Order No. 2003-A-474
September 11, 2003
File No. M4210/C471-1
On August 8, 2003, Air NorTerra Inc. carrying on business as Canadian North (hereinafter Canadian North) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.
Under Licence No. 980142, Canadian North is authorized to operate a domestic service, medium aircraft and a domestic service, large aircraft.
Canadian North submits that the reason for withdrawing service at Fort Smith is based on continued poor financial results, combined with the end of an aircraft lease period and the scheduled maintenance for the Fokker F28 aircraft type.
Canadian North further submits that it has informed the community leaders of Fort Smith of its intention to discontinue air service at Fort Smith, subject to government approval, and that it has met with Northwestern Air Lease Ltd. (hereinafter Northwestern) who will commence service to and from Edmonton International Airport effective September 15, 2003. In this regard, Canadian North states that following the discontinuance of its non-stop scheduled air service between Edmonton International Airport and Fort Smith, Northwestern will be operating 6 days a week between these two points starting September 15, 2003.
In addition, Canadian North adds that it is working closely with Northwestern to plan the reaccommodation of all passengers presently holding bookings, should the Agency grant its request for a reduction of the period of notice to be given. Finally, Canadian North indicates that it rarely carries passengers from Fort Smith to Hay River.
In light of the foregoing, Canadian North requests the Agency to grant its request for a reduction in the notice period requirement set out in subsection 64(2) of the Canada Transportation Act (hereinafter the CTA).
Subsection 64(1) of the CTA provides that where a licensee proposes to discontinue a domestic service or to reduce the frequency of such a service to a point to less than one flight per week and, as a result of the proposed discontinuance or reduction, there will be only one licensee or no licensee offering at least one flight per week to that point, the licensee shall give notice of the proposal in prescribed form and manner to such persons as are prescribed.
Pursuant to subsection 64(1.1) of the CTA, if a licensee proposes to discontinue its year-round non-stop scheduled air service between two points in Canada and that discontinuance would result in a reduction, as compared to the week before the proposal is to take effect, of at least 50 percent of the weekly passenger-carrying capacity of all licensees operating year-round non-stop scheduled air services between those two points, the licensee shall give notice of the proposal in the prescribed form and manner to the prescribed persons.
Subsections 64(1.2) and 64(2) of the CTA state, inter alia, that as soon as practicable after giving notice, an opportunity must be given to elected officials of the municipal or local government of the community of the point or points, as the case may be, to meet and discuss with the licensee the impact of the proposed discontinuance, and the proposal to discontinue the service must not be implemented until the expiry of 120 days, or 30 days if the service has been in operation for less than one year, after the notice is given or until the expiry of any shorter period that the Agency may, on application by the licensee, specify by order.
Section 14 of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR) states that, for the purposes of section 64 of the CTA, a licensee shall give notice of a proposal to discontinue or reduce the frequency of a service to the Agency, to the Minister of Transport of Canada, and to the minister responsible for transportation in the province where the area to be affected is located. Additionally, the licensee is required to advise holders of domestic licences operating in the area to be affected by the proposal and to the persons resident therein by publishing a notice in local newspapers.
Pursuant to paragraph 80(1)(c) of the CTA, the Agency may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of Part II of the CTA or of a regulation or order made under that Part where the Agency is of the opinion that compliance with the provision by the person is unnecessary, undesirable or impractical.
The Agency has thoroughly investigated the level of service and frequency of air service that will take place at Fort Smith starting September 15, 2003. The Agency finds that following the discontinuance of Canadian North's year-round non-stop scheduled air service between Edmonton International Airport and Fort Smith, there will not be a reduction, as compared to the week before the proposal is to take effect, of at least 50 percent of the weekly passenger-carrying capacity of all licensees operating year-round non-stop scheduled air services between these points. Therefore, the Agency finds that subsection 64(1.1) of the CTA does not apply in this case.
With respect to Canadian North's air service between Fort Smith and Hay River, the Agency finds that following discontinuance of this service there will be no air carrier offering services between these points and, therefore, subsection 64(1.1) of the CTA applies in this case.
The Agency also finds that, as of a result of Canadian North's discontinuance of service at Fort Smith, there will only be one licensee offering at least one flight per week to this point. Therefore, the Agency finds that subsection 64(1) of the CTA applies.
The Agency also notes that air services will continue to be offered between Edmonton International Airport and Fort Smith via Yellowknife by Canadian North and Northwestern starting September 15, 2003. The Edmonton International Airport-Yellowknife portion will be operated by Canadian North and the Yellowknife-Fort Smith portion will be operated by Northwestern.
The Agency has carefully considered and balanced the needs of the communities and those of the carrier. In light of the fact that a very limited portion of the public use the service between Fort Smith and Hay River and that Fort Smith will be regularly served by Northwestern, the Agency is of the opinion that compliance by Canadian North with the requirements set out in section 64 of the CTA in respect of its proposed discontinuance of year-round non-stop scheduled air service between Fort Smith and Hay River, and of its proposed discontinuance of service at Fort Smith is impractical. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, hereby exempts Canadian North from the application of section 64 of the CTA, subject to the following conditions:
- Canadian North shall not implement its proposal to discontinue year-round non-stop scheduled air service between Fort Smith and Hay River and its proposal to discontinue service at Fort Smith before September 15, 2003.
- Canadian North is required to advise the following parties of its proposed discontinuance of services on or before September 3, 2003:
- the Minister of Transport of Canada;
- the minister responsible for transportation in the Northwest Territories;
- the local communities of Fort Smith and Hay River, by publishing a notice in both official languages in the newspapers with the largest circulation in the communities of Fort Smith and Hay River.
- Canadian North is requested to provide the Agency with copies of the notices provided to the Minister of Transport of Canada and the minister responsible for transportation in the Northwest Territories, and copies of the notices published in the newspapers showing the name of the newspapers in which the notice was given and the date on which the notice was published.
- Canadian North shall, before September 15, 2003, provide an opportunity for elected officials of the municipal or local governments of Fort Smith and Hay River, Northwest Territories, to meet and discuss with it the impact of the proposed discontinuance of services.
This Order takes effect as of August 22, 2003, the date on which its content was verbally communicated to Canadian North.
- Date modified: