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Airports eye $30 tax for upgrade

 

By Kevin Dougherty
Copyright 2000 Southam Inc.
Article date: February 25, 2000
 

The $1.25-billion plan to upgrade and modernize Montreal's Dorval and Mirabel airports over the next 20 years will be financed by tripling the $10 airport-departure tax to $30 unless the federal government agrees to renegotiate the lease on Dorval airport.

''It could be $30,'' Nycol Pageau-Goyette, chairman and chief executive officer of Aeroports de Montreal, the authority that manages Montreal's two airports, told a press conference to officially announce the $1.25-billion plan.

Under the existing lease, as profits increase the airport rent goes up, she told reporters without revealing the exact lease figures. She will ask Ottawa to allow the authority to keep its profits to finance the $1.25-billion program.

Transport Canada official Donald Beaulieu said yesterday that the lease, in force since 1992, was intended to be a long-term arrangement.

''There is no revision process under way,'' he said.

At present, the $10 tax, known as the airport-improvement fee, in addition to operating profits on airport facilities leased to airlines, other concessions and airport parking, generate about $50 million a year for capital expenditures and development efforts.

''This amount, however, is insufficient to meet the needs of our 20-year program,'' Pageau-Goyette said. ''We must therefore increase our revenues.''

'Revisit rent clause'

In 1998, the latest year figures are available, operating revenues were $51.4 million, and $56. 4 million was invested in airport improvements. The $10 airport tax generated $30.3 million.

She said under its lease, Toronto's Pearson International Airport is not forced to turn over its profits to the federal government.

''I am hopeful that the federal government will yield to the arguments of Montreal as it has done elsewhere in the country and agree to revisit the rent clause to ensure that our community will not be solely responsible for the upgrading of Dorval and Mirabel airports,'' she said.

Still, Montreal is not alone is charging an airport tax. She noted that passengers leaving Britain pay a 20-pound departure tax, or nearly $50 Canadian. The airport tax in Sydney, Australia, is the equivalent of $26.30 and Mexico City charges $20.

The plans unveiled yesterday call for a $500-million investment at Dorval in the period 2000-2004, expanding the existing airport terminal and adding new jetties for transborder and international flights.

In addition, $90 million would be spent to maintain and upgrade existing facilities at Dorval, with another $35 million allocated to Mirabel.

The plan also calls for running a one- kilometre rail link to the existing CN Rail line, to allow commuter trains to carry passengers between Dorval Airport and downtown Montreal. Via Rail intercity trains could also include the airport of their routes.

Pageau- Goyette said that if Via Rail goes ahead with plans for a high-speed train on its Montreal-Ottawa run, Ottawa passengers could travel through Dorval, rather than flying to Toronto to change planes.

In the period 2004-2020, another $325 million would be spent on new construction, with two sums of $150 million each allotted for continuing improvements at Dorval and Mirabel.

Since the decision in 1996 to transfer scheduled international flights from Mirabel to Dorval, Mirabel's role has been reduced to handling vacation charter flights and cargo flights.

One of the weak points about Dorval is highway congestion near the airport. Dorval Mayor Peter Yeomans said yesterday a $40-million program, financed by the Quebec and federal governments, as well as the city of Dorval and the airport authority, would be implemented in the next 18 months to rebuild the chronically congested Dorval traffic circle.

Yeomans said he is confident the plan will eliminate traffic congestion. ''One of the advantages (of Dorval) is that at no other airport in North America can you go from the airport to downtown and not have a traffic light,'' the mayor said.

Air Canada CEO Robert Milton said the $1.25-million investment plan will allow Dorval to become a secondary hub airport, handling international, transborder and domestic flights as an alternate airport to Toronto's Pearson, similar to the role played by the Munich airport to Germany's hub airport in Frankfurt and Osaka in Japan.

''It's going to be a very attractive place to change planes,'' Milton said. ''That's exciting.''

But the plan to develop Dorval did not receive unanimous applause. Daniel Lefebvre, a defeated mayoral candidate in Laval, who said he still wants to be mayor of Laval, recalled that a 1996 plan to develop Mirabel would have cost $500 million.

Lefebvre said the public will have to foot the bill to improve Dorval through the airport tax and said developing Mirabel would be better for the Laval region.
 

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