Group That Represents Airlines Slams High Taxes in Canada: IATA Head Slams Canada's High Taxes

By Rakobowchuk, Peter | The Canadian Press, March 6, 2012 | Go to article overview

Group That Represents Airlines Slams High Taxes in Canada: IATA Head Slams Canada's High Taxes


Rakobowchuk, Peter, The Canadian Press


MONTREAL - The head of the association that represents most of the world's air carriers has slammed the high taxes the Canadian government imposes on its airline industry.

The advantages that Canada does have "cannot compensate for government policies that treat aviation like a cash cow, instead of a powerful draught horse," Tony Tyler, CEO of the International Air Transport Association, said Tuesday.

Tyler used a speech to an international-relations group to call on policy-makers to improve the competitiveness of the aviation sector -- including reducing the heavy tax burden.

Aside from Crown rents, airports also pay hundreds of millions in what he said are tantamount to ''municipal taxes." Tyler said that, for an airport like Toronto's Pearson International, that's $25 million a year in such taxes.

He added that Canada also has some of the highest security fees in the world -- "roughly three to 10 times the fees charged passengers in the U.S., depending on the destination."

When asked to comment, Transport Canada defended itself. It zeroed in specifically on the issue of airport rent.

Spokesman Patrick Charette said such rent, "represents a fair return to taxpayers for the economic opportunity provided to airport authorities to manage airport operations." He added that airport rent represents less than one per cent of the cost of a ticket and is not likely to be a key factor in a traveller's decision to choose a U.S. airport over a Canadian one.

But Tyler wasn't entirely negative about Canada, saying it is well positioned to use aviation as a catalyst for growth.

He pointed to a report from the World Economic Forum which ranked Canada first in the world for the quality of its air-transport infrastructure.

Tyler also mentioned that the aviation sector is a major contributor to the country's economy. An IATA-commissioned study said aviation generates $33.3 billion -- or just over two per cent -- of Canada's GDP and supports 401,000 jobs.

"That's impressive, but aviation could contribute more if the government took a more strategic approach," Tyler said.

Tyler, who spent many years in Asia, said that with a population of just seven million, Hong Kong supports 250,000 aviation-related jobs.

"That's more than half those in Canada, although Canada's population is five times as large as Hong Kong's," he said.

But Tyler said he's optimistic about the future because there are signs policy-makers may be reassessing aviation's role. …

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