Air Canada has expressed its disappointment with
the proposed Ontario budget to increase aviation excise fuel
taxes, and has welcomed the decision by Ontario Opposition parties
to defeat the government's proposed budget.
Canada already has some of the highest aviation
taxes in the world, recently ranking an unenviable 136th position
of 144 countries in a World Economic Forum survey.
A recent Conference Board of Canada study
estimates that more than five million Canadians already drive to
U.S. airports to avoid the high taxes on Canadian airline fares.
"As one of the largest private sector employers
in the province of Ontario, I can say that the proposed increase
to aviation fuel taxes is bad for our industry, bad for our
employees, bad for our customers and ultimately bad for the
economy of Ontario," said Calin Rovinescu, President and Chief
Executive Officer. "Ontario will continue to lose business to U.S.
border airports and other provinces with more progressive
perspectives on economic development. The approach on aviation
rates, charges and taxes must go in the other direction.
"Air Canada welcomes the decision of the
opposition parties to defeat the Ontario budget and its punitive
increases in aviation fuel excise taxes. The proposed budget would
have increased costs to Canada's aviation industry by as much as
$100 million a year. Even before the budget, Ontario had the
highest excise tax on aviation fuel in North America. The proposed
increases to almost triple the excise fuel tax would have been
passed on to air travellers and shippers, resulting in higher
fares for travellers to and from Ontario, and negative economic
consequences in Ontario and Canada including direct and indirect
"Air Canada and its 12,000 Ontario-based
employees will be looking for leadership from each of the parties
on definitive measures to address the aviation cost structure in
the upcoming Ontario election. We are calling on the parties to
follow the lead of their provincial counterparts, such as B.C.,
and neighbouring competing U.S. states who recognize the value of
the aviation industry as an economic engine and enabler of trade,
not as a facile source of revenue to subsidize other government
initiatives," concluded Mr. Rovinescu.
Air Canada directly employs nearly 12,000 people
in the Greater Toronto Area alone - plus 2,200 more including its
wholly-owned subsidiaries Air Canada Vacations and Air Canada
Rouge as well as its Air Canada Express partners - Jazz and Sky
Regional. Together with its Air Canada Express partners and Air
Canada rouge, Air Canada operates more than 240,000 flights a year
from Toronto Pearson Airport and carries about 18 million
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