Canadian Air Passengers to Pay Government 33% More in Security Fees

A file photo of an employee performing security checks of passengers and their carry-on luggage at Vancouver International Airport in Richmond, B.C.. Jonathan Hayward/The Canadian Press

To gain revenue of about $300 million, the federal government will collect 33 percent more in safety fees from airline travellers.

The rise in fees is part of the 2023 budget plan, and it includes an increase from $15 to $20 on domestic flights and $26 to $34 on international flights, according to Blacklock’s Reporter.

While the fee 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.

National Airlines Council (NAC) brought up the same issue at a pre-budget consultation in 2019: “While it was notionally intended to fund the operation of the new security screening body, between 2010 and 2016, the Air Travellers’ Security Charge (ATSC) has generated a windfall for the Government of Canada of $547.5 million.”

“Another tax added to an airline ticket is more reason for Canadian travellers to drive across the border where they can fly less expensively from U.S. airports,” The NAC quoted Barry Prentice, professor of supply chain management at the University of Manitoba.

The “export of air passengers” is a big problem, Prentice said, and it reduces the spending at Canadian airports that could be taxed. “It is by no means obvious that the federal treasury is coming out ahead,” Prentice said.

Cabinet’s 2023 budget document, “A Made In Canada Plan,” states, “Budget 2023 proposes to increase ATSC rates, which will support the financing of air security costs.” It shows revenues growing from $279 million next year up to $333 million in 2027. The total revenue expected for four years is about $1.2 billion.