Tom and I are going to Carnaval de Quebec City at the end of January. I was sticker shocked while trying to book flights, however.
We are flying from Calgary to Montreal, and then taking a bus from Montreal to Quebec City, because it would have doubled our cost to fly from Montreal (where we have to layover, since there are no direct flights) to Quebec City.
Our friend Woody is flying direct from Denver to Quebec City for less than it costs us to fly to Montreal. Quelle absurdité!
When I moaned and groaned about the cost, Tom explained that airport fees for airlines are astronomical in Canada, thus making intra-Canada air travel super expensive, and prohibiting any cut-rate airlines from operating in Canada. No US cut-rate airlines will pay the fees, hence…no cut rates. Our choices inside Canada are Air Canada and West Jet. Prior to the arrival of West Jet, Canadians had only one choice of airline within the country, Air Canada–which kept travel costs sky-high. I don’t think they’ve decreased much since West Jet, but at least we have a “choice.”
Once we had bought our tickets, we were informed that we had to buy seats on the plane. What the heck happens if you don’t buy a seat? Do you have to stand in the back by the bathrooms the entire flight? You buy a ticket, and then you buy a seat, and then you pay for luggage. Oh, and if you want to eat, you can buy a meal (otherwise you make due with a cup of juice or water or soda and a packet of four tiny pretzels). Welcome to Air Canada!
According to the Globe and Mail, for the past decade, report after report has trumpeted the strategic importance of the airline sector and its competitiveness, and politicians have generally talked the same talk. But they haven’t walked the walk, and things have changed very little.
The tax burden imposed on Canadian airports remains among the highest in the world. In 2015, Canada was ranked 130th out of 138 countries in this regard, according to the World Economic Forum’s Travel And Tourism Competitiveness Report. The set of fees, charges, and regulations that applies to airports in turn affects the competitiveness of Canadian airlines that must deal with higher landing fees and an exodus of Canadians looking for more affordable tickets south of the border.
Canada is in a particular situation, since the federal government owns most of the 26 largest airports in the country that make up the National Airport System (NAS). As of 1992, the government began to transfer the management of these airports to private, non-profit companies using long-term leases.
Although the largest of these no longer receive any government subsidies, they are still saddled with substantial rents to pay. For the 2014-2015 fiscal year, Transport Canada collected $313-million from NAS airports. This rent can represent up to 12 per cent of airports’ revenues.
Given that 75 per cent of Canadians live within 90 minutes of the U.S. border, Canadian airports face stiff competition from U.S. airports, which generally offer more attractive prices because of considerably lower taxes and fees.
It is estimated that each year, about five million Canadians choose to cross the border to take a trip from a U.S. airport. This passenger exodus entails economic losses of $2.4-billion a year and costs the country nearly 9,000 jobs.
In order to ensure the competitiveness of the airline sector in Canada, the government should eliminate airport rents and cede ownership of airports to private investors, as recommended by the standing Senate committee on transport and communications in 2012. While such a measure would deprive Ottawa of revenue in the short term, this shortfall would be compensated by new revenue from increased air traffic and the economic activity that goes with it.
There’s no good reason why Canadian airports and airlines cannot compete successfully in the global marketplace, to the benefit of Canadian travelers everywhere. The federal government should lighten the fiscal burdens that keep them from soaring as high as they can go.
Canada, we would travel so much more, and spend so many more tourist dollars!, if you just made the costs reasonable. Imagine paying one cost (economy) to fly 2,238 miles from Calgary to Montreal, and then doubling the cost just to fly the 158 miles to Quebec City … That’s so diculous, it’s reediculous!