Many Canadians who were planning to travel this year chose not to go to the United States, responding to the government’s call for “domestic travel.” However, studies have found that the relatively high-ticket prices for domestic flights in Canada are caused by the government.<\/p>\n
The Montreal Economic Institute (MEI), a public policy think tank, released a report on Monday (18th) pointing out that the federal government plays an important role in the high prices of domestic air tickets. The main reason for the high prices of domestic air tickets is the high taxes levied by the federal government.”<\/p>\n
Lowering airfares is well within the power of the federal government, which is the primary driver of ticket prices. By refusing to address these high costs, the government is making the airlines the scapegoat,” Samantha Dagres, MEI communications manager, wrote in the report. MEI pointed out that various taxes levied by the government on airports are reflected in the airfares of major routes and account for a large part of them.<\/p>\n
The report said a Montreal- Toronto flight costs $190.04, with government fees and taxes totalling $68.04, or 35.8 per cent. A round-trip ticket between Toronto and Calgary costs $118.36, with government fees and taxes totalling $51.03, or 43% of the ticket price. A round-trip ticket between Vancouver and Toronto costs $183.06, with government fees and taxes totalling $51.52, or 28% of the ticket price.<\/p>\n
MEI said Canadian passengers’ airfare includes an Airport Improvement Fee (AIF), which is used to indirectly pay the rent of the land where the airport is located. Airports in Canada are operated as non-profit private organizations. The land on which the airports are located is owned by the federal government, which collects rent from the airports.<\/p>\n
“These costs are passed on from airports to airlines and then to passengers,” the report reads.<\/p>\n
In January 2020, Vancouver International Airport increased its airport improvement fee from $20 to $25 per ticket to upgrade airport facilities. The Calgary International Airport Authority says revenue from the airport improvement fee is used to fund improvements and expansion projects at the airport.<\/p>\n
The MEI report said Calgary International Airport pays the government a quarter of its revenue from AIF fees, while at Vancouver International Airport, the ratio is as high as one-third. The report uses flights between Montreal and Toronto as an example. Passengers pay an airport improvement fee of $77, of which $25 (about one-third) is equivalent to the rent paid by the airport to the government.<\/p>\n
Airports are expected to pay a record $490 million in rent to the federal government in 2024, up $75.6 million from the previous year and a 68 per cent jump from $290 million a decade earlier.<\/p>\n","protected":false},"excerpt":{"rendered":"