In the early 1990s, Canada’s air traffic control system was plagued by chronic underfunding, rapidly depreciating facilities and equipment, persistent staff shortages, growing delays, and costs that were outpacing dedicated airline passenger ticket tax revenue. That might sound familiar because that is exactly what the United States is experiencing today.
But rather than accept an unsustainable status quo, Canada’s political leadership implemented sweeping governance reform to air traffic control. A new Reason Foundation report by John Kefaliotis, an aviation professional with more than 50 years of experience in air traffic management, examines the Canadian air traffic control model and what United States political leadership can learn from it.
Originally a unit of Canada’s transport ministry, much like the Federal Aviation Administration (FAA) is in the United States, air traffic control was spun off into an independent customer cooperative in 1996. The new nonprofit utility, called NAV CANADA, is entirely self-supported by cost-based user fees assessed on aircraft operators. There have been zero taxpayer subsidies since 1998. Nobody owns NAV CANADA because there are no shares. The NAV CANADA board of directors has 15 members whose backgrounds reflect stakeholder balance between commercial airlines, general aviation, employee unions, and the government.
NAV CANADA’s reliance on dedicated user fees allows it to issue revenue bonds to pay for large-scale modernization all at once. Instead of slowly upgrading equipment over a decade or longer as taxpayer funding is appropriated, as is the norm at the FAA, new systems and infrastructure can be brought online in a year or two. For instance, NAV CANADA replaced its paper flight progress strips, used by controllers to track individual flights, with electronic versions at its 42 control towers by 2009. By contrast, as of the first half of 2026, the FAA has deployed electronic flight strips at just 17 of its nearly 300 towers, with no plan to equip all of them.
Under NAV CANADA, user costs have been reduced and are consistently lower than the FAA’s. Consider the difference between the FAA and NAV CANADA on cost per instrument flight rules (IFR) hour in continental airspace, a common air traffic control cost-efficiency metric. The most recent available data from 2009 and 2023 show that FAA costs averaged 25% higher than NAV CANADA’s during that 15-year period. The smallest cost disparity (8%) occurred during the COVID-19 pandemic, when air traffic cratered and the large fixed costs of air traffic control were spread over fewer aircraft movements. By 2023, NAV CANADA had recovered its sizeable cost advantage, with the FAA seeing 34% higher costs per IFR hour.
It is important to note that the FAA’s higher reported costs significantly understate its inefficiency because these figures do not account for the fact that the FAA’s facilities and equipment have not been maintained to modern standards, while NAV CANADA is constantly investing in the latest technology and maintaining its existing infrastructure.
Safety has also improved following the transition to NAV CANADA. A central purpose of air traffic control is ensuring safe separation between aircraft to avoid midair collisions, and air navigation service providers impose minimum horizontal and vertical separation buffers. NAV CANADA’s reported five-year average rate of incidents involving a loss of separation between aircraft operating under IFR flight plans fell from 1.0 per 100,000 aircraft movements in 2022 to 0.47 in 2025. The FAA does not publish comprehensive annual or historical data on loss of separation incidents, and the agency was criticized in 2023 by the Department of Transportation’s Office of Inspector General for failing to consistently collect, benchmark, and analyze these data.
Attempts have been made to overhaul air traffic control governance in the United States over the last 50 years with no success. The most recent effort came in 2017 with a proposal to convert the FAA’s Air Traffic Organization into a NAV CANADA-style air traffic control utility. This move was endorsed by the FAA’s controllers’ union, all U.S. airlines (with the exception of Delta), and a group representing CEOs of the largest U.S. corporations. It faced strong opposition from general aviation (both private aircraft owners and business jets) and all federal government employee unions save the FAA controllers’ union.
The opponents were successful in preventing reform, raising five principal objections to the NAV CANADA model: potential airline dominance of the structure; harm to general aviation and rural access; no specifically promised benefits to modernization from the plan; a giveaway of government assets; and a lack of congressional oversight. Kefaliotis examines each of these objections individually and finds them all unfounded or incoherent. He identifies the real objection to reform: a resistance by general aviation to paying for its use of the airspace.
While the 2017 reform proposal would have exempted all categories of general aviation from paying user fees, shifting the fee burden entirely to commercial airlines, it is worth considering what these users might pay if they were subject to NAV CANADA-style cost-based user fees. Kefaliotis notes that the roughly $150 annual per-aircraft fee charged by NAV CANADA for unlimited use of Canadian airspace is a tiny charge to owners of piston-engine aircraft.
With respect to private jets, it is true they would pay more than under the status quo, where they currently pay a minuscule fuel tax despite consuming a nontrivial share of air traffic control resources. But a NAV CANADA-style weight-distance user fee for private jets would be perhaps twice that of the current fuel tax. Put in context with total costs to operate these aircraft, user fees would likely range from about 3% to 4% of the hourly operating cost. This is hardly a threat to the viability of America’s robust business aviation industry.
NAV CANADA is today the world’s leading air navigation service provider and owes much of its success to its institutional design. The FAA currently finds itself in a position very similar to that of Transport Canada in the years before air traffic control was spun off into NAV CANADA. Congress would be wise to consider air traffic control governance reform rather than doubling down on the unsustainable status quo.
The full Reason Foundation report, “Changing America’s Air Traffic Control Model: Learning from Canada,” by John Kefaliotis, has much more detail and is available here.