Canada's Airports Disappointed with Ontario Move on Aviation

Let's start talking about ways to better harness the economic potential of aviation

OTTAWA, July 14, 2014 /CNW/ - The Canadian Airports Council today said it is disappointed with the Ontario provincial government's decision to go ahead with the tripling of its tax on aviation fuel, calling instead for the province to work more closely with the aviation sector on ways to strengthen it.

"Aviation is an important industry for Ontario, helping drive other parts of the economy and providing Ontarians with access to the world," said Canadian Airports Council President Daniel-Robert Gooch.  "Airports are working to help Canada grab a healthy share of the growing global market for air travel and tourism.  It's time for the province to work with airports, air carriers and our partners in tourism and business to support this sector's growth in ways that will benefit not only industry employers, but consumers and taxpayers as well."

As formalized in today's budget, Ontario's tax on aviation fuel will triple – an increased cost that will be passed on to air travellers and shippers in the form of higher fares and shipping costs.   Airport opposition joins concerns expressed by airline and tourism partners, while the Canadian Chamber of Commerce has named travel and tourism competitiveness as one of the top ten barriers to Canadian competitiveness two years in a row. 

It is not clear that the increased aviation fuel tax will result in additional revenue for the province.  Vijay Gill of the Conference Board of Canada, who has examined the economic costs associated with losing about five million air passengers to cheaper U.S. border airports, says a significant portion of the new tax revenue projected by the measure could be lost if traffic decreases at Ontario airports as a result.

Meanwhile, a recent report from Fred Lazar of the Schulich School of Business projects a $67-97 million cut to provincial gross domestic product from the measure, with a negative impact on 2,000-3,000 jobs. 

"As Canada's largest province and home to several of the largest operational hubs for aviation in the country, Ontario should be working to take greater advantage of opportunities for growth of this vital sector," said Mr. Gooch. "Ontarians want vibrant, competitive air access.  Let's take this as the impetus to instead start talking instead about ways to do that."

Canadians say the cost of air travel is one of their top concerns.  Other important files for airports in Ontario include ensuring the secure, efficient flow of travellers through security and border services at airports, the need for greater marketing/promotion of Canada in overseas tourism markets and infrastructure funding challenges for smaller airports.

About the Canadian Airports Council

The Canadian Airports Council (CAC), a division of Airports Council International-North America, is the voice for Canada's airports community.  Its 45 members represent more than 120 airports, including all of the privately operated National Airports System (NAS) airports and many municipal airports across Canada. Canada's airports are independently operated by non-share capital corporations that are fully responsible for self-funding their operating and infrastructure costs, and balancing the needs and interests of the communities they serve. In 2012, Canada's air transportation industry had a $34.9 billion economic footprint, supported 405,000 jobs, and contributed more than $7 billion to federal taxes.

SOURCE: Canadian Airports Council

Daniel-Robert Gooch, President, Canadian Airports Council, [phone] ext 16, [email protected]