The voice of Canada’s airports.
Thursday, February 7, 2008 -
Airports hope Minister of Finance will act on ADF recommendation,
submissions on airport rent and security charge
OTTAWA (February 7, 2008) – The Canadian
Airports Council today urged the Minister of Finance to adopt the
recommendation of the finance standing committee* that would see legal changes
allowing for the introduction of Arrivals Duty Free in Canada.The group said it also hopes the minister
will act on submissions made to the committee** on airport rent and the Air
Travellers’ Security Charge, which also put Canadian airports at a competitive
disadvantage.
“Arrivals Duty Free represents a unique
win-win opportunity for the federal government to help Canadian duty free
operators and their airport hosts while also increasing federal tax revenue,”
said CAC President and CEO Jim Facette.“We hope the minister will act on this
recommendation from the committee, as well as on our submissions on the issues
of airport rent and the funding of air travel security in this country.”
Airport duty free is a $174 million
industry in Canada; however,
currently duty free sales are restricted to travellers departing Canada.Arrivals Duty Free would allow travellers
arriving at Canadian airports the opportunity to buy duty free items when they
get back from their trip.
Since Canadian travellers returning from a
trip abroad often buy duty free items at foreign airports on their way home,
the CAC estimates that the introduction of Arrivals Duty Free would repatriate
some $61 million a year in foreign retail sales.This would result in 400 new Canadian retail
jobs and about $7.2 million in additional federal tax revenue.
Arrivals Duty Free is currently in place at more than 45 countries around the world, including Australia.In the 20 years since ADF was introduced in Australia, duty free revenue increased more than 30 per cent and the concept has come to be accepted by Australia’s federal government as an invaluable service for travellers and contributor to the travel experience.
Airport
Rent, Air Traveller’s Security Charge
In addition to hearing recommendations on
ADF from the CAC, its members and partners in the airport duty free sector, the
Standing Committee on Finance also heard requests from industry and business
stakeholders for the elimination of airport rent.
“Canada’s airports currently pay
about $300 million a year in rent, while remaining responsible for all capital
investment and operating costs,” said Mr. Facette.“Canada’s
airports have invested some $9.5 billion over the past 15 years to ensure Canada’s
aviation infrastructure is able to handle the growth in international trade and
tourism in this country.The current
imposition of airport rent represents a choke on Canada’s competitiveness.”
While contending that rent should be
eliminated, the CAC has proposed an interim solution that would see government
exclude revenue raised to cover debt servicing costs and Airport Improvement
Fees from the definition used to calculate rent.
The CAC also has supported calls for the
elimination of the Air Travellers’ Security Charge, contending that aviation
security is a matter of national security for which costs should be borne out
of general tax revenues.
About
the Canadian Airports Council
The
Canadian Airports Council (CAC) is the voice for Canada’s airports.Its 49 members represent more than 180
airports, including all of the National Airports System (NAS) airports and most
significant municipal airports in every province and territory. Together, CAC
members handle virtually all of the nation’s air cargo and international
passenger traffic and 95% of domestic passenger traffic.They create in excess of $45 billion in economic
activity in the communities they serve.And more than 200,000 jobs are directly associated with CAC member
airports, generating a payroll of more than $8 billion annually.
- 30 -
* Taxing to Prosper, Report of the Standing Committee on Finance