Observations reçues par le Groupe d'étude

Soumission complète

Auteur : NAV CANADA
Envoyé : le 8 novembre 2001

(Soumis en anglais seulement.)

NAV CANADA Disclosure Policies and Safety Oversight

Introduction

NAV CANADA is a private sector company, incorporated under the Canada Corporations Act. The company purchased the assets and rights of the Civil Air Navigation System from the federal government for $1.5 billion and began operating the system on November 1, 1996.

The purchase of the system was funded through a syndicated bank loan. Ongoing capital requirements are funded through long term revenue bonds. The government provides no funding and retains no ownership over the system but has an extensive safety oversight role. Revenue for ongoing operations is generated through service fees charged to airlines and owners of aircraft as well as other revenue sources such as interest, the sale of technology, and the leveraging of the system's assets.

The company is mandated to recover costs incurred while running the air navigation system, including reasonable re-investment in the company. As such, service charges are set at a level required to cover expenses in a given fiscal year. In other words, the company operates on a "break even" basis. Since there are no shareholders, the company does not pay dividends. Profits, when they occur, are recycled to reduce customer charges, pay down debt or finance capital expenditures.

Corporate governance issues were carefully considered at the time of the company's formation in order to ensure balanced representation and accountability to stakeholders. The company has a 15 member Board of Directors. The Board structure is as follows:

• 4 members appointed by airlines;
  
• 1 member appointed by general aviation;
  
• 3 members appointed by government;
  
• 2 appointed by unions;
  
• 4 independent members; and
  
• the President and CEO.

Accountability / Disclosure Regime

NAV CANADA operates according to a well-defined, well-articulated governance structure and legal accountability / disclosure regime which is set out in:

• enabling and related legislation such as the Civil Air Navigation Services Commercialization Act (CANSCA); the Aeronautics Act and Regulations including among others, the Canadian Aviation Regulations (CARS) Part VIII
  
• corporate by-laws
  
• corporate governance manual
  
• corporate policies, and
  
• provincial securities laws and regulations.

Enabling and related legislation

The company's by-laws and certain provisions of CANSCA prescribe specific additional requirements for communication and consultation with the public and company stakeholders.

Information related to the services provided by the company are required to be published in several different aeronautical publications, designed for use by licensed pilots but widely available, and updated every 56 days.

The company is required under CANSCA to have a published level of service policy that describes the policy to be followed by NAV CANADA in the provision of air navigation services. It contains assessment criteria for determining the specific need for services at each site. The Act requires the company to provide notice and to consult extensively on the initial establishment of the policy and any subsequent revisions.

Any changes to the level of service provided by NAV CANADA are subject to a Transport Canada safety review. Transport Canada has the ability to require an Aeronautical Study into any proposed material change, but in practice, NAV CANADA has conducted and submitted such studies whenever either increases or decreases to the current level of service are proposed. The aeronautical study process involves publishing the terms of reference in advance of the study, a two-phase consultation process with all interested stakeholders, a rigorous CSAQ850 risk management approach to safety, a Transport Canada safety review of the study and the publishing of the study itself. Prior to the change in service actually occurring, a notice of the change must again be published 60 days in advance.

Additionally, the service charges established by the company must meet several criteria established in CANSCA and must be broadly consulted upon. The company is required to provide 60 days notice of any proposal to increase these charges and to invite representations on the revisions. This notice is provided through advertisements in English and French national newspapers, and through letters to all interested stakeholders. The charges can also be appealed to the Canadian Transportation Agency.

Safety Oversight Regime

On the same day as the transfer of the air navigation system to NAV CANADA, the federal government promulgated new regulations pertaining to the system, known as the Civil Aviation Regulations (CARS) Part VIII. These regulations, coupled with the Canadian Air Navigation System Commercialization Act (CANSCA), provide an enhanced level of safety oversight for Transport Canada.

Federal regulation provides Transport Canada with the ability to conduct operational audits and evaluations, field inspections, request information related to the operations of the system, or, to require NAV CANADA to conduct aeronautical studies into safety issues. The aeronautical study process includes full consultation with users and stakeholders on safety and risk issues and proposed mitigation measures.

Incidents from a loss of separation between aircraft, to requests for emergency assistance or aircraft overriding the hold short position on a taxiway, are reported by NAV CANADA on a daily basis to Transport Canada. These reports are published by Transport Canada as Civil Aviation Daily Occurrence Reports (CADORS) available on the Transport Canada website.

Either Transport Canada or the Transportation Safety Board may choose to investigate the circumstances surrounding any incident or accident and may access NAV CANADA files for the purpose of such an investigation. NAV CANADA itself investigates any incident that implicates air traffic control and the company's reports are available to Transport Canada.

In addition to the regulatory regime that exists for safety oversight, additional bodies and consultative forums exist to provide the review and resolution of safety issues as they arise:

1. A Transport Canada / NAV CANADA Safety Oversight Committee meets regularly to provide a focal point between both organizations for the exchange of information and the resolution of safety matters relating to the safety performance of NAV CANADA.
   
   
2. The Civil Air Navigation Services Commercialization Act mandated the creation of an independent Office of Safety and Quality Management in NAV CANADA reporting directly to the President and CEO.
   
   
3. A Board of Directors Safety Committee reviews the companies' safety performance and programs on a regular basis (at least 4 times a year).
   
   
4. The NAV CANADA Advisory Committee is an 18-member body reporting directly to the company's Board of Directors. The Board may seek advice from the committee or the committee may conduct its own studies and make recommendations to the Board.
   
   
5. The Air Navigation System National Advisory Committee is a forum for domestic carriers, aviation associations bargaining agents and groups representing airlines, business aircraft owners and general aviation.
   
   
6. The Air Transport Operations Consultative Committee which represents the major airlines, the Airline Pilots Association and the International Federation of Pilots Associations.

Securities Law Disclosure Regime and Obligations

As a private company that issues debt securities in the financial market, NAV CANADA is subject to provincial securities laws and regulations. The disclosure requirements of securities laws are aimed at ensuring that investors receive all relevant information on a timely basis based on the principle that no single investor should gain advantage or profit from having information unavailable to others. Securities laws and corporate governance policies require that NAV CANADA proactively disclose all material information about itself, and that such information not be selectively disclosed. In this regard, NAV CANADA must ensure that selective disclosure of material information does not occur.

There is a legal obligation under securities law to maintain a public disclosure file containing all material facts relating to NAV CANADA. The legislation also requires that this file be continuously updated.

The SEDAR web-site is the repository for all documents publicly disclosed under such securities laws. The site may be accessed at www.sedar.com.

Information Broadly Disclosed by NAV CANADA under Corporate By-laws and Securities Laws.

The following information is broadly disseminated by NAV CANADA, either on its internet site (www.navcanada.ca), to the media, or is available upon request to the corporation:

• An annual information form providing a detailed three-year corporate record containing all material facts relating to the business of NAV CANADA, its development and operations, its management and its financial position.
  
  
• A summary of the company's business plan for the up-coming fiscal year.
  
  
• A prospectus describing the company's business and financial structure.
  
  
• Quarterly financial statements immediately following approval by the Board of Directors at the end of each quarter.
  
  
• A quarterly detailed management discussion and analysis of NAV CANADA's financial results.
  
  
• Full details of salary, all other compensation, and all benefits received each year by NAV CANADA's five most highly paid officers.
  
  
• Name, residential address and five-year employment history of each of NAV CANADA's directors and officers.
  
  
• Any material development affecting the company, immediately upon occurrence. In this instance the company can claim confidentiality but must re-request and justify the confidentiality claim every ten days, otherwise the information becomes public.
  
  
• Annual report, providing an overview of the past year.
  
  
• Annual financial statements, notes to financial statements and audit report.
  
  
• Management's discussion and analysis of financial statements.
  
  
• Rate revision submissions.

Observations reçues par le Groupe d'étude