Ottawa delays privatization of air-travel security screening

A Canadian Air Transport Security Authority official performs security checks of passengers and their carry-ons at Vancouver International Airport in February 2017
A Canadian Air Transport Security Authority official performs security checks of passengers and their carry-ons at Vancouver International Airport in February 2017. Jonathan Hayward/The Canadian Press

The federal government has delayed a plan to privatize airport security screening amid ongoing negotiations with the transportation industry, which has expressed concern over the speed and cost of the change.

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Talking Point

The federal government is planning to privatize the security screening of air travellers, following years of complaints from the transport industry about the quality of service offered by the Canadian Air Transport Security Authority. Ottawa originally hoped to transfer the work from the Crown corporation to a new non-profit on March 31, but has pushed back the timeline. Airlines and airports have expressed concerns about the speed and cost of the move.

Ottawa had planned to transfer responsibility for passenger and baggage vetting from the Canadian Air Transport Security Authority (CATSA) to a new non-profit organization on March 31. It agreed to extend that deadline late last year; however, Transport Canada has not established a new handover date because of ongoing talks with the Designated Screening Authority Corporation (DSA), a “consortium of airports and air carriers associations.” 

Airlines and airports have long called for funding changes and service improvements at CATSA, a Crown corporation established following the Sept. 11, 2001 attacks. They say its lack of stable funding—it relies on Parliament to sign off on each year’s budget allocation, which sometimes results in it operating at a loss—has left it unable to deal effectively with its growing workload, leaving travellers waiting longer to be screened. The corporation is responsible for screening at 89 Canadian airports, which it contracts out to private businesses. In the 2018–19 fiscal year it screened 67.9 million passengers, up 25.7 per cent over the 2013–14 fiscal year.

The agency’s target is for 85 per cent of passengers to wait 15 minutes or less to be screened, which it beat in each of the last six years. But the National Airlines Council of Canada (NACC) has said hitting that mark during peak periods “is not feasible with existing equipment and staffing levels,” and that only three-quarters of travellers actually receive such service during the time. The NACC and Canadian Airports Council (CAC) have called for a higher standard of 95 per cent in under 10 minutes at high-volume checkpoints.

Passengers travelling in Canada currently pay up to $25.91 for security screening, which airlines collect with their ticket prices. That money is paid to the federal government, which frequently earns more from the fees than it allocates to CATSA. In the 2018–19 fiscal year, it collected $872 million from screening charges, giving CATSA $769 million. The Crown corporation ended up spending $790 million. 

The federal government moved to privatize airport security screening as part of the April 2019 omnibus bill to implement that year’s budget. The legislation allowed cabinet to transfer CATSA’s assets and responsibilities to a new non-profit, and then shut CATSA down. It planned a handover date of March 31, 2020 and set aside $872 million for transition payments to help it through its first year, after which it would begin collecting fees.

But Canada’s major airlines objected to the deadline. “Government’s timelines on this policy are simply not realistic, and quite frankly are irresponsible,” Ferio Pugliese, Air Canada’s senior vice-president of government relations, told a parliamentary committee last April. WestJet’s representative also said the transfer was being rushed. 

Massimo Bergamini, then-CEO of the NACC, said the industry was “grappling with major operational challenges” as a result of the grounding of Boeing 737 Max 8 aircraft following a fatal Ethiopian Airlines crash, as well as the implementation of new compensation rules for inconvenienced passengers. 

Some airlines and airport authorities have also expressed concerns about the cost of the transfer. Pugliese warned the parliamentary committee that acquiring CATSA’s assets could leave the new screening authority “burdened with long-term debt.” In order to pay it off, Pugliese said, the authority would need to raise fees and charges, making air travel more expensive.

The legislation states that “charges may only be used to recover costs for the mandatory security screening services,” and the organization cannot use them to generate profit. Some airport authorities claim this framing would prevent the new screening authority from funding innovation or improvements to its processes. 

In response to questions from The Logic, NACC spokesperson Francesca Iacurto said a non-disclosure agreement prevented the organization from commenting on the commercialization of CATSA. WestJet also declined to comment, while Air Canada said it had nothing to add to Pugliese’s April 2019 testimony. 

At her own committee appearance a week later, Sara Wiebe, director general of air policy at Transport Canada, pushed back on those concerns. She claimed the government could commercialize security screening faster than it did Canada’s civil air navigation service in 1996—following two years of industry discussions—because it was “applying lessons learned” through that process, and that the transfer of CATSA’s assets would be less complex.    

But last fall, the government quietly pushed back its timeline. The March 31 date had been “an estimated target,” Transport Canada spokesperson Alexandre Desjardins told The Logic. “The deadline has been extended, with the agreement of all parties, to allow the transaction to be completed in an effective, efficient and robust manner.”

Transport Canada declined to disclose which companies are involved with the negotiations as part of the DSA, or how much they will pay for CATSA’s assets, citing the need for confidentiality in an ongoing commercial transaction.

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The department did not specifically respond to questions about the concerns industry representatives expressed at the April 2019 committee hearing. Desjardins said the commercialization of CATSA “would in no way change or compromise safety and security” and that the agency will not be dissolved until its successor has been established and the sale has closed. 

Daniel-Robert Gooch, CAC president, said in an email to The Logic that the new screening authority should “maintain a high standard of aviation security while improving the screening experience for travellers,” but also be able to “innovate and plan long term” by trying out new technology. He said the association’s members “remain hopeful” that transition will occur “by the end of 2020.”

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