Ottawa can make air travel more affordable by reducing taxes & fees: report

The National Airlines Council of Canada (NACC) – which represents Air Canada, Air Transat, Jazz Aviation LP and WestJet – has published a study which finds that Canada could boost its GDP by up to $15 billion, create up to 150,000 jobs, and unlock trade benefits, all while improving the affordability of air travel by reducing third-party taxes, fees, charges and regulations. 

The study, conducted by Oxera Consulting, is called “Ready for takeoff: the economic case for reducing aviation costs in Canada.”

It outlines concrete actions Ottawa can take to stimulate Canada’s air travel sector.

“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, president and CEO of NACC, in a statement. “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.”

Other countries that share similarities with Canada, including Sweden, have recently moved to eliminate some of these taxes and fees, in order to improve competitiveness and stimulate their air travel markets.

Key findings

The study examined 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 United States all the way up to a complete removal of all taxes, charges and fees.

Key results include:

• 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.
• This would result in up to $9 billion in additional GDP and create 86,000 jobs from increased air travel. Reducing fees to this level could also increase the value of trade by $106 billion and increase GDP by $17 billion through enhanced productivity.
• Matching the level of taxes, charges and fees with those in the US would generate $11 billion in increased GDP, creating 112,000 jobs.
• Removing all taxes, charges and fees would generate $15 billion in additional GDP while creating 151,000 jobs. This would also increase trade by over $160 billion and generate $30 billion in GDP from enhanced productivity.

“While some might fear that lifting fees would reduce tax revenues that the federal government relies on, today’s report finds that unlocking more affordable air travel in our country could result in an increase in total tax revenue between $2 and $10 billion, by spurring more economic activity,” said the NACC. “The benefit to both consumers and the government is clear.”

The NACC is not the first to outline the clear need for change.

 In June 2025, the Competition Bureau of Canada acknowledged the impact of the current “user pay” model and proposed amendments to the Air Passenger Protection Regulations.

In November 2025, the House of Commons’ Standing Committee on Transport, Infrastructure and Communities tabled a report finding that high costs, excessive federal fees, and regulatory hurdles are among the core challenges undermining affordability and competition in Canadian aviation, and calling for a government review.

“It has been made abundantly clear that a better system is within reach. As Canada looks to strengthen its own economy and reinforce our ties with trading partners around the world, the time to act on air travel fees is now,” said Morrison.

The report can be found here.

In a statement posted to LinkedIn, WestJet said it welcomed the report “and the opportunities it highlights.”

“We’re ready to work with our government partners on solutions that strengthen Canada’s aviation sector, improve affordability for travellers, and support a more competitive future for our country,” the airline wrote.

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