An access-to-information memo from the federal Finance Department, dated May 9, 2023, shows that the ATSC increase will bring in $1.248 billion of revenues from 2024 to 2028, according to Blacklock’s Reporter.
Under the changes coming May 1, the ATSC will jump from $7.48 to $9.94 for a one-way domestic flight, and from $14.96 to $19.87 for a round-trip domestic flight.
For a transborder flight, the fee will jump from $12.71 to $16.89, and for an international flight, it will jump from $25.91 to $34.42.
The memo says the fee provides revenues to offset the costs associated with the security screening of air passengers and their baggage.
The airline industry did not appear to be happy with the increases when they were announced.
“Third-party fees and charges make the cost of air travel in Canada more expensive than most other countries, particularly the United States,” said the submission.
“Third-party fees represent a competitive disadvantage to Canadian carriers and reduce access to air travel for Canadians, given that many foreign and domestic air carriers will not choose to serve regional markets due to higher operating costs.”
It added, “U.S. carriers have already reduced flights to non-hub Canadian markets by 42% due to the high fees and costs associated with the Canadian market.”
‘A Direct Carry-Over to the Passenger’
Jeff Morrison, president of the NACC, told the Senate Committee on National Finance on May 30, 2023, that it’s unlikely the fee increase “would lead to better service for both the airlines and the passengers.”“I cannot say that. For example, with the increase in the air security charge, that is money that goes into general revenue,” Mr. Morrison said.
“The 30% [ATSC] increase is a direct carry-over to the passenger. In other words, that charge gets automatically added to the ticket price. In fact, when you pay for an airline ticket, you can see that carve-out and what that fare is. Airlines don’t have a say in that,” he noted.
“When you have this constant increase of third-party fees and charges, including those by government departments that they do not have in the United States, you’re absolutely correct that the cost of [air] travel in Canada is going to be higher than it would be south of the border.”
The NACC’s budget submission said fees should be reviewed and benchmarked with foreign jurisdictions, with the goal of reducing the costs to airline passengers to travel to, from, and within Canada.
The ATSC was first introduced in 2002, after the 9/11 terrorist attacks, as a way to help finance airport security upgrades.
