By the 1990s, Canada’s air navigation system (ANS) was in need of change.
Despite the excellence of ANS personnel and its safety record, the grind of government bureaucracy was no longer up to the challenge of maintaining infrastructure, investing in new technology and keeping costs under control.
Key stakeholders – government, airlines, employees and representatives from general aviation – agreed that change was needed.
After years of collective stakeholder effort, NAV CANADA in 1996 purchased the ANS from the Government of Canada for $1.5 billion. The ANS would now be operated by a non-share capital corporation. This ensured a focus on providing great service to aviation, rather than generating a return for shareholders.
Strong and collaborative governance
A board of directors would ensure sound governance and operate independently of management. While directors might be elected by specific stakeholder interests, they could not represent those interests, and had to agree to abide by the common-law fiduciary duty to act honestly, in good faith and in the best interests of the corporation.
Twenty-two years later, this model has proven itself as the way to ensure an ANS that is safe, efficient, cost-effective and innovative. It has become the envy of other nations. Why then, does NAV CANADA’s model remain unique?
“It has worked in Canada because the stakeholders collectively decided it was a better way to do things,” said Neil Wilson, President and CEO of NAV CANADA. “You need that consensus among all stakeholders and the political will to make it happen.”
Why does it work for Canada?
Case in point – U.S. lawmakers have attempted to privatize America’s Federal Aviation Authority (FAA), based on the Canadian model, only for that legislation to fail due to lack of support.
“A collective decision was made in Canada to design a governance structure where the concerns of all stakeholders could be brought to the table, on the understanding that they would all receive better value than they had in the past,” Wilson said. “The strongest attribute of this model is that all the stakeholders, while they may have different interests and concerns, can have all those interests and concerns addressed through what it is essentially a cooperative.”
A world leader for innovation
The decision was made at the outset to handle new technology development internally, with teams of engineers, air traffic controllers and other service specialists working together. The world-class systems and solutions that resulted soon attracted interest from abroad.
“The systems we now use in about 120 facilities across Canada are the same ones being used in every tower of every airport around London, in Copenhagen and Mumbai, and in a host of other places,” Wilson said.
A year ago, the first of 66 new satellites were launched as part of Aireon LLC, an international joint venture spearheaded by NAV CANADA. This network will create a digital net so air-traffic controllers can always know the precise locations of aircraft flying over the 70 per cent of the world that is not covered by ground-based systems.
“This will provide aircraft with better route options, altitudes and speed adjustments in real time, to make flight operations more efficient, cut fuel costs and reduce greenhouse-gas emissions,” Wilson said.
Lessons learned
What has NAV CANADA learned about making such an innovative “stakeholder cooperative” work?
• There has to be the will for everyone to come together.
• There must be recognition that not every particular stakeholder can have a say in things, but collectively there can be a structure that ensures they will receive better value.
• A system of checks and balances must be incorporated to prevent conflicts of interest.
• No one stakeholder can dominate, and all must be willing to engage with an organization that approaches issues from a collaborative standpoint.
