Hamilton Airport Tells Council COVID Downturn May Decrease Revenue to City

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Hamilton City Hall

Hamilton’s international airport is reporting a 51.1% year-over-year decrease in passenger traffic in the first half of 2020. The airport expects by the end of the year, passenger traffic will be down 65 to 70 percent.

Cargo is up 12.4%, which Cathie Puckering, President and CEO, John C. Munro Hamilton International Airport attributes to e-commerce growth and PPE flights paid for by the federal government. “80% of Canada’s supply was coming though Hamilton airport”, Puckering states.

Much of the new cargo flights are originating from Vancouver’s airport, which Puckering’s report to Hamilton City Council attributes to “e-commerce activity from Asia-originating shipments”.

With the ongoing expansion of cargo hubs at the airport, Hamilton is becoming one of the largest cargo hubs in North America. The new DHL facility will be the fourth-largest hub for the international cargo company, says Puckering.

The Airport is requesting to use $55,000 from a joint marketing funding contributed to by the City of Hamilton to complete a land use plan update, with the goal of attracting more companies seeking lands with airside access (direct access to the airport’s runway). City of Hamilton Senior Director of Growth Management Tony Sergi recommended Council approve the expenditure.

Councillors on the the Airport Sub-Committee voted 8-0 to approve the spending.

The rate of noise complaints has nearly doubled this year, from 18 per 10,000 airplane movements in 2019 to 31 per 10,000 movements thus far in 2020. The airport attributes this to use of Runway 06-24, which has an approach over the urban area of the city. The main runway, 12-30, is under construction for upgrade and expansion. The airport also states that a combination of increases in cargo flights and people working from home are likely contributing to the increase in complaints.

Note: This section is updated with information provided by Hamilton International Airport

During the meeting, the Airport CEO showed a slide showing a tax fee assessment payment of $400,000 in January and a payment of $339,000. During this slide, Puckering discussed the economic downturn, and that the Airport would be decreasing its payments to the City. Details were not provided in closed session. Puckering stated this would be part of the closed session.

The Airport, in an email to The Public Record after the original publication of this story states “With respect to the tax assessment fee, this was paid in full and there have been no adjustments that have been made to that payment”.

“With respect to rent payable, this is a function of activity at the Airport. The commentary included in the presentation, along with [Puckering]’s comments, were meant to reflect a potential decrease compared to prior years”, writes Tomas Cleary, Senior Coordinator, Marketing and Communications at the Airport. “However, as we get closer to year end, we provided an update that the Airport will likely overperform previous rent estimates previously stated”.

Council claims this financial matter represents a matter of “a proposed or pending acquisition or disposition of land by the municipality or local board; and a position, plan, procedure, criteria or instruction to be applied to any negotiations carried on or to be carried on by or on behalf of the municipality or local board”.

Hamilton City Council conducts more business in closed session than any other municipality governed by the Ontario Municipal Act.

“While this one [downturn] is likely the worse we’ve experienced and going to be the longest to recover from”, says Puckering. “We’ll face it head-on and recover”.

Airlines have been shifting passenger flights from Hamilton to Toronto in response to COVID-19 decreases in passenger volumes. Hamilton Airport believes this is a temporary shift, as the low-cost airline model is not compatible with the higher landing fees and longer turn-around times at Toronto’s Pearson International.

Council then went into closed session for over 90 minutes to discuss “TradePort / City Lease Negotiation Status Update”, and the Airport indicated that it would be discussing the payment and fees issue.

Production Details
v. 1.0.0
First published: October 15, 2020
Last edited: October 15, 2020
Author: Joey Coleman

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v. 1.0.0 original version
v. 2.0.0 UPDATED based upon information provided by Hamilton Airport. The deleted content is available below. 

Removed Content
The Airport paid a $400,000 tax assessment fee in January, and decreased the payment to $339,000 in March "due to the pandemic and forecast uncertainty". The airport states they are working on the issue of payments to the City in the light of the economic downturn. 

Neither Council nor the Airport are publicly disclosing the tax fee issue. 

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