Here’s why your plane ticket is so expensive

While the strike by WestJet mechanics lasted only a few days, many Canadian air travellers faced long delays and cancelled flights. More broadly, according to the Canadian Transportation Agency, customer complaints have hit an all-time high.

Yet many dissatisfied travellers likely don’t realize that Ottawa heavily contributes to their frustrations. Let’s look at the various ways federal policies and laws make air travel worse in Canada.

First, federal laws insulate Canada’s airlines from competition. Foreign airlines are subject to highly restrictive “cabotage” laws which, for example, dictate that foreign airlines cannot operate routes between Canadian cities. At the same time, foreign investors are forbidden from owning more than 49 per cent of Canadian airlines. By restricting international participation in the Canadian air travel market, these laws both deprive Canadian consumers of choice and insulate incumbent airlines from competition. When consumers have more choice, incumbents have a greater incentive to improve performance to keep pace with their competitors.

Second, a wide array of taxes and fees heavily influence the cost of airline tickets in Canada. Airport improvement fees, for example, average $32.20 per departing passenger at airports in Canada’s 10 largest markets. In contrast, airport improvement fees in the United States cannot exceed $4.50. And last year the Trudeau government increased the “air travellers security charge” by 32.85 per cent—this fee, which now ranges from $9.94 to $34.82 per flight, is higher in Canada than the U.S. across all flight categories. On the tax front, in addition to fuel taxes including the federal carbon tax, the federal excise tax on unleaded aviation gasoline in Canada is 10 cents per litre compared to 6.9 cents per litre in the U.S. And the U.S., unlike Canada, does not apply sales taxes to aviation fuel.

Third, air travel is a heavily regulated sector. Federal legislation generates thousands of provisions airlines must follow to operate legally in Canada. Of course, some regulation is necessary to ensure passenger safety, but each regulation adds administrative and compliance costs, which ultimately affect ticket prices. To lower the cost of air travel, the federal government should reduce the regulatory burden while maintaining safety standards.

Lastly, the ownership model of Canada’s airports results in a yearly transfer of rent to the federal government. The federal government used to own Canada’s national system of airports until they were transferred to private not-for-profit corporations in the early 1990s. However, these airports must still pay rent to the federal government—nearly half a billion dollars annually, according to the Canada Airports Council. As with the other examples listed above, these costs are ultimately passed on to consumers in the form of higher ticket prices.

While a precise estimate is difficult to obtain, various government policies, taxes and fees comprise a large share of the cost of each airline ticket sold in Canada. With complaints from travellers at all-time highs, the federal government should reduce the regulatory burden, increase competition, and lower fees and taxes. Policy reform for air travel in Canada is long overdue.

Authors:

Alex Whalen

Director, Atlantic Canada Prosperity, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Up Next

Estonia’s solution to Canada’s stagnating economic growth

Don't Miss

Ignore climate-obsessed propagandists and enjoy your summer

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Let’s Make Canada Great Again!

Censorship Industrial Complex / 5 hours ago

UNESCO launches course aimed at ‘training’ social media influencers to ‘report hate speech’

International / 8 hours ago

Afghan Evacuee Added to CIS National Security Vetting Failures Database

Business

Trudeau’s four-day trip to Europe racks up $71,000 food bill

Published on December 13, 2024

Todayville

From the Canadian Taxpayers Federation

By Ryan Thorpe

“It would have been cheaper for each member of the prime minister’s delegation to go to the Keg, order a prime rib steak, a Caesar salad, baked garlic shrimp and a bottle of pinot noir for every meal.”

Break out the DVD player and aerate a few bottles of the 2015 Riesling, because Prime Minister Justin Trudeau has an important work trip.

The food bill for Trudeau’s four-day trip to Italy and Switzerland this June cost more than $71,000, including at least $43,000 spent on airplane food alone, according to the records.

That works out to an average meal cost of $145. Add it up and the total food bill averaged more than $1,700 per member of the Canadian delegation.

To put that in context: the average Canadian family of four spends about $1,400 on food per month, according to Canada’s Food Price Report.

“The per person food bill for Trudeau and his entourage on this trip was more than the average Canadian family spends on groceries in a month,” said Franco Terrazzano, CTF Federal Director. “It would have been cheaper for each member of the prime minister’s delegation to go to the Keg, order a prime rib steak, a Caesar salad, baked garlic shrimp and a bottle of pinot noir for every meal.”

The total taxpayer tab for the four-day trip came to nearly $1 million, according to access-to-information records obtained by the Canadian Taxpayers Federation from the Department of National Defence and the Privy Council Office.

The cost of the trip could be even higher, as “some accommodations were covered by Global Affairs Canada,” according to the records.

Trudeau travelled to Apulia, Italy, and Lucerne, Switzerland, between June 13 and 16, 2024, to attend a G7 Summit and a Summit on Peace in Ukraine.

All told, the trip cost Canadian taxpayers at least $918,000, according to the records.

Prior to take-off, government bureaucrats purchased $812 worth of junk food from a grocery store – including Red Bull, pop (Pepsi, Coke, Sprite), chocolate bars (Kit Kats, Twix’s, Reece’s Pieces) and candy (Swedish Berries, Fuzzy Peaches).

Government bureaucrats also swung by a record store and purchased $102 worth of DVDs for the flight, according to the records.

The purchases included the first season of Wednesday, a supernatural coming-of-age TV show based on the Addams Family, Madame Web, a superhero film, the sci-fi thriller Chronicle, and Witness, a 1995 crime movie starring Harrison Ford.

During the flights, the passengers were served meals that would be at home on the menu of a fine dining restaurant, alongside four types of wine – a 2021 Chardonnay, a 2015 Riesling, a 2018 Baco Noir and a 2021 Merlot.

Meals included veal piccata Milanese with potato, buttered green peas and broccoli, and lamb ribs with whole grain mustard sauce, rice pilaf and sauteed spinach.

Other dinner options included cheese ravioli with rose sauce, roasted red peppers and parmesan cheese, grilled chicken with lemon caper sauce, mashed potatoes and glazed carrots, and beef stroganoff with buttered noodles and snow peas.

For dessert, passengers chose between raspberry cheesecake coulis, chocolate and pistachio cake and Swiss chocolate cake.

“I like Sydney Sweeney as much as the next guy, but maybe Trudeau could do some actual work or download a movie on Netflix the next time he flies, instead of billing taxpayers for a DVD copy of Madame Web,” Terrazzano said. “While he’s at it, maybe Trudeau could forgo the Swiss chocolate cake while Canadians back home are lining up at food banks in record numbers.”

Trudeau travelled with an entourage ranging from 36 to 41 people during the four-day trip, including two coordinators of digital and creative content, a videographer, and a photographer, according to the records.

This is far from the first time a short trip for Trudeau meant a big bill for taxpayers.

Trudeau’s six-day trip to the Indo-Pacific region in September 2023 included more than $223,000 spent on airplane food, according to records obtained by the CTF.

That entire trip came with a taxpayer tab of nearly $2 million.

In 2022, Stewart Wheeler, who was Canada’s chief of protocol at the time, told a Parliamentary committee the government would bring down the cost of international travel.

“We recognize that the system that we had in place was not delivering the kind of oversight and control that Canadian taxpayers deserve,” Wheeler said.

Wheeler’s comments came after Governor General Mary Simon spent $100,000 on inflight catering during a nine-day trip to the Middle East in March 2022.

“The government promised to bring the cost of international travel down, but taxpayers are still getting stuck with outrageous bills,” Terrazzano said. “The government needs to figure out how to fly overseas without spending more on food in a few days than four families spend on groceries in an entire year.”

Business

Why Government Can’t Build Broadband or Charging Stations… Or Anything!

Published on December 13, 2024

Todayville

From StosselTV

The government promised to expand broadband, build hundreds of thousands of EV chargers, and to bring back semiconductor jobs. They delivered delays, waste, and failure. Why? Because they spend your money, not their own.

After three years and $65 billion spent to expand broadband, not a single person has yet been connected.

Also, two years into Biden’s $7.5 billion EV charging stations initiative, which was supposed to build 500,000 stations, only seven have been built.

The CHIPS Act promised to bring semiconductor jobs back to America. But the money got tied up in DEI quotas, climate pledges, and union mandates.

When bureaucrats spend other people’s money, they have little incentive to spend it carefully. Our new video explains why government should leave building things to the private sector.

After 40+ years of reporting, I now understand the importance of limited government and personal freedom.

——————————————

Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people.

Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20.

Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year.

Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.

Links