Ottawa - Roughly five million Canadians drive across the border to fly from US airports instead of using pricier Canadian airlines, according to a report published recently.
The growing trend is due to a number of factors, says the Conference Board of Canada study, warning that if these are not addressed it can lead to reduced flight frequencies at Canadian hubs, even higher travel costs and poorer service for all Canadians.
The report says fees and taxes in Canada contribute to the higher cost of travelling from Canadian airports, up to 40 percent of the difference in air fare in the US.
Higher fuel and labour costs, low carrier productivity and the rise in value of the Canadian dollar also make Canadian airlines less competitive than their US counterparts.
“Canadians love crossing the border for bargains, and increasingly their shopping list includes cheaper flights from American airports,” the report concluded.
It recognises that Canadian airports and navigational systems are, for the most part paid for by users, and have been recently upgraded and maintained, whereas in the US, user fees don’t cover these.
Also, US airports are in need of major upgrades and an increase in fees, subsidies, or both will be required in the near future in that country to pay for it.
The government is currently consulting airport authorities across Canada to stem the loss of passengers.
The report’s author Vijay Gill said: “Reducing taxes and fees or even changing how they are assessed and collected could make a difference.” Lower Canadian fees and taxes would reduce government receipts in the short term, but much of this loss could be recaptured through direct and indirect tax revenues generated by the additional traffic originating in Canada, he added. – Sapa-AFP