ACTA Slams Proposed Aviation Fuel Tax Increase

ACTA has come out against a proposed Ontario government proposal to increase the tax rate on aviation fuel by one cent per litre each year for four years, effective the day after the amendment receives Royal Assent. Subsequent rate increases of one cent per litre in 2015, 2016 and 2017 would be effective April 1 of each respective year. Upon full implementation, the tax rate would be 6.7 cents per litre.

“This increase in fuel tax has a direct negative impact to the travel and tourism sector and we must show our distaste and make it clear that we are serious about this issue and that it is not something we can simply let ‘go away,'” said ACTA president David McCaig.

When the initial budget was announced in April, ACTA joined key industry leaders to form the Coalition For A Competitive Ontario which includes 23 of the most influential trade associations and airlines. The coalition commissioned an economic impact study by Prof Fed Lazar of the Schulich School of Business at York University which showed direct, economic consequences to increasing the aviation fuel tax in Ontario. The study showed that by 2017 we would see a decrease in the provincial GDP of between $67 – $97 million resulting in a decrease in employment across the province of between 1,991 to 2,907 full-time jobs. Furthermore, the tax increase would negatively affect Ontario’s vital travel and trade sector by driving away 292,700 to 407,800 air travellers. A reduction in productivity would also result in a further decrease in Ontario’s GDP that by 2030, could be $323 million to $1.0 billion lower, with corresponding negative impacts for employment.

The coalition continues to prepare a strategy.

McCaig added, “We believe it is critical to reiterate our position over the next few weeks, months and years. There is an opportunity for outreach and education – and hopefully an eventual repeal or suspension of further increases.

“We believe we are part of an impressive coalition and count on your support. We are asking you to take an interest in this matter and write to your local MPP,” concluded McCaig.

ACTA members can contact the head office in Mississauga, Ont. if assistance in connecting with their MPP is required.