New political landscape in Niagara – time to move on from a Conservative pet project?

There was a Federal election last week. It was of some import. Since then, there have been many articles about “WHAT THIS MEANS”. One part of one of those articles caught my eye. Maryanne Firth of the local Postmedia chains wrote about Niagara Region priorities in the wake of the election. This is particularly newsworthy since the new Liberal government has promised $125-billion for public infrastructure and St. Catharines just elected a new Liberal MP, Chris Bittle. This would seem a good time to be soliciting dollars from the Feds. Firth interviewed Niagara Region Chair Alan Caslin and he pointed out the Region’s infrastructure priorities:

All four of the priorities mentioned are worth looking at in depth, but the last one stood out to me. The idea of an international airport in Niagara is not a new one, but the push for international flights to Niagara-on-the-Lake continues to mystify me. Niagara has a great opportunity to receive Federal funding right now, is spending time and money on an international airport prudent?

Niagara is getting an airport?

Actually, Niagara already has two airports. The Niagara Central Airport in Pelham and the St. Catharines/Niagara District Airport (NDA) in Niagara-on-the-Lake. The NDA is located in Niagara-on-the-Lake, near the St. Catharines border and the Garden City Skyway. It currently has no regular passenger service. Its primary utility is serving small, private aircraft of no more than 15 passengers. Customs officials are on hand for aircraft landing from the United States. The NDA is occasionally used by a local charitable aviation safety organization, the Royal Canadian Air Force for refueling and also for private functions. But it’s best thought of as a private small craft airport.

The NDA is a publicly owned, controlled jointly by the municipalities of St. Catharines, Niagara Falls and Niagara-on-the-Lake. Each municipality provides a city councillor to the NDA Commission and elects other, non-political representatives. Including the politicians, St. Catharines has fours reps, Niagara Falls has three and NOTL has two. The airport is funded by contributions from the three municipalities, plus its own revenue. We will get to the financials of the airport in a later section.

Why is updating the airport a priority now?

The push to for investment to convert the airport to an international airport with regularly scheduled large passenger aircraft is not new. The idea has been revisited intermittently since at least 1993, but let’s look back at when the current push began to pick up steam in earnest.

2011 – Nearly $12-million is granted to the NDA for capital investments in equal installments by the Federal, Provincial and Regional governments. The money is intended for improvements to the terminal and runways.

2012 – A “bun fight” emerges between the NDA Commission and the Mayors/CAOs of the three municipalities who oversee the Commission. The Commission wants to make the airport more robust, and the oversight committee is fine with that but wants ultimate control on the amount spent (since it is coming out of their respective municipality’s budget.) [Former] St. Catharines Mayor Brian McMullan attempts to avoid hearing from the Commission when City Council debates the relevant motion. In response, somewhat controversially, [former] St. Catharines Federal MP Rick Dykstra becomes involved in this municipal issue and arranges a private meeting with the Commission where only 6 of the 12 city Councillors are invited (Siscoe, Harris, Stack and Washuta attend.) This meeting is the subject of a complaint to the Ontario Ombudsman. The ombudsman report summarizes itself with:

However, as discussed, while the meeting did not technically violate the Act, closed meetings between members of Council and Local Boards have the potential to fuel public speculation and mistrust. As such, the commission may wish to consider a more transparent and open approach to such gatherings in the future where practicable. In this case, in order to avoid public speculation, the Commission might have considered inviting members of St. Catharines Council to a public meeting of the Commission to hear its concerns, particularly since the Commission’s view on the mandate changes was already presented at public Council meetings held in Niagara Falls on November 27, 2012 and in Niagara-on-the-Lake on December 3, 2012.

2013 – Niagara Region and the Tourist Partnership fund a study on the viability of passenger service in and out of the NDA. The report surprisingly finds that the NDA’s best bet would not be domestic flights to NDA but international service from the US; but the airport would need to be upgraded to the tune of $8-million. An unnamed US airport carrier commits to twice daily service between the NDA and New York City if the airport is upgraded. However, there is a catch. The unnamed carrier requires a revenue guarantee of at least $1.2 million for the first year of operation. So…a soft commitment. “We’ll do it, as long as you promise us over a million dollars even if no passengers fly.”

2015 – MP Dykstra continues to seek support for expanding the airport. The NDA Commission advocates for Niagara Region to take responsibility for the NDA from the three local municipalities. The Commission sees this as part of the path to move from small private aircraft to international passenger flights. St. Catharines, Niagara Falls and NOTL all vote to have the Region assume responsibilities. The Region has yet to address the issue. Conspicuously, there is not the same interest in uploading the responsibility of Niagara’s other, similar airport, the Niagara Central Airport, to the Region. This causes some tension and the southern mayors endorse the Region taking control of both airports. (It should be noted that “triple majority” support is required to upload the NDA; given the four southern municipalities’ endorsement, that seems very unlikely to happen without also uploading the Niagara Central Airport.)

History is boring. What’s the current status of the NDA?

As mentioned earlier, the NDA is funded by St. Catharines, Niagara Falls and NOTL with each contributing based on its population. According to its 2014 financial statement, the NDA is economically dependent on funding from the municipalities. The NDA generates $261,400 in revenue and costs $527,900 to operate. The municipalities help make up the operating difference by each providing $184,578, $122,235, and $21,687, respectively. The majority of the NDA’s operating costs are personnel ($316,800). In 2011, $11-million was granted to the NDA for capital investments by the Federal, Provincial and Regional governments; however, as of 2014, $10,762,139 of that is still sitting in the NDA’s bank account, unused. Despite that, the three local municipalities contributed another $112,374, $74,423, and $13,294, respectively, in 2014 in capital grants. So the NDA already has enough money in its coffers for the proposed upgrade. Curious.

But I could fly directly into and out of Niagara? Sweet!

That is what’s proposed. However, keep in mind those proposing it also suggest an airport that doesn’t currently offer passenger service, makes $17,000 a year in landing fees and operates at a de facto loss has a $25-million economic impact on Niagara.

There are five airports that currently provide most of the passenger service for those travelling to or from Niagara: two in Toronto, Buffalo, Hamilton and Niagara Falls New York. Buffalo, Hamilton and Niagara Falls New York are reasonably equidistant to the NDA for many Niagara municipalities. Furthermore, it is considerably more expensive to fly between the US and Canada due to Canada’s relatively high flying taxes. That’s why many traveling to/from the US fly out of/into Buffalo.

There’s a reason that unnamed carrier earlier asked for a revenue guarantee: there’s not an obvious unserved or under-served market here.

There has not been a lot in the way of compelling arguments for the airport upgrade. A lot of the “benefits” are stated in vague, politicianspeak. From St. Catharines Councillor Mike Britton, a Commission member and Dykstra ally:

HOWEVER, the above catches an even bigger red flag that the rationale of expansion being an economic boon is dubious. St. Catharines, Niagara Falls and NOTL all lose money out of their budget every year to support the NDA, yet we are supposed to believe they’re giving up control of the NDA just as it is to start turning a profit? Dubious.

Conclusion

I believe that this was a passion (or pet) project for outgoing St. Catharines MP Rick Dykstra. I am not sure upgrading the airport will attract a carrier and not sure that even with a committed carrier providing seasonal service it would be an economic boon. I can understand why a politician may find bringing an international airport to their riding to be a feather in their cap. However, there’s a new Federal party in power, and though St. Catharines is still represented the governing party, the Liberals are likely to be loath to embrace a project championed by the Conservatives. Furthermore, the airport itself is in NOTL, which, along with Niagara Falls is represented by a Conservative. And not just any Conservative; one running for the interim leadership of the party.

In light of this, I think it’s safe to say that even if the airport project were an important one, those funds are unlikely to be granted from the new Liberal government’s infrastructure fund.

Bittle has said he’s motivated to fund “shovel ready” ready” infrastructure projects in Niagara. For an area that has lost Via Rail service, is still asking for daily GO service and has not sorted out its bus service, an international airport famously promoted by the rival political party seems like a wasteful transportation infrastructure ask.

The political landscape has changed (much to the chagrin of some local politicians). This will be a test to see if our local municipalities can be nimble enough and prudent enough to pivot its efforts to more worthy local infrastructure projects that are likely to receive funding. If the Federal government is willing to dole out cash, and we have an MP representing the governing party, we cannot waste that opportunity to improve.