Pretty obvious headline today in the Globe and Mail, zero surprise to me at least:
Ottawa’s carbon tax will send more passengers to U.S. carriers, Canadian airlines warn
That headline doesn’t actually list the worst part…
Canada’s airlines are warning Ottawa’s planned carbon tax will increase airfares, reduce flights on marginal domestic routes and drive passengers to nearby American airports.
The airline industry is such a tough business already, with thin margins business. It’s the first thing to be hit in an economic downturn.
And then factor in the cost of fuel.
The carbon tax will just kill it off.
But the Globe and Mail found a pro-carbon tax lobby group to cheer on the higher taxes. It’s Dale Beugin of Preston Manning’s “ecofiscal commission” — seriously, can you imagine the founder of the Reform Party is part of this? He says:
“I think it is quite likely they will just be able to pass along their costs to consumers. So yes, flights might cost more but I don’t see them losing market share to international competitors.”
But if the price of something goes up, the demand for it goes down. As in: if a flight to Mexico for a holiday is $1,000, maybe 100 people will buy it. If the price goes up to $1,500, maybe only 50 people would buy it. That might mean the whole flight is no longer economical — it would just be cancelled.
That’s one thing when it’s a holiday flight to Mexico. But how about when it’s a flight to a small Canadian city?
You have to fill up your car to get to work. But where flights are concerned, people will just take a vacation closer to home; businesses will use Skype or phone calls instead.
Already, many budget-conscious customers drive down from Toronto to Buffalo, New York, or from Vancouver to Washington state, to save hundreds of dollars on flights. But that only works with flights to the U.S. or foreign places. It’s not going to help you get to somewhere like London, Ontario or Whitehorse. They’ll just shut down.
And taking the bus isn’t an option for many any longer:
After Rachel Notley announced her provincial carbon tax, Greyhound bus lines pulled the plug on a lot of their routes in Western Canada. Hundreds of people were put out of work, and low-budget travellers were stuck.
This is what carbon taxes do — in fact, it’s the whole point of a carbon tax: to make people “change their behaviour.” That’s what Justin Trudeau and Catherine McKenna and the whole lot of them always say — it’s Stephane Dion’s “green shift.”
I promise you, though:
All of them will keep flying on their private jets, long after Air Canada and WestJet shut down flights to Mexico, or to Nanaimo or to Moncton…