Aviation Fuel Tax Cut A Canadian Election Issue


Jet fuel costs grabbed the spotlight on the second full day of the Canadian election campaign on Tuesday. Current Prime Minister Stephen Harper said that if his government is re-elected it will cut the federal excise tax on jet fuel in half, to about nine cents per Canadian gallon. No reductions in the 50-cent-per-gallon tax on avgas were mentioned. Harper said the reduction, which will also apply to diesel fuel, will cost the country $600 million CDN a year but offer some relief to airlines and transportation companies struggling with high fuel costs. His rivals in the election (which, by the way, was called on Sunday and will be over Oct. 14) are dismissing the tax cut as a “gimmick,” but it may have legs as an issue because of a proposal by the Liberal Party for a nationwide carbon tax that would almost triple the current fuel taxes.

Liberal Leader Stephane Dion’s Green Shift plan would increase the current 18-cents-per-gallon jet fuel tax to about 50 cents a gallon. Harper defended the proposed tax cut against criticism that it will encourage air travel and road transport at the expense of the environment. He said jet fuel and diesel power essential services and that extra taxes won’t curb their use, just cost consumers more.