CONTENTS VICTORIA AIRPORT AUTHORITY ANNUAL REPORT. Photo credit: Alessandro Roethel

Transcription

1 2014 An nual Report

2 CONTENTS Reports from President Chief Executive Officer, Vicria Accountability Psenger Statistics Air Services Achievements Awards Air Termal Buildg Renovati Envirment Red Coat Volunteer Program Ground Transportati Overlay Runway L Development Cusmer Service Community Relatis Community Events Events at YYJ Datis Spsorships 2014 Charitable Datis Spsorships High Level Incident Stats 2014 Safety Security Board Chair Operatis Vicria Board Direcrs Vicria Corporate Governance Guideles Direcr Committee Participati 2014 Board Committee Structure Board Direcrs Skills Qualificatis Tenure Direcrs ( Years) Capital Program Sole Sce Ctracts Over $75,000 Capital Initiatives Busess Plan Fancial Highlights Highlights 2014 Fancial Results Rent Federal Government Management Respsibility Fancial Statements Independent Audirs Report VAA Statement Fancial Positi VAA Statement Operatis VAA Statement Changes Net Assets VAA Statement Ch Flows Notes Fancial Statements Pho credit: Alessro Roel ANNUAL REPORT 2014 ANNUAL REPORT 3 55

3 REPORTS FROM THE PRESIDENT AND CHIEF EXECUTIVE OFFICER, AND THE BOARD CHAIR 2014 w a very successful year Vicria Internatial It experienced strg psenger growth, ctued cost efficiency, recogniti cusmer service excellence significant frtructure vestment positi airport future growth YYJ experienced twelve csecutive mths 2014 record psenger volumes, culmatg an annual all time high 165 milli psengers Gef Dicks President Chief Executive Officer 2014 w 75th Anniversary Vicria Internatial, which h evolved csiderably sce its establishment a military airfield A big thank you all tenants, ctracrs employees success, we look ward new opportunities future The year saw a significant turnover Vicria Board Direcrs I would particularly like thank outgog Board Chair, Ldalee Brougham, whose guidance sight h been valuable me I would also like thank Peter Bray, Bob Coulter, Glen Crawd, Bruce Knott, Suromitra Sanatani Mel Sak ir commitment ensurg airport is best it can be Gef Dicks The Air Transport Research Society identified Vicria Internatial havg lowest cost per enplaned psenger highest percentage revenue generated from n-aviati sces 12 major airports studied It is essential Vicria Internatial mata a low cost structure attract mata air service The Vicria Internatial is a jewel crown regi It belgs all us, at some pot, we all move through it pickg up loved es, gog a trip, workg, watchg aircraft or havg a meal While some us visit air termal regularly busess, ors sp by rarely, part a dream vacati or trip visit family Many people work airport ls, ctributg a busess whose work is important community At airport, we laugh, cry, work, share sries dream Vicria Internatial w recognized by s Council Internatial wner 2014 Service Quality Award best regial airport North America It is an h receive this global recogniti secd time three years Without dedicated people workg at YYJ, this award would not have been possible After several years careful planng coordati, two critical frtructure projects were completed First, a $75 milli overlay Runway strengned structural tegrity airport s ma runway cree its life expectancy a furr twenty years Perhaps airport s most critical project date, overlay Runway w flawlessly executed Keepg a runway open while pavg over a seven week period is a complex challenge Each night, after lt flight led, cstructi teams cverged airfield complete a porti overlay prepare runway morng s flights The pressial team airport staff, ctracrs airle partners made this project a success Secd, an $81 milli termal renovati project volved expansi YYJ s pre-board screeng capacity, cludg troducti NEXUS Preferred Traveller Program; additi new ccessi programs; creati a centralized circulati core improve psenger flow; expansi seatg capacity upper departures area We thank cusmers ir patience durg cstructi period In May, Vicria ficially opened its 93-kilometre Flight Path, a multiuse trail circles Vicria Internatial The Flight Path is an itiative we are extremely proud, we are pleed how community h embraced it The Vicria ctued vest airport, planng future growth will benefit entire regi Our five-year strategic plan w completed guide airport s progress I joed Vicria s Board Direcrs eight years ago At time, I had no idea about diversity people volved or work y did at airport Sce n, I have seen Board Management team improvg airport short term layg foundati years come Beg volved projects diverse walkg paths, envirmental remediati, termal improvements CEO recruitment, well activities like welcomg new airport tenants, h been an h Ldalee Brougham Board Chair As I reflect my years Vicria Board Direcrs, I remember value people who worked me so many excitg endeavs I am thankful my fellow Board members Vicria is tunate have a Board truly cares about airport community wants do its best create success everye I am also thankful airport staff, who always go above beyd create a spectacular envirment employees travellers alike I am proud my time Vicria many people who were part experience Now I look ward seeg new Board members brg ir gifts table You will take Vicria Internatial new heights Ldalee Brougham 5

4 VISION GOALS To be best airport anywhere Provide operate a safe secure airport MISSION Reta attract a talented motivated team employees Be a leader envirmental protecti management Provide exceptial airport facilities cusmer service Attract mata air service Operate a ly respsible manner To provide a safe, secure efficient airport enhances ecomic social benefits regi ACCOUNTABILITY The objective Vicria is manage, operate develop Vicria Internatial a safe, secure, efficient, cost effective ly viable manner, while chargg reable user fees The Vicria develops airport l, exps transportati facilities generates ecomic activity ways are compatible air transportati Underlyg all Vicria s activities are general goals enhancg Vicria regi benefittg public Vicria s accomplishments community accountability are shared many ways, cludg regular prt electric communicatis, meetgs, planng exercises reviews The Csultative Committee is comprised direcrs Vicria representative members from various airport user groups, cludg nomatg entities, busess community, airles, airport tenants, stakeholders local First Natis Pho credit: Alessro Roel 6 7

5 N-Sp Destati N-Sp Destati N-Sp Destati N-Sp Destati One-Sp Service One-Sp Service PASSENGER STATISTICS Fort St John One-Sp Service One-Sp Service N-Sp Seal N-Sp Destati Seal Destati Vicria Internatial is tenth busiest airport Canada Vicria is well served, more than 120 daily flights throughout North America, cludg n-sp service Vancouver, Kelowna, Prce George, Abbotsd, Nanaimo, To, Calgary, Edmn, Tor, Seattle, San Francisco, L Veg, Phoenix, Puer Vallarta, Los Cabos, Cancun Holulu One-sp service is available Fort St John, Ska, Wnipeg Ottawa Fort St John CANADACANADA CANADA CANADA Edmn Edmn Fort St John Fort St John Prce GeorgePrce George N-Sp Seal N-Sp Destati Seal Destati One-Sp Seal One-Sp Service Seal Service Prce GeorgePrce George One-Sp Seal One-Sp Service Seal Service Ska Ska Edmn Calgary Calgary Ska Ska Nanaimo Vancouver Nanaimo Vancouver Kelowna Calgary Kelowna To To Calgary Vancouver Vancouver Edmn Nanaimo To Nanaimo Abbotsd Abbotsd Kelowna To Kelowna Vicria Vicria Seattle Seattle Abbotsd Abbotsd Vicria Vicria Seattle Seattle Wnipeg Wnipeg Wnipeg Wnipeg Ottawa Ottawa Ottawa Tor Tor San FranciscoSan Francisco Holulu 1,650,904 Holulu record # psengers 2014 Holulu USA USA USA Tor USA San FranciscoSan Francisco L Veg Holulu L Veg L Veg L Veg Phoenix Phoenix Phoenix Phoenix Up 6% from 2013 Domestic Transborder Charter/Seal MEXICOMEXICO MEXICOMEXICO 1,359, ,681 24,894 Los Cabos Los Cabos Los Cabos Los Cabos Puer Vallarta Puer Vallarta Cancun Cancun Cancun Puer Vallarta Puer Vallarta ANNUAL PASSENGER TRAFFIC Annual Psenger Traffic 1,700,000 1,600,000 AIR SERVICES 1,500,000 WestJet troduced year-round, scheduled service L Veg, which w previously a seal destati Additially, WestJet added daily e-sp service Ska Wnipeg 1,400, Throughout 2014, several meetgs were held senior management low-cost carriers discuss importance cludg Vicria ir start-up plans ,200, ,300,000 To provide access BC s growg norrn ecomy, Pacific Cotal Airles announced new n-sp service, commencg January 2015, between Vicria Prce George For details about n-sp destati flight times airles, visit wwwvicriaairportcom/n-sp-destatis Pho credit: Alessro Roel 8 9 Cancun Toro

6 THANK THANK THANK YOU YOU FOR YOU FOR MAKING FOR MAKING MAKING YYJYYJ #1 YYJ #1 IN CUSTOMER #1 IN CUSTOMER IN CUSTOMER SERVICE! SERVICE! SERVICE! Service Service Quality Service Quality (ASQ) Quality (ASQ) Best (ASQ) Best Best North North America North America America <2M Psengers <2M Psengers <2M Psengers ACHIEVEMENTS AND AWARDS Travel Press Baxter s Agents Choice Award Council Internatial Service Quality Award Travel Press announced Vicria Internatial w a 2014 Baxter s Agents Choice Award YYJ ranked p 10 airports, voted by travel agents Vicria Internatial s commitment providg excellent cusmer service h earned it prestigious s Council Internatial (ACI) Award Service Quality (ASQ) 2014 Vicria Internatial ranked first overall airports North America carryg up two milli psengers a year This is Vicria s secd w, after earng h 2012, highest possible distcti airport dustry Sce its creati 2006, ASQ Awards have become world s leadg airport psenger satisfacti benchmark, over 260 airports participatg The ASQ Awards recognize award best airports world bed ACI s psenger satisfacti surveys The ASQ cusmer satisfacti benchmarkg program meures more than 30 pects cusmer service, cludg airport ambience, efficiency ctesy staff, security screeng processes, overall cleanless, value mey food beverage retail outlets Vicria Internatial will be ficially recognized this significant achievement at ASQ Awards Ceremy, which will be held durg ACI Asia-Pacific Regial Assembly April Pensula Streams Society Biodiversity Cservati Award Pensula Streams Society presented Vicria its Biodiversity Cservati Award recogniti airport s ecological resrati educati activities relatg Reay Creek This award is a testament Vicria s gog commitment envirmental matters Excellence Canada Healthy Workplace Mth Vicria participated Canada s Healthy Workplace Mth (CHWM) competiti spsored by Excellence Canada, an dependent not--prit organizati is committed advancg organizatial excellence The me competiti w Workplace Wellness Fosters Healthy Mds The Mental Health Cnecti While YYJ s program ctued throughout year, majority events were held durg mth Ocber There were 1,017 companies submitted all categories Vicria w selected e p 5 its category Selecti w bed quality submissi, creativity, uniqueness staff volvement The submissi is showced CHWM website at: 11

7 AIR TERMINAL BUILDING RENOVATION Cstructi an $81 milli air termal buildg renovati project began 2012 w completed 2014 The physical footprt pre-board screeng area w exped double its capacity, which allowed relocati queug les reduce termal cgesti Countdown clocks were stalled keep travellers med about security wait times A dedicated le NEXUS card holders w added expedite security screeng process trusted travellers The icic Spnakers On The Fly restaurant opened busess, ferg grab go selectis -house dg optis Two new retail shops, Breakwater Boutique Harbwalk Retail & Duty Free, were added provide a selecti quality, local products Two new busess centres were added cvenience workg pressials durg ir travels Creati a csolidated circulati core improved psenger flows made navigatg termal more tuitive Installati a large skylight allows more natural light make atmosphere upper psenger departure lounge commensurate lower lounge New floorg carpetg were stalled a fresh look, comtable new seatg optis were troduced throughout termal Climate ctrol doors were added better temperature regulati protecti from elements YYJ s agg boilers were replaced a modern, energy efficient system The boiler project qualified under FortisBC s Efficient Boiler Program, resultg a substantial rebate will be revested additial green energy itiatives at airport Outside, jetways, a 27 x 305-metre phographic mural Butchart Gardens famed Dahlia Walk w stalled provide a greater sense place Pho credit: Bob M 12 13

8 ENVIRONMENT The Vicria Internatial mat a leadership positi respect envirmental stewardship Throughout 2014, Vicria ctued efts improve water quality reduce polluti A detailed geotechnical review TenTen Creek w cducted m bis site remediati by Transport Canada Noise curs noise ects were updated posted Vicria s website A program test recyclg aircraft de-icg fluids w itiated a local company Vicria received a clean envirmental review from Transport Canada Phe 1 BC Hydro s Ctuous Optimizati Program w completed, Vicria s emphis energy cservati ctued Vicria spsored a volunteer plantg day through Pensula Streams Society enhance vegetati around Reay Creek An additial portable srm water mirg stati w acquired complement existg statis airport property Vicria implemented a new process screeng capital projects usg Envirmental Assessment Act (CEAA) framework Carb Accreditati Program Vicria joed s Council Internatial s Carb Accreditati Program, a voluntary itiative focusses managg reducg carb dioxide emissis aviati operatis The European regi s Council Internatial launched s Carb Accreditati program 2009 It provides a framework airports around world work wards becomg carb neutral by reducg carb emissis from ir operatis By obtag certificati program, Vicria Internatial w third North American airport after Mtreal-Trudeau Internatial Seattle-Tacoma Internatial achieve this accreditati Pho credit: Alessro Roel 14 15

9 RED COAT VOLUNTEER PROGRAM Named after bright red blazers y wear, Red Coats are friendly airport ambsadors provide a welcomg presence dependable resce travellers GROUND TRANSPORTATION Red Coats warmly greet guests, provide frtle cusmer sistance, answer ground transportati questis, provide bic flight mati help wherever possible Wils s Transportati Ltd operated ir first full year licensed hotel shuttle bus operar The new service h been bred YYJ Shuttle Cusmer satisfacti, dicated through market research, h been very positive 2015 will mark 25th anniversary program The Vicria is proud thankful men women who generously dedicate ir time serve public enrich community Thank you followg volunteers, who have reached milesnes ir ctributi Red Coat Volunteer Program: 20+ Years Jacquele de Muck Doreen Drayn Irene Holman 15 Years Barbara Nedzelski Breda Teh Years Christe Bk Lissen Lockwood Lori Ogle Mari Rogers Margarete Rothlisberger Lorrae Smith Sue Williams 5+ Years 1+ Years1+ Years Joan Beattie Annie Buchholz Joan Beattie David Petroski Diana CunnghamDavid Petroski Dna Petroski Jan Jenngs Dna Petroski Colleen Riddell Peta MacKenzie Colleen Riddell Robert Roper Pat Maxwell Robert Roper Maggie McNish Janet Moir Vicria held discussis BC Transit improve access public transit both airport psengers staff BC Transit tripled level service airport 2011 While re are now cvenient bus cnectis at McTavish Road terchange, Vicria would like see same-bus service from airport will ctue work advancg this itiative Pho credit: Alessro Roel 17

10 OVERLAY OF RUNWAY Vicria completed an tricate $75 milli runway improvement project enhance aircraft safety The Runway Overlay project cluded two years advanced collaborati airle partners stakeholders Over a period seven weeks, 76 workers 72 pieces equipment worked each night between 11:45 pm 6:30 am resurface a 2,133-metre-lg 60-metre-wide stretch pavement The night schedule ensured ctuous airle operatis throughout durati cstructi project In additi pavg electrical work w completed, grooves were added phalt dra water away from centrele f surface runway This reduces likelihood hydroplang Although grooves are not mated Canada yet, practice groovg is comm around world because it enhances runway safety Vicria Internatial ctues its commitment safety LAND DEVELOPMENT Vicria is ctemplatg development a 324-hectare parcel near Beac Avenue Highway 17 Public open houses were held July 2014 solicit feedback a traffic study w itiated When study is complete appropriate type commercial development h been proposed, Vicria will request Town Sidney amend its Official Community Plan zg bylaws After three years gog cstructi, new 443 Maritime Helicopter Squadr hangar is nearg completi This $155 milli project cludes a hangar will accommodate up ne Cycle helicopters, an aircraft wh refuelg cabet, parkg large body aircraft parkg up 300 vehicles When Department Natial Defence vacates ir mer hangar, Vicria will be a positi market facility prospective tenants, especially those a strg focus aviati dustry As part its commitment community, Vicria plans use a large quantity bricks were reclaimed from 443 Squadr s mer admistrative facility, Admistrati Buildg 11, create a commemorative mument h men women who served at Patricia Bay, recognize pivotal ctributi this airport made Secd World War Vicria works closely District North Saanich Town Sidney regardg proposed developments near airport ensure issues around airport noise, buildg heights or l use csideratis are cluded ir planng processes Pho credit: Alex Evans, Tetra Tech 18 19

11 COMMUNITY RELATIONS Vicria mat a comprehensive public communicatis program through its Annual General Meetg well through meetgs Csultative Committee, Envirmental Committee Noise Management Committee Vicria representatives are active members a number community organizatis, cludg Tism Vicria, Greater Vicria Ecomic Development Agency, Saanich Pensula Chamber Commerce, Greater Vicria Chamber Commerce Sidney Community Development Committee In additi, updates about Vicria Internatial are communicated through Vicria s annual report, On Approach newsletter, website, YYJ Airmail notificati program social media platms YYJ s mobile site w updated 2014 enhanced graphics ctent CUSTOMER SERVICE YYJ s new icic Spnakers On The Fly restaurant w ficially opened January The NEXUS Preferred Traveller program w launched November Pre-approved frequent fliers can now be fttracked through security screeng process New countdown clocks were added at security checkpot dicate wait times alleviate stress sociated leups The Vicria completed stallati a number terpretive signs around its 93-kilometre multi-use trail, The Flight Path, enhance this unique recreatial facility The Vicria organized a holiday music program termal buildg enterta travellers those who came greet m COMMUNITY EVENTS Vicria held open houses participated numerous speakg engagements share mati about upcomg projects, itiatives events Vicria sisted Department Natial Defence a solemn repatriati ceremy Leadg Seaman Br South, who psed away Tanzania durg his deployment HMCS Rega YYJ s Corps Commissiaires received a Certificate Appreciati from Be Commer Forces Be Esquimalt recogniti ir ctributi ceremy In May, Vicria hosted a community event celebratg completi The Flight Path, YYJ s 93-kilometre multi-use trail circles airport The celebrati cluded entertament a flypt vtage military aircraft A social media ctest awarded bicycles prizes w held encage users share ir favite thg about path The Flight Path is a highly appreciated gift community The fact it s safe from traffic, paved, open, well marked well used, makes this favite walk We feel airport h de a great service community this path, we thank you y staff this wderful gift ~ letter Vicria from a local Sidney resident The Town Sidney s Glow As You Go safety campaign w extended The Flight Path encage pedestrians rema visible while enjoyg outdoors Vicria facilitated a number exclusive behd--scenes airport urs military cadets, preschool groups service organizatis Senior airport executives Vicria Board Direcrs participated several menrship itiatives a number post-secdary stitutis share knowledge build relatiships future busess leaders In cooperati Community Arts Council Greater Vicria Art Gallery Greater Vicria, a rotatg art collecti is featured throughout airport This display promotes Vicria a centre artistic cultural excellence, provides pressial opportunities local regial visual artists enhances public spaces 20 21

12 EVENTS AT YYJ In January, Vicria Internatial hosted annual Santa Shave For Hospice, raisg funds awareness Vicria Hospice Society In August, Vicria Flyg Club welcomed Maid Shade B-25J bomber fered public urs hisric aircraft In March, Vicria Fire Services hosted a very special event: a firehall trag day a young patient fightg neuroblma Vicria participated a ribb cuttg ceremy celebrate cnecti The Flight Path Town Sidney s Heartsmart Walk, creatg a 13-kilometre route public enjoy Natial Volunteer Week w celebrated recognize valuable service Vicria Internatial s Red Coat Volunteers WestJet s Disney Magic aircraft paid several visits YYJ over summer mths In June, a resred Secd World War-era de Havill Mosqui made its augural test flights at Vicria Internatial Between May November, Vicria hosted a replica Vikg ship display rotunda promote Royal BC Museum s exhibiti Vikgs Lives Beyd Legends Award-wng radio producer USA Today writer Harriet Bk visited Vicria Internatial wrote her experience her travel blog, which promotes airport services amenities around world Pho credit: Vicria 22 23

13 2014 CHARITABLE DONATIONS AND SPONSORSHIPS DONATIONS AND SPONSORSHIPS In August, Vicria accepted ALS Ice Bucket Challenge dated $1,000 cause In lieu sendg out holiday greetg cards, Vicria collected n-perishable food items ch gifts dati Sidney Lis Food Bank, Mustard Seed Food Bank Vicria Hospice Society The Vicria Board Direcrs matched employee ctributis United Way Greater Vicria a tal $10,660 In tal, Vicria ctributed $58,610 ward various charitable causes community events through datis spsorships, which are noted opposite page Organizati ALS Society Of BC Ice Bucket Challenge BC Aviati Council BC Aviati Museum BC Children s Hospital Foundati Blue Bridge Reperry Theatre Broadmead Care Foundati s Electrical Associati Cference Bret Cancer Foundati Cancer Society Cops For Cancer Collliers Charity Event Community Arts Council Sidney Fe Arts Show Certified General Accountants Educatial Dati City Of Vicria Canada Day Celebratis CR Flair Saanich Pensula Flav Trail District Of North Saanich Tree Plantg Event Gerimo Canoe Club Greater Vicria Chamber Of Commerce (Various Events) Greater Vicria Housg Society Heart And Stroke Foundati Leadership Vicria Mount Flays Madness Multiple Sclerosis Society Canada Pears College Pensula Celebratis Society Pensula Mor Hockey Associati Pensula Streams Society Power To Be Adventure Therapy Rugby Canada Sancha Community Cultural Centre Foundati Mary Wspear Centre Saanich Pensula Chamber Of Commerce Saanich Pensula Hospital Foundati Saanich Sports Associati First Natis Soccer Spsorship Seide Magaze Takg It To The Streets Event Shaw Ocean Discovery Centre Sidney Anglers Associati Sidney Fire 100 Year Anniversary Sidney Lis Food Bank And Tulista Park Playground Equipment Sidney Pier Hotel Food Bank Fundraiser Team For Hope Touch A Truck For Neuroblma Research Tseycum First Nati Aborigal Beball Tseycum First Nati Elders Garg Tseycum First Nati Shorekeepers Envirmental Program Tseycum First Nati Women s War Canoe Racg Club United Way Of Greater Vicria (Includes Board Match) University Of Vicria Aero Team Vicria Radio Ctrol Modelers Society CFAX Sant Anymous And Saanich Pensula Hospitals Foundati TOTAL Amount $ 1,000 1, ,500 1, , , , ,500 5, , ,500 1, ,000 1, , , , ,000 1,000 2,500 1,000 10,660 1,500 1,000 $58,610 Pho credit: Bob M 24 25

14 HIGH LEVEL INCIDENT STATS FOR 2014 SAFETY AND SECURITY 64 Fire Service respses 23 Security screeng respses Safety Policy 25 Envirmental respses 8 Vehicle accidents 80 Medical respses 42 Wildlife cidents 75 Security respses Life safety, preventi jury employees cusmers, protecti envirment shall be given highest priority throughout airport Safety security are highest priorities Vicria Internatial In 2014, a project exp airport s closed-circuit televisi (CCTV) camera coverage w completed It troduced state---art systems exped program 125 camer Vicria Internatial implemented Transport Canada s enhanced N-Psenger Screeng (NPS) program comply Internatial Civil Aviati Organizati stards Vicria hosted annual Operars Security Cference February Vicria participated Capital Regial District s Goose Management Program objective reduce threat aviatirelated bird strikes A number safety security itiatives were implemented, cludg a new system documentati checks, an enhanced Airside Vehicle Operars Program, an updated Hazard Registry Safety Management System an updated Incidents Reportg System All Vicria staff participated Human Facrs trag Pho credit Alessro Roel 26 27

15 AIRPORT OPERATIONS The Operatis team is respsible keepg runways clear, spectg repairg equipment, matag airport grounds termal buildgs, matag Vicria s fleet ensurg compliance Transport Canada s safety requirements In 2014, a multi-phe airfield power distributi system project w itiated upgrade entire airfield Glycol capacity w doubled ensure creed operatial readess worst ce snow cditis A mid-life retrit airport s f psenger boardg bridges w completed extend ir operatial life by an additial ten years In July, a new Direcr Operatis joed Vicria from Charlottewn Vicria implemented a new procedure uses its recently acquired heavy-duty sweeper truck capture spent glycol A new spill respse trailer provides latest spill respse technology, cludg a spark-free vacuum hydrocarb clean-up activities, w brought service Pho credit: Alessro Roel 28 29

16 BOARD OF DIRECTORS The Board Direcrs provides oversight Vicria ensure its purposes objectives are realized YYJ operates a safe, efficient reliable manner The Vicria h a comprehensive program stakeholder csultati objectives transparency, genue community stakeholder respsiveness, accountability Details about Vicria s Stakeholder Csultati Program biographies all current direcrs are provided Vicria website at wwwvicriaairportcom Ldalee Brougham Mel Rald James Crowley Glen Crawd Lynne Henders Peter Bray Robert Coulter Bruce Knott Graeme Roberts Gord Safarik Suromitra Sanatani Mel Sak 30 Col Smith 31

17 The followg appotments Officers Corporati Committee Chair positis were made 2014: Chair Vice Chair Chair - Csultative Committee Secretary Chair - Governance Committee Chair - Audit Fance Committee Chair - Planng Development Committee Direcr Attendance Compensati Ldalee Brougham Mel Rald James Crowley Glen Crawd Lynne Henders Direcr Remunerati Board Attendance Committee Attendance Peter Bray* $ 4,000 50% 75% Ldalee Brougham $47, % 100% Bob Coulter $15,500 70% 67% Glen Crawd $21,500 90% 78% Jim Crowley $24, % 100% Lynne Henders $22, % 89% Bruce Knott $15,500 70% 67% Mel Rald $23,000 90% 89% Graeme Roberts $18, % 100% Suromitra Sanatani $15,500 60% 78% Gord Safarik** $16, % 100% Mel Sak $15,500 80% 67% Col Smith $16,500 80% 89% Total: $ 254,800 * Peter Bray Term ended March 31, 2014 ** Gord Safarik Appoted February 24, 2014 Management Compensati Vicria s Senior Management team, comprised President Chief Executive Officer five senior managers, received $792,433 salary year ended December 31, 2014 CORPORATE GOVERNANCE GUIDELINES The Board should explicitly sume respsibility stewardship Corporati sume respsibility followg: The Board oversees management Vicria s busess ensure its purposes are realized Adopti a strategic planng process In 2014, Board Management team revisited approved a new Strategic Plan To identify prcipal risks ensure implementati appropriate systems manage se risks Vicria h systems place identify, manage mitigate various risks Successi planng, cludg appotg, trag mirg senior management The Board appots President CEO mat a successi plan The Board mirs CEO s permance through a mal annual review A communicatis policy The Vicria Board ctually reviews its governance ensure effective transparent communicati nomars, stakeholders public The primary method communicati public is through Vicria website, Csultative Committee meetgs Annual Public General Meetg The tegrity ternal ctrol management mati systems The Board s Audit Fance Committee meets periodically durg year review management external ors any significant accountg, ternal ctrol g matters A majority Direcrs should be dependent management free from any cflict terest The Board is comprised exclusively n-management Direcrs All Direcrs complete a Disclosure Statement annually are compliance Corporati s Direcrs Officers Code Cduct The Board should appot a Committee respsible appotment sessment Direcrs The Board h adopted criteria process evaluatg nomees Board Direcrs This functi is carried out by Board Governance Committee 32 33

18 Implement a process sessg effectiveness Board a whole, Committees Board ctributi dividual The Board cducts annual evaluatis Completed questinaires are sessed by Governance Committee results are reviewed Board Provide an orientati educati program each new Nomee Board Each direcr receives comprehensive orientati when appoted As part Board s gog educatial program, Direcrs hear from guest speakers pics applicable aviati dustry throughout year Exame size Board a view determg impact size effective decisi-makg There are thirteen Board members representg followg nomatg bodies: two District North Saanich; two Town Sidney; e District Central Saanich; e District Saanich; e City Vicria; e Capital Regial District; e Provce British Columbia; two Government Canada; e Greater Vicria Chamber Commerce; e Board appotment The Board h authority appot up three Direcrs The Board should review compensati Direcrs light risks respsibilities The Governance Committee cducts an annual review Direcrs remunerati, per diem meetg fees expenses so y are csistent those comparable airports Committees should generally be composed outside Direcrs, a majority whom are unrelated Vicria Board Committees are comprised entirely n-management Direcrs, all whom are unrelated The Board should appot a Committee respsible corporate governance The Board s Governance Committee is respsible corporate governance The Board should develop positi descriptis Board CEO, Board should approve corporate objectives Respsibilities are defed Board s Policy Procedures Manual, which is posted public website Board s Intranet The Board reviews approves corporate objectives an annual bis Establish structures ensure Board functis dependently management Direcrs are n-management stg Committees are chaired by members Board The Board meets dependently management at end every Board meetg The Board also meets In Camera required Audit Committee should be composed outside Direcrs The roles respsibilities Committee should be specifically defed so provide members appropriate guidance regardg ir duties The Committee is have direct communicati external ors oversee management reportg ternal ctrol The Audit Fance Committee is comprised entirely outside Direcrs The Committee meets directly external ors Terms Reference are defed Board s Policy Procedures Manual are available public website Board s Intranet DIRECTOR AND COMMITTEE PARTICIPATION FOR 2014 Below is a summary Vicria Board Direcrs Committee participati 2014: Member Nomatg Body Committees Ldalee Brougham Board Chair Mel Rald Board Vice-Chair James Crowley Board Secretary Greater Vicria Chamber Commerce Chair, Steerg Committee Ex Officio, all Committees Town Sidney Chair, Csultative Committee Steerg Committee Governance Committee Planng Development Committee District North Saanich Chair, Governance Committee Steerg Committee Audit Fance Committee Glen Crawd District Saanich Chair, Audit Fance Committee Steerg Committee Governance Committee Lynne Henders Graeme Roberts Col Smith Provce British Columbia District Central Saanich Capital Regial District Chair, Planng Development Committee Steerg Committee Csultative Committee Governance Committee Planng Development Committee Audit Fance Committee Csultative Committee Mel Sak Town Sidney Vice-Chair, Planng Development Committee Governance Committee Bob Coulter Bruce Knott Gord Safarik Suromitra Sanatani Peter Bray (term ended March 2014) Government Canada Government Canada District North Saanich Vicria Board Direcrs Vice-Chair, Csultative Committee Planng Development Committee Audit Fance Committee Csultative Committee Governance Committee Planng Development Committee Governance Committee Audit Fance Committee City Vicria Audit Fance Committee 34 35

19 BOARD COMMITTEE STRUCTURE TENURE OF DIRECTORS (IN YEARS) Peter Bray 8 Board Direcrs Ldalee Brougham Robert Coulter Glen Crawd James Crowley 475 Steerg Committee Audit Fance Committee Planng Development Committee Csultative Committee Governance Committee Lynne Henders Bruce Knott Mel Rald Graeme Roberts 65 Suromitra Sanatani 2 Mel Sak 575 Col Smith 425 Government (8) Tism (4) Law (1) Corporate Human Resce Organizatial Management (10) CAPITAL PROGRAM Senior or Executive Admistrati / Management (13) Engeerg (4) Over $124 milli h been vested capital improvements facility sce Vicria ok over operatis Vicria Internatial 1997 In 2014, approximately $13 6 milli w expended capital projects Fance (8) BOARD OF DIRECTORS SKILLS QUALIFICATIONS Air Transportati Aviati (8) Industry, Commerce Technology (9) SOLE SOURCE CONTRACTS OVER $75,000 In Board Policy #205: Fancial Cditis Activities, Board approval is required dividual capital projects over $75,000 Ctracts over $75,000 are awarded by public tender lowest bidder or best proposal ferg best overall value, except specified circumstances Pressial (9) Busess (10) Communicatis Marketg (6) Accountg (4) Sole sce ctracts will be entered ly when re is justificati The normal competitive process may be precluded respse unique circumstances, such need a specified proprietary product, technology or licensg mopoly; availability ly e qualified firm when all facrs are taken account; availability specialized services; or need address an emergency In 2014, Vicria did not enter any sole sce ctracts over $75,000 The number brackets dicates how many members Board Direcrs have noted qualificati 36 37

20 CAPITAL INITIATIVES AND BUSINESS PLAN Durg 2014, Vicria underok capital projects tallg $13 6 milli Some significant projects cluded: Thouss $ Overlay Runway (2014 porti) 6,8143 Circulati Security & Ccessis (2014 porti) 2,6724 Airside Pavements Rehabilitati 3667 Airfield Power Distributi Modernizati 4910 HBS Recapitalizati Project 4459 ATB Boiler 3738 Climate Ctrol Termal Buildg Doors 2999 ATB Renovati 2501 Boardg Bridge Rehabilitati Actual vs Busess Plan (Shown Thouss $) Actual Plan Difference Explanati Revenue $ 26,179 0 $ 25,023 0 $ 1,156 0 Variance is attributable creed aviati activity psenger volume, which creed aviati, AIF parkg revenues In additi, certa ccessi agreements were negotiated durg 2014, resultg creed ccessi revenue Expenses (note 1) $ 13,788 8 $ 13,617 1 $ Variance is maly attributable rent expense beg higher than budget a result rent paid cree revenues accrued rent payable a new lee agreement Capital $ 13,604 0 $ 14,234 4 $ Variance is maly attributable favorable tender results runway overlay project Notes: 1 Expenses clude terest do not clude n-ch items, such amortizati Busess Plan Forect Revenues $ 28,717 6 $ 31,676 7 $ 32,829 7 $ 34,115 1 $ 35,090 3 Expenses (note 1) $ 14,403 5 $ 15,371 7 $ 16,058 6 $ 16,732 5 $ 17,300 6 Capital $ 13,090 0 $ 20,468 9 $ 17,560 0 $ 16,041 9 $ 13,877 0 Notes: 1 Expenses do not clude n-ch items such amortizati FINANCIAL HIGHLIGHTS There w no cree $10 Improvement Fee, which is lowest airports Natial System h remaed unchanged sce 2004 The Air Transport Research Society identified Vicria Internatial havg lowest cost per enplaned psenger highest percentage n-aerautical revenue twelve major airports studied HIGHLIGHTS OF THE 2014 FINANCIAL RESULTS Termal lg fees rema amg lowest amg major airports Total revenue is 6 1% ahead 2013 Aviati-related revenue creed by 8 5% a result creed activity Parkg-related revenue creed by 9% a result creed psengers N-aerautical revenue accounts 66% operatis revenue Year-end lg-term debt reduced by $1 8 milli $4 05 milli Excess revenue over expenses bee amortizati is 7 8% ahead 2013 RENT TO THE FEDERAL GOVERNMENT In 2014, Vicria paid approximately $908,000 federal government rent airport ls The amount rent paid government by Vicria is determed by a mula uses a progressive scale bed airport gross revenue A 5% margal rent bracket applies annual gross revenue between $10 milli $25 milli, crees 8% gross revenue over $25 milli 38 39

21 MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS The accompanyg have been prepared by management accountg stards not--prit organizatis The most significant se are set out Note 2 The s accountg related systems ternal ctrol are designed provide reable surance its sets are safeguarded its records are reliable These clude some amounts bed up management s best estimates judgments Recognizg is respsible both tegrity objectivity, management is satisfied se have been prepared reable limits ity The Board Direcrs h appoted an Audit Fance Committee csistg six Board Direcrs The Committee meets periodically durg year review management ors any significant accountg, ternal ctrol g matters They also review falize annual ger dependent or s report bee ir submissi Board Direcrs fal approval The mati throughout text Annual Report is csistent mati presented On behalf Gef Dicks President Chief Executive Officer April 13, 2015 ABCD ABCDABCD ABCD G G LLP LLP G G LLP LLP Chartered Chartered ABCDABCD Chartered Accountants Accountants Chartered Accountants Accountants ABCDABCD G LLP G LLP St Andrew s Square St Andrew s II Square II St Andrew s Square St Andrew s II Square II View Street View Street LLP View Street LLP View Street Chartered Accountants Chartered Accountants G G Vicria BC V8W Vicria 3Y7 BC V8W 3Y7 Vicria BC V8W Vicria 3Y7 BC V8W 3Y7II St Andrew saccountants Square St Andrew s II Square Chartered Chartered Accountants View Street View Street St Andrew s Square St Andrew s II Square II Vicria V8W Vicria 3Y7 BC V8W 3Y BC View Street View Street Vicria BC V8W Vicria 3Y7 BC V8W 3Y7 Telephe Telephe Fax Fax Internet Internet Telephe Fax Telephe Internet Fax Internet (250) Telephe (250) (250) Telephe (250) (250) Fax (250) (250) Fax (250) wwwkpmgca Internet wwwkpmgca wwwkpmgca Internet wwwkpmgca (250) Telephe (250) (250) Fax (250) Telephe wwwkpmgca Internet wwwkpmgca (250) Fax (250) wwwkpmgca Internet wwwkpmgca INDEPENDENT INDEPENDENT AUDITORS AUDITORS REPORT REPORT INDEPENDENT INDEPENDENT AUDITORS AUDITORS REPORT REPORT INDEPENDENT INDEPENDENT AUDITORS AUDITORS REPORT REPORT INDEPENDENT AUDITORS REPORT To To Members Vicria Vicria To Members Members To Members Vicria Vicria INDEPENDENT INDEPENDENT AUDITORS AUDITORS REPORT REPORT Report Fancial Fancial Statements To Members To Members Vicria Vicria Report Report Report Fancial Statements Statements Fancial Statements To Members To Members Vicria Vicria We have ed accompanyg ''), We have ed accompanyg Vicria ('' Report Fancial Statements Report Fancial Statements We have ed We have ed accompanyg accompanyg Vicria Vicria Vicria ('' ('' ''), ('' ''), ''), Report which Report Fancial statement Statements Fancial Statements which at 31, comprise which comprise comprise which comprise statement statement statement positi positi positi positi at December December at at December December 31, 2014, 2014, 31, 31, 2014, 2014, operatis, changes net sets ch flows year n ended, notes, comprisg a operatis, changes net sets ch flows year n ended, notes, comprisg a We have ed accompanyg Vicria ('' ''), We have ed accompanyg Vicria ('' operatis,operatis, changes changes net sets net sets ch flows ch flows year n ended, year n ended, notes, comprisg notes, comprisg a''), a We have ed We have ed accompanyg accompanyg Vicria Vicria ('' ''), ('' ''), summary significant accountg policies or explanary mati summary significant accountg policies or explanary mati which comprise statement positi at December 31, 2014, which comprise statement positi at December 31, 2014, summary summary significant significant accountgaccountg policies policies or explanary or explanary mati mati which comprise which comprise statement statement net positi positi atyear December December 31,n 2014, 31, 2014, operatis, changes net sets ch flows ended, notes, comprisg a operatis, changes sets ch flows n atended, year notes, comprisg a operatis, operatis, changes net sets net sets ch flows ch flows year n ended, year n ended, notes, comprisg notes, comprisg a a Management's Respsibility Fancial Statements Management's Respsibility Fancial Statements summary significant accountg policies or explanary mati summary changes significant accountg policies or explanary mati Management's Management's Respsibility Respsibility Fancial Statements Fancial Statements summary summary significant significant accountgaccountg policies policies or explanary or explanary mati mati Management is respsible Management is respsible Management's Fancial Statements Management's Fancial Statements Management Management isrespsibility respsible isrespsibility respsible fair fair fair fair se se se se Management's Management's Respsibility Respsibility Fancial Statements Fancial Statements stards organizatis, organizatis, accountg accountg accountg accountg stards stards stards not--prit not--prit not--prit not--prit organizatis, organizatis, such such ternal ternal such such ternal ternal ctrol management is necessary enable is necessary enable Management is respsible determes se Management isdetermes respsible fair se ctrol ctrol ctrol management management management determes determes is necessary is necessary tair enable enable Management Management isare respsible is misstatement, respsible wher fair fair se se ternal from due fraud or error free from misstatement, wher due fraud or accountg stards not--prit organizatis, such accountg stards not--prit organizatis, ternal such are are free free from are free from misstatement, misstatement, wher due wher fraud due or error fraud or error error accountg stards not--prit organizatis, organizatis, such ternal such ternal ctrol management determes isaccountg necessary not--prit enable ctrol management determes is stards necessary enable ctrol ctrol management management determes is necessary is due necessary enable Audirs Respsibility Audirs Respsibility are free from misstatement, wher fraud orenable error are free from determes misstatement, wher due fraud or error Audirs Respsibility Audirs Respsibility are free from are free from misstatement, misstatement, wher due wher fraud due or error fraud or error Our is opi se bed We Our is Audirs Respsibility Audirs Our respsibility respsibility Our respsibility respsibility isrespsibility express express is an anexpress express opian an opi opi se se se bed bed bed We We We Audirs Respsibility Audirs Respsibility cducted generally Those generally accepted g Those cducted cducted cducted generally accepted accepted generally g g acceptedstards stards g stards stards Those Those stards require comply ethical requirements plan obta stards we comply ethical plan Our respsibility is require we express opi se bed perm We Our respsibility is an express an opi requirements se bed We stards stards require require we comply we comply ethical requirements ethical requirements plan perm perm plan an an perm an an obta obta obta Our respsibility Our respsibility is express is an express opi an opi se se bed bed We We reable surance about wher are free misstatement reable surance wher are free from misstatement cducted generally accepted g stards Those cducted about generally accepted g stards Those reable reable surance surance about wher about wher are free from from are free from misstatement misstatement cducted generally generally accepted stards g Those stards cducted require require we comply ethical requirements accepted plan perm an stards obta stards we comply ethical requirements g plan perm an Those obta stards stards require require we comply we comply ethical requirements ethical requirements plan an perm an obta obta An obta evidence about amounts disclosures An volves permg obta evidence about amounts disclosures reable surance about wher are plan free from misstatement reable surance about wher areperm free from misstatement An volves volves An permg permg volves permg obta obta evidence about evidence amounts about amounts disclosures disclosures reable reable surance about wher about wher are free from are free misstatement misstatement The selected depend judgment, cludg The selected judgment, cludg surance The The selected depend selected depend depend judgment, from judgment, cludg cludg sessment risks misstatement wher due or sessment risks misstatement wher due An volves obta evidence about, amounts disclosures An volves permg obta evidence about amounts sessment sessment permg risks risks misstatement misstatement,,, wher due wher fraud fraud due ordisclosures fraud fraud or or An volves An permg volves permg obta obta evidence about evidence amounts about amounts disclosures disclosures error In makg those risk sessments, we csider ternal ctrol relevant 's error In makg those sessments, we csider ternal ctrol 's The risk selected depend judgment, cludg The selected depend judgment, cludg error In makg error In those makg risk those sessments, risk sessments, we csider we ternal csider ctrol ternal relevant ctrol relevant relevant 's 's The The selected depend selected depend judgment, judgment, cludg cludg fair order design fair order design sessment risks, wher due fraud or fraud sessment risks, wher due or fair fair misstatement misstatement order design order design sessment sessment risks risks misstatement misstatement but,, wher due wher fraud due or fraud or are but not purpose expressg an opi are not expressg an error In makg risk sessments, csider ternal ctrol relevant 's error In makg risk sessments, we csider ternal ctrol 's are appropriate appropriate are appropriate appropriate those circumstances, circumstances, those circumstances, circumstances, but we not but not purpose purpose purpose expressg expressg anrelevant opi an opi opi error In makg error Inthose makg risk those sessments, sessments, we csider ternal csider ctrol ternal relevant ctrol relevant 's effectiveness 's ternal An cludes evaluatg appropriateness effectiveness 's ternal ctrol An also cludes evaluatg fair risk ctrol order design 's fair order design effectiveness effectiveness 's 's ternal ctrol ternal An ctrol wealso also An cludes also evaluatg cludes evaluatg appropriateness appropriateness appropriateness fair fair circumstances, not order design order design policies used reableness accountg estimates made by management, accountg policies used reableness estimates made by management, are appropriate circumstances, but not purpose expressg an opi are appropriate but accountg purpose expressg an opi accountg accountg accountg policies used policies used reableness reableness accountg accountg estimates made estimates by management, made by management, are appropriate are circumstances, circumstances, but not but not purpose purpose expressg expressg an appropriateness opi an opi overall evaluatg overall effectiveness appropriate 's ternal ctrol also cludes evaluatg effectiveness 's ternal ctrol An also cludes evaluatg appropriateness well well evaluatg evaluatg well well evaluatg overall overall An effectiveness effectiveness 's 's ternal ctrol ternal Anctrol also An cludes also evaluatg cludes evaluatg by appropriateness by appropriateness accountg policies used reableness accountg estimates made management, accountg policies used reableness accountg estimates made management, accountg accountg policies used policies used reableness reableness accountg accountg estimates made estimates by management, made by management, We believe evidence we have obtaed is sufficient appropriate We believe evidence we have obtaed is sufficient well evaluatg overall well evaluatg overall We believewe believe evidence we evidence have obtaed we have obtaed is sufficient is sufficient appropriate appropriate appropriate well evaluatg well evaluatg overall overall provide a provide a bis opi provide a bis bis provide a bis opi opi opi We believewe have obtaed appropriate believe evidence we evidence we have obtaed is sufficient is sufficient appropriate We believe We believe evidence evidence have obtaed we have obtaed is sufficient is sufficient appropriate appropriate Opi Opi provide a bis opi provide a bis we opi Opi Opi provide a bis provide a bis opi opi In present In opi, present respects, Opi Opi In opi, opi, In opi, present fairly, fairly, present all allfairly, fairly, all allrespects, respects, respects, positi positi positi positi Opi Opi Vicria at 31, its flows Vicria 31, its results its Vicria Vicria at December December at at December December 31, 2014, 2014, 31, 2014, 2014, its results results itsoperatis operatis results operatis operatis its its ch ch flows its ch ch flows flows n ended accountg stards not--prit year n accountg stards not--prit In opi, present allfairly, positi In opi, ended present allrespects, respects, positi year year n year ended n ended fairly, accountg accountg stards stards not--prit not--prit In opi, In opi, fairly, present 2014, allfairly, allrespects, respects, positi positi organizatis organizatis Vicria at December 31, 2014, its results operatis its ch flows Vicria atpresent December 31, its results operatis its ch flows organizatis organizatis Vicria Vicria at December December 31, 2014, 31, 2014, its results itsoperatis results operatis stards its flows its flows year n ended accountg stards ch not--prit year n ended at accountg ch not--prit year nyear ended n ended accountgaccountg stards stards not--prit not--prit organizatis organizatis organizatis organizatis Accountants Chartered Accountants Chartered Chartered Chartered Accountants Accountants April April April 13, 13, April 13, 13, Chartered Accountants Chartered Accountants Vicria, Canada Vicria, Canada Vicria, Canada Vicria, Canada Chartered Accountants Chartered Accountants April 13, 2015 April 13, 2015 April 13, Canada 2015 April 13, Canada 2015 Vicria, Vicria, Vicria, Canada Vicria, Canada G LLP is a limited G LLP is liability a partnership limited liability a member partnership firm a member G firm G G is a member limited G is liability a partnership limited liability a member partnership firm a member G firm Cooperative G netw orkllp dependent netw orkllp dependent firms affiliated member w ith firms G affiliated Internatial w ith Cooperative G Internatial netw ork dependent netw member ork dependent firms affiliated member w iss ith firms G affiliated Internatial w ithcooperative G Internatial Cooperative ( G Internatial ( ), a Sw Giss Internatial entity ), a Sw entity ( Internatial ( ), ag Sw G iss Internatial entity ), services a Sw iss entity GG Canada provides services Canada provides G LLP G LLP G Canada provides services G Canada provides G LLP services G LLP G LLP is a limited G LLP is liability a partnership limited liability a member partnership firm a member G firm G netw ork dependent netw member ork dependent firms affiliated member w ith firms G affiliated Internatial w ithcooperative G Internatial Cooperative GG LLP is a G LLP is liability a partnership liability a member partnership firm a member G firm G ( Internatial ( ), alimited Sw G iss Internatial entity ), alimited Sw iss entity netwg orkcanada dependent netw member orkcanada dependent firms affiliated member w ith firms G affiliated Internatial G Internatial Cooperative provides services G provides G LLP services G LLP w ithcooperative ( G Internatial ( ), a Sw Giss Internatial entity ), a Sw iss entity G Canada provides services G Canada provides G LLP services G LLP

22 VAA STATEMENT OF FINANCIAL POSITION VAA STATEMENT OF OPERATIONS December 31, 2014, comparative mati 2013 Year ended December 31, 2014, comparative mati Assets Current sets: Ch ch equivalents Accounts receivable Invenry Prepaid expenses Tangible capital sets (note 3) Liabilities Net Assets Current liabilities: Accounts payable accrued liabilities Deferred revenue Current porti lg-term debt Current porti retirement allowance liability Current porti future rent payments Lg-term debt (note 4(a)) Retirement allowance liability (note 5) Future rent payments (note 6(a)(ii)) Deferred capital ctributi (note 7) Tenants security deposits Net sets: Invested tangible capital sets Unrestricted net sets 2013 $ 5,419,134 2,001, , ,791 $ 8,257,771 1,960, , ,760 7,940,212 10,749,056 81,750,283 73,900,575 $ 89,690,495 $ 84,649,631 $ 2,287, ,985 1,800, ,031 22,481 $ 2,519, ,613 1,800, ,418 22,481 4,407,329 4,677,182 2,250, , , ,475 7,920,618 4,050, ,970 22, ,675 9,609,309 77,700,283 4,069,594 68,050,575 6,989,747 81,769,877 75,040,322 Commitments (note 6, note 12(b)) Ctgent liabilities (note 14) $ 89,690,495 $ 84,649,631 Revenue: Lg fees General termal charges Ccessis Rentals Or $ 3,370,845 2,852,610 8,386,853 3,095, ,312 $ 3,117,753 2,616,158 7,785,793 3,032, ,967 18,150,655 17,031,475 Improvement Fee ( AIF ) (note 8) Expenses: Salaries employee benefits Services, supplies admistrati Security termal services Rent (note 6(a)) Property taxes AIF admistrati hlg fees Amortizati Utilities Interest Excess revenue over expenses 8,028,340 7,639,740 26,178,995 24,671,215 4,434,618 3,672,670 2,398, , , ,095 5,703, , ,360 4,223,811 3,435,163 2,342, , , ,698 5,065, , ,548 19,492,412 18,246,589 $ 6,686,583 $ 6,424,626 VAA STATEMENT OF CHANGES IN NET ASSETS Year ended December 31, 2014, comparative mati 2013 Balance, begng year Invested tangible capital sets Unrestricted $ 68,050,575 $ 6,989,747 $ 75,040,322 $ 68,615,696 See accompanyg notes Excess revenue over expenses - 6,686,583 6,686,583 6,424,626 On behalf Board: Net change vested tangible capital sets 9,649,708 (9,649,708) ,972 42,972 - Ga actuarial valuati retirement allowance liability Direcr Balance, end year $ 77,700,283 $ 4,069,594 $ 81,769,877 $ 75,040,322 See accompanyg notes Direcr 42 43

23 VAA STATEMENT OF CASH FLOWS Year ended December 31, 2014, comparative mati Ch provided by (used ): Operatis: Excess revenue over expenses $ 6,686,583 $ 6,424,626 Amortizati, which does not volve ch 5,703,612 5,065,192 Loss disposal tangible capital sets 41,045 8,302 Change actuarial valuati retirement allowance liability recorded net sets 42,972 - Changes n-ch operatg workg capital: Accounts receivable (40,595) (147,438) Invenry (18,167) (40,695) Prepaid expenses 28,969 25,587 Accounts payable accrued liabilities (231,836) (100,230) Deferred revenue (78,628) (71,110) Retirement allowance liability (94,336) 43,873 Future rent payments (22,482) (22,481) Security deposits 83,800 3,150 12,100,937 11,188,776 Investg: Purche tangible capital sets (13,604,042) (8,355,210) Proceeds from sale tangible capital sets 9,675 16,698 (13,594,367) (8,338,512) Fancg: Repayment lg-term debt (1,800,000) (1,800,000) Deferred capital ctributi 454,793 - (1,345,207) (1,800,000) (Decree) cree ch (2,838,637) 1,050,264 Ch ch equivalents, begng year 8,257,771 7,207,507 Ch ch equivalents, end year $ 5,419,134 $ 8,257,771 See accompanyg notes NOTES TO FINANCIAL STATEMENTS Year ended December 31, Nature operatis: Vicria ( VAA or ) is corporated under Part II Canada Corporatis Act a n-share capital, not--prit corporati all earngs from operatis are revested airport development The VAA h operated Vicria Internatial sce April 1, 1997 under a lee from Transport Canada ( ground lee ) 2 Significant accountg policies: (a) Bis accountg: The VAA are prepared accountg stards not--prit organizatis (b) Changes accountg policies: Effective January 1, 2014, adopted CPA Canada Hbook Secti 3462, Employee Future Benefits, issued by Canada s Accountg Stards Board ( AcSB ) Under new stard, changes actuarial g losses are no lger recorded through operatis The full actuarial liability net sets is recorded Statement Fancial Positi, annual benefit cost is recorded Statement Operatis actuarial g (losses) arisg from changes actuarial sumptis used determe accrued benefit obligati are recognized Statement Changes Net Assets The uses valuati prepared accountg purposes its retirement allowance liability h implemented new stard retrospectively The h determed re is no impact amounts presented year ended December 31, 2013 (c) Ch ch equivalents: Ch ch equivalents are defed ch highly liquid vestments csistg term deposits origal maturities at date purche three mths or less (d) Fancial struments: Fancial struments are recorded at fair value itial recogniti Freestg derivative struments are not a qualifyg hedgg relatiship equity struments are quoted an active market are subsequently meured at fair value all changes fair value are recognized excess revenue over expenses period curred All or struments are subsequently recorded at cost or amortized cost, unless management h elected carry struments at fair value The h not elected carry any such struments at fair value Transacti costs curred acquisiti struments meured subsequently at fair value are expensed curred All or struments are adjusted by transacti costs curred acquisiti fancg costs, which are amortized usg straight-le method Fancial sets are sessed impairment an annual bis at end fiscal year if re are dicars impairment If re is an dicar impairment, determes if re is a significant adverse change expected amount or timg future ch flows from set If re is a significant adverse change expected ch flows, carryg value set is reduced highest present value expected ch flows, amount could be realized from sellg set or amount expects realize by exercisg its right any collateral If events circumstances reverse a future period, an impairment loss will be reversed extent improvement, not exceedg itial carryg value 44 45

24 (e) Hedge accountg: The accounts a qualifyg hedge an terest-bearg set or liability follows: (i) Interest hedged item is recognized usg strument s stated terest rate plus or mus amortizati any itial premium or discount any fancg fees transacti costs (ii) Net amounts receivable or payable terest rate swap are recognized an adjustment terest hedged item period which y accrue (f) Invenry: The venry csumable supplies is recorded at lower cost, determed a first- first-out bis, net realizable value (g) Transport Canada Lee: The Transport Canada Lee (see note 6(a)) is accounted an operatg lee (h) Tangible capital sets: Tangible capital sets are recorded at cost amortized a straight-le bis over estimated useful lives sets at followg annual rates: Asset Leehold improvements: Termal or buildgs 4%-33% Runway apr surfaces 5%-33% Airfield electrical 5% Parkg facilities roadway systems 5%-10% Infrtructure 1 66%-10% Or 5%-33% Furniture equipment 20% Computer equipment 33% Vehicles 10% Or equipment 10%-20% The terest cost debt attributable cstructi capital sets is capitalized durg cstructi period No terest w capitalized 2014 or 2013 Capital work- -progress is not amortized until set is available use When a capital set no lger ctributes VAA s ability provide services, its carryg amount is written down its residual value no reversals such write downs subsequent periods Rate (i) Revenue recogniti: The VAA follows deferral method accountg ctributis whereby unrestricted revenue is recognized when received or receivable if amounts can be reably estimated collecti is reably sured When a porti ctributis relates a future period, it is deferred recognized subsequent period Government reimbursements specific operatg costs are fset agt costs curred Revenue is recognized follows: Lg general termal fees are recognized revenue when airport facilities are utilized Ccessi revenue is recognized bed greater agreed percentages reported ccessiaire sales specified mimum guaranteed amounts over terms respective lees Car parkg revenue is recognized when car parkg facilities are utilized Rental revenue is recognized over terms respective lees Improvement Fees ( AIF ) (note 8), are recorded when psengers subject fee depart (j) Employee future benefits: VAA its employees make ctributis Municipal Pensi Plan These ctributis are expensed curred An unfunded retirement allowance benefit is also available VAA s employees The costs se benefits are actuarially determed bed service best estimates retirement ages expected future salary wage crees The obligati under this benefit plan is accrued bed projected benefits employees render services necessary earn future benefits Actuarial g (losses) arise from changes actuarial sumptis used determe accrued benefit obligati All actuarial g (losses) are recorded net sets (k) Use estimates: The cmity accountg stards not-prit organizatis requires management make estimates sumptis affect reported amounts sets liabilities disclosure ctgent sets liabilities at date reported amounts revenue expenses durg period Are requirg use management estimates clude determati retirement allowance, useful lives amortizati provisis ctgencies Actual results could differ from se estimates 46 47

25 3 Tangible capital sets: 4 Lg-term debt: (a) Lg-term debt: Cost Accumulated amortizati 2014 Net book value 2013 Net book value Leehold improvements: Termal buildg $ 48,372,266 $ 17,283,426 $ 31,088,840 $ 23,605,127 Runway apr surfaces 19,489,365 5,098,086 14,391,279 7,945,353 Airfield electrical 5,902,699 1,889,069 4,013,630 3,731,558 Parkg facilities roadway systems 14,140,369 3,873,771 10,266,598 9,486,003 Or buildgs 12,446,117 2,841,857 9,604,260 10,098,590 Infrtructure 9,758,525 3,575,820 6,182,705 6,463,410 Or 1,986,255 1,103, , ,159 Capital work-progress 1,912,618-1,912,618 8,053,720 Furniture equipment 344, , , ,193 Computer equipment 1,053, , , ,002 Or equipment 1,951,258 1,321, , ,237 Vehicles 5,108,889 2,877,623 2,231,266 2,491,223 $ 122,466,166 $ 40,715,883 $ 81,750,283 $ 73,900,575 Durg year sold sets a net book value talg $50,721 ( $25,000) proceeds talg $9,675 ( $16,698) resultg a loss sale sets $41,046 (2013 loss $8,302) This loss is cluded or come statement operatis Bank loan $ 4,050,000 $ 5,850,000 Less current porti lg-term debt 1,800,000 1,800,000 $ 2,250,000 $ 4,050,000 The VAA h a $20,000,000 credit facility Imperial Bank Commerce ( CIBC ) fance Air Termal Buildg ( ATB ) expansi secured by way a mortgage VAA s leehold terest signment Improvement Fee The loan w capped at $18,000,000 Cstructi Term Out Date December 31, 2006 Under terms credit facility, VAA borrows by way banker s acceptance at market rate or at CIBC prime The loan is repayable over 10 years quarterly stallments $450,000 which began April 1, 2007 Interest rate swap ctracts (note 12(b)) are used reduce ch flow risk 100% outstg loan balance Accordgly, effective terest rate VAA s lg-term debt w 4 15% 2014 ( %) Interest expense related lg-term debt w $196, ( $270,548) The mimum scheduled prcipal repayments over next five years are follows: 2015 $ 1,800, ,800, ,000 (b) Or credit facilities: The VAA h a $2,000,000 operatg le credit CIBC bearg terest at CIBC prime lendg rate The operatg le credit is secured by a dem collateral first mortgage VAA s leehold terest signment rents an unlimited amount The VAA h access a $5,000,000 dem revolvg capital set expenditure facility This facility bears terest at CIBC prime lendg rate is secured by way a mortgage VAA s leehold terest signment Improvement Fee The VAA s credit facility requires it mata a fixed charge coverage ratio The VAA h never failed meet ratio These two credit facilities were undrawn at December 31,

26 5 Retirement allowance liability: Under terms transfer agreement Transport Canada, VAA sumed Government Canada s obligati pay its mer employees compensati up retirement or termati collective agreements The retirement benefit is bed years completed service The VAA received from Government Canada an amount equivalent actuarially adjusted liability at time transfer The VAA h recorded additial liabilities compensati up retirement or termati collective or agreements negotiated subsequent transfer The VAA accrues cost se future benefits, employees render ir services, bed actuarial valuatis obligatis It is VAA policy perm actuarial valuatis a compent plan a mimum every three years An actuarial valuati over a compent plans w completed December 31, 2014 The next actuarial valuati plans is scheduled December 31, 2017 The significant ecomic sumptis used by VAA s actuaries meurg accrued retirement allowance liability at December 31, 2014 are follows: Discount rates 3 6% Rate compensati crees 3 0% Balance at January 1, 2013 $ 835,515 Annual accrual, net benefits paid 13,658 Interest 30,215 Balance at December 31, ,388 Annual accrual, net benefits paid (84,362) Interest 32,998 Adjustment actuarial value at December 31, 2014 (42,972) Balance at December 31, 2014 $ 785, Fancial statement : Current porti $ 185,031 $ 144,418 Lg-term 600, ,970 $ 785,052 $ 879,388 In 2014, net retirement benefit plan expense taled $28,193 ( $67,100) 6 Commitments: (a) Ground lee Transport Canada: The ground lee governs both ecomic day--day relatis between VAA Transport Canada The signed a 60 year ground lee Transport Canada effective April 1, 1997, lee provided an opti extend term a furr 20 years On January 28, 2015 Mister Transport signed an amendment ground lee extendg term 20 years endg March 31, 2077 The ground lee ct specific cditis compliance a series requirements, cludg envirmental stards, mimum surance coverage, specific accountg reportg requirements various or matters have a significant effect day--day operati The believes is h complied all requirements under ground lee (i) Effective January 1, 2010 rent payable Transport Canada is calculated bed a percentage gross revenue a progressive scale The projected rent expense bed VAA s lg-range ect is follows: 2015 $ 1,097, ,334, ,426, ,529, ,607,200 (ii) Durg 2003, Transport Canada amended ground lee payments resultg a deferral, out terest, $224, , payments (b) Capital commitments: In cnecti cstructi certa capital projects purche certa capital items, VAA h capital commitments outstg at December 31, 2014 approximately $736,000 ( $1,303,000) (c) Beac Avenue extensi: The VAA entered an agreement Town Sidney ( Town ) participate extensi Beac Avenue 2001 The benefit extensi VAA is street access l will be developed at a later date When VAA develops l, VAA is committed reimburse Town e third Town s costs extensi This reimbursement is estimated be approximately $70,000 (d) Beac Avenue pedestrian overps: The VAA h made a commitment Town Sidney ctribute $100,000 cstructi a pedestrian overps at Beac Avenue Highway 17 The agreement is ctgent up Town securg sufficient funds complete project Should project proceed Town Sidney have agreed relee VAA from its obligati related Beac Avenue extensi 50 51

27 7 Deferred capital ctributi: The airport authority receives fundg from Air Transport Security ( CATSA ) wards specific security frtructure upgrades The funds received are deferred brought revenue ctributis at a rate or amount csistent amortizati related capital set ce amortizati set begs 2014 Balance, begng year $ - Ctributis received: 454,793 Less: Amounts amortized revenue - Balance, end year $ 454,793 The balance unamortized ctributis related capital sets csists followg: 2014 Unamortized ctributis used purche capital sets $ 445,876 Unspent ctributis 8,917 Balance, end year $ 454,793 8 Improvement Fee ( AIF ): On May 31, 1999, VAA entered an agreement ( AIF Agreement ) Air Transport Associati Canada air carriers servg Vicria Internatial The AIF Agreement provides a csultati process air carriers airport development well collecti an AIF by air carriers AIF revenue is collected by airles behalf VAA which entitles m hold a 7% hlg fee AIF revenues are used solely fund capital expenditures related cstructi or improvement airport frtructure related fancg costs The AIF charge is $10 (effective July 1, 2004) per local boarded psenger To December 31, 2014 cumulative expenditures exceeded cumulative AIF revenue follows: AIF revenue $ 92,099,141 Airle/ATAC admistrati fees (6,689,138) AIF program expenditures (92,429,133) Fancg costs (8,678,044) Excess AIF expenditures over AIF revenue $ (15,697,174) The excess AIF expenditures over AIF revenue h been funded through a combati surpluses from operatis debt 9 Pensi ctributis: The VAA its employees ctribute Municipal Pensi Plan ( Plan ), a jotly trusteed pensi plan The Board Trustees, representg plan members employers, is respsible overseeg management Plan, cludg vestment sets admistrati benefits The pensi plan is a multi-employer ctribury pensi plan Bic pensi benefits provided are bed a mula The plan h about 182,000 active ctriburs approximately 75,000 retired members Active members clude approximately 37 ctriburs from Vicria The most recent actuarial valuati at December 31, 2012 dicated a $1,370 milli fundg deficit bic pensi benefits The next valuati will be at December 31, 2015 results available 2016 Employers participatg Plan record ir pensi expense amount employer ctributis made durg fiscal year (defed ctributi pensi plan accountg) This is because Plan records accrued liabilities accrued sets Plan aggregate result re is no csistent reliable bis allocatg obligati, sets cost dividual employers participatg Plan The VAA paid $336,633 ( $309,905) employer ctributis while employees ctributed $260,445 ( $235,366) plan fiscal Accounts payable accrued liabilities: Included accounts payable accrued liabilities are government remittances payable $47,379 ( $56,391), which cludes amounts payable GST remittances workers compensati board premiums 11 Risk management: Exposure credit risk, liquidity risk, terest rate risk, arises normal cse VAA s busess The VAA manages terest rate risk arisg from terest rate fluctuatis through use derivative struments The struments are not used tradg or speculative purposes (a) Credit risk: Credit risk is risk a third party a strument might fail meet its obligatis under terms strument For ch ch equivalents accounts receivable VAA s credit risk is limited carryg value balance sheet The VAA h a ccentrati credit risk two airles The VAA manages risk sociated ccentrati credit risk through its policy actively mirg agg receivables Credit risk is furr reduced by letters credit, deposits cusmer credit evaluatis The VAA limits its exposure credit risk ch ch equivalents by vestg struments issued by high credit quality stitutis The VAA enters ctracts such terest rate swaps ly high credit quality stitutis As at December 31, 2014 agg analysis trade receivables, net impaired amounts $nil ( $567) is follows: Current 97 95% $ 1,535, days overdue 1 87% 29, days overdue 0 11% 1, days plus overdue 0 07% 1,100 Total 100 0% $ 1,568,004 (b) Liquidity risk: Liquidity risk is risk VAA will not be able meet its obligatis sociated liabilities Funds generated through operatis provide VAA s ch requirements These funds are used support operatis fance capital program repayment VAA s lg term debt The VAA also h access an undrawn operatg le credit which sists mitigate liquidity risk (c) Interest rate risk: The VAA s exposure terest rate risk relates its current future anticipated borrowgs Ch flow risk related se borrowgs is reduced by terest rate ctracts (note 12(b)) 52 53

28 12 Fancial struments: (a) Interest come terest expense: Interest come durg 2014 taled $86,580 ( $81,343) Interest expense durg 2014 taled $201,360 ( $275,548) Included terest expense is stby fees stampg fees $23,401 ( $30,421) (b) Interest rate ctracts: The VAA h two terest rate ctracts its bank, CIBC, reduce ch flow risk any potential cree terest rates related VAA s lg-term debt The VAA applies hedge accountg se ctracts The followg ctracts hedge 100% outstg debt at a blended terest rate 415% are projected match VAA s loan repayment term: (i) Declg balance terest rate ctract effective January 2, 2007, which fixes terest rate at 483% The itial ctract balance w a notial amount $7,000,000; which decled by $175,000 a quarterly bis until January 2, 2009 Effective January 2, 2009, notial amount creed $10,100,000, decles a quarterly bis by $315,625 until end ctract January 3, 2017 As at December 31, 2014 notial amount ctract is $2,841,000 (ii) Declg balance terest rate ctract effective March 2, 2009, which fixes terest rate at 255% The itial ctract balance is a notial amount $4,300,000 which decles by $134,375 a quarterly bis until end ctract January 3, 2017 As at December 31, 2014 notial amount ctract is $1,209,000 The fair value terest rate ctracts at December 31, 2014 is a liability $121,060 (2013 $235,502) Due relative fluctuati terest rates, if VAA had wished termate ctracts at December 31, 2014 a payment CIBC $121,060 would have been required 13 Or mati: (a) The VAA come generated from airport-related operatis is exempt from federal provcial come taxes (b) Durg year ended December 31, 2014, fees paid Board VAA ir services direcrs taled $254,833 ( $275,667) 14 Ctgent liabilities: The, cductg its usual busess activities, is volved various legal proceedgs litigati, outcome which is determable It is s policy carry adequate surance mimize risk sociated such matters Management is opi aggregate net liability, if any, se proceedgs litigati would not be have a impact s positi 15 Comparative mati: Certa comparative mati h been reclsified cm adopted current year 54 55