Structural changes required to improve Canada’s competitive advantage: report

Wide-ranging reforms are needed if Canada’s aviation industry is to reach its full potential, according to a position paper co-authored by two former WestJet executives. In a sign of consumers voting with their wallets, millions of Canadians each year cross the border in their vehicles to take advantage of cheaper fares at U.S. airports. In the several years before the pandemic, for example, the number of such flights made by Canadians at U.S. airports averaged roughly 5m annually. “It should be a source of great frustration for all Canadians that the aviation industry framework drives such a competitive disadvantage,” said Richard Bartrem and Bob Cummings. Bartrem formerly worked as vice-president of communications, brand and community investment at Calgary-based WestJet. Cummings is a former executive vice-president at WestJet. In his latest role before he left the airline, he served as president of the company’s Swoop operations, the ultra-low-cost carrier that was integrated into the mainline in October 2023. With three-quarters of Canada’s population living within 160 kilometres of the Canada-U.S. border, the lure of cheaper U.S. fares lingers. Within Canada, the airline industry faces an array of challenges, including having to operate under a governance system for major airports that has resulted in ground rent charges by the Canadian government since 1992. Ground rent is paid by not-for-profit, community-based authorities and other groups. The Montreal Economic Institute noted that from 2013 to 2023, members of the National Airports System paid more than $3b in ground rent to the Canadian government. <br/>