Ottawa is excluding many small airports across Canada when it comes to badly needed capital-improvement funding, says an aviation industry analyst.

Transport Canada recently doled out $40 million for safety upgrades at 49 smaller airports under its long-established Airports Capital Assistance Program (ACAP). This year's money goes toward projects such as runway rehabilitation, mobile equipment, including snowblowers, and terminal upgrades. Projects range from a $5.3-million runway upgrade at Yellowknife to the replacement of a $154,000 runway sweeper in Sudbury.

But Rick Erickson, a Calgary-based analyst, says the money is "paltry" compared to hundreds of millions that the federal government collects from the aviation industry in rents, security charges and other fees.

"When they're taking north of $750 million (annually) out of the industry, not to mention the aviation fuel tax at four cents a litre, why are they putting such a crummy amount back?" says Erickson. "And why do they put such limitations on it?" Many small airports fail to qualify for ACAP money because they do not meet the requirement of scheduled flights for 1,000 passengers per year. Some provincial governments, such as B.C. and Alberta, provide funds to facilities that do not qualify, but the Ontario government spends mostly on airports that it owns, he says.

Rick Erickson

Large airports, considered national facilities, are not eligible for ACAP money.

"(Ottawa) should think about taking the scheduled requirement off, because there's a lot of airports that do not have a scheduled-airline component to them," says Erickson. "They may have some charter activity. They may be recreational corporate airports, where people are flying in and out for corporate reasons. They all are creating economic benefits for the community - and that's not being recognized."

But Transport Canada spokesman Patrick Charette says the 1,000-passenger minimum is a necessary part of the program.

"When you develop a program, you need to come up with certain criteria to make sure you can have a threshold by which you can provide some funding," says Charette.

Merv Phillips, CEO of the airport in Red Deer, Alta., says he does not have a problem with the passenger requirement. "All we ask is that they be transparent in the process," says Phillips. "The rules are fairly simple."

The Red Deer airport applied for $2.5 million for airside lighting improvements, but no Alberta airports are slated to receive funds this year, says Charette, adding requests are kept on file for future consideration. No Saskatchewan airports received ACAP funds, either.

But Ken Graham, chairman of the Russ Beach Smith Falls/Montague Airport Commission in Ontario, says the 1,000-passenger minimum will prevent his facility from qualifying for funding for another decade.

"There should be (other funding mechanisms) for smaller airports - for sure," says Graham, also a Smiths Falls town councillor. "Some of them are going to have some difficulty sustaining the airport facilities without some funding.

"Right now, we're lucky, we have the municipalities of Smiths Falls and Montague who fund the airport. We (Smiths Falls) are supporting the airport, but we're heading into another budget year and it's always a concern in the budget process whether we're going to continue to be able to fund it. Even though it's not a lot of money, every little penny helps when times are tough."

Smith Falls covers 75 per cent of the airport's operating costs, about $31,000 per year, while Montague pays the remaining 25 per cent, a little over $10,000. The local flying club manages the airport, named after late Smith Falls businessman and pilot Russ Beach, and members put in approximately 5,000 volunteer hours to keep it operational.

The airport is used by companies as well as commercial recreational flyers, an air ambulance service, Ottawa police, Ontario Provincial Police, the local search and rescue service, and the military, among others.

Graham says the airport will need money in future to replace an aging runway that has a remaining lifespan of about 10 years. But he doesn't know where the $500,000 will come from.

Since 1995, says analyst Erickson, ownership of most small airports has been transferred to municipal governments from Ottawa. He says ACAP is underfunded because the feds over-built airport infrastructure that now needs to be upgraded.

Safety is not really an issue, he adds, because airports have to meet federal regulations. Instead, the ACAP money helps reduce financial inefficiencies, including expensive machines that burn large amounts of fuel.

"Most of the small airports are fairly good at being able to meet their operating and maintenance costs,"says Erickson. "However, in virtually no cases can they meet their capital costs."

Ottawa, he adds, should provide small airports with funds for marketing and other operational aspects that would generate more business.

Graham agrees.

"The only way we're going to make the airport sustainable is to find some way to market the facility and attract some commercial activity," he says.

(Monte Stewart can be reached at monte@businessedge.ca)