SOMBA K'E/YELLOWKNIFE
Members of NWT Tourism threw a wrench into plans for increased fees at the Yellowknife Airport last week, passing a resolution demanding the Department of Transportation withdraw its proposed airport improvement fee.

A motion passed at the NWT Tourism AGM calls for the territory halt proposed increases in fees at the Yellowknife airport, and instead lobby the federal government to fund infrastructure improvements. - NNSL file photo

The resolution called for the territory to actively lobby the federal government for increased infrastructure investments to ensure the airport is competitive and that regulatory requirements are adequately funded.

The Department of Transportation presented a draft business plan for the airport last month. The plan proposes an airport improvement fee that would charge travellers heading south $20, and $10 for those flying within the territory. Existing fees already charged to airlines would also go up, adding an additional $7 to $9 per passenger. The fees are estimated to bring in around $10 million in new revenue per year and would go into a revolving fund to operate, maintain and improve the airport.

But NWT Tourism executive director Cathie Bolstad said these changes could harm the tourism industry.

"We are competing in a global marketplace," she said. "At a national level the tourism industry is advocating for Canada to bring down the cost of its airports because we're not globally competitive. Any kind of approach that's going to drive increase costs coming from Canada's airports is not good for our industry."

Michael Conway, the Department of Transportation's regional superintendent for the North Slave region said at a technical briefing last month that many of the proposed changes would actually help the tourism industry, including the potential for more direct flights, including a direct flight from B.C., which would make travel from Asia to the NWT easier.

But Bolstad isn't buying it.

"I don't see how moving the airport to collecting an additional fee and doing marketing is going to bring and convince airlines to put a direct flight from Vancouver into the Yellowknife airport. We're already working with the Department of Industry, Tourism and Investment to try and achieve that with airline partners," she said.

Pricing Canada out of the market isn't the only problem, according to Bolstad. She said the bulk of tourists coming through Yellowknife originate from Asia, including China, Japan and Korea. Many are coming to view the aurora. According to statistics from the Department of Industry, Tourism and Investment, the number of tourists arriving to view the aurora rose 48 per cent from 2014-15 to 2015-16, with total visitors to the NWT rising 11 per cent. But Bolstad said increased fees may put the kibosh on those numbers.

"The bulk of the travel that is sold is sold well in advance, through packages that the tour operators put together," she said, adding that there can be a 12 to 18 month lead-time on packages."When the prices go up, the sales in those international markets have to honour the price, and that means the tour operator takes the bite."

And while the fees might not sound like a lot individually, they do add up.

"If you have 10,000 clients coming in ... that's a lot of money," said Bolstad, adding that for operators to build those new fees into package prices, and not lose money, they'd need at least a year's warning.

Should the fees be implemented, the resolution called for a mechanism to be put in place to protect tourism operators who have already sold packages for the coming season.

Conway said last month that originally his department was looking at a fairly quick turnaround on the fees - with changes coming as soon as a bill amending the Revolving Fund Act passes in the legislative assembly. The Standing Committee on Economic Development and Environment was granted a 120 day extension to review the plan during this session, and committee chair Cory Vanthuyne says public engagement will start in the near future, with findings to be presented on the floor early in the next sitting of the legislative assembly in February.

According to Bolstad, improvements are actually the federal government's responsibility.

"The best scenario is that the broader tax base of all Canadians properly cover the construction and operation of airports," she said. "Doing it through a mechanism to create the airport as a full source for profit operation is not the right vehicle."

The Canadian Transportation Act Review Report tabled in Parliament on Feb. 25 agrees with her, recommending the Government of Canada draws on general government revenues - in addition to user fees - to support objectives, especially in Northern and remote regions. The report found traffic volumes in northern and remote regions were insufficient to support needed infrastructure improvements based on commercial and user-pay principles alone, and that small price changes can have pronounced impacts on travel decisions.

The Yellowknife Airport handles around 58,000 flights carrying about 500,000 passengers per year.

The Department of Transportation was unable to comment on how the NWT Tourism motion may affect plans.

"We are working to get a copy of the motion to better understand the concerns of the tourism operators," said spokesperson Ioana Spiridonica, in an e-mail to Yellowknifer.

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