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NAV Canada to implement new service charges at start of 2024

NAV Canada on December 18 announced it will proceed with its proposal to change customer service charges, consistent with the Notice issued on September 21, 2023, that was subject to a mandatory consultation period of at least 60 days. The revised charges will become effective on January 1, 2024, except as otherwise noted.

In making the announcement, NAV Canada points to the negative impact of Covid-19 pandemic in creating lower air traffic volume and a material shortfall in its Rate Stabilization Account (RSA), with costs exceeding revenue. NAV Canada also notes, that over the past several months, demand for air travel has remained strong and its own air traffic forecast reflects an assumed return to normal seasonal variation plus incremental growth.

Revisions to service charges, explains NAV Canada, were made for it to rebuild financial resilience, invest in safety and service delivery for the aviation industry.

The revised rates have two components, including: (i) A base rate adjustment to recover NAV Canada’s anticipated fiscal 2024 costs, by service; and (ii) an additional temporary rate adjustment to recover a portion of the remaining cumulative RSA shortfall.

The overall average net decrease in service charges of 5.57 per cent includes an average base rate decrease of 9.33 per cent and an average temporary rate increase of 3.76 per cent. NAV Canada notes the rate adjustments vary by service category depending on how far each charge deviates from its breakeven level, as well as how much it has contributed to the overall RSA shortfall.

Details of NAV CANADA’s revised service charges are available here.