The Government of British Columbia will eliminate the jet fuel tax levied on international flights operating out of B.C. airports starting April 1. The move follows up on a proposal first announced in September 2010. According to a government press release, the change is expected to save airlines $12 million in the next two years and will give B.C. greater trade access to foreign markets.
The switch, which is part of the government’s “Canada Starts Here – The B.C. Jobs Plan” and is estimated to create a large increase in jobs, is being celebrated by officials at the Vancouver International Airport. Larry Berg, the airport’s president and CEO, said in a statement that rescinding the tax will help bring new services and increased routings to the area. It will also level the competitive playing field.
“Aviation fuel tax relief … makes it easier for airports in B.C. to compete for international traffic with airports in other jurisdictions such as Alberta and Washington State that do not have this type of tax,” he said, adding that the government’s decision will only strengthen the changes that are already planned for the airport. “The additional flights we expect to attract to YVR by 2020 will enable B.C. companies to access more markets and customers as well as a wider base of suppliers, business partners and employees.”
George Petsikas, president of the National Airlines Council of Canada, echoed Berg’s sentiments. Petsikas added that, while this is a huge step for British Columbia, the federal government should address the tax as well.
“Despite facing fiscal challenges, the B.C. government has nevertheless demonstrated vision and leadership in recognizing the value of the aviation industry as an economic engine, facilitator of growth, and enabler of travel and tourism,” he said in a statement. “We strongly encourage other provinces and the federal government to follow their lead.”
According to a report published by the Ministry of Small Business and Revenue in February 2008, the government’s carbon tax began with a charge of 2.62 cents per liter of jet fuel in July of that year. This charge was to increase annually, hitting a per-liter charge of 7.87 cents on July 1. The per-liter taxes were based on a charge of $15 per tonne in 2009, which would have increased to $30 per tonne this year. According to the report, “the revenues from the carbon tax will be returned to taxpayers through reductions in other provincial taxes.”