Business
Here’s why your plane ticket is so expensive
From the Fraser Institute
By Alex Whalen and Jake Fuss
While the strike by WestJet mechanics lasted only a few days, many Canadian air travellers faced long delays and cancelled flights. More broadly, according to the Canadian Transportation Agency, customer complaints have hit an all-time high.
Yet many dissatisfied travellers likely don’t realize that Ottawa heavily contributes to their frustrations. Let’s look at the various ways federal policies and laws make air travel worse in Canada.
First, federal laws insulate Canada’s airlines from competition. Foreign airlines are subject to highly restrictive “cabotage” laws which, for example, dictate that foreign airlines cannot operate routes between Canadian cities. At the same time, foreign investors are forbidden from owning more than 49 per cent of Canadian airlines. By restricting international participation in the Canadian air travel market, these laws both deprive Canadian consumers of choice and insulate incumbent airlines from competition. When consumers have more choice, incumbents have a greater incentive to improve performance to keep pace with their competitors.
Second, a wide array of taxes and fees heavily influence the cost of airline tickets in Canada. Airport improvement fees, for example, average $32.20 per departing passenger at airports in Canada’s 10 largest markets. In contrast, airport improvement fees in the United States cannot exceed $4.50. And last year the Trudeau government increased the “air travellers security charge” by 32.85 per cent—this fee, which now ranges from $9.94 to $34.82 per flight, is higher in Canada than the U.S. across all flight categories. On the tax front, in addition to fuel taxes including the federal carbon tax, the federal excise tax on unleaded aviation gasoline in Canada is 10 cents per litre compared to 6.9 cents per litre in the U.S. And the U.S., unlike Canada, does not apply sales taxes to aviation fuel.
Third, air travel is a heavily regulated sector. Federal legislation generates thousands of provisions airlines must follow to operate legally in Canada. Of course, some regulation is necessary to ensure passenger safety, but each regulation adds administrative and compliance costs, which ultimately affect ticket prices. To lower the cost of air travel, the federal government should reduce the regulatory burden while maintaining safety standards.
Lastly, the ownership model of Canada’s airports results in a yearly transfer of rent to the federal government. The federal government used to own Canada’s national system of airports until they were transferred to private not-for-profit corporations in the early 1990s. However, these airports must still pay rent to the federal government—nearly half a billion dollars annually, according to the Canada Airports Council. As with the other examples listed above, these costs are ultimately passed on to consumers in the form of higher ticket prices.
While a precise estimate is difficult to obtain, various government policies, taxes and fees comprise a large share of the cost of each airline ticket sold in Canada. With complaints from travellers at all-time highs, the federal government should reduce the regulatory burden, increase competition, and lower fees and taxes. Policy reform for air travel in Canada is long overdue.
Authors:
Quick Hit:
President Trump on Thursday confirmed a sweeping new 35% tariff on Canadian imports starting August 1, citing Canada’s failure to curb fentanyl trafficking and retaliatory trade actions.
Key Details:
- In a letter to Canadian Prime Minister Mark Carney, Trump said the new 35% levy is in response to Canada’s “financial retaliation” and its inability to stop fentanyl from reaching the U.S.
- Trump emphasized that Canadian businesses that relocate manufacturing to the U.S. will be exempt and promised expedited approvals for such moves.
- The administration has already notified 23 countries of impending tariffs following the expiration of a 90-day negotiation window under Trump’s “Liberation Day” trade policy.
Diving Deeper:
President Trump escalated his tariff strategy on Thursday, formally announcing a 35% duty on all Canadian imports effective August 1. The move follows what Trump described as a breakdown in trade cooperation and a failure by Canada to address its role in the U.S. fentanyl crisis.
“It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship,” Trump wrote to Prime Minister Mark Carney. He added that the tariff response comes after Canada “financially retaliated” against the U.S. rather than working to resolve the flow of fentanyl across the northern border.
Trump’s letter made clear the tariff will apply broadly, separate from any existing sector-specific levies, and included a warning that “goods transshipped to evade this higher Tariff will be subject to that higher Tariff.” The president also hinted that further retaliation from Canada could push rates even higher.
However, Trump left the door open for possible revisions. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” he said, adding that tariffs “may be modified, upward or downward, depending on our relationship.”
Canadian companies that move operations to the U.S. would be exempt, Trump said, noting his administration “will do everything possible to get approvals quickly, professionally, and routinely — In other words, in a matter of weeks.”
The U.S. traded over $762 billion in goods with Canada in 2024, with a trade deficit of $63.3 billion, a figure Trump called a “major threat” to both the economy and national security.
Speaking with NBC News on Thursday, Trump suggested even broader tariff hikes are coming, floating the idea of a 15% or 20% blanket rate on all imports. “We’re just going to say all of the remaining countries are going to pay,” he told Meet the Press moderator Kristen Welker, adding that “the tariffs have been very well-received” and noting that the stock market had hit new highs that day.
The Canadian announcement is part of a broader global tariff rollout. In recent days, Trump has notified at least 23 countries of new levies and revealed a separate 50% tariff on copper imports.
“Not everybody has to get a letter,” Trump said when asked if other leaders would be formally notified. “You know that. We’re just setting our tariffs.”
From LifeSiteNews
By Dan Frieth
In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.
U.S. President Donald Trump has launched a fierce rebuke of Brazil’s moves to silence American-run social media platforms, particularly Rumble and X.
In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.
He calls attention to “SECRET and UNLAWFUL Censorship Orders to U.S. Social Media platforms,” pointing out that Brazil’s Supreme Court has been “threatening them with Millions of Dollars in Fines and Eviction from the Brazilian Social Media market.”
Trump warns that these actions are “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans,” and states: “starting on August 1, 2025, we will charge Brazil a Tariff of 50% on any and all Brazilian products sent into the United States, separate from all Sectoral Tariffs.” He also adds that “Goods transshipped to evade this 50% Tariff will be subject to that higher Tariff.”
Brazil’s crackdown has targeted Rumble after it refused to comply with orders to block the account of Allan dos Santos, a Brazilian streamer living in the United States.
On February 21, 2025, Justice Alexandre de Moraes ordered Rumble’s suspension for non‑compliance, saying it failed “to comply with court orders.”
Earlier, from August to October 2024, Moraes had similarly ordered a nationwide block on X.
The court directed ISPs to suspend access and imposed fines after the platform refused to designate a legal representative and remove certain accounts.
Elon Musk responded: “Free speech is the bedrock of democracy and an unelected pseudo‑judge in Brazil is destroying it for political purposes.”
By linking censorship actions, particularly those targeting Rumble and X, to U.S. trade policy, Trump’s letter asserts that Brazil’s judiciary has moved into the arena of foreign policy and economic consequences.
The tariffs, he makes clear, are meant, at least in part, as a response to Brazil’s suppression of American free speech.
Trump’s decision to impose tariffs on Brazil for censoring American platforms may also serve as a clear signal to the European Union, which is advancing similar regulatory efforts under the guise of “disinformation” and “online safety.”
With the EU’s Digital Services Act and proposed “hate speech” legislation expanding government authority over content moderation, American companies face mounting pressure to comply with vague and sweeping takedown demands.
By framing censorship as a violation of U.S. free speech rights and linking it to trade consequences, Trump is effectively warning that any foreign attempt to suppress American voices or platforms could trigger similar economic retaliation.
Reprinted with permission from Reclaim The Net.
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