Ottawa airport in 'scramble' to fund LRT station after feds cough up $6.4M of projected $16.8M cost

CEO says no word yet on when terminal will be reopened to direct flights from U.S. and other countries
Airport LRT station
Construction is already under way at the new airport LRT station. Photo courtesy Transport Canada

The federal government said Wednesday it’s chipping in $6.4 million for the construction of a new LRT station at the Ottawa airport, but the terminal’s CEO warns that passengers will likely face additional fee hikes to help pay for the project unless more funding can be found from other sources.

“I’m going to be selling extra coffees and chocolate bars,” Ottawa International Airport Authority boss Mark Laroche deadpanned when asked how he plans to finance the remaining costs of the three-storey station on the Trillium LRT line, which has an estimated price tag of $16.8 million.

While Laroche was trying to find a bit of humour in the situation, he said the airport has already had to borrow money to get the project off the ground and will likely have to go deeper into debt as it strives to meet the city’s spring 2022 deadline to finish the station. 

“I’m going to try to scramble and see if I can get some money elsewhere,” he told OBJ on Wednesday afternoon. “But if I can’t, I’m going to have to borrow. 

“I don’t have a lot of solutions. I’m going to have to increase the debt, and that’s going to have to be funded by increased (passenger) fees and increased charges. I don’t have any other prospects.”

No provincial cash

Federal Transport Minister Omar Alghabra announced the funding Wednesday morning. It comes after months of lobbying from the airport authority, which had asked for $13.5 million in federal support. 

While Laroche said he was grateful for the new funding from Transport Canada's Airport Critical Infrastructure Program, he still needs to find a way to cover the rest of the tab. He said he was hoping the province would step up with matching funds, but “so far it has not happened.”

Meanwhile, the airport faces other pressing challenges as it deals with the biggest cash crunch in its history. 

Passenger volumes at the Ottawa terminal plummeted nearly 75 per cent last year compared with 2019 as all but essential air traffic was grounded in the wake of the pandemic. Roughly two dozen flights a day now serve the airport, compared with about 110 pre-COVID.

As a result, the airport – which relies on improvement fees charged to passengers as well as terminal and landing fees, concession revenues and parking fees for most of its revenues – racked up a net loss of $51.2 million in 2020 and expects to incur an even bigger deficit this year.

Capital projects deferred

The airport authority deferred most capital expenditures last year in an effort to cut costs. But Laroche said multimillion-dollar projects such as the repaving of the terminal’s apron – the areas where aircraft are parked, loaded, unloaded and refuelled – can’t be put off forever.

“Sooner or later, we have to get it done,” he said.

The federal government is giving the airport authority another $5.7 million from Transport Canada's Airport Relief Fund to help cover the facility’s operating expenses, which total about $95 million a year.

Laroche said the extra cash is welcome but falls far short of what is necessary.

The CEO said he’s planning to apply for more additional funding for capital projects under the feds’ critical infrastructure program. The airport authority is prepared to borrow up to $100 million on the bond market if necessary to cover any shortfalls, but it’s committed to paying that money back over the next 10 years.  

“The less money I put on that credit card, the less money I have to reimburse and the less charges and fees I’m going to have to increase,” Laroche said. “I don’t want to pull that trigger if I don’t have to.”

Laroche said he’s also awaiting word on when the feds will reopen the Ottawa airport to direct flights from U.S. and international destinations. Currently, all foreign passengers entering and leaving Canada are funnelled through terminals in Vancouver, Calgary, Toronto and Montreal.

When that day comes, he hopes the feds will also come through with extra funding for rapid COVID testing. But so far, he’s heard nothing on that front.

“That’s a mystery to me at this point,” Laroche said.