GTAA Rent Reduction Deal
Looks like there will finally be a reduction in rent that YYZ pays to the federal government....
GOVERNMENT OF CANADA SIGNS AGREEMENT WITH THE GREATER TORONTO AIRPORTS AUTHORITY, PROVIDING LONG-TERM RENT REDUCTION
No. H 043/08
For release - February 15, 2008
OTTAWA — The Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, and the Honourable Jim Flaherty, Minister of Finance and Minister Responsible for the Greater Toronto Area, today announced that an agreement on airport rent has been reached between the Government of Canada and the Greater Toronto Airports Authority (GTAA).
"The signing of the amended rent agreement with the GTAA is the last step in implementing the Airport Rent Policy," said Minister Cannon. "This policy provides a reduction in long-term costs for the GTAA and supports its ongoing financial viability."
The current airport rent policy has already led to considerable savings for airport authorities across the country, helping the air industry remain competitive. However, under the GTAA's previous lease, rent would have more than doubled in 2012 to almost $400 million annually. The Government of Canada and the GTAA have agreed to amend the rent arrangement to reflect the current rent policy adopted by all other airport authorities. This new agreement, which came into effect on January 1, 2008, reduces the rent payable by approximately $12 million in 2008 and $18 million in 2009.
"The announcement being made today is not only good news for the GTAA and Pearson International Airport, it is good news for the travellers and businesses using Canada's busiest airport," said Minister Flaherty. "Cost effective air travel is an essential component of a strong and growing national economy."
The Government of Canada's current airport rent policy is the result of extensive study and analysis which aims for a balance between a fair return to taxpayers and the financial viability and competitiveness of the air industry.
"The federal government continually monitors the health of the Canadian air industry, and strives to ensure that Canadian policies are designed to promote the health of the air sector and meet the needs of the travelling public," added Minister Cannon.
The rent formula is based on modern commercial leasing principles and is in line with other rent formulas within the Government of Canada and the private sector. The formula uses a progressive scale based on airport gross revenues to set out a more modern and equitable rent for the 21 rent-paying airports across Canada. The Airport Rent Policy will result in close to $8 billion of relief for Canada's airport authorities over the course of their existing leases and will address inequities in the system.