Canadian Air Passengers to Pay Additional $264 Million in Security Fees Next Year: PBO

People line up before entering the security zone at Pearson International Airport in Toronto on Aug. 5, 2022. (Nathan Denette/The Canadian Press)

Ottawa’s proposal to increase air travel security fees by 33 percent will cost passengers more than a quarter billion dollars next year, according to estimates from a report by the Parliamentary Budget Office (PBO).

Budget 2023 released by the federal government in March proposed to increase the Air Travellers Security Charge (ATSC) by 32.85 percent, effective May 1.

This means Canadian air passengers will see the flat fee levied on them at the time of ticket purchase increase from about $15 to $20 for a round trip domestic flight, from $13 to $17 for a U.S. flight, and from $26 to $34 for an international flight, as estimated by the PBO report, titled “Increasing the Air Travellers Security Charge.”

Published on May 9, the report calculated that the higher fees will generate an additional $264 million in fiscal year 2024–25. The increase is on top of revenues that in pre-pandemic years generated $823 million in 2018 and $872 million in 2019, according to an Inquiry of Ministry document tabled in the House of Commons on May 8, reviewed by Blacklock’s Reporter.

Travellers at airports across Canada have experienced unprecedented delays and cancellations since last spring. The problems were exacerbated by a resurgence in air travel after certain COVID-19 travel restrictions were lifted that year amid labour shortages at airports and airlines.

The Liberals’ budget says the fee hike is to increase the service level of the Canadian Air Transport Security Authority, “improve screening wait times, and strengthen security measures at airports.”

While the ATSC was introduced in 2002 following the 9/11 attacks to increase security, it has provided the Department of Transport with a profit of some 8 percent above and beyond security costs, according to figures reviewed by Blacklock’s.

$1.2 Billion

The PBO projected that the ATSC will grow to $302 million in 2025–26, followed by $317 million in 2026–27, and reach its peak at 332 million in 2027–28, generating about $1.2 billion in revenues to fund the Canadian air travel security system over four fiscal years.

Actual costs of airport security, however, averaged about 12 percent less than fee revenue, Blacklock’s said of its findings.

A 2015 statutory review of the Canada Transportation Act recommended that fees be charged at cost.

“Canadian travellers already pay one of the highest aviation security fees in the world,” said the review report, titled “Pathways: Connecting Canada’s Transportation System to the World.”

It recommended Parliament to charge no more than the actual costs of air passengers and baggage screening by “enacting so-called light-touch regulations covering fees and charges to protect users and confer oversight on the Canadian Transportation Agency.”

The 2015 report also noted security fees at the time surpassed the actual cost of security screening.

“Security charges of up to $25 per passenger have exceeded the cost of security screening by an average of 18 percent every year since 2010 and fail to recognize the national interest in a secure system,” it said.

Peter Wilson and Tara MacIsaac contributed to this report.