Discussion of the Canada Transportation Act Review Presentation to Northern Air Transport Association 40th Annual General Meeting, Conference, & Trade Show April 26, 2016

The Review mandate was broad and sought to examine how the national transportation system will support Canada’s long-term economic growth and prosperity. Transport Canada is currently conducting forward-looking discussions with stakeholders on the Review’s recommendations with a view to shaping the Government’s long-term transportation agenda. Air sector recommendations cover a number of broad thematic areas: Chapter 4: The North – Recommendations related to aviation Chapter 9: Air Transport 1.Airports: user pay; cost competitiveness; small NAS/ACAP (National Airports System) 2.Foreign ownership 3.Air liberalization 4.Facilitation : border processes and visa policy 5.CATSA 6.Consumer protection 7.Civil aviation regulations and UAVs 2 CONTEXT

PURPOSE AND THEMES The purpose of these discussions is to: –Hear your views on the findings in the Canada Transportation Act Review Report; –Develop a deeper understanding of the priority issues facing the air sector over the next 20 to 30 years; and –Seek your input on how to best address these issues in a long-term vision for transportation. The focus of today’s discussion will be on the recommendations relating to the North, foreign ownership and the user-pay model. A similar conversation took place yesterday with your board. We would like to hear your views. 3

FRAMING THE DISCUSSION Questions to consider for all Report recommendations The Report notes the air sector is generally doing well, but where are the areas for improvement? –What gaps would implementing the Review’s recommendations fill? Not fill? –Do the Review’s recommendations present new challenges? What can the air sector do to improve things in the three theme areas? In the other areas related to air transport? Are there other areas beyond the Report's recommendation that should be considered? Discussion guidelines: Your frank and open views are appreciated. These questions have been shared with you in advance to help focus the discussions. 4

QUESTIONS Northern & remote aviation infrastructure 1.How could air infrastructure improvements have the greatest positive impact on the North? What should the priorities be? 2.How could we make these investments as sustainable as possible, in terms of addressing ongoing maintenance costs? Foreign Ownership: 1.With a view to optimizing competition and connectivity in a sustainable manner, what is the right balance in terms of foreign ownership of Canadian air carriers? 2.What benefits could be derived from higher foreign investment limits? User pay model: 1.The recommendation speaks generally of “fees”, but much focus is on the ATSC. What changes support this recommendation to improve fee predictability and transparency in the provision of services and infrastructure? 2.How could the ATSC be more predictable and transparent (as recommended), and security costs be divided between the taxpayer and passenger? 3.The recommendation is to eliminate airport rent and provide more general revenue to the smaller airports. Keeping in mind other fiscal pressures, how could this be done in a sustainable manner? 5

Wrap Up Thank you very much for your input. You are welcome to submit further comments or input to Sara Wiebe, Director General, Air Policy at 11