TORONTO — The National Airlines Council of Canada (NACC) says Canada could boost its GDP by up to $15 billion, create up to 150,000 jobs, and unlock trade and productivity benefits while improving the affordability of air travel – by reducing the third party taxes, fees, charges and regulations currently imposed on air travel.
NACC represents Canada’s largest passenger air carriers (Air Canada, Air Transat, Jazz Aviation LP and WestJet), and its latest data comes from a peer-reviewed study by Oxera Consulting.
The report, titled ‘Ready for Takeoff: The economic case for reducing aviation costs in Canada’, can be found here.
“In a country as vast as Canada, air travel is not a luxury. It is a crucial mode of transport for people and goods, and Canadians expect an air travel system that supports economic growth and that is affordable,” said Jeff Morrison, NACC’s President and CEO. “This report illustrates that improving the affordability of air travel through a reduction in taxes, charges and fees will stimulate the market, which in turn will have spinoff benefits across the economy.”
The NACC notes that other countries including Sweden have recently moved to eliminate some of these taxes and fees; the study looks at four scenarios of reductions in taxes, charges and fees, including: reversing recent fee increases and reinvesting airport rents, aligning fee levels with Sweden or the U.S. all the way up to a complete removal of all taxes, charges and fees.
Based on the study, the NACC says that aligning taxes, charges and fees with levels in Sweden means a family of four travelling on a return trip from Toronto to Vancouver would pay around $251 less for their plane tickets. A family of four travelling from Edmonton to Montreal on a return trip would save $282.
AIRFARE AFFORDABILITY
Airfare affordability, always on the radar for Canadians, has made headlines these past couple of years amid post-pandemic cost surges for travel and other goods, and inflation pressures.
The Competition Bureau’s June 2025 report ‘Cleared for Take-Off: Elevating Airline Competition’ noted that “many Canadians report that international flights are often cheaper than flights within Canada.”
That report outlined 10 recommendations aimed at making air travel in Canada more affordable, including up to 100% foreign ownership for domestic-only Canadian airlines. Recommendation #4 suggested a review of the airport oversight and funding model.
There was also the House of Commons Standing Committee on Transport, Infrastructure and Communities’ report, State of Airline Competition in Canada, released in November 2025 and highlighting the challenges facing the country’s aviation sector. In December 2024 Canadian airline executives appearing before the Standing Committee were in the hot seat over carry-on bag fees, and said the federal government needs to reform Canada’s aviation system if it wants travel to become more affordable.
INDUSTRY REACTION
In a statement yesterday WestJet Group EVP & Chief People and Public Affairs Officer, Jacqui McGillivary, said the airline is “pleased to see that our valued partners at NACC are investing in the research WestJet has long believed and advocated for. Making air travel more affordable by lowering third-party taxes and fees is one of the most important levers in strengthening Canada’s economy. A Canada connected by affordable air travel is a better Canada for everyone.”
Not everyone is cheering. Canadian Airports Council (CAC) also issued a statement in the wake of the NACC’s report.
“Canada’s airports share the goal of improving affordability and strengthening connectivity for Canadians. However, it is overly simplistic to attribute airfare levels primarily to third-party fees. Ticket prices reflect a combination of airline pricing strategies, market competition, geography, federal charges, security and navigation costs, and the infrastructure required to safely operate airports across a vast country. A balanced analysis must examine the entire system,” said the CAC.
The CAC noted that Canadian airports have operated on a fully self-sustaining user pay model since the 1990s, and said it agrees with the NACC that there is “room for improvement” to make air transportation a truer user pay model. Unlike rail, ferries and ports, Canadian airports currently pay $525 million a year in land-lease rent to the federal government. “This rent should be reinvested in aviation infrastructure to support the system,” said the CAC.
