Monday, September 29, 2014

Air travel taxed to max by Wynne

By Candice Malcolm
Monday, September 29, 2014

When the Kathleen Wynne government introduced its 2014 budget, many were surprised by the number of new taxes introduced without any prior notice.

Usually when governments impose new taxes, they take the time to study the issue, calculate how much money the tax will raise, and decide whether it will have a negative impact on the economy.

But the 2014 Ontario budget seemed to have forgone these steps, and the results are starting to show.

For instance, look at Premier Wynne’s decision to increase jet fuel taxes by 148%.

It is clear the government didn’t realize flying is already one of the most heavily taxed activities in Canada.

When you book an airline ticket, the amount charged by the airline is only a portion of the total cost.

You also pay airport improvement fees, security fees, federal taxes, provincial taxes, HST, and any international fees and taxes that apply, depending on where you are going.

There are also additional charges and taxes that inflate the ticket price, such as airport rent taxes, navigation fees and fuel taxes for the planes.

Even before the new tax hike by the Wynne government, Toronto’s Pearson airport was the most expensive airport in the world to land a plane — this according to a 2012 report by the Senate of Canada.

It is already difficult for Canadian airlines to complete with competitors south of the border.

An estimated five million Canadians fly from the U.S. each year rather than from their local Canadian airport.

The majority come from Ontario.

You can imagine all the lost business opportunities that go along with those five million Canadians.

Everything from airport restaurants and hotels, to manufacturers and maintenance shops lose business to their U.S. counterparts. This is not to mention the hundreds of millions of dollars in airline tickets purchased in places like Buffalo, Detroit, Minnesota and Syracuse, rather than Toronto, Hamilton, London, Ottawa and Thunder Bay.

And it isn’t just travelers that are fleeing high taxes in Ontario.

Sunwing Airlines, a Canadian-owned airline specializing in vacations to tropical destinations, recently announced it would be operating select flights out of Buffalo instead of Toronto Pearson this winter.

If Wynne and Finance Minister Charles Sousa had done their research, they would have realized this. Clearly, they didn’t.

At first, the Wynne government claimed Ontario’s tax hike was modest compared to other big airports.

Sousa claimed Ontario’s jet fuel tax was “significantly lower” than other big cities such as London, Paris, New York and Chicago.

The truth is commercial airlines pay zero jet fuel taxes in those cities.

When it was pointed out that Sousa had his facts wrong, the government shifted its message.

They are now blaming the federal government.

But it wasn’t the Stephen Harper government that delivered this devastating new travel tax.

It was Wynne. This is one of her many new “revenue tools” to fund her latest pet project — building subways in Toronto.

In fact, other big cities in Canada like Montreal, Vancouver and Calgary do not pay these jet fuel taxes either.

B.C. recently removed its tax. Within a year, 22 new international direct flights were added to the Vancouver International Airport.

That’s 22 additional jets, each filled with hundreds of passengers arriving in Vancouver, thanks to good policy and lower taxes.

The opposite is happening here in Ontario, where high taxes and an aloof government are chasing flyers away.

— Malcolm is Ontario Director of the Canadian Taxpayers Federation,​

- Source:

Liberals' aviation fuel tax hike will hurt Ontarians: Critics

By Christina Blizzard, QMI Agency
September 16, 2014

TORONTO - Finance Minister Charles Sousa’s 148% hike in the tax on aviation fuel has been largely flying under the radar since his May budget and the June election.

It was a sneak attack on an industry that’s vital to this province. It’s a punitive tax that will slap every airline passenger with higher costs.

At least one airline — Sunwing — has said it will operate two of its flights out of Buffalo largely to avoid the increased costs.

Sunwing is one of the top five carriers in Ontario. Its president, Mark Williams, says once it’s fully implemented, the tax hike will cost the company $3 million a year. In a competitive business environment, that makes a big difference, Williams says.

“It’s a big deal when we’re a large contributor to the economy in Canada and in Ontario,” he said in a phone interview.

“When the government views an industry as a cash cow rather than a commercial asset, it leads to various decisions such as the recent one to offer two flights out of Buffalo,” he said.

“If you can’t beat them — join them.”

Air Canada spokesman Peter Fitzpatrick said the higher tax will cost the airline $48 million when fully implemented. That’s going to make it harder for the airline to expand in this province and will cost the average traveller more to fly.

“At the same time, it will drive even more Canadians to U.S. border airports, taking with them money that could instead revive the Ontario economy and create jobs at home,” Fitzpatrick said. The airline industry is moving to global hubs and Toronto is well placed to excel in that regard, he said.

What’s holding us back? High operating costs — especially taxes.

“This tax increase is just one more cost that further inhibits us and certainly makes us think twice before adding new services,” Fitzpatrick said.

“We remain hopeful reason will prevail and this tax will be reduced or even eliminated as it has in other provinces,” he said.

Tory critic Michael Harris said other provinces, such as B.C., New Brunswick, Alberta, Quebec and Saskatchewan, have eliminated the fuel tax.

“Ontario is going in the opposite direction,” Harris said.

“They’re estimating another 400,000 people will move south of the border for cheaper flights.”

Harris said the Tories are asking the government to do an economic impact study before they implement the hike.

Sousie Heath, a spokesman for Sousa, said the province has a “competitive and thriving” airline industry, pointing to figures showing international and domestic flights have increased both at Billy Bishop airport and at Toronto Pearson.

“At 2.7 cents per litre, the taxation rate of aviation fuel has remained unchanged since 1992. This modest change in rate will allow us to invest in infrastructure with minimal impact on consumers, with analysis showing that the impact on airlines, per passenger, would be as little as a few dollars,” said Heath.

Meanwhile, a study by Fred Lazar, of the Schulich School of Business at York University, found the proposed increase will directly cost the province between 1,991 and 2,907 full-time jobs.

The National Airlines Council of Canada estimates the tax increase will drive away 292,700-407,800 flyers.

About three million Ontario travellers already drive across the border to fly from U.S. airports every year. Ontarians make up almost 40% of passengers at Buffalo Airport and up to 70% of passengers at the Niagara Falls Airport.

So, think of Sousa and Premier Kathleen Wynne next time the airline dings you for those extra charges.

To your government, you’re just so much excess baggage.

Smile and remember — you voted for this budget and this tax hike.

- Source:

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