Air Canada opposes proposed Ontario fuel hike

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Air Canada is opposing a proposed move to raise aviation excise fuel taxes in the Ontario budget, and has thrown its support behind Ontario opposition politicians who are seeking to defeat the proposed budget.

Canadian media reports say the proposed budget includes a hike of C$0.04 ($0.04) per litre of aviation fuel over four years.

"As one of the largest private sector employers in the province of Ontario, I can say that the proposed increase to aviation fuel taxes is bad for our industry, bad for our employees, bad for our customers and ultimately bad for the economy of Ontario," says Calin Rovinescu, Air Canada CEO.

Rovinescu estimates that the hike will increase costs for Canada's aviation industry by $100 million annually.

"Even before the budget, Ontario had the highest excise tax on aviation fuel in North America. The proposed increases to almost triple the excise fuel tax would have been passed on to air travellers and shippers, resulting in higher fares for travellers to and from Ontario, and negative economic consequences in Ontario and Canada including direct and indirect job losses."

The carrier employs about 12,000 people in Ontario.