RESPONSE BY THE NATIONAL AIRLINES COUNCIL OF CANADA (NACC) AND THE AIR TRANSPORT ASSOCIATION OF CANADA (ATAC)

Similar documents
UNFCCC Facilitative Dialogue on Enhancing Ambition and Support (Marrakech, Morocco, 16 November 2016)

A carbon offsetting and reduction scheme for international aviation

BUSINESS AVIATION COMMITMENT ON CLIMATE CHANGE

There was consensus among the participants that a strong European aviation industry is critical to ensure the right to

Briefing: ICAO Council discussion on including aviation in the EU-ETS

Flexible and Effective measures - Market Base Approach -

(Geneva, Switzerland, 2-3 October 2018) The sustainability of international civil aviation is a key priority for ICAO and its Member States today.

Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA):

CANADA S ACTION PLAN. to Reduce Greenhouse Gas Emissions from Aviation

National Airlines Council of Canada Submission to the Canada Transportation Act Review Panel

Global Action on International Aviation and Climate Change

Stimulating Airports is Stimulating the Economy

Paul Steele, Executive Director Air Transport Symposium

INTERNATIONAL CIVIL AVIATION ORGANIZATION NORTH AMERICAN, CENTRAL AMERICAN AND THE CARIBBEAN REGIONAL AND SOUTH AMERICAN REGIONAL OFFICES

South Pole Group Carbon Offsetting Scenario Simulation. Thomas Schroder Director Marketing & Communications

AVIATION ENVIRONMENT CIRCULAR 2 OF 2013

ENVIRONMENT ACTION PLAN

No flight plan. How the International Civil Aviation Organisation (ICAO) has blocked progress on climate change for a decade

Asia Pacific Aviation

United Global Performance Commitment 2017

Impact of Environmental Taxes & Charges on Aviation

Recent Developments on International Aviation and Climate Change

Canada s Airports: Enabling Connectivity, Growth and Productivity for Canada

ICAO Young Aviation Professionals Programme

DEADLINE APPROACHES FOR AVIATION CARBON FOOTPRINT CAP

Performance Criteria for Assessing Airport Expansion Alternatives for the London Region

Federal Budget Submission. Prepared for the House of Commons Standing Committee on Finance. Greater Toronto Airports Authority

HIGH-LEVEL MEETING ON A GLOBAL MARKET-BASED MEASURE SCHEME

Canada s Travel and Tourism Industry

IMPACT OF EU-ETS ON EUROPEAN AIRCRAFT OPERATORS

Tourism Industry Association of Nova Scotia Statements of Tourism Policy

About ABTA. Executive summary

BUSINESS AVIATION INTERNATIONAL CHALLENGES AND ISSUES. A presentation to the ICAO Council

Report on Geographic Scope of Market-based Measures (MBMS)

2. Our response follows the structure of the consultation document and covers the following issues in turn:

(Quito, Ecuador 17 October 2016)

JUNE 2016 GLOBAL SUMMARY

Australian Airport Association Stakeholder Dinner. 31 May 2018 Sydney, Australia. Speech by Angela Gittens

Session 1: Overview of CORSIA Introduction to the CORSIA and Resolution A39-3. ICAO Secretariat

Aviation and Climate Change The Views of Aviation Industry Stakeholders February, Introduction and Background

AIR CANADA REPORTS THIRD QUARTER RESULTS

WORLDWIDE AIR TRANSPORT CONFERENCE: CHALLENGES AND OPPORTUNITIES OF LIBERALIZATION. Montreal, 24 to 29 March 2003

Forest Carbon Partnership Facility

AIR CANADA REPORTS FIRST QUARTER RESULTS

Statement of continued support by the Chief Executive Officer (CEO)

PHD Aviation Summit: Indian Civil Aviation Benefit Beyond Borders. February 18 th, Presented To:

COLLOQUIUM ON ENVIRONMENTAL ASPECTS OF AVIATION

ASSEMBLY 39TH SESSION

Re: Review of the Canada Transportation Act (CTA)

Making travel easier and more affordable. easyjet s views on how aviation policy can improve the passenger experience and reduce costs

ACTION PLAN OF MEXICO ON AVIATION AND CLIMATE CHANGE. Bonn, June 7, 2011

(Strasbourg, France 10 July 2018) President of the European Civil Aviation Conference, Ms. Ingrid Cherfils,

Making The Caribbean Competitive

PROJECT CLEAN AIR. Certification Scheme for Clean Air Charter. Final Report. For. Cathay Pacific Airways Limited (CX) Prepared by

Sunshine Coast Council Locked Bag 72 Sunshine Coast Mail Centre QLD Submitted via online portal. 2 June 2017.

COP23 Special event International aviation and maritime transport

General Aviation Economic Footprint Measurement

IAPSC CONFERENCE 4 DECEMBER 2003 EU EMISSIONS TRADING SCHEME

COMOX VALLEY AIRPORT. Strategic Plan Summary. October 2010

AIR CANADA REPORTS 2010 THIRD QUARTER RESULTS; Operating Income improved $259 million or 381 per cent from previous year s quarter

REAUTHORISATION OF THE ALLIANCE BETWEEN AIR NEW ZEALAND AND CATHAY PACIFIC

Asia Pacific Aviation

Regulating Air Transport: Department for Transport consultation on proposals to update the regulatory framework for aviation

Many Nations through Civil Aviation. China Civil Aviation Development Forum Beijing June 2015

Decision Strategic Plan Commission Paper 5/ th May 2017

REGION OF WATERLOO INTERNATIONAL AIRPORT AIRPORT MASTER PLAN EXECUTIVE SUMMARY MARCH 2017

GHANA S ACTION PLAN ON CO 2 EMISSIONS REDUCTION ACTIVITIES

UBM Travel Brands. Events & Conferences. Data, Consultancy & Training. Media & Digital

September 1, Re: Project No. 3-24P. Dear Director of Research and Technical Activities:

Airport Incentive Programs: Legal and Regulatory Considerations in Structuring Programs and Recent Survey Observations

In the name of God. Association of Iranian Airlines

Air Transport Association of Canada

ANGLIAN WATER GREEN BOND

ICAO Technical Cooperation Progress and Future Potential Program on Environmental Sustainable Air Transportation in Indonesia

Internalising external costs. Policy instruments to internalise externalities at airports

REGULATORY POLICY SEMINAR ON LIBERALIZATION POLICY AND IMPLEMENTATION PORT OF SPAIN, TRINIDAD AND TOBAGO, APRIL, 2004

ASSEMBLY 37TH SESSION

Airservices Australia Long Term Pricing Agreement. Discussion Paper April Submission by Australia Pacific Airport Corporation (APAC)

SUSTAINABLE DEVELOPMENT PLAN 2015

Climate Change and Trade: The EU Aviation Directive. Dr. Joshua Meltzer Fellow, Brookings Institution

Region of Waterloo Planning, Development and Legislative Services Region of Waterloo International Airport Office of Economic Development

The Multilateral Agreement on the Liberalization of International Air Transportation

Aviation Data and Analysis Seminar February Economics of Airports and Air Navigation Services Providers

LOW FARES AIRLINES AND THE ENVIRONMENT. June 2005

POST-IMPLEMENTATION COMMUNITY IMPACT REVIEW

Airways New Zealand Queenstown lights proposal Public submissions document

Frequently Asked Questions. Free allocation from the Special Reserve (Art 3f ETS Directive 1 )

IATA Carbon Offset Program

EUROPE S GREENEST AIRLINE

AFCAC Presentation ENVIRONMENTAL ISSUES IN AFRICA. Boubacar Djibo Secretary General of AFCAC. EU-Africa Aviation Summit (Windhoek, 3 4 April 2009)

Submission to. Southland District Council on. Draft Stewart Island/Rakiura Visitor Levy Policy and Bylaw

Manager of Strategy and Policy. SUBJECT: LEGISLATIVE UPDATE DATE: April 28, Federal. Raising the Passenger Facility Charge Cap

easyjet response to the European Commission consultation on the aviation package for improving the competitiveness of the EU aviation sector

Views of London Forum of Amenity and Civic Societies to the House of Commons Environmental Audit Committee on the Airports Commission report

Safe Skies for Air Navigation over Africa

(Presented by the United States)

TRUTH ABOUT FLYING. (and KLM)

Aviation Taxes and Charges

Response to CAA Guidance for Heathrow Airport Limited in preparing its business plans for the H7 price control

Route Support Cork Airport Route Support Scheme ( RSS ) Short-Haul Operations Valid from 1st January Introduction

Transcription:

RESPONSE BY THE NATIONAL AIRLINES COUNCIL OF CANADA (NACC) AND THE AIR TRANSPORT ASSOCIATION OF CANADA (ATAC) TO THE PROPOSED FEDERAL BENCHMARK AND BACKSTOP FOR CARBON PRICING INTRODUCTION The National Airlines Council of Canada (NACC), the Air Transport Association of Canada (ATAC) and their members are pleased to respond to Environment and Climate Change Canada s invitation to comment on the proposed federal benchmark and backstop for carbon pricing. I. BACKGROUND We recognize the need to respond to the global challenge of climate change. In alignment with the global aviation industry, we have adopted ambitious targets to reduce carbon dioxide (CO 2 ) emissions from air transportation. These targets are: Improve fuel efficiency by an average of 1.5 per cent a year from 2009 to 2020; Cap CO 2 emissions from air transportation at 2020 levels; and Reduce net CO 2 emissions by 50 per cent over 2005 levels. In pursuit of these goals, we are: Investing in new technology, including the advancement of biofuels; Improving infrastructure, including modernizing air traffic management systems; 1 Maintaining more efficient aircraft operations; and Investing in excess of $30 billion between 2005 and 2020 in more fuel-efficient aircraft 2. Beginning in 2005 we were parties to the world s first voluntary agreement with the Government of Canada to address greenhouse gas emissions from aviation, and starting in 2012, we participated in the subsequent initiative, Canada s Action Plan to Reduce Greenhouse Gas Emissions from Aviation, which set ambitious goals to reduce CO 2 emissions from both domestic and international aviation and to contribute to global efforts to minimize aviation s carbon footprint. 1 Infrastructure and air traffic management system improvements have been financed through the NAV CANADA fees paid by airlines 2 Fleet renewal provides significant fuel savings; emissions can be reduced by up to 20 per cent by replacing older airplanes. 1

Our efforts to date have been successful. Between 2008 and 2016, the Canadian aviation industry improved its fuel efficiency by an average of 13 per cent. We also worked with our international partners and with the Government of Canada toward an international framework to reduce global aviation emissions of CO 2. In October 2016, aviation became the first industry to develop a global sector approach to limit CO 2 emissions, culminating in the International Civil Aviation Organization (ICAO) adoption of the Carbon Offsetting and Reduction Scheme for International Aviation, known as CORSIA. Under this global agreement, aircraft operators are required to purchase offsets, or emission units, for the growth in CO 2 emissions above 2020 levels covered by the framework. When it was signed, CORSIA had the support of both the Canadian aviation industry and the Government of Canada. Minister of Transport Garneau said at the time that Canada had played a leading role in securing what he called an historic agreement, with 85 per cent of the world s emitters participating in a voluntary carbon-offset system beginning in 2021. II. INDUSTRY VIEWPOINT NACC and ATAC believe that Canadian aviation and our international colleagues have demonstrated a strong commitment to reducing aviation s carbon footprint. We believe that any carbon-pricing scheme for aviation must be evaluated in light of several factors. These include: how well a particular carbon-pricing scheme reduces aviation CO 2 emissions; how the scheme affects the competitiveness of Canadian aviation, considering the industry s current cost structure; how the scheme affects Canadian jobs and tourism in Canada; and how the scheme affects the provision of affordable and accessible travel for Canadians. We agree with the Government of Canada that a national approach is needed to determine how to treat interjurisdictional emissions. We appreciate that the Government recognizes that aviationspecific issues need consideration. The Government has stated its intention to engage with provincial and territorial governments and stakeholders to ensure that this emission source is properly covered. 3 Such engagement is required, and we look forward to participating. However, the current backstop proposal raises a number of concerns for our sector. For instance, the framework proposed differs from that of all non-backstop jurisdictions and places an additional burden on airlines. It does so by requiring fuel users to purchase fuel with the levy embedded and to self-assess how much fuel was used within a backstop jurisdiction in order to see relief. Upfront exemptions, such as those currently in place in British Columbia and Alberta, would have presented a much lighter administrative burden on airlines. We are more concerned, however, that the Government s Technical Paper on the Federal Carbon Pricing Backstop has set the stage for a national carbon tax on aviation fuels, while failing to either 3 Technical Paper on the Federal Carbon Pricing Backstop, p.15 2

demonstrate the environmental efficacy of a carbon tax or consider its impact on the competitiveness of Canada s aviation sector. A national carbon tax on aviation fuel is not our preferred approach, for a number of reasons. First, introducing a national carbon tax would exacerbate Canadian aviation s already severe competitiveness problems (see chart), caused in large part by the already substantial burden of government taxes, fees, airport rents, and other levies under our current user-pay system. In addition to its uncompetitive aviation cost structure, Canada borders the United States, home to several large international carriers, including Delta Airlines, the world s largest carrier. With over 75 per cent of Canadians living within 90 minutes of the US border, Canadian airlines are already losing a substantial number of passengers to US carriers approximately five million per year according to the Conference Board of Canada. The United States provides its carriers with an extremely competitive tax environment and subsidized infrastructure for their operations. All of these factors combine to further erode our ability to collect feeder traffic from smaller airports to our hubs to feed our international services. In 2015, Canada was ranked 130 out 141 countries by the 2015 World Economic Forum Tourism Competitiveness Report when it comes to taxes, rates and charges. In this context, any incremental fee added to Canadian aviation s existing cost structure that provides no benefit in the form of reduced CO 2 emissions or improved service will only increase the cost of airfares, making Canadian carriers less able to compete with US-based carriers. Source: International Air Transport Association (IATA) 3

Second, there is no evidence that a carbon tax on aviation fuel would reduce the carbon footprint of aviation in Canada. Theory suggests that carbon taxes would reduce emissions in two ways by encouraging industries to adopt emission-reducing technologies and by reducing demand for air travel. Canada s airlines are already adopting emission-reducing technologies and, despite the many taxes and fees that Government has already placed on aviation in Canada, demand for air travel continues to grow. For a carbon tax to be effective at reducing emissions from passenger air travel, it would have to dampen demand enough to reduce the number of aircraft flying, not just load levels, resulting in the loss of service to Canadian communities. The Government has presented no evidence that another tax, regardless of its purpose or name, will accelerate the development of emission-reducing technology, reduce demand for air travel, or reduce emissions. It will, on the other hand, increase the cost of flying in Canada, encourage Canadians to cross the border in pursuit of cheaper fares, and further harm the overall competitiveness of our industry. Third and finally, a carbon tax is incompatible with the CORSIA agreement signed with ICAO in October 2016, with the full support of the Government of Canada. OUR SOLUTION These arguments should not be construed as opposition by NACC, ATAC or their members to reducing aviation s carbon footprint. However, we disagree strongly with the proposed mechanism, a national carbon tax on aviation fuel. In its place, we propose that the Government of Canada establish a carbon-offsetting scheme for domestic aviation similar to the CORSIA agreement established for international aviation by ICAO in 2016. The International Air Transport Association (IATA) agrees with this approach, writing that carbon offsetting also guarantees a higher degree of environmental integrity compared to carbon taxation. Provided adequate quality criteria are implemented, each emission unit surrendered will in effect deliver an equivalent reduction in CO 2 emissions. In contrast, there is no guarantee that for each tonne of CO 2 taxed, there will be a tangible reduction in CO 2 emissions, in particular if tax revenues are not earmarked for such initiatives. In line with our commitment under the CORSIA agreement to carbon-neutral growth by 2020, the federal government should establish a baseline date against which future emissions are compared. Each aircraft operator would be responsible to reduce its own carbon emissions beyond its established baseline by using either eligible Carbon Offset Credits from an open market or lowcarbon biojet fuel. This approach would produce real, measurable reductions in CO 2 emissions. It would also align Canada s aviation-emissions strategy with that of the international community, and allow carriers to harmonize their domestic operations with their international requirements. Given the crossborder nature of aviation, emission reduction policies affecting the sector should strive to be harmonized across jurisdictions, both domestic and international, as much as possible. 4

CONCLUSION In summary, we propose that international and inter-jurisdictional domestic air transport should be excluded from the scope of all Canadian carbon taxes/levies and cap-and-trade regimes, based on the following principles: The terms and conditions of existing Air Service Agreements (ASAs) between Canada and various third-party States; The taxation policies detailed by ICAO, of which Canada is a Contracting State; and Global measures adopted by ICAO to address CO 2 emissions from aviation, specifically the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Furthermore, we propose that the Government of Canada establish a carbon-offsetting scheme for domestic aviation similar to the CORSIA agreement established for international aviation by ICAO in 2016. We look forward to continued discussions with Environment and Climate Change Canada on how this proposed course of action can best be implemented. - The National Airlines Council of Canada (NACC) is the trade association representing Canada's largest passenger air carriers: Air Canada, Air Transat, Jazz Aviation LP, and WestJet. We advocate for safe, environmentally responsible, and competitive air travel by promoting the development, by governments, of policies, regulations, and legislation to foster a world-class transportation system. Collectively, NACC member airlines carry over 71 million passengers annually and directly employ more than 50,000 people. NACC represents almost 90 per cent of domestic passenger traffic and 65 per cent of international traffic in Canada. The Air Transport Association of Canada (ATAC) is Canada s national trade association representing approximately 200 companies dedicated to commercial air transport in Canada including scheduled and charter, passenger and cargo, air carriers operating regionally, nationally and internationally as well as the industry that supports them. 5