The NACC continues to voice its strong opposition to the Ontario Government’s budget proposal to phase in a four-cent-per-litre increase to the province’s aviation fuel tax over the next four years. Public policy leaders and the aviation community have long been making the case for the Government of Ontario to eliminate the fuel tax on international flights to level the playing field in the province.
Instead, to increase the aviation fuel tax by 148 per cent is extremely disappointing and inconsistent with the interests of Ontarians as it will hinder job creation, economic growth, trade and the development of Ontario’s vital travel and tourism sectors. The measure punishes consumers, makes Ontario a less attractive destination to invest and expand into, and exacerbates an already large competitiveness gap with U.S. airports.
A new report by Fred Lazar of the Schulich School of Business at York University finds that increasing the aviation fuel tax in Ontario by 148 per cent will directly cost the province between 1,991 and 2,907 full-time jobs and decrease provincial GDP between $67 and $97 million over the next four years. Furthermore, between 292,700 and 407,800 air travellers will be lost. A copy of Professor Lazar’s full report can be found here.
The NACC continues to urge the Ontario Government to pause in order to conduct a full study of the adverse economic impacts of the aviation fuel tax increase. This would include meaningful consultations with Ontario municipalities, consumer organizations, chambers of commerce, airports, tourism operators, and other affected parties before it is too late to reverse the damage to Ontario’s economy.
See our submissions to Ontario's Standing Committee on Finance and Economic Affairs.
