Study on Aviation Charges, Fees and Taxes

The overall cost of air travel is influenced by multiple factors, including, but not limited to, various charges, taxes, and fees. Other significant and impactful factors include the degree of competition, Canada’s vast geography and relatively low population, sometimes challenging weather conditions, and differences in the type of travel (e.g., a domestic flight versus an international flight).

The Government of Canada sets and collects two charges (e.g., security screening charges, airport rent), as well as other broader tax measures (e.g., GST, aviation fuel tax). However, it does not set the fees of key private entities in the system, notably National Airports System (NAS) airport authorities and NAV CANADA. Moreover, aside from enabling legislation in the case of NAV CANADA, there are no mechanisms through which the government can direct how these organizations determine their charges. Instead, these are typically established through commercial arrangements and consultations among carriers, airports, NAV CANADA, and other stakeholders.

Transport Canada (TC) is seeking a contractor to undertake an external, comprehensive, and evidence-based study with the following objectives:

1) Establish a factual and up-to-date baseline understanding of how air passenger charges, fees, and taxes are set in Canada, and how this compares to other jurisdictions; 2) Support government decision-making; and 3) Enable discussion of broader policy questions related to Canada’s reliance on the user-pay model for air transportation and whether it remains appropriately calibrated.

Special comments: a. The requirement is intended to result in the award of one (1) contract b. The initial proposed period of contract shall be from Contract award up to 6 months thereafter. c. There is no Incumbent at present. d. There is no security requirements associated with this solicitation of offers