Rick Nicholls: Aviation fuel tax hike sends airline costs soaring

Chatham-Kent Essex M.P.P. Rick Nicholls.

(Chatham) – Chatham-Kent-Essex MPP Rick Nicholls is concerned that an aviation fuel tax hike will hurt Ontario’s airline industry from Pearson International to the Chatham-Kent Municipal Airport.

Ontario already has one of the highest taxes on aviation fuel amongst neighbouring provinces and adjacent American states. As part of the budget, aviation fuel tax will increase by nearly 150% per liter over the next three years.

“Being close to the border, even more people will fly out of Detroit to save money. A tax increase is just going to encourage more people to cross the border to fly,” Nicholls said.

The impact of this tax increase goes beyond larger airports in Toronto and Windsor.

“Small airports will also be hurt by this, perhaps even more than large airports.  At the Chatham-Kent Municipal Airport pleasure pilots and students will be forced to pay more,” Nicholls stated. “This added tax will also affect the cost to fly goods on cargo planes, impacting the end consumer.”

Testifying at budget committee hearings, Marc-Andre O’Rourke, executive director of the National Airlines Council of Canada, told committee members the harmful effect an aviation fuel tax hike could have on Ontario. British Columbia eliminated its fuel tax on international flights to attract new services and jobs in 2012. Since then, 22 airlines added Vancouver flights.

“This tax increase could also mean a loss of more than 2,000 jobs and 400,000 air travelers in Ontario. By 2030, the catalytic effect of this four-cent increase could cost the province up to $1 billion in lost GDP,” O’Rourke told the committee.