NC service charge reduction

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NAV CANADA To Reduce Service Charges Effective September 1, 2006

(Ottawa, July 13, 2006) - NAV CANADA is pleased to announce the withdrawal on September 1, 2006 of its average 2 per cent charge implemented on August 1, 2003 to rebuild the Rate Stabilization Account to $50 million.

“This is good news for our customers and the travelling public” said John Crichton, NAV CANADA President & CEO. “We are once again in a position to pass on savings while continuing to operate one of the safest and most advanced air navigation systems in the world.”

The reduction in charges is possible due to a combination of diligent cost control and a recent Supreme Court of Canada decision that entitles the Company to recover $8 million in unpaid customer service charges.

In August 2003, NAV CANADA implemented a temporary rate adjustment to gradually eliminate the deficit of $116 million in the Company's Rate Stabilization Account (or “rainy day account”) that had resulted from the post 9/11 decline in traffic. The objective was to replenish the account to a balance of $50 million within five years.

The Rate Stabilization Account balance has exceeded this target, at $73 million as of May 31, 2006. As a result, the temporary rate adjustment will be removed.

“Not only are rates going down through the elimination of the temporary adjustment, but we are in a position to reduce them two years earlier than expected,” said Crichton.

As of September 1, 2006, NAV CANADA customer service charges will have increased by only 10 per cent on average since March 1999, when they were fully introduced – approximately 10 percentage points below inflation. They will also be 22 per cent less than the Air Transportation Tax they replaced.

The removal of the temporary adjustment is also consistent with the NAV CANADA commitment not to use service charge increases to move beyond the $50 million rate stabilization account target balance to the new $75 million target balance, which also comes into effect September 1, 2006.

“Next fiscal year, we intend to draw down the Rate Stabilization Account by approximately $29 million to achieve our break even position,” said Crichton.

Details of NAV Canada's revised service charges are available on the Company's web site.