Canadian Transportation Agency Dismisses Appeal of Nav Canada's Revised Charges

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OTTAWA - November 19, 2003 - The Canadian Transportation Agency today dismissed Air Canada's appeal of Nav Canada's revised charges implemented for air navigation services on August 1, 2003.

On August 20, 2003, Air Canada filed an appeal with the Canadian Transportation Agency opposing the revised charges, a 6.9 per cent average increase, on the grounds that, in establishing the revised charges, Nav Canada had failed to observe two of the charging principles set out in the Civil Air Navigation Services Commercialization Act.

The Agency, in its Decision No. 650-NC-A-2003, concluded that it was "satisfied, on a preponderance of the evidence, that the Revised Charges are set at a level that, based on reasonable and prudent projections, would not generate revenues exceeding [Nav Canada's] current and future financial requirements in relation to the provision of civil air navigation services" and that the "Revised Charges are not inconsistent with the international obligations" of the Government of Canada referred to in the Civil Air Navigation Services Commercialization Act.

In the decision, the Agency recognizes that the worldwide airline industry has suffered and has been negatively impacted economically by a variety of shocks since 2001. However, it observed that, in establishing the revised charges, Nav Canada appears to have been sensitive to the resulting financial difficulties faced by its customers by reducing and deferring a number of its costs, operating at a deficit for the past two years, and by choosing to recover certain costs identified as financial requirements in the Civil Air Navigation Services Commercialization Act over five years instead of a shorter period.

The Canadian Transportation Agency is an independent quasi-judicial tribunal that regulates various modes of transportation under Government of Canada jurisdiction, including air, marine and rail. Its procedures are governed by the rules of natural justice. The application of these rules will ensure that all parties receive fair and equitable treatment.

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