• CTF Warns New Air Travellers Security Charge will Become Cash Cow for Ottawa
• Taxpayers Federation Lays Out Five Policy Questions for Government to Answer

OTTAWA: The Canadian Taxpayers Federation (CTF) today continued its reaction to Monday's federal budget. Specifically, the CTF sounded the alarm bell about the new Air Travellers Security Charge that will add a minimum cost of $12 for one-way domestic flights and up to $48 for round-trip international tickets.

Another EI Slush Fund
"It is becoming evident that the primary motivation for this charge is not about air safety at all, it is about adding a minimum of $2.2 billion - including GST - in taxes to the consolidated general revenue fund over the next five years," stated CTF federal director Walter Robinson. "It's EI slush fund surpluses all over again: the AG could get a head start and right her scathing report now."

The charge, to be borne by passengers, will be collected by the federal government, not airport authorities. The budget states the money will be used to purchase high-tech detection equipment, fund airport security infrastructure improvements and train and equip pre-boarding passenger screening personnel.

"Ottawa already collects - at a minimum - $230 million in lease payments from Canada's eight busiest airports (Vancouver, Edmonton, Calgary, Winnipeg, Toronto, Ottawa, Montreal [Mirabel and Dorval] and Halifax) with no accounting for what this money funds," added Robinson. "And now it plans to unilaterally impose a $12 one-way fee on top of this amount which runs contrary to three months of negotiations between the federal government and airport authorities where a fee in the range of $2.50 and $5.00 was the main subject of discussion."

The CTF has challenged the Transport Minister (David Collenette) and the Finance Minister (Paul Martin) to answer five key policy questions before implementing this new tax.

Five Key Policy Questions

1. Where does the government draw the line between public safety and private benefit in arriving at this user fee structure

"Costs for border crossing improvements and fast-tracking frequent fliers through customs and airports are being spread across all taxpayers while security costs at airports are to be borne solely by the traveling public, there seems to be a great deal of inconsistency in policy here," noted Robinson. "If terrorism is directed against the state, why doesn't the state play a greater role in its anti-terrorism response. Where is the line drawn."


2. How will this charge improve airline competition and encourage growth in domestic and international traffic from and to Canadian destinations

"Forty-eight dollars on a round-trip, full fare across the continent is relatively minimal in one's purchase decision, however, adding $24 to a discount carrier's short-haul fee seems exorbitant," observed Robinson. "Ottawa's misguided airline policy which focuses on carriers instead of a competitive environment for consumers has already effectively destroyed competition in Canada - on the surface, this doesn't seem to help matters much."


3. Why does Canada need a new federal authority to manage the security issue at all Why not just set stricter security regulations and standards for airport authorities and airlines and allow market flexibility and innovation to determine the funding structure to meet these new requirements

"This authority will be primarily directed and controlled by the federal government. Bigger government is not the answer to security and public safety issues, properly crafted policy is the more appropriate response," said Robinson.


4. What accountability and reporting mechanisms will be in place to ensure that all monies raised go directly to aviation security measures

"Right now the answer to this question is that there are none," stated Robinson. "Just like EI taxes, Ottawa spends this money as is sees fit and we know, beyond a shadow of a doubt, that the AG just last week documented billions of dollars in waste and mismanagement."


5. What assurances do Canadians have that this tax will not become a permanent revenue source for the government

"If the changes that these revenues are supposed to fund can be implemented over five years, why doesn't the government announce a sunset clause when the tax will end " This tax is like an onion: the more you peel, the more it stinks. And taxpayers can only shed tears," concluded Robinson.