Jeff Colbourne
Northern News Services

NNSL (Aug 17/98) - Proposed Nav Canada user fees expected to go into effect Nov. 1 have been delayed.

A surplus of $1 million, brought on by higher traffic volumes and lower than expected financial costs in the company's third quarter calculations, will put increases on the back burner till Jan. 1, 1999 or later.

This is good news for NWT residents said Arthur Andreassen, director of rates and revenues for Nav Canada.

"What you're going to have is a situation where, for however long, at least till January, there is no change to the air transportation tax and no changes to the charges that came in on March 1," said Andreassen.

"Sure that's good news."

Proposed Nav Canada user fee increases struck a nerve with many Northern groups, including Nunavut Tunngavik Inc. and the Baffin Chamber of Commerce. They strongly opposed to the rate hikes, saying it would hit lower income families much harder than middle and upper income families.

Third quarter revenue for Nav Canada was $222 million, made up of approximately $92 million in transition period payments from the federal government which they raised through air transportation taxes. Net user charges of $130 million make up the rest.

Operating expenses for the quarter totalled $180 million.

Compared to third quarter results of other years, Nav Canada saw a gross increase in revenue of $20 million or $8.4 per cent due to higher traffic volumes. Operating expenses for the quarter were $2 million or 1.2 per cent lower than the same time last year.

Nav Canada is a non-profit company. All surpluses have to be put back into their business.

"The Act of Parliament which governs Nav Canada stipulates that the corporation must set its fees at levels which do not generate significant surpluses beyond our reasonable financial needs," said Don Ingham, Nav Canada's vice president, corporate planning and commercial relations and acting chief financial officer.

"Any surplus beyond these requirements must be used to pay down debt, re-invest in the business or reduce user fees."

For the nine-month period ending May 31, Nav Canada's net revenues were $708 million. Operating expenses totalled $521 million, which after interest and depreciation, produced an operating surplus of $65 million.

Nav Canada provides the country with civil navigation services which operate coast to coast providing traffic control, flight information, weather briefings, airport advisory services and electronic aids to navigation.