3
Table of Contents
4 Greetings from the Chairman of the Board and the Chief Executive Ocer
7 Business Planning
8 Strategic Priorities
11 Marketing & Business Development Review
11 Air Service
13 Marketing
14 Operational Review
15 Financial Review
16 Human Resources
17 Community Relations
19 Governance
22 Financial Statements
4 Charlottetown Airport | 2014 Annual Report
Chairman of the Board Letter
As I draft this letter it’s late March and we are
enduring yet another winter storm. Provincial plows
have been taken o the roads because of poor
visibility and there are reports of major road routes
that are impassable.
Whatever the means of transportation, it has been
a tough winter for scheduling and maintenance.
The sta at Charlottetown Airport and our terminal
partners are to be commended for the herculean
eort given to accommodate air travellers and to
keep flights and passenger trac flow moving.
Thank you.
We set snowfall records this past year. We also set
another record with the number of air travellers
moving through Charlottetown Airport in 2014. That’s
quite a milestone, and thanks needs to go again to
everyone on the ground who helped make passenger
movements as smooth and uneventful as possible. It
was pretty hectic by times with passengers travelling
for meetings and conventions, the East Coast Music
Awards and big concerts like Shania Twain and
Cavendish Beach Music Festival.
Special thanks to our airline partners who responded
to the anticipated travel demand generated by the
PEI 2014 Charlottetown Conference sesquicentennial
celebrations by adding additional seat capacity.
Air travel today is fast, safe and convenient. I think
that’s reflected in the individual Islanders travelling
the world who are showcased in our current
marketing campaign. As chair of The Charlottetown
Airport Authority, it is an honour to be part of a team
striving to make travel through Charlottetown Airport
even faster, safer and more convenient.
Many thanks to former board member Mike Gallant,
who completed nine years on the Airport Authority
Board this past October. Mike, your professionalism,
knowledge, counsel and contributions over the years
are appreciated. And welcome aboard to new board
member Myron MacKay. We have a strong board
with the collective knowledge and experience to set
goals and provide direction to the management of
Charlottetown Airport Authority, while allowing the
team to use their expertise and resources to deliver
results.
It is my pleasure to continue to serve as chair of the
board of directors and I look forward to continued
exciting growth and development ahead for
Charlottetown Airport.
Sincerely,
Shaun MacIsaac, Chairman
Greetings from the Chairman of the Board
and the Chief Executive Ocer
55
Chief Executive Ocer Letter
I love to travel and I love to travel from Charlottetown
because of the all-round ease and convenience of flying from
a small airport and the people that work hard every day to
accomplish this. Our Travel Stories campaign this year has
attracted a lot of attention, not only inspiring Islanders about
the wonderful global experiences possible through air travel,
but reminding Islanders that Charlottetown Airport – their
airport – is a convenient connection to the world.
We work hard to grow air access because passengers are
the lifeblood of our business. Generating passenger trac
is all about convenience, choice, eciency and friendliness.
It’s a competitive business as travellers do have options.
I’m tremendously proud of our airport team and the quality
of service oered, which is reflected in the record 317,827
passengers moving through Charlottetown Airport in 2014.
That’s the first time in the history of the airport that the
300,000 passenger movement mark has been broken.
We’re also pleased that our team’s eorts are recognized
within the community. We were extremely proud to be
recognized as the Greater Charlottetown Area Chamber of
Commerce Excellence in Business Award Winner for 2014.
Charlottetown Airport is a community airport, with the
community being Prince Edward Island from tip-to-tip. We’re an
integral part of the community and we continue to build on our
commitment to support worthy community initiatives.
In 2014, the second annual flypei Runway Run in support of
Habitat for Humanity PEI was a great success. The Charlottetown
Airport team rose to the ALS ice bucket challenge as well, with
our donation going to ALS Canada in memory of former Airport
Authority board member Bob Bateman. We were also very
pleased to be a sponsor of the PEI 2014 150th Charlottetown
Conference anniversary celebrations and the East Coast Music
Awards.
While the airport did not have any major capital projects this
past year, we did invest over one million dollars in repairs,
rehabilitation and new equipment. Being diligent on maintenance
and staying ahead with asphalt crack sealing and upgrades
annually ensures that we maintain a safe airport for our airline
partners and passengers.
Once again we want to recognize the support of the City of
Charlottetown and the Province of Prince Edward Island through
grants in lieu of property tax. This support recognizes our
partners’ belief in Charlottetown Airport as an integral part of our
provincial economic engine and we would not be where we are
today without these valuable partners.
Looking ahead to the 2015 summer season we are anticipating
a slight decrease in overall seat capacity compared to 2014. Air
Canada will make slight adjustments to the extra capacity that
was added for the 2014 celebrations, but we are excited about
WestJet increasing their aircraft size for the summer season,
which helps to oset this loss in capacity.
I would like to thank our dedicated team, airline partners,
suppliers, tenants and contractors for their contribution to
another successful year at Charlottetown Airport.
Sincerely,
Doug Newson, CEO
6 Charlottetown Airport | 2014 Annual Report
7
Charlottetown Airport Authority embarked on a
business planning process in 2012 to define what
success will look like over the next five years. This
process sought input from airport stakeholders, looked
at the challenges the airport faces, and identified
opportunities for growth. Working closely with other
stakeholders and partners, we developed a new road
map for the future. The following is an outline of our
new strategic direction.
Mission
Prince Edward Island’s gateway to the world and
catalyst for economic growth.
Vision
Inspiring pride and ownership in Prince Edward Island’s
airport.
Business
Planning
Guiding Principles
Safety And Security First
We put people first and our number one priority
is the safety and security of every passenger and
employee and of our facilities.
Service Excellence
We strive to deliver positive experiences for
our passengers, tenants, partners, and other
stakeholders.
People-Oriented
We work together to foster an open and cooperative
environment that encourages professional
development, teamwork, communication, and mutual
respect.
Valued Partnerships
We value partnering with community, business, and
government for the benefit of the airport and our
province.
Results-Oriented
We strive to be innovative in our thinking and
approaches, turning challenges into opportunities
and focusing on achieving optimal results for the
airport.
Responsible Stewardship
We are transparent and accountable to all
stakeholders, managing our finances and
infrastructure prudently and continually seeking ways
to protect the environment and the future viability of
Prince Edward Island’s airport.
8 Charlottetown Airport | 2014 Annual Report8 Charlottetown Airport | 2014 Annual Report
Enhanced Air Service
GOAL 1:
Maintain existing air service and
aggressively pursue growth
Exceptional Passenger
Experience
GOAL 2:
Deliver the best small airport
experience
Engaged Island
Community
GOAL 3:
Engage the Island community in
ownership of the Airport
Sound Financial
Management
GOAL 4:
Continue the tradition of strong
financial management
Organizational Excellence
GOAL 5:
Foster a safe, healthy, and
accountable work environment
Strategic
Priorities
The Airport Authority will address the five key strategic priorities and goals for
continuing to grow the number of passengers flying to and from PEI, working towards
our vision of inspiring pride and ownership in Prince Edward Island’s airport.
9
10 Charlottetown Airport | 2014 Annual Report
11
With 317,827 passenger movements in 2014, passenger
trac was up 7.3% over 2013. It was a record year and
the first time in the airport’s history that trac numbers
surpassed the 300,000 mark.
Air Canada continues to be the main service provider
to Charlottetown Airport with daily year-round service
to Toronto, Montreal and Halifax, and seasonal non-stop
service to Ottawa. For the PEI 2014 150th celebrations, both
Air Canada and WestJet recognized the spike in demand to
travel to Prince Edward Island and added additional daily
capacity.
In 2014, WestJet provided twice daily service to Toronto
in the summer to meet the needs of the Island’s tourism
industry and then moved to three days a week in the late fall
and winter months.
Sunwing Vacations provided Islanders with the option to fly
direct from PEI for their southern vacation by oering a 13-
week service to Cayo Coco, Cuba.
Delta Air Lines continued with daily summer service non-
stop from New York City to Prince Edward Island for the
peak tourism season.
Marketing & Business Development Review
Air Service
12 Charlottetown Airport | 2014 Annual Report
13
Marketing
In an eort to instill pride of ownership of our airport and encourage
Islanders to travel we must communicate the oerings we have and the
value proposition of flying from PEI.
The airport’s multi-media campaign features prominent Islanders and
frequent travellers telling why they choose to fly from PEI. This print,
online and radio advertising campaign was successful building pride in
the services our airport oers. It also raised awareness of the ease and
convenience of why people choose to fly from YYG.
Additionally, we ran two
radio promotions with our
airline partners WestJet
and Sunwing Vacations. The
WestJet promotion tied into
the PEI 2014 150th anniversary
theme of celebrating Canada
by oering a trip for two
anywhere in Canada WestJet
flies. The Sunwing Vacations trip
promotion aimed to publicize to
Islanders that they can choose
to fly from Charlottetown for
their winter southern vacations.
This is a growing travel segment
and we want to communicate
the convenience of using our
Island airport.
Both of these promotions were
successful in raising awareness
of Charlottetown Airport and
generating interest in travel.
More than 5,000 Islanders
entered contests online and we
continue to communicate with
them through our quarterly
E-traveller newsletter.
In 2014, the airport continued
to engage with the community
through social media, which
included posting messages
and interacting on the business
Facebook page and Twitter
account. The social media
audience has increased
significantly and activities have
been very successful in linking
the airport with consumers
and building on our positioning
that Charlottetown Airport is a
convenient choice for Islanders.
www.flypei.com
Connecting Islanders to the World.
Paper Lions
on tour in
Sydney, Australia
We flypei...
TO TAKE OUR SHOW GLOBAL
Connecting Islanders to the World.
www.flypei.com
w
Start your year off on the right foot
with a chance to WIN an all-inclusive Sunwing
Vacation for 2 to the 4.5-star beachfront
Playa Pesquero Resort in Holguin, Cuba.
Visit
www.sunwing.ca
to
book your sun vacation today.
Terms and conditions apply.
14 Charlottetown Airport | 2014 Annual Report
Operational Review
The Airport Authority did not undertake any major construction projects in 2014, but we did invest approximately $1.3 million in
capital upgrades, which are outlined in more detail below.
The largest spend was on the purchase of new equipment. We have been very vigilant with our fleet and equipment
replacement program over the past few years as we strive to ensure that we have the necessary tools at our disposal to
maintain a safe airport for all our of passengers and stakeholders.
One of the smaller projects that we invested in was the addition of new entry/exit signage at the airport. We are pleased
with how this project turned out as it now compliments our new and improved main access road and roundabout that was
completed in 2013.
In addition to these projects we continue to make investments in repairs and rehabilitation of some of our hard surfaces, both air
and groundside. Annually we make significant investments in asphalt and concrete crack sealing and asphalt patching. This past
year we continued our apron panel replacement program as well.
This past year also saw us purchase and implement the Vortex management system that is now being used at several Canadian
airports. This online management system is used to track safety and security incidents as well as hazard reporting while
providing real time reporting and trend analysis. As part of the Vortex software, we have added new forms on our website to
allow the public to report safety concerns and provide general customer feedback.
Summary of Capital Expenditures in 2014
Land $
Vehicles, Motor & Shop Equipment $
Chiller $
Hard Surface Rehabilitation & Repairs $
Maintenance Garage – Doors $
Signage – Main Access $
Nav Aids and Lighting $
Hangar $
Arrivals Lighting $
Entrance Mats $
Fuel Monitoring Systems $
Misc. Small Projects & Equipment $
Total $
217,868
446,785
119,415
267,096
59,800
40,038
25,745
26,416
23,610
18,218
14,864
39,180
1,299,035
15
Financial Review
Continued strong passenger demand – record setting passenger trac in fact – bolstered revenues in 2014. Record
passenger numbers also translated into increased revenues derived from concessions, including rental cars, parking
and passenger facility fees.
The early months of 2014 were challenging with a number of significant storm systems and historic amounts of snow
impacting flights. This led to increased operational costs for snow removal. Coupled with this, we had increased
maintenance and repairs on our air terminal building. These increased expenses were oset with savings over budget
on insurance, gas and diesel, salaries and depreciation.
Overall, this past year was a very successful financial year for the Airport Authority, with excess revenues of $1.9 million
being generated in 2014; a significant increase over budgeted excess revenues of $1.4 million.
Property tax grants provided by the City of Charlottetown and the Province of Prince Edward Island are greatly
appreciated and we hope to continue to work with these valuable partners to increase the economic benefits that the
airport generates for our Island economy.
2014 Actual vs. Business Plan Forecast
Plan Actual Dierence Explanation
Revenues
Expenses
Capital
8,310,441
6,857,630
1,641,000
8,766,973
6,837,225
1,299,035
456,532
20,405
341,965
Record passenger trac generated increased revenues
from concessions, parking and passenger facility fees.
Increased operational costs re: adverse winter weather and
increased maintenance and repairs ATB oset with savings
over budgeted expenses including diesel, gas, salaries,
insurance and depreciation.
Budgeted capital spend of approximately $625,000 on
natural gas was deferred. Board approved changes to
capital budget to include purchase of land, hangar and
entrance mat systems.
16 Charlottetown Airport | 2014 Annual Report
Business Plan Cash Flow Forecast 2015 – 2019
Year 2015 2016 2017 2018 2019
Revenues
Expenses
Capital
Note: Revenues includes PFF, operations, and investment income.
8,103,816
6,691,227
1,070,500
8,149,205
6,792,411
6,086,235
8,193,848
7,045,054
6,643,827
8,241,564
7,335,420
3,459,017
8,346,416
7,596,647
3,748,750
Human Resources
The 21 full-time, year round, employees of the Charlottetown Airport Authority are a dedicated and professional
group of individuals that go above and beyond the call of duty to ensure that the airport maintains a safe operation
for the travelling public and our tenants. How they handled the past few winters is a testament to the character of
the people that we employ here. Their contribution and eorts are a big reason as to as why the Airport Authority
has been so successful in recent years.
In 2014 we said goodbye to Ken Gallant, our Director of Operations. We wish Ken all the best in his future endeavors.
In August, we were fortunate to hire Shelley Christian as our new Director of Operations. Shelley brings a wealth of
experience to the team and has quickly fit in well with the sta and the airport community as a whole. Last summer
we also welcomed Andrew MacRae to our team as a Seasonal Equipment Operator. Andrew was a great addition
to the sta and we thank him, along with all our employees, for their dedication and ongoing commitment to the
Airport Authority in 2014.
17
Community Relations
In 2014, the Airport Authority held its second annual flypei Runway Run. This event has been a major success for the
airport as well as our charity of choice, Habitat for Humanity. In addition to being able to give our community the
opportunity to see our runway from a unique perspective, we are thrilled to be able to support this great cause.
Throughout each year, we also support numerous other special events and charities on Prince Edward Island. One
highlight in 2014 was being a Confederation Sponsor of the PEI 2014 anniversary celebrations. This year-long event
proved to be a great boost for air travel in 2014 and we were pleased to be able to do our part to help support their
eorts.
Other organizations that the Authority and its employees partnered with in 2014 are:
• East Coast Music Awards
• Habitat for Humanity Build Day
• Queen Elizabeth Hospital Foundation
• Prince County Hospital Foundation
• Mayors Cup Golf Tournament in support of Stars for Life
• United Way
• BBQ for Easter Seals
• COPA for Kids event held by the PEI Flying Association
• ALS Ice Bucket Challenge
18 Charlottetown Airport | 2014 Annual Report
19
The Airport Authority’s board of directors
meets six times a year with committee
meetings taking place on an ongoing basis.
The current committees of the board are:
executive, finance and audit, infrastructure
and development, human resources,
governance, and nominating.
All committees are actively involved in airport
activities, although the executive committee
is convened only when decisions are required
on an urgent basis between regularly
scheduled board meetings.
We were extremely pleased to welcome
Myron Mackay as our newest board member
in March of 2014. Myron, a nominee of the
City of Charlottetown, will be a valuable
member of our team.
We would like to acknowledge and thank
outgoing board member Mike Gallant for his
commitment to the board over the past nine
years.
Governance
20 Charlottetown Airport | 2014 Annual Report
Judy
MacDonald
Myron
MacKay
Kathryn
Coll
Paul
Kiley
George
MacDonald
Heather
Howatt
Mike
Gallant
Clair
Sudsbury
Paul
Beauregard
Kent
Scales
Shaun
MacIsaac
Robert
Sear
Susan
Ching
Shelley
Christian
Nominators’ Representatives
As of December 31, 2014
Government of Canada (2)
Shaun MacIsaac
Clair Sudsbury
Government of PEI (1)
Heather Howatt
Federation of PEI Municipalities (1)
George MacDonald
Charlottetown Airport Authority Inc (3)
Paul Beauregard
Robert Sear
Ernie Brennan
City of Charlottetown (2)
Myron MacKay
Kent Scales
City of Summerside (1)
Mike Gallant, up to October 3, 2014
Tourism Industry Association of PEI (1)
Judy MacDonald
Greater Charlottetown Area Chamber of Commerce (1)
Kathryn Coll
Chief Executive Ocer
Doug Newson
Director, Planning & Development
Jason Lindsay
Director, Finance & Administration
Susan Ching
Director, Operations
Shelley Christian
Combined salaries of the
senior management team $402,223
Board of Directors remuneration
consisting of honorariums and
per diems $56,199
Doug
Newson
Jason
Lindsay
Ernie
Brennan
21
22 Charlottetown Airport | 2014 Annual Report
Financial
Statements
Charlottetown Airport Authority Inc.
December 31, 2014
March 10, 2015
Independent Auditor’s Report
We have audited the accompanying financial
statements of Charlottetown Airport Authority Inc.,
which comprise the statement of financial position
as at December 31, 2014, and the statements of
operations, changes in net assets and cash flows for
the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management’s Responsibility for the Financial
Statements
Management is responsible for the preparation and
fair presentation of these financial statements in
accordance with Canadian accounting standards for
not-for-profit organizations, and for such internal
control as management determines is necessary to
enable the preparation of financial statements that are
free from material misstatement, whether due to fraud
or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on
these financial statements based on our audit. We
conducted our audits in accordance with Canadian
generally accepted auditing standards. Those
standards require that we comply with ethical
requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the financial statements. The procedures selected
depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of
the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s
preparation and fair presentation of the financial
statements in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the eectiveness
of the entity’s nternal control. An audit also includes
evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained in
our audit is sucient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the financial statements present fairly, in
all material respects, the financial position of
Charlottetown Airport Authority Inc. as at December
31, 2014, and the results of its operations and its cash
flows for the year then ended in accordance with
Canadian accounting standards for not-for-profit
organizations.
Chartered Accountants
23
Assets
Current assets
Cash
Short-term investments (note 3)
Accounts receivable
Prepaid expenses
Long-term investments (note 3)
Capital assets (note 4)
Pension surplus (note 11)
Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 6)
Security deposits
Deferred revenue
Severance pay obligation (note 10)
Deferred capital contributions (note 5)
Contingencies (note 7)
Net Assets
Invested in capital assets
Internally restricted for future requirements (note 8)
Unrestricted
Statement of Financial Position
As at December 31, 2014
Director Director
Approved by the Board of Directors
2014
$
3,064,318
6,926,801
524,305
114,991
10,630,415
2,249,000
18,274,225
327,000
31,480,640
307,037
130,034
173,043
610,114
205,487
4,628,104
5,443,705
13,646,121
12,115,280
275,534
26,036,935
31,480,640
2013
$
1,862,951
3,430,647
581,120
134,511
6,009,229
5,584,780
18,638,078
252,000
30,484,087
891,843
129,934
105,069
1,126,846
183,861
5,076,193
6,386,900
13,561,885
10,213,215
322,087
24,097,187
30,484,087
24 Charlottetown Airport | 2014 Annual Report
Net assets - Beginning of year
As previously reported 13,561,885 10,213,215 322,087 24,097,187 22,392,352
Retroactive restatement of
pension expense (note 12) - - - - 67,000
13,561,885 10,213,215 322,087 24,097,187 22,459,352
Excess revenue (expenses) for the
year (1,213,699) - 3,143,447 1,929,748 1,729,835
Pension remeasurements and other
items (notes 11 and 12) - - 10,000 10,000 (92,000)
Internally imposed restrictions
(note 8) - 3,200,000 (3,200,000) - -
Investment in capital assets, net of
related capital contributions and
proceeds of disposals 1,297,935 (1,297,935) - - -
Net assets - End of year 13,646,121 12,115,280 275,534 26,036,935 24,097,187
Statement of Changes in Net Assets
For the year ended December 31, 2014
2013
Total
$
2014
Total
$
Unrestricted
$
Restricted
for
Future
Requirements
$
Invested
in
Capital
Assets
$
25
Statement of Operations
For the year ended December 31, 2014
630,708
627,794
426,799
1,043,307
904,807
66,006
681,952
437,794
474,239
5,293,406
1,765,174
497,356
2,880,154
1,579,301
6,721,985
(1,428,579)
2,971,520
1,542,941
138,844
42,050
6,000
186,894
1,729,835
Revenue
Rentals
Concessions
Parking
Landing fees
Terminal fees
Airport services
Other income
Amortization of deferred capital contributions
Grants in lieu of property taxes (note 9)
Expenses
Salaries and benefits
Property taxes
Materials, supplies and services
Amortization
Operating loss before passenger facility fees
Passenger facility fees
Operating income
Other income
Investment income
Gain on sale of disposal of capital assets
Defined benefit pension income (notes 11 and 12)
Excess revenue for the year
2014
$
2013
$
666,929
704,976
467,161
1,025,015
903,911
79,984
669,728
448,089
478,246
5,444,039
1,780,505
506,128
2,887,704
1,662,888
6,837,225
(1,393,186)
3,152,460
1,759,274
160,374
1,100
9,000
170,474
1,929,748
26 Charlottetown Airport | 2014 Annual Report
Cash provided by (used in)
Operating activities
Net earnings for the year
Items not aecting cash
Amortization
Amortization of deferred capital contributions
Gain on disposal of capital assets
Net change in non-cash working capital items
Decrease in accounts receivable
Decrease (increase) in prepaid expenses
Increase in security deposits
Increase (decrease) in accounts payable and accrued liabilities
Increase in deferred revenue
Financing activities
Increase in severance pay obligation
Decrease (increase) in pension surplus benefit
Pension remeasurement and other items
Prior period adjustment of opening net assets
Increase in deferred capital contributions
Investing activities
Purchase of capital assets
Proceeds on disposal of capital assets
Decrease (increase) in long-term investments
Increase (decrease) in net cash
Net cash - Beginning of year
Net cash - End of year
Net cash consists of
Cash
Short-term investments
1,729,835
1,579,301
(437,794)
(42,050)
2,829,292
14,405
(11,918)
6,900
638,508
22,567
670,462
3,499,754
15,044
19,000
(92,000)
67,000
388,377
397,421
(2,009,372)
76,610
(3,415,238)
(5,348,000)
(1,450,825)
6,744,423
5,293,598
1,862,951
3,430,647
5,293,598
1,929,748
1,662,888
(448,089)
(1,100)
3,143,447
56,815
19,520
100
(584,806)
67,974
(440,397)
2,703,050
21,626
(75,000)
10,000
-
-
(43,374)
(1,299,035)
1,100
3,335,780
2,037,845
4,697,521
5,293,598
9,991,119
3,064,318
6,926,801
9,991,119
Statement of Cash Flows
For the year ended December 31, 2014
2013
$
2014
$
27
Notes to Financial Statements
December 31, 2014
1 Purpose of the organization
Charlottetown Airport Authority Inc. was incorporated without share capital under Part II of the Canada
Corporations Act in 1996. The Authority operates the Charlottetown Airport and airport business park
under a 60-year lease with the Government of Canada.
Charlottetown Airport Authority Inc. is currently exempt from federal and provincial income taxes.
2 Summary of signicant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with Canadian accounting standards for
not-for-profit organizations. These financial statements include the following significant accounting
policies:
Method of accounting
Charlottetown Airport Authority Inc. follows the deferral method of accounting for contributions. Re-
stricted contributions are recognized as revenue in the year in which the related expenditures are in-
curred. Unrestricted contributions are recognized as revenue when received or receivable if the amount
to be received can be reasonably estimated and collection is reasonably assured.
Cash
Cash consists of cash on hand and bank balances.
Revenue recognition
Rental revenue arises from agricultural and commercial land leases and airline rental of space in the air
terminal building. These revenues are recognized on an accrual basis.
Concession income is recognized as earned and is primarily from licenses to vehicle rental agencies and
other concession type operations.
Parking revenue consists of fees paid for long and short term parking by travellers, car rental parking, and
employee parking, and is recognized as earned.
Landing and terminal fees are recognized upon the landing of aircraft at the airport.
Airport services revenue consists of aircraft parking fees, snow removal charges and other miscellaneous
charges to airport users, and are recognized as it is earned.
Other income consists primarily of recovered costs and is recognized in the period in which the cost
recovery occurs.
28 Charlottetown Airport | 2014 Annual Report
Deferred government contributions
Government contributions relating to the acquisition of capital assets are recorded as deferred capital
contributions. These amounts are amortized on the same basis as the related capital assets are amortized.
Government grants relating to expenses are shown as revenue in the period in which the related expenses are
incurred.
Capital assets and amortization
Purchased capital assets are recorded at cost. Contributed capital assets are recorded at fair value at the date
of contribution. Amortization of capital assets is calculated using the straight-line method. The estimated
useful life of individual assets within a category is determined upon acquisition and once it is put into use, the
asset’s cost is written o over this term as follows:
Mobile equipment 1 - 25 years
Equipment and furniture 2 - 15 years
Business park 40 years
Leasehold improvements 5 - 25 years
Use of estimates
The preparation of these financial statements in conformity with Canadian accounting standards for not-
for-profit enterprises requires management to make estimates and assumptions that aect the reported
amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the current period. Significant items
subject to such estimates and assumptions include the valuation of accounts receivable, and the estimated
useful life of capital assets. Actual results could dier from those estimates.
Financial instruments
(a) Measurement of nancial instruments
Charlottetown Airport Authority Inc.’s financial instruments consist of cash, short-term investments,
accounts receivable, long-term investments, accounts payable and accrued liabilities and security
deposits.
The company initially measures its financial assets and financial liabilities at fair value adjusted by, in
the case of a financial instrument that will not be measured subsequently at fair value, the amount of
transaction costs directly attributable to the instrument. This fair value amount is then deemed to be
the amortized cost of the financial instrument.
The company subsequently measures all its financial assets and financial liabilities at amortized cost.
Investments are classified as short-term or long-term based on their individual maturity dates.
Investments with maturity dates within twelve months are classified as short-term. All other
investments are classified as long-term.
29
(b) Impairment
Financial assets measured at amortized cost are tested for impairment when there are indicators of
possible impairment. When a significant adverse change has occurred during the period in the
expected timing or amount of future cash flows from the financial asset or group of assets, a write-down
is recognized in net earnings. The write-down reflects the dierence between the carrying
amount and the higher of:
i) The present value of the cash flows expected to be generated by the asset or group of assets;
ii) The amount that could be realized by selling the asset or group of assets;
iii) The net realizable value of any collateral held to secure repayment of the asset
or group of assets.
When events occurring after the impairment confirm that a reversal is necessary, the reversal is
recognized in net earnings up to the amount of the previously recognized impairment.
(c) Risks
Transacting in financial instruments exposes the Authority to certain financial risks and uncertainties.
These risks include:
i) Credit risk: The Authority is exposed to credit risk in connection with the collection of its
accounts receivable. The Authority mitigates this risk by performing continuous evaluation
of its accounts receivables.
ii) Liquidity risk: The Authority’s exposure to liquidity risk is dependent on the collection of
accounts receivable or raising of funds to meet commitments and sustain operations. The
Authority controls liquidity risk by management of working capital, cash flows and
availability of borrowing facilities.
30 Charlottetown Airport | 2014 Annual Report
Land 217,868 - 217,868 -
Mobile equipment 4,173,163 2,364,185 1,808,978 1,631,547
Equipment and furniture 1,227,134 682,121 545,013 615,353
Business park 2,049,139 448,722 1,600,417 1,679,171
Leasehold improvements 22,122,506 8,020,557 14,101,949 14,712,007
29,789,810 11,515,585 18,274,225 18,638,078
3 Investments
Cash - investment account
Accrued interest receivable
Short term investments
(market value - $6,880,212; 2013 - $3,377,477)
Long-term investments
(market value - $2,275,486; 2013 - $5,618,003)
(maturity range August 2016 - January 2017)
Net
$
Net
$
Accumulated
amortization
$
Cost
$
2013
$
10,997
106,607
3,313,043
3,430,647
5,584,780
9,015,427
2014
$
24,185
215,311
6,687,305
6,926,801
2,249,000
9,175,801
20132014
4 Capital assets
31
Mobile equipment 1,219,089 879,382 339,707 399,369
Leasehold improvements 7,912,519 3,624,122 4,288,397 4,676,824
9,131,608 4,503,504 4,628,104 5,076,193
5 Deferred capital contributions
2013
Net
$
2014
Net
$
Accumulated
amortization
$
Cost
$
7 Commitments and contingencies
(a) Charlottetown Airport Authority Inc. is involved in a legal dispute concerning a personal injury
matter. No amount has been accrued in the records of the Authority as the outcome of the dispute is
uncertain and the amount of the liability, if any, is expected to be fully covered by insurance.
(b) Under the ground lease agreement with Transport Canada, the Authority is not required to pay rent
to the Landlord until the year 2016. At that time, rent will become payable using a formula based on
annual airport revenues.
(c) The responsibility for any liability that may arise in the future relating to the existence of hazardous
substances, originating before the transfer on March 1, 1999 to the Authority, rests with the
Government of Canada. The Authority has responsibility for any environmental liabilities that arise
from hazardous substance problems that occur subsequent to the transfer date.
2014
$
316,283
(9,246)
307,037
2013
$
863,397
28,446
891,843
6 Accounts payable and accrued liabilities
Trade
GST, HST and PST payable (receivable)
32 Charlottetown Airport | 2014 Annual Report
8 Net assets internally restricted for future requirements
Eective December 31, 2014, the Board authorized the transfer of $3,200,000 (2013 - $2,700,000) from
unrestricted net assets to internally restricted net assets. The internal restrictions set by the Board allow
transfers from this fund only for authorized purposes including the purchase of capital assets.
9 Grants in lieu of property taxes
The Province of Prince Edward Island and the City of Charlottetown provide the Authority annually with
grants in lieu of property taxes. The granted amount of $478,246 for the year ended December 31, 2014
(2013 - $474,239) is included as revenue in these financial statements.
10 Severance pay obligation
Employees are entitled to severance pay under the terms of a collective agreement and management
contracts. The severance pay obligation is accrued by the Authority commencing with an individual’s
employment.
11 Pension plan
Charlottetown Airport Authority Inc. is a member of the Canadian Airport Authorities and Canadian Port
Authorities Pension Plan (the “Plan”), a multiple employer pension plan. The Plan includes both a defined
benefit portion (“Superannuation Plan”) and a defined contribution portion (“Defined Contribution Plan”).
Employees who were previously employed by Transport Canada automatically became members of the
Superannuation Plan on March 1, 1999 when control of the Charlottetown airport was transferred to
Charlottetown Airport Authority Inc. The Superannuation Plan was closed to new members subsequent
to that date, and all other employees of the Authority are members of the Defined Contribution Plan.
Eligible employees contribute to the Superannuation Plan each year at the rate of 7.5% of earnings up to
$3,500, 4.0% of earnings between $3,500 and $52,500 and 7.5% of earnings above $52,500. The
Authority is required to make annual contributions to the Superannuation Plan as advised by the
actuaries.
Employees who are members of the Defined Contribution Plan contribute up to 6% of earnings, while the
Authority matches 100% of employees’ contributions. Pension expense for the Defined Contribution
Plan was $72,214 for 2014 (2013 - $66,937), and is included in salaries and benefits in the Statement of
Operations.
33
Valuation information on the Superannuation Plan for the year ended December 31, 2014 is provided by
the Plan’s actuary, AON Consulting Inc., from their most recent actuarial valuation of the Plan, completed
as of June 2014 and extrapolated to December 31, 2014.
Significant assumptions used by the Plan’s actuary for this valuation are:
2014 2013
Discount rate 5.50% 5.50%
Salary escalation rate 3.00% 4.00%
Indexation rate 2.50% 2.50%
34 Charlottetown Airport | 2014 Annual Report
Superannuation Plan - Actuarial valuation information
Defined benefit plan assets
Fair value of plan assets -
Balance - beginning of year
Expected return on assets
Charlottetown Airport Authority Inc. contributions
Employee contributions
Benefits paid
Actuarial gain on plan assets
Balance - end of year
Defined benefit plan obligations
Accrued benefit obligation -
Liabilities - beginning of year
Current service cost
Interest cost
Benefits paid
Actuarial losses
Balance - end of year
Reconciliation of the funded status of the Superannuation
Plan to the amount recorded in the financial statements
Fair value of the plan assets
Accrued benefit obligation
Accrued benefit asset
Accrued benefit asset - beginning of year
Defined benefit pension income for the year (note 12)
Pension remeasurement and other items (note 12)
Charlottetown Airport Authority Inc. contributions (note 12)
Accrued benefit asset per financial statements - end of year
1,076,000
62,000
67,000
2,000
(54,000)
80,000
1,233,000
805,000
13,000
45,000
(54,000)
172,000
981,000
1,233,000
981,000
252,000
271,000
6,000
(92,000)
67,000
252,000
1,233,000
68,000
56,000
3,000
(51,000)
51,000
1,360,000
981,000
10,000
52,000
(51,000)
41,000
1,033,000
1,360,000
1,033,000
327,000
252,000
9,000
10,000
56,000
327,000
2014
$
2013
$
The following information is calculated by the Plan’s actuary in accordance with Accounting Standards
for Private Enterprises:
35
12 Prior period adjustment
On January 1, 2014, measurement and disclosure standards for employer future benefits changed
under Canadian Accounting Standards for not-for-profit organizations. This required retroactive
restatement of 2013 pension costs as follows: pension cost, previously reported as $19,000 on the
2013 Statement of Operation was adjusted to pension income of $6,000, increasing excess revenue
for 2013 by $25,000 to $1,729,835; pension remeasurement and other items, previously reported
as nil on the 2013 Statement of Changes in Net Assets was adjusted to $(92,000); and opening
net assets, previously reported as $22,392,352 on the 2013 Statement of Changes in Net Assets,
was adjusted by $67,000 to $22,459,352. These restated 2013 numbers were provided by the
Superannuation Plan’s actuary.
Charlottetown Airport Authority
250 Maple Hills Avenue, Suite 132
Charlottetown, PE
C1C 1N2