The federal government must step in and make massive changes to the aviation industry to keep Canadians flying out of this country's airports, a new report says.
High fuel taxes and onerous foreign ownership and airline-specific policies are harming the competitiveness of airlines, the C. D. Howe Institute report says.
This means Canadians are being forced to look south of the border for cheaper flights - including 4.8 million in 2011 - or are choosing not to travel at all.
The report, released Wednesday and called Full Throttle: Reforming Canada's Aviation Policy, says Canada was a global leader 20 years ago when it moved airports from government to private operation. The feds signed operating leases with not-for-profit airport authorities and the report's author Benjamin Dachis said now is the time for the federal government to sell the remaining interest either to those authorities or to for-profit corporations.
"Such sales could make investors, airlines, travellers, and taxpayers all better off," he said in a release.
The federal and provincial governments should reduce or eliminate remaining aviation fuel taxes and he said the federal politicians need to open up competition for foreign-owned airlines to be allowed to operate domestic routes.
"If Canadians are to have the most economically efficient aviation system possible - crucial for such a geographically huge country - the federal government should enact a comprehensive set of policy reforms across the aviation sector."
Transport Canada spokeswoman Karine Martel said they are aware of the report and are reviewing it.
"Transport Canada regularly reviews policies affecting the air sector to ensure they serve Canada’s current and future needs. Like all reports of this nature, the findings and recommendations will inform government decision-making and planning," Martel said.