A new report says a soaring number of jet-setting Canadians are border-hopping to catch flights that are 30 per cent cheaper on average -- an issue that has caught the attention of the federal government.
The Conference Board of Canada report, issued Wednesday, said about five million Canadians cross the United States border by land every year to fly out of American airports.
Higher airfares and fees and taxes in Canada, as well as differences in wages, aircraft prices and industry productivity, make it 30 per cent cheaper to fly out of the U.S. For example, a flight to New York City leaving Thursday morning from Toronto costs $337 on Air Canada, but a flight leaving from Buffalo on JetBlue costs $226 -- 33 per cent less.
Fees and taxes make up about 40 per cent of the difference in airplane ticket costs between Canada and the U.S., the Conference Board said. Although other factors such as lower aircraft costs and better labour productivity in the U.S. are beyond government control, the think-tank says small reductions in the airfare differential could lead to traffic gains for Canadian airports and carriers. It estimates changes to Canadian policies alone could bring more than two million passengers a year back to Canadian airports.
Federal Finance Minister Jim Flaherty told reporters Wednesday Ottawa is "concerned" about the issue. Transport Minister Denis Lebell "has been working on a consultation project with the airlines, with the airport authorities in Canada, to try to see what we can accomplish," Flaherty added.
The Conference Board analysis focused on Vancouver International Airport, Pearson International Airport in Toronto, and Montreal-Trudeau International Airport, along with their cross-border competitors.
"When a Canadian hub airport loses passengers, it can lead to reduced flight frequencies, higher travel costs and poorer service for all Canadians," said David Stewart-Patterson, the Conference Board's vice-president of public policy.
-- The Canadian Press