Customs user fees hampering airport growth: regional operators want Ottawa to pick up tab for border services.

Dryden airport manager George Friesen would like to turn his municipally-run facility into a profit centre.

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When Transport Canada transferred the assets of small airports to communities in 1998, the onus was on them to generate business on their own.

That's been a tough proposition for many because of a constant stream of downloaded responsibilities.

A big hurdle to opportunity is the federal system of imposing user fees on small airports to pay for Canada Border Services Agency (CBSA) inspectors.

With a land development strategy underway, Dryden airport wants to market itself as a centre of commerce and looks to attract an air carrier for winter vacation charters connecting to southerly flights.

Friesen is part of a growing movement of small operators who want the federal government to abolish these user fees imposed on them.

The Regional Community Airports Coalition of Canada calls the fees "highly discriminatory" to small airports. They want Ottawa to start picking up the tab.

Small airports have complained for years that they are being handcuffed by a outdated federal system that doesn't make publicly-funded border agents available equitably around Canada.

Friesen says sites like Dryden airport can be key economic drivers "where business can be done to expedite the movement of people, products and services."

Federal funding from the Airports Capital Assistance Program helps pay for new runway lighting, repaying projects and terminal upgrades. But more than half of the local and regional airports in Canada run operating deficits. Most are not in a position to take on ambitious revenue-generating projects.

Since customs agents can't be spared from the busy Fort Frances border point, Dryden airport has set up a contract for border services on a seasonal basis (spring and summer) at their sites.

Friesen has two CBSA-trained staff, available daily from 8 a.m. to 4 p.m. The cost to outfit and train them is $15,000 annually. Because of new safety regulations, he'll soon have to budget for four agents.

That's not chump change for his cash-strapped facility. "For an airport that doesn't have a pot to pee in ... that's a big number."

To recover costs, they instituted higher landing and terminal fees for visiting American pilots. Friesen says it puts small airports behind the eight-ball in the competitive field of aviation.

"Is CBSA more interested in being a revenue body or is the federal government in the business of nation-building?"

Friesen is waiting on CBSA to finish a highly anticipated internal level of service review. That will be the basis for a "candid discussion" on expanding services.

The system has also been a headache for domestic travellers as well.

Last winter, a charter flight of Canadian vacationers returning to Thunder Bay from the Caribbean were diverted to Dryden because of bad weather.

The aircraft was refueled, but passengers weren't allowed to disembark because customs agents aren't available during winter. The flight continued on to Winnipeg.

Earlier this spring, officials at Mont Tremblant (Que.) International Airport threatened to close because of being unable to pay the government for the use of border agents.

Ottawa reacted quickly. Public Safety Minister Stockwell Day struck a deal in June to spend $100,000 to cover the costs of agents needed for daily Continental Airlines flights from New Jersey to the resort during the ski season.

Day is expected to make a string of similar announcements across Canada this summer. A spokeswoman with his office wasn't certain what's coming for Northern Ontario.

Melisa Leclerc says the department minister is sympathetic to the plight of small airports but CBSA resources across Canada are limited.

"We recognize the impact it has had on the economic prosperity of the region."

With the first phase of the review completed, she says there's been the introduction of publicly-funded 24/7 custom services at Halifax and Ottawa airports.

Day has met with chambers of commerce, airport authorities and has recruited Jim Facette, CEO of the Canadian Airports Council, "to help sort out the problem."

She couldn't speculate on when the final review will be complete and what changes are coming since the department is still gathering information. But funding will go where it's most urgently needed. "Some regions will be worse than others."

The existing cost recovery model makes Greater Sudbury Airport CEO Bob Johnston hesitant to go out and drum up new business.

He's working to get daily scheduled service into Detroit to link up with the Northwest Airlines network. But the costs of custom agents staffing and the physical building requirements to clear international flights are too prohibitive to justify the expense.

Johnston says under the current system, the economics don't work.

"In our experience, it's a very expensive process."

Two winters ago, Sudbury ran 13 Sunwing charter flights to the Caribbean.

With only one CBSA agent in Sudbury, the rest were flown in from Sault Ste. Marie. A minimum of six customs agents are required to clear 190 passengers.

The airport corporation paid their salary, hotel, meals and other expenses. Then there were capital costs of creating a special holding area, recessed lighting and doors that swung out.

With Sunwing hesitant to pass the costs onto the ticket prices, the airport absorbed the $300,000 bill.

Last year, the charter flights were cleared through Ottawa, which wasn't popular with Sudbury passengers who had to disembark for inspection.

"Ultimately it will impact the decision of whether people travel from here or still drive to Toronto," says Johnston.

Thanks to Sudbury's robust mining economy, daily scheduled service has been a core business with secondary revenues coming from a successful land development and expansion program. It's helped the airport go from losing $250,000 during the 2003 Air Canada bankruptcy to posting a $1 million operating surplus this year.

Johnston hopes if the airport is successful in scoring daily service to the U.S. with 60-seat aircraft, it would be incumbent on CBSA to place more agents in Sudbury.

Johnston understand CBSA's manpower challenges, "but what's needed is a formula that's fair and equitable from an economic viewpoint. There's a real benefit to communities to have these services in place."

www.rcacc.ca

By IAN ROSS Northern Ontario Business