Air travel cost too much? Blame the feds

Posted on December 27, 2023 by Taber Times

Flying in Canada is expensive.

The reasons are obvious when you consider that nearly a third of the price of a plane ticket is made up of taxes and fees outside of the airline’s control.

For example, imagine that you want to book a flight from Montreal to Vancouver to go skiing during your spring break.

Even before adding a single bag, the least expensive return trip with Porter will cost you $512.05. Yet, from the airline’s perspective, this trip is offered to you at $332.00.

The other $180.05 represents the various charges and taxes you have to pay, of which the federal government is one of the largest beneficiaries.

The biggest slice, making up $102.00 in this case, is due to what is known as airport improvement fees.

Although these fees are charged by the non-profit airport authorities responsible for managing Canada’s large airports, these could be much lower if not for the elevated rents they must pay Transport Canada each year.

The Montreal airport, for example, paid the federal government an amount in rent equivalent to a little over a third of what it collected in airport improvement fees last year. The proportion was similar in Vancouver.

And although the air travel and tourism sector is still trying to pick itself back up after the pandemic, that’s not stopping the federal government from continuing to raise the rent.

In the last fiscal year, the total amount paid to Ottawa in rent by the country’s large airports was $419 million, 42.5 per cent more than they paid 10 years ago.

This is due to the fact that instead of seeing Canadian airports as transportation infrastructure that’s important for our communities, the Trudeau government seems to think of them as cash cows.

If the money from these increasingly expensive rents could be put into infrastructure instead, the airport improvement fees paid on this return trip would fall from $102 to $66.

Then there’s the matter of the air travellers’ security charge, introduced following the September 11, 2001 attacks and representing air travellers’ contribution to airport security measures.

If your trip is in March, and the flight is domestic, you’re in luck! This only adds $14.24 to the price of your ticket. But if you are travelling after May 1, 2024, and you are leaving the country, it will cost you $34.42.

While the goal is valid, we wonder why our neighbours to the south limit the charge to a maximum of $15.30 Canadian per return trip, or less than half the maximum amount charged by the Canadian government.

The fees listed on your receipt also include the applicable sales taxes for both the ticket price and the various fees you are required to pay. For that $512.05 ticket, these come to $63.81.

But wait – there’s more! There are also hidden taxes that the federal government charges you on each plane ticket.

The most obvious is the excise tax on aviation fuel, which is 4.0 cents per litre. Again, the federal government is greedier than its American counterpart, whose equivalent tax works out to 1.55 cents Canadian per litre.

When you add it all up, it’s easy to see why travelling is so expensive in this country. It’s also clear why so many travellers choose to drive a couple of hours to fly out of Plattsburg, Burlington, or some other airport near the border rather than a Canadian airport.

It’s time for Ottawa to realize that air travel is not a cash cow to milk but an essential means of connecting our communities.

Gabriel Giguère is a public policy analyst with the Montreal Economic Institute.

© Troy Media