If you’re looking to escape Ontario’s long winter, it just got a bit more expensive.
As of 12:01 a.m., April 1st, 2015, the tax rate on jet fuel in Ontario increased from 3.7
cents to 4.7 cents per litre, making it the highest in the country. This new tax on travel is not an April Fools’ joke, it’s actually the second of four annual hikes to the cost of jet fuel. By 2017 the tax is scheduled to grow to 6.7 cents per liter, which is a 148 per cent increase.
While the price of fuel is falling, much of the savings are being eaten up by these tax increases instead of being passed on to travellers.
The cost of travelling out of Ontario is already prohibitively expensive for many families. In 2013, the World Economic Forum ranked Canada
136 out of 140 countries for the competitiveness of airline ticket taxes and airport charges.
This second tax hike for travellers will drive more Ontarians to airports south of the border where fees and taxes are lower. For example, on one
discount travel website the cheapest nonstop flight from Toronto Pearson to Orlando this weekend is $978, compared to $642 out of Buffalo.
Buffalo Niagara International Airport already markets itself to Canadian travellers looking for savings. After Ontario’s announcement of the new aviation fuel tax hikes, the Buffalo airport began running an
electronic billboard along the Gardiner Expressway advertising “Buffalow fares,” and launched a
website aimed at attracting Canadians. Almost half of Buffalo’s
5.5 million passengers were Canadian in 2013, compared with only 26 per cent in 2006. Other airports are also taking advantage of Ontario’s lack of competitiveness. The tiny, single runway airport in Ogdensburg, New York is getting a
$17 millionrenovation in the hopes of attracting an additional
40,000 passengers from nearby Ottawa. This 10,000 person town is putting itself on the map thanks to Ontario’s misguided aviation policies.
An estimated
three million Ontarians already drive across the border looking for travel deals. With this new tax hike, the National Airlines Council of Canada estimates an
additional 292,700 to 407,800 air travellers will be driven away.
The Canadian Taxpayers Federation calculated the cost of the tax hikes for a vacationing family of four. A trip to Florida, Mexico or the Caribbean would have an average price increase of $31.79. For a trip to Asia or the Middle East, the increase would be $119.76. Families facing rising hydro bills and shrinking take home pay may be forced to choose between meeting daily expenses and a family vacation.
The direct, short-term negative consequences of increasing the aviation fuel tax is an estimated decrease in provincial GDP between
$67 and $97 million in 2017, and a resulting decrease in employment across the province between
1,991 and 2,907 full time jobs.
The motives of the Ontario government are clear. In order to tackle the enormous deficit and debt that has been accumulated over more than a decade of waste and mismanagement, the government is turning to the taxpayers for yet another revenue stream.
But financially squeezing Ontarians out of their hard earned money and vacations isn’t the right answer. Policies like this simply allow Kathleen Wynne to blow money on things like MaRS, cancelled gas plants, and the malfunctioning SAMS welfare system, all while leaving the people of the province poorer.
Christine Van Geyn, Ontario Director
