Canadian province proposes jet fuel tax relief for Vancouver

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British Columbia officials have proposed to discard a 2.5% tax on jet fuel partly to make local airports, including Vancouver International, more competitive to international traffic compared to Calgary and Seattle-Tacoma.

The provincial government has proposed to eliminate the tax after 1 April on commercial flights. If approved by the provincial legislature, the change will save airlines about $12 million over the next two years, according to government estimates.

The province hopes the move increases daily international traffic to Vancouver's main airport, as each new flight generates between 150 and 200 new jobs locally.

The Vancouver Airport Authority noted competing airports in Alberta province and Washington state do not have such a tax on jet fuel. Removing the tax is part of the authority's five-year plan to increase routes and capacity at Vancouver International, the organisation said.

Although the tax change is aimed at international traffic, domestic carriers will receive the same benefit on local routes.

Rivals Air Canada and WestJet both welcomed the province's decision in separately issued statements.

Calgary-based WestJet said such an initiative helps make Canada's aviation hubs more competitive on the global market.

Montreal-based Air Canada, meanwhile, "applauded" British Columbia for proposing the tax change.