Canada one of most expensive countries to fly: study

CTV News Channel: Sky-high cost of flights Aviation expert Karl Moore explains why it is so expensive to fly within Canada.

If you’ve been lured by a bargain airfare only to be shocked by the final cost when you book, it may only anger you to find out Canada is among the most expensive countries to fly to and from.

A recent study shows that in 2015 Canada was the eighth-most expensive jurisdiction out of 138 countries when it comes to taxes and fees attached to airline tickets. Those charges are levied on airports, which then pass them on to travellers.

A Senate report conducted in 2012 compared the cost of flying in Canada and the United States. It found that a ticket from Toronto to Orlando, Fla., on a Canadian airline had a base fare of $118. Of the final cost of $207, 43 per cent was taxes and fees.

A flight between Buffalo and Orlando was found to come in at $145, with 15 per cent of that in taxes and fees.

Airports say a big part of the problem is the federal airport system which means the land under the nation’s airports is Crown land but the airport operations are leased to private, non-profit companies.

“One of the biggest expenses that we have is we pay ground lease or rent, back to the government of Canada,” said Heather Hamilton at Edmonton International Airport.

Airport authorities paid nearly $313 million in payments, which accounts for up to 12 per cent of an airport’s revenue. For instance, the Montreal Airport Authority paid $48 million in 2014.

“That rent payment is the difference between running at a profit and running at a loss,” said Hamilton in Edmonton. “We were at $3 million in the red last year. That’s after an $18-million payment to the federal government.”

A study by the Montreal Economic Institute concluded that airports should be privatized to end the rent payments. That would free airports to make investments, lower the cost of flights to consumers and increase demand and service for air travellers, the report said.

"Replacing the current system of excessive rents based on a percentage of gross revenues with a tax on companies' profits would encourage airports to develop their infrastructure more and to reduce the fees charged to carriers and consumers," argues Alexandre Moreau, a public policy analyst at the Montreal Economic Institute and author of the report.

He says the higher prices to fly in Canada reduce demand for flights, since some travellers cross the border to fly and others simply choose not to fly at all.

With a report from CTV Edmonton