by Jen Mallia
Last updated: 12:40 PM ET, Tue June 23, 2026
Ottawa’s attempt to help protect air passengers from rising air fares in the face of increasing jet fuel costs has been largely useless, a senate committee heard this month.
The government suspended the federal excise tax on aviation fuel from April 20 to September 7, 2026. Earlier this month, the Senate Committee on Transport and Communications heard from industry witnesses that the measure has been largely ineffective in saving passengers any money. The tax represents only a small proportion of aviation fuel costs, according to airline insiders, noting that the exemption applies only to fuel used on domestic flights. David Rheault, Vice President, Government and Community Relations at Air Canada said the value of the reduction represents just 0.5 percent of the carrier’s total fuel costs from 2025.
Jeff Morrison, CEO of National Airlines Council of Canada told the committee that while the council welcomed the temporary removal of the fuel excise tax, “its impact on fares is minimal, ” with savings to customers amounting to just $1.50 to $2 per domestic passenger.
John Weatherill, Executive Vice President and Chief Commercial Officer at WestJet explained that domestic flights generate “a profit per passenger in line with what some pay for a cup of coffee at Starbucks.” With fuel costs increasing by about $40 per passenger, airlines cannot absorb the shock.
The user-pay system the Canadian air transport system operates under passes most of the fees and taxes onto customers. This includes things like security fees, airport improvement fees, navigation fees, fuel surcharges, taxes, and other types of surcharges which a passenger must pay on top of the base fare.
According to the report from the committee, witnesses also stressed that airfare costs are influenced by a number of factors, such as supply and demand, fuel prices, labour, maintenance, and regulatory requirements.
The senate committee accepted the submissions of the witnesses and reports it will continue to monitor the situation. The June 2 and June 10, 2026 meetings of the Senate Committee on Transport and Communications are available to watch online.
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