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ATAC welcomes new Canada-US Open Skies agreement

The Air Transport Association of Canada today welcomed the signing of the expanded Open Skies agreement between Canada and the United States but called upon the Government of Canada to maximize the
opportunities for Canada by improving the competitiveness of Canadian air carriers.


September 18, 2007
By Carey Fredericks

The Air Transport Association of Canada today welcomed the signing of the expanded Open Skies agreement between Canada and the United States but called upon the Government of Canada to maximize the
opportunities for Canada by improving the competitiveness of Canadian air carriers.

"Canadians can take great pride in the fact that their air carriers are world-wide industry leaders in delivering innovative fare and service options for travelers", said ATAC President and CEO, Sam Barone. "From the beginning of Canada's Open Skies relationship with US in 1995, Canadian carriers have led the way in opening up new services between our two countries", continued Barone. "Today's agreement has the potential of significantly expanding the global reach of Canada and its air carriers if the government of Canada commits itself to addressing some of the serious tax disadvantages we face, compared to American carriers", he concluded.

ATAC has long supported the principle of open markets and fair competition but stresses the need to address the international cost competitiveness of our air travel industry. Of particular urgency, ATAC stresses the need to address three areas of taxation which significantly undermine the competitiveness of Canadian carriers in relation to their US counterparts:

1. Airport rents are a simple but brutal tax on aviation, with over $2 billion collected since their inception in 1994, for use of facilities which were valued at $1.5 billion when they were transferred. No services are provided in return for these payments. No other G8 nation charges its airport users rents and the United States even funds airport improvements.

2. Canada's Fuel Excise Tax is set at 4 cents per litre – almost 4 times the US rate of 4 cents per gallon.

3. Canada's passenger security charge is amongst the highest in the world, with a one-way domestic ticket paying $4.67 – almost double the US rate of USD$2.50 for a similar ticket.

"ATAC was heartened by Minister Cannon's comment's on November 27, 2006, when he acknowledgement of the legitimacy of Canadian air carriers concerns related to federal fees and costs", stated Barone. "The time has come to replace words with action if Canada is truly serious about being a gateway to the world and opening new markets and destinations for Canadian travelers and shippers", he concluded.