A recent study took a deep dive into why Canadian domestic flights are so costly and found that the federal government’s current policies may be to blame.
The Montreal Economic Institute (MEI), an independent public policy think tank, published this study at the beginning of September saying high fees are the main problem for Canadians’ wallets when flying.
“Ottawa prefers to treat our airports as cash cows, rather than the essential transportation infrastructure that they are,” said Gabriel Giguère, public policy analyst and author of the study.
“These taxes have a direct effect on the high cost of domestic travel in this country.”
According to Giguère’s study, the three main factors that are to blame for the high cost of domestic travel are airport rental costs, security fees and airplane fuel taxes.
For the rent that airports pay the federal government, the 2022-23 fiscal year saw prices exceed pre-pandemic peaks with a total of $419 billion.
The MEI says that over the past 10 years, these rent costs have gone up by 42.5%. However, to contrast this increase, in BC average residential rent has gone up by around 110%.
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In terms of security fees, as of May 1st, 2024, these fees are soon to increase to $9.94 for domestic flights and $34.42 for international. In comparison, the study claims that Canada’s American neighbours pay only $15.30 CAD.
Fuel taxes are the third main reason why costs are rising with the current tax set at four cents per litre, while in the United States the tax is set at only $1.55 CAD per litre.
“When you add up all of these fees charged by the federal government, you quickly realize that a substantial portion of the price of a plane ticket is taxes,” explained Giguère.
“Whether a ticket is bought for a vacation or to reach our remote regions, these taxes have a negative effect on families’ budgets.”
Right now the average flight from Victoria to Toronto is around $460, while a flight nearly the same distance to Detroit from Victoria costs approximately $910.
