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IATA Highlights
Montreal’s Important Role In Global Aviation By Jim Douglas |
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March 12, 20122 - The International Air Transport
Association (IATA) called upon Canada’s policy makers to
take actions to improve the competitiveness of the
country’s aviation sector including reducing the heavy
tax burden.
IATA’s Director General and CEO Tony Tyler in an address
to the Montreal Council on Foreign Relations said
"Yet government policies including a high tax burden hamper aviation’s ability to serve as an even greater catalyst for economic growth and jobs creation.” |
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Tyler
compared Canada’s aviation sector with Australia’s, a
country with which Canada shares some characteristics in
terms of geography, resources, demographics and other areas.
According to country studies conducted on behalf of IATA by
Oxford
Economics:
Aviation
directly contributes 2.2% of GDP for Canada but 2.6% for
Australia.
If
catalytic benefits through tourism are included, GDP
contribution rises to 2.8% for Canada—and to 6.1% for Australia.
Canada’s
population is around 50% larger, but Australia has more air
travel: 78 million passengers travel to, from and within
Australia, compared to 71 million for Canada.
“There is
one statistic, however, where Canada wins hands down over
Australia: aviation’s contribution to taxes. It is about 19%
higher in Canada, excluding the impact of domestic taxes on
fuel. Were fuel to be included, the difference would be even
greater, since Canadian fuel taxes are about double the amount
for Australia,” said Tyler. “The Crown rent charged for Canada’s airport infrastructure is a CAD 250 million annual competitive disadvantage. The pain is not only felt by the Canadian air transport sector which suffers from passengers opting to start their journeys from US airports. Every business that relies on connectivity shares the burden. That is not all. The burden also includes Property in Lieu of Taxes and some of the highest security fees in the world—which can be up to ten times those charged in the US,” said Tyler. |
Despite these
competitive disadvantages, recent developments provide reason to be
optimistic that Canadian policy makers are starting to view aviation as
a strategic asset. “The announcement by the government of British
Columbia that it is proposing to do away with the provincial tax on
international jet fuel from next month is excellent news. In another
positive development, Transport Canada has initiated a stakeholder
consultation on key policies affecting the competitiveness of the
aviation industry. I urge the Minister of Transport, Infrastructure and
Communities Denis Lebel to include a look at the impact of aviation
taxes in this review. It is important that this consultation process
develops consensus on a coherent national aviation policy that supports
improved competitiveness in recognition of the catalytic impact of air
connectivity on economic growth and development,” said Tyler.
Taking a global
context, Tyler made special mention of the important role that Montreal
plays in the key areas of safety, security and environment.
Safety: “Aviation
safety is built on global standards. And these standards are built in
Montreal. Today IATA announced that in 2011, the global accident rate
for Western-built jets was the lowest in history. Last year 2.8 billion
people flew safely on 38 million flights. This amazing performance is a
testament to the strength and commitment to aviation safety by the
stakeholder community through global standards,” said Tyler. The
accident rate for Western-built jets was 0.37 hull losses per million
flights or one accident for every 2.7 million flights which represents a
61% improvement over the last decade.
Security: “A
Declaration on Aviation Security was unanimously agreed upon at the last
ICAO Assembly in 2010. Building on that commitment to cooperate to
improve global security, IATA has been working closely with ICAO,
Interpol and states to improve the airport checkpoint and eliminate the
long lines, unpacking, disrobing and intrusive searches that too often
characterize today’s checkpoint experience,” said Tyler.
IATA has proposed
a Checkpoint of the Future that combines differentiated screening
powered by passenger information that is already being collected for
immigration purposes with technology solutions that allow passengers to
walk through checkpoints without stopping or unpacking. The Checkpoint
of the Future already has support from major stakeholders such as the
European Commission, the Chinese Government, the US Department of
Homeland Security and Interpol.
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