Vancouver cancels construction project worth $460 million


CORE programme was meant to reduce airport’s carbon footprint while expanding parkade

Vancouver joins Winnipeg as airports cancel construction projects to save cash

Vancouver cancels construction
Construction on the CORE project at Vancouver International Airport June 18, 2020 (photo: Brett Ballah).

In a bold move, Vancouver International Airport cancels a major construction project half-way to completion. YVR’s so-called CORE programme would have produced enough clean energy to heat 1,000 homes and made the facility a global leader in cutting greenhouse gas emissions.

Vancouver airport said is cancelling construction as a result of financial pressures stemming from the ongoing COVID-19 pandemic.

“Cancelling this major infrastructure project was a difficult but necessary decision,” said Tamara Vrooman, the President and Chief Executive Officer of the Vancouver Airport Authority. “We simply do not need the capacity this project brings for the foreseeable future and need to prioritize our resources elsewhere.”

Then-CEO Craig Richmond launched the $460 million project in June 2018. It was a massive undertaking – one of the largest geo-exchange systems in the country together with a parkade that could be converted to office use. It was being built in an area that formerly housed the airport’s value parking, near the main terminal. Two years later, the bones of a new parkade stand waiting to be finished. Massive geothermal wells sit idle. The project was due for completion in 2022.

But the airport said it doesn’t need either the extra parking nor the energy as passenger numbers dwindle. Crews will stop construction in its tracks, though they will be on the site until the end of November. The airport said work could resume at some point in the future.

An unrelated expansion of the airport’s international terminal is continuing. Construction on that project is due to wrap up by the end of the year.

But ongoing construction is sapping the airport of badly-needed funds.

Redistributing cash

“I want to emphasize that making this decision is one more step in preserving the ongoing financial stability of Vancouver Airport Authority so that we can continue to serve our community and focus our resources on the immediate needs of the airport,” said Vrooman.

Those needs include a trial being developed with Westjet to test passengers for COVID before they board their flight.

Airports across Canada have seen their revenues plummet due to the pandemic. Airports earn most of their money from passengers and the fees they generate.

Already, Toronto has reported losses of almost $100 million in three months and Montreal said its revenues were off by 50% in the first six months of the year. Across the country, the Canadian Airports Council projects airports will lose $2.2 billion in revenues this year, roughly 50% of their 2019 results.

Winnipeg pleads for help

The Winnipeg Airport Authority said Wednesday it was on track for a $45 million loss this year.

Winnipeg Airport Authority President and Chief Executive Officer Barry Rempel speaks at an Annual Public Meeting September 9, 2020 (photo: WAA).

“Clearly not something that we feel is sustainable in the environment that we see today,” Barry Rempel, the airport’s chief executive, told an Annual Public Meeting. He said the airport handled roughly 1,000 passengers a day through the summer, mainly consisting of people going to visit their family or taking short holidays within Canada. But as summer turns into fall, he said business travel has not picked up.

He said the airport won’t be able to handle the downturn alone. He pointed to the example of Grand Forks, a small airport across the U.S. border. If Winnipeg received the same pandemic federal funding as Grand Forks, it would qualify for a $469 million grant. “That would go a long ways to sustainability,” he said.

Barry Rempel speaks at the Winnipeg Airports Authority Annual Public Meeting Sept. 9, 2020 (WAA).

Rempel admitted such a large grant in Canada is unlikely. Ottawa has stepped up with rent relief and salary subsidies for airports. But Rempel projected it could take five years for the industry to recover. And cash reserves are dwindling.

“Without the government stepping in to support the industry,” said Rempel, “we will continue to struggle and fall farther behind the rest of the world.”

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