Tbnewswatch Local News
Monday June 29 2015
11:30 PM EDT
2014-07-15 at 14:42

‘Hugely disappointing’ Airport CEO sounds off on jet fuel tax hike

Thunder Bay International Airport Authority president and CEO Scott McFadden
Matt Vis, tbnewswatch.com
Thunder Bay International Airport Authority president and CEO Scott McFadden
By Matt Vis, tbnewswatch.com

THUNDER BAY – Increases to the provincial jet fuel tax don’t sit well with the president and CEO of the Thunder Bay International Airport Authority

“It’s hugely disappointing, especially given the industry has tried very hard to make the case that air transportation is an economic generator,” Scott McFadden said Tuesday.

“The Thunder Bay airport and associated air transport business in Thunder Bay is worth over $500 million to the local economy and this kind of de-stimulating tax is a step in the wrong direction.”

The Liberal’s budget, which was unveiled at Queen’s Park on Monday, includes hiking the aviation fuel tax from the current rate of 2.7 cents per litre up to 6.7 cents per litre over the next four years.

McFadden said it would be difficult to predict exactly how much of the tax increase will be passed down to passengers and how sizeable the impact would be on fares.

What he can predict is that the spin-off effects will extend beyond just passengers on commercial flights.

“There is no question fuel is the biggest single cost line item on any air operator,” he said, adding the trickle down of costs could include higher shipping rates.

“This will increase the costs for everybody.”

Instead, McFadden would rather Ontario follow the lead of British Columbia, after that province removed all taxes on jet fuel.

Last week the airport celebrated its 20th anniversary and highlighted attracting a new American carrier to replace United Airlines as a significant target for growth.

The increased taxes is just one other obstacle to overcome to try to appeal to outside airlines while competing against markets, such as Duluth, with much favourable conditions.

A trend is developing across the industry where Canadian passengers are driving south to fly out of American airports.

“It’s just one more reason why it would make more economic sense for air operators to operate out of U.S. border airports rather than crossing the border into Canada,” McFadden said.

“Canada is the only significant nation in the world that uses the air transportation sector as a cash cow. Every other significant country recognizes the economic value of a vibrant air transportation system.”

Once direct flights from Canadian airports to international destinations might begin to include stops in American airports to circumvent the extra costs, he added.


Click here to submit a letter to the editor.

Click here to report a typo or error



We've improved our comment system.
jonthunder says:
Another tax and spend move by the incompetent Ontario government. Moves such as this unjustified tax grab continue to destroy the Ontario economy and future. Our Local MP's should tell us how this is good for our economy and future? Clearly the industry is saying it is a stupid decision.
7/16/2014 2:41:47 AM
Truthandjustice says:
This is exactly what I have been saying since early May when the liberals brought forward their budget. Nobody minds increases in taxes and fees unless it affects them directly. Typical comments like " increase taxes on the "rich" they can afford it"; it's ok as it doesn't affect me. Increase I taxes and fees ultimately affects everyone. Increasing taxes on fuel is another hidden tax that ultimately affects the general population. It doesn't matter if you are a liberal,NDP or Conservative. We have a major spending problem in this province that we collectively need to address. Significant changes in the makeup of the working population needs to occur by transferring more to the private sector. Not easy to do and that ultimately involves pain and time to do so. Focus on priorities in the province and cutback on the "wants". People need to take more personal responsibility for their own lives and stop relying on the government to assist them (for example all day kindergarten etc)
7/15/2014 6:33:35 PM
Marak says:
Just the start of the Liberal$ tax grab bucket (or maybe it should be a dump truck?)... grab your ankles and assume the crash position folks, it's gonna be a rough ride for the next 4 years!!!
7/15/2014 6:32:28 PM
Watchmaker says:
Any comments Bill and Mike?
7/15/2014 5:56:22 PM
progress now says:
Everything is an economic generator. And everything costs money.

With apologies to Robert Frost:

We love to live in Thunder Bay;
But we have legacies built without our say;
And years to go before we pay;
And years to go before we pay.

Our city has an open chequebook for the waterfront and demands provincial and federal money to boot. Where does the money come from? Trees?

Of course taxes will raise provincially and just wait till you see your municipal taxes. And guess what, no one will factor in the de-stimulation from these taxes into the prayed for economic boom these pet projects will allegedly provide.

We have all heard the fantasy - this is the reality.

7/15/2014 5:45:00 PM
S Duncan says:
I wonder how Mr. McFadden voted in the provincial election?

The other thing liberals (and apparently Mr. McFadden) don't seem to realize is that companys don't pay taxes, their customers do.

The airlines just download those costs to the end users, whether it be freight, luggage surcharges, or little Billy flying to see his grandparents in some other city, it will all cost them more.

The NDP never understood that reality, and the wynnie government doesn't either. All tax increases destroy economies.

Liberals, socialists, red tories, and our city council would be served well if they took a minute to learn about the "laffer curve" Its the basis for why people will only stand to be taxed so much before they turn to other methods.


there is a point where people refuse to pay and the liberals have breeched that barrier.
7/15/2014 3:47:30 PM
Tachyion says:
You didn't expect the Fiberals to do anything intelligent, did you?
7/15/2014 3:19:13 PM
Jack Frost says:
Blatant Government GREED !!!

“Canada is the only significant nation in the world that uses the air transportation sector as a cash cow."
7/15/2014 3:13:36 PM
Eastender says:
The first of many tax grabs by the spender liberals. You either cut spending, (think Hudak), or you raise taxes. Wait till you get that increase to the health tax. It's coming!
7/17/2014 10:19:57 AM
Comments for this story are semi-moderated. Read our comment guideline.

Add a new comment.
You must log in to add comments.
Create a new account
Log In