IATA has expressed its shock and disappointment
over the Ontario government’s proposal to more than double the
Province’s aviation fuel tax.
The fuel tax already costs Ontario
travelers and shippers over C$60 million annually. When fully
implemented, the increase from C2.7 cents per liter to C6.7 cents
per liter will add more than C$100 million per year to the cost of
air transport in the province.
“At a time when the government is proposing to
spend some $2.5 billion to attract businesses to Ontario, why make
air connectivity more expensive? Businesses depend on cost-efficient air connections. So the
proposal runs at cross-purposes to the initiative to attract new
investment by making the province less competitive,” said Tony
Tyler, IATA Director General and CEO. “If implemented, this tax
hike could literally drive travelers and shippers away from
Ontario’s airports. Aviation is intensely competitive and air
travelers and businesses have options to spend their dollars
elsewhere, using nearby airports.”
the Hotel Association of Canada’s Annual Travel Survey, already
17% of Canadian travelers crossed the border for less expensive
tickets last year. For Ontario, the figure was 23%.
jobs are flowing south, away from Ontario, and this tax increase
will only hasten the exodus,” said Tyler.
Canada contributes C$42.3 billion or 2.8% of GDP and supports some
550,000 jobs including the benefits of aviation-supported tourism.
“Toronto Pearson is Canada’s busiest airport. Air
travelers there are paying a heavy price for the government’s
short-sightedness. Ontario should follow the example of British Columbia, which eliminated its provincial fuel tax, a step that
helped Vancouver International Airport consolidate and strengthen
its position as a leading transpacific gateway,” said Tyler.
Taxing fuel for international flights (including trans-border
flights) violates longstanding international agreements including
the Chicago Convention.
“This tax hike is just wrong and
must not be implemented. It makes no economic sense because it
will be a blow to Ontario’s competitiveness at a time when job
creation is a priority. Flouting ICAO standards and agreements
sets a very bad precedent at a time when the Canadian government
is calling on other governments to follow ICAO’s leadership in key
areas such as the environment. And adding insult to injury for the
travelers and shippers who will be affected, none of the planned
increase is fuel tax will be invested in aviation,” said Tyler.
Air Canada Opposes Proposed Ontario Budget Increases to Aviation
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