Get on with expansion, airport urged:
$10 departure tax could rise

By Michael Prentice
Copyright 2000 Southham Inc.
Article date: October 12, 2000
 

Managers of the Ottawa Airport are being urged by the region's business community to approve a $300-million expansion even if it means raising the departure tax to pay for it.

Airport managers are convinced the community-run facility can afford the expansion but aren't ruling out raising the $10-per-passenger departure tax to pay for construction.

The airport has operated without government funding since 1997. Like many Canadian airports, it levies a fee on all departing passengers to cover cost of improvements.

Ottawa Airport introduced the $10 departure tax in September 1999. With almost 1.8 million travellers flying out of Ottawa annually, the tax has already raised about $18 million.

The airport's board is poised to give the go-ahead for the $300-million expansion within the next few days. Airport managers hope work will begin this year and be completed by 2004.

Plans call for construction of a new terminal, about twice the size of the current one, which, all agree, is too small for current demand, let alone anticipated growth in flights, passengers, and freight.

Yesterday, the airport released a study showing it contributes $1 billion a year to the economy of the capital region. Airport officials said it was a coincidence the study was released as the board weighs whether to approve the $300-million expansion.

Airport managers, who are strongly urging the board to approve the expansion plans, say the departure tax, at its existing level of $10, will eventually enable the airport to repay much of the construction cost.

It would borrow as much as $250 million for construction, and officials anticipate no difficulty in finding lenders.

The airport is seeking a better rent deal with the federal government and lower payment in lieu of property taxes to the Ontario government.

How the airport fares is likely to determine when, and if, it's necessary to raise the $10 departure fee.

Members of the business community have urged airport managers ''to do whatever it takes'' to push through expansion, airport officials say.

''Some business people are telling us to raise the fee to $25 if we have to,'' one airport official said.

Industry Minister John Manley this week added his voice to the chorus calling for expansion of Ottawa Airport. He said it's vital for Ottawa's infrastructure to grow to match the pace of expansion in the high-technology sector.
 

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