security Charge, which is to increase from $14.96 to $19.87 on roundtrip domestic flights, and from $25.91 to $34.42 on international flights, according to a CTV News report.
Moreover, the 2023 budget says the government intends to amend the Canada Transportation Act “to strengthen airline obligations to compensate passengers for delays and cancellations . . . make the Canadian Transportation Agency’s (CTA’s) complaint adjudication process more efficient, and provide the Minister of Transport with the authority to impose a regulatory charge on airlines to help cover the costs of resolving air passenger complaints.”
These statements come just two weeks after the federal government announced $75.9 million in funding over three years to the CTA to ensure it has the “resources for enforcement and compliance.”
According to the budget, Transport Canada will also receive $5.2 million over five years to “collect and analyze air sector performance data.”
While seemingly reluctant to provide support to Canada’s major airlines at the start of the pandemic, the government eventually stepped in to help the airline sector “to safeguard financial sustainability/viability.” Airport authorities, however, did not receive reciprocal support. Although Transport Canada’s Airport Critical Infrastructure Program is providing $571.2 million in funding over five years, this has not been enough to stop airports from raising aeronautical fees and tariffs to improve cash flows and reignite future growth.
Budget 2023 has also placed focus on “strengthening Canada’s trade corridors.” As part of this goal, the government has proposed $150 million towards air freight infrastructure in Quebec and Alberta. More specifically, $50 million has been proposed to the Montreal Airport Authority “to improve air freight logistics at the Montreal-Mirabel International Airport.” This includes new cargo, warehouse, and aircraft storage facilities, which would “expand capacity to export Canadian goods,” the budget states.
Moreover, Edmonton International Airport is to receive $100 million to build a new 2,000-acre cargo hub. “The new facility will help businesses in Western Canada reach international markets and strengthen distribution capacity to the rest of Canada, the U.S., and Mexico.”
The budget report does not outline the timeline for either of the two air freight projects.
