Federal fees on airfare hitting passengers in the pocket, report finds

Canada’s federal regulations are behind the high cost of domestic air fares, a new report says. Excessive fees and taxes on airlines and airports are being passed down to travellers and making ticket prices less competitive, according to a Montreal Economic Institute study. “Ottawa prefers to treat our airports as cash cows, rather than the essential transportation infrastructure that they are,” said Gabriel Giguère, the author of the new study. “These taxes have a direct effect on the high cost of domestic travel in this country.” Using a roundtrip flight from Montreal to Vancouver during Spring Break 2024 as an example, Giguère estimated taxes and fees would make up more than a third of the final ticket price. While Porter Airlines charges $332 for the flight if booked today, the airport improvement fee of $102 plus $14.24 security fee and subsequent sales tax would equal to $180, bringing the final price up to $512. According to the report, rental fees imposed on airports are a major reason ticket prices are so high. “For the 2022-2023 fiscal year, the rents paid to the federal government amounted to $419m, an increase of 42.5% in just 10 years,” the report says. Toronto Pearson and Montréal-Trudeau, two of Canada’s busiest airports, accounted for more than half of the rent collected in 2022. This amounts to about 12% of the two airports’ total revenue, according to MEI. “Compared to the billions of dollars it collects in rent, the federal government invests little, if anything, in maintaining airport infrastructure,” the report says.<br/>