Finance Canada said a 33% increase in mandatory security fees will cost air passengers millions more than estimated, according to Blacklock’s Reporter. “The Department of Finance estimates revenue from the increase to Air Travelers Security Charge (ATSC) rates will total $1.248 billion from 2024 to 2028,” said Finance Canada in a memo. “The Parliamentary Budget Office estimates that revenues from the increase will total $1.216 billion or 2.6% lower than the department’s estimate.”Finance Canada called the $32 million gain “a minor discrepancy.” Moreover, it said it results from the use of different sources of historical revenue data and economic predictions. Cabinet said in April the ATSC airlines charge passengers would rise by one-third in Budget 2023. READ MORE: Liberals budget increases airport security fees by 33%Security charges on domestic round-trip tickets would increase from $15 to $20. Mandatory charges on international flights would rise from $26 to $34.Higher rates took effect in May. Revenues were estimated at $313 million next year.Finance Canada went on to say the ATSC “provides revenues to offset expenses associated with the security screening of air passengers and their baggage.” With the ATSC increase, it said it ensures travellers who benefit from security services continue to bear the costs of providing them. It was introduced in 2002 to finance security upgrades following 9-11. At pre-inflation rates, figures show it has generated a net annual profit of about 12%. National Airlines Council CEO Jeff Morrison said at a Senate National Finance Committee hearing in 2023 he wished he could say these increases in fees would lead to better services for airlines and passengers. “I cannot say that,” said Morrison. “For example, with the increase in the air security charge, that is money that goes into general revenue.”
Finance Canada said a 33% increase in mandatory security fees will cost air passengers millions more than estimated, according to Blacklock’s Reporter. “The Department of Finance estimates revenue from the increase to Air Travelers Security Charge (ATSC) rates will total $1.248 billion from 2024 to 2028,” said Finance Canada in a memo. “The Parliamentary Budget Office estimates that revenues from the increase will total $1.216 billion or 2.6% lower than the department’s estimate.”Finance Canada called the $32 million gain “a minor discrepancy.” Moreover, it said it results from the use of different sources of historical revenue data and economic predictions. Cabinet said in April the ATSC airlines charge passengers would rise by one-third in Budget 2023. READ MORE: Liberals budget increases airport security fees by 33%Security charges on domestic round-trip tickets would increase from $15 to $20. Mandatory charges on international flights would rise from $26 to $34.Higher rates took effect in May. Revenues were estimated at $313 million next year.Finance Canada went on to say the ATSC “provides revenues to offset expenses associated with the security screening of air passengers and their baggage.” With the ATSC increase, it said it ensures travellers who benefit from security services continue to bear the costs of providing them. It was introduced in 2002 to finance security upgrades following 9-11. At pre-inflation rates, figures show it has generated a net annual profit of about 12%. National Airlines Council CEO Jeff Morrison said at a Senate National Finance Committee hearing in 2023 he wished he could say these increases in fees would lead to better services for airlines and passengers. “I cannot say that,” said Morrison. “For example, with the increase in the air security charge, that is money that goes into general revenue.”
