The FAA's air traffic control costs averaged 34% higher per flight hour than Canada's nonprofit system in 2023, according to a new Reason Foundation report by aviation professional John Kefaliotis. The report examines how Canada transformed its struggling air traffic system in 1996 by spinning it off from government control into an independent customer cooperative called NAV CANADA. Today, the U.S. faces the same problems Canada did three decades ago: chronic underfunding, aging equipment, staff shortages, and growing delays.
The cost gap between the two systems has been consistent over time. The report finds that FAA costs per instrument flight rules hour in continental airspace averaged 25% higher than NAV CANADA's during the 15-year period from 2009 to 2023. The smallest gap was 8% during the COVID-19 pandemic, when collapsed air traffic spread fixed costs over fewer flights. Safety improved dramatically under the Canadian model as well. NAV CANADA's five-year average rate of incidents involving loss of separation between aircraft fell from 1.0 per 100,000 aircraft movements in 2022 to 0.47 in 2025. The FAA doesn't publish comprehensive annual data on these incidents and was criticized in 2013 by the Transportation Department's inspector general for failing to consistently collect and analyze this information. Equipment modernization shows an even starker contrast. NAV CANADA replaced paper flight progress strips with electronic versions at all 42 of its control towers by 2009, while the FAA has deployed them at just 17 of its nearly 300 towers as of early 2026, with no plan to equip the rest.
The report notes that NAV CANADA is "entirely self-supported by cost-based user fees assessed on aircraft operators" with "zero taxpayer subsidies since 1998." Nobody owns NAV CANADA because it issues no shares, and its 15-member board reflects stakeholder balance between commercial airlines, general aviation, employee unions, and government. According to Kefaliotis, the FAA's reported costs "significantly understate its inefficiency" because they don't account for the agency's failure to maintain facilities to modern standards while NAV CANADA constantly invests in the latest technology. The report explains that NAV CANADA's reliance on dedicated user fees lets it "issue revenue bonds to pay for large-scale modernization all at once" rather than slowly upgrading equipment over a decade or longer as taxpayer funding trickles in.
The 2017 attempt to create a similar U.S. system failed despite support from the FAA controllers' union, nearly all major airlines, and CEOs of the largest corporations. General aviation groups blocked reform by raising objections the report calls "unfounded or incoherent," identifying the real issue as "resistance by general aviation to paying for its use of the airspace." Yet the costs would be minimal. NAV CANADA charges about $150 annually per piston-engine aircraft for unlimited use of Canadian airspace, while private jets would pay perhaps twice their current fuel tax under a weight-distance fee system, amounting to just 3% to 4% of hourly operating costs. The report's author argues this is "hardly a threat to the viability of America's robust business aviation industry." Congress would be wise to consider governance reform rather than accept an unsustainable status quo that leaves the U.S. with higher costs, slower modernization, and outdated equipment compared to its northern neighbor.