Reason for cautious optimism on Canadian air travel prices

Blog, Transportation, Steve Lafleur

The first step to addressing a problem is acknowledging that it exists. For those of us who are concerned about air travel prices in Canada, hearing Jim Flaherty admit that there is a problem was welcome news. But Flaherty didn’t just acknowledge that it is a problem — he also mentioned that Minister of Transportation Denis Lebel is working with airlines and airport authorities to come up with a solution.

Flaherty’s remarks were prompted by a Conference Board of Canada report that estimated 5 million Canadian cross the border annually to fly out of US airports to save an estimated 30% of ticket prices. A 2011 report from the Canadian Airports Council (CAC) claimed that this costs the Canadian economy $1.4 billion annually. The Conference Board Report recommended, among other things, eliminating the $270 million in ground rents airports pay annually to the federal government. A recent Senate report also urged the federal government to phase out ground rents. NDP MP Olivia Chow argued in favour of this measure, pointing out that the CAC estimated doing so would increase Canadian tax revenue by $240 million and create 11,000 by stemming the flow of Canadian travelers to US airports. The Conference Board estimates that the package of reforms they recommend could decrease the annual number of Canadians flying out of US border airports by 2 million.

The fact that the Minister of Finance and Minister of Transportation acknowledge the problem, and the Official Opposition is supportive of the Conference Board recommendations is encouraging. Building consensus around any policy change is difficult. Hopefully the Liberal Party of Canada can get behind this as well to help push these much needed reforms through. I`m cautiously optimistic with what I`ve heard thus far.