A study commissioned by the National Airlines Council of Canada (NACC) says Canada's four largest airlines could contribute significantly more to the national economy if the federal government modified its aviation policies.
The reports says the airlines generate as much as $50 billion a year in direct and indirect benefits for the Canadian economy but suggests that the elimination of certain industry-specific taxes and other charges could result in additional economic output of between $869 million and $3.3 billion.
"The air transport industry, led by the members of NACC, is a key sector in spurring productivity growth," wrote the study's author, Fred Lazar of the Schulich School of Business at York University.
"Consequently, there are sound economic and policy reasons for ensuring that the air transport industry thrives in Canada and that Canadian carriers succeed in the North American and international markets. Changing the policy course from the current one where the air transport industry is viewed strictly from a fiscal position, to one where it is recognized as a key contributor to productivity growth requires cutting the costs faced by this industry."
The study recommends that the federal government eliminate ground rents for Canadian airports, the Air Transport Security Charge and the federal excise tax on jet fuel. It suggests that these measures alone could increase traffic by more than 2 million passengers annually.
"At a time when the government is looking to stimulate the economy, create jobs and spur growth, boosting the aviation sector is a way to achieve all three while also making it easier for Canadians to travel," said NACC President George Petsikas. "Airlines and airports in Canada must be treated by government policy as strategic partners in our country's long term economic development and global competitiveness."
Other findings from the report, titled The Economic Impacts of the Member Carriers of the National Airlines Council of Canada, include:
- NACC members carried more than 48 million passengers and directly employed almost 40,000 people in 2009. Total revenues of the four airlines exceeded $14 billion, with expenditures of just under $11 billion. Their estimated total economic output impact was $19.6 billion, and the total number of jobs created by the NACC members was at least 84,800.
- Taking into account important secondary impacts, the potential tourism-induced effects of the NACC members might have contributed an additional total economic output of $29 billion in 2009.
- The air transport sector plays an important role in facilitating trade, a key driver of the Canadian economy. In 2009, the total value of exports and imports shipped by air between Canada and the rest of the world was $94 billion.
- During the past 10 years, the federal government has collected directly and indirectly almost $6.9 billion from the air transport industry in Canada.
The NACC is a trade association founded by Canada's largest commercial airlines: Air Canada, Air Transat, Jazz Air LP and WestJet.
