Financial Overview 

Funding

As an appropriated Crown corporation, CATSA delivers its aviation security screening mandate in accordance with the resources it is assigned by the Government of Canada.

Since 2015, CATSA’s A-Base funding has been supplemented with incremental funding to maintain its operations. In March 2026, the Government of Canada confirmed CATSA’s supplemental funding of $736.8 million for 2026/27 (net of CER reductions).
Sustainable long-term funding is necessary in 2027/28 and beyond for CATSA to deliver its mandated activities.^{Footnote 2}

CATSA has introduced many initiatives to improve efficiency and reduce and/or avoid costs. It will strive to further reduce the operating cost per passenger over the planning period while never compromising security effectiveness.

Financial Plan

The operating and capital budgets are presented on a modified accrual basis. The narrative that follows reflects strategic objectives, subject to available funding.
Key priorities having a significant financial impact include, but are not limited to, the following:

• Delivering CATSA’s mandated activities, which include targeting a wait time service level where 95% of all passengers wait less than 15 minutes to be screened at Class 1 airports on an annual basis;
• Ongoing replacement of current X-ray technology at PBS checkpoints at major airports with CT technology to elevate the traveller experience and increase security effectiveness;
• The introduction of new technologies, upgrades to existing technologies and additional equipment to strengthen security through innovation and collaborative partnerships;
• Implementation of enhanced non-passenger screening to address amendments to security measures set by Transport Canada;
• Deployment of supplemental full body scanner units in a primary screening position at Class 1 and 2 airports to enhance security effectiveness;
• Lifecycle management of other explosives detection systems (EDS) and non-EDS capital assets;
• Modernization of CATSA’s IT service delivery through strategic investments and partnerships in key areas including cybersecurity, AI and cloud computing; and,
• Continuing to maximize operational efficiencies to invest in advancements in elevating the client experience and enhancing security effectiveness through innovation and technology.

The following table summarizes the financial results for 2024/25, the forecasted financial results and original budget for 2025/26, as well as the operating and capital budgets for 2026/27 to 2030/31 by program activity based on CATSA’s approved funding.

The following section provides highlights of CATSA’s financial plan, subject to available funding.

2026/27 – 2030/31

Screening Operations

Screening services to carry out CATSA’s mandated PBS, HBS and NPS programs account for a significant majority of its operating budget. These costs consist mainly of payments to Canadian third-party screening contractors for the delivery of security screening performed by screening officers.

The financial plan reflects an increase in screening services costs, which is mainly attributable to additional screening hours to accommodate increasing passenger traffic, enhanced non-passenger screening, and inflationary increases in screening contractor billing rates. These increases are partially offset by the introduction of various efficiencies, including regulatory modernization and new screening technologies which will increase the efficiency of screening operations while also enhancing security effectiveness and elevating the passenger experience.

New/Ongoing Initiatives

CATSA’s financial plan emphasizes investment over the planning period in the accelerated adoption of new and advanced technology to enhance operations and improve the client experience, including the ongoing upgrade of existing screening equipment with the latest detection algorithms. CATSA will also invest in corporate initiatives such as advanced analytic techniques and artificial intelligence to enhance oversight, screening operations and training programs, the modernization of CATSA’s IT service delivery through strategic investments and partnerships, and the implementation of CATSA’s Cyber Plan to mitigate cyber security risks and strengthen cyber security defenses.

Capital Lifecycle Management/New Technology

CATSA’s lifecycle management plans include the ongoing replacement of current X-ray technology with CT X-rays at PBS checkpoints in major airports which enhances security effectiveness through improved detection capabilities and reduces passenger divesting requirements. As part of this program, CATSA will also replace single-view X-ray machines with multi-view versions at NPS checkpoints and Class 3 airports to maximize the organization’s resources and optimize its investments.
The introduction of CT X-rays at PBS establishes a foundation for future efficiencies, including the future integration of APIDS. APIDS is designed to work alongside explosives detection systems to improve identification of prohibited items and reduce alarm rates. Deployment of this technology is expected in 2028/29 provided the technology meets all required regulatory detection standards.

In addition, CATSA’s capital plan includes the deployment of additional full body scanner units in a primary screening position at Class 1 and 2 airports to enhance security effectiveness, as well as upgrades to full body scanner software and hardware to keep pace with anticipated detection algorithm and hardware improvements in the coming years. CATSA’s capital plan also provides for the deployment of additional screening equipment to accommodate the 95/15 wait time service level and the expansion of screening capacity for existing HBS systems at Canada’s largest airports, as well as the replacement of non-EDS equipment and systems as the existing assets reach the end of their useful lives.

When making capital acquisitions of screening equipment, CATSA follows its procurement and contracting policy, which ensures transparency and consistency in establishing operational requirements and procurement strategies for screening equipment. With respect to specific requirements for screening equipment, the equipment must meet Transport Canada detection performance standards, which are typically aligned with the TSA and/or ECAC.

Unforeseen impacts, including supply chain disruptions and potential delays on the part of industry partners, may affect the timing of capital projects and result in delays beyond CATSA’s control. Consequently, the organization may require a re-profile of funds to account for any unexpected delays in capital projects.

Key Assumptions and Financial Risks

Passenger Traffic Projections — In 2025/26, CATSA expects to screen 71.1 million passengers, representing a 3.2% increase from 2024/25 levels. CATSA’s current passenger volume projections are based on a range of passenger forecast scenarios as well as analysis from Oxford Economics/IATA and InterVistas Consulting, and reflect ongoing increases in passenger traffic levels over the planning period. Any significant deviation from CATSA’s passenger forecasts will have a material impact on its financial requirements.

Screening Officer Staffing — The financial plan assumes screening contractors will be able to hire and retain the necessary number of screening officers to address the increasing volumes of passengers and non-passengers over the planning period. If labour market conditions make it challenging for screening contractors to hire the necessary number of screening officers, passenger wait times would be negatively impacted.

95/15 Wait Time Service Level — CATSA’s ability to deliver its funded wait time service level target is significantly impacted by the physical space allocated by, or available within, airports for screening lines. The financial plan assumes physical space at the airports will be available for additional lines that may be required. In addition, the financial plan is based on current operations and does not consider unknown changes in CATSA's regulatory or operating environment which may increase or decrease the efficiency with which screening is performed, including major airport expansion projects such as GTAA LIFT.

Inflation and Billing Rates — Billing rates for screening and maintenance services are the greatest source of inflation in CATSA’s ongoing operations. The rates used in the financial plan are based on the terms of existing contracts and anticipated rate increases in contracts to be signed or renewed over the planning period. Any significant change to inflationary assumptions may have a material impact on future financial requirements.

Foreign Exchange Rates — Financial projections reflect a projected USD exchange rate of 1.40 for the planning period, except for maintenance costs that have been hedged at approximately 1.37 for 2026/27. CATSA will continue to monitor its future commitments and will enter new hedging contracts as per its approved hedging strategy. Significant fluctuations in the exchange rate for any unhedged amounts may have a material impact on CATSA’s financial requirements.

Re-Profiles — Re-profile requests have become a necessary part of CATSA’s annual financial management process. The financial plan assumes CATSA will continue to receive approval of capital re-profiles, including the possible transfer of capital funding to a future financial period based on a revised spending profile for major projects.

Internal transfer — The financial plan assumes that CATSA will receive approval for internal budget transfers if required, from capital to operating to align reference levels to required budget. Approval of internal transfers (if any) is critical for CATSA to offset incremental operating requirements with available capital funding where the organization’s capital requirements are lower than the approved funding for that fiscal year.

Refocusing Government Spending

As part of Budget 2023, the Government of Canada announced an initiative seeking approximately a 3.3% reduction of eligible spending by 2026/27. CATSA’s approved proposals focused on maximizing operational efficiencies and reinforcing CATSA’s federal role and mandated responsibilities.

Budget 2023 also announced initiatives aimed at reducing government spending in professional services and travel budgets. CATSA implemented these reductions while recognizing the importance of the organization’s air travel security screening service mandate. An 18.5% reduction in spending in both professional services (from 2023/24 planned spending levels) and travel (from pre-pandemic spending) is reflected in CATSA’s financial plans throughout the planning period, except in 2026/27 as CATSA’s plans include additional travel spending to support FIFA World Cup 2026.

Cost Recovery

In 2025/26, CATSA established a cost recovery agreement with the Montreal Metropolitan Airport (MET) in Saint-Hubert, Québec aligning with the cost recovery framework outlined in the CATSA Act. As MET is not a designated airport under the CATSA Aerodrome Designation Regulations, screening services will be provided on a cost-recovery basis, independent of CATSA’s mandate to screen passengers at designated airports. If MET were to become a designated airport, CATSA will require supplemental funding to avoid operating and capital budget shortfalls, as this scenario has not been factored into the current budget.

The following table summarizes the anticipated cost recovery amounts using flight and passenger volume assumptions and equipment requirements provided by the airport authority. The amounts identified as a “Net Operating Cost (Revenue)” and “Total” reflect funds available for CATSA to cover administrative costs.