EU tax doesn't fly in Canada

By DANIEL PROUSSALIDIS PARLIAMENTARY BUREAU

Posted 4 hours ago

OTTAWA -- As American airlines start imposing a $6 carbon emission surcharge on airfares to Europe, travellers on Canadian airlines are getting a bit of a reprieve.

Air Canada and Air Transat have confirmed they have not yet applied any surcharge, even though the European Union now charges airlines landing at EU airports for carbon emissions.

But that could change.

"Airlines are going to be looking at what they're going to do now in terms of mitigating that cost impact," George Petsikas, president of the National Airline Council of Canada, said.

He adds Canadian airlines are complying with the EU's emissions trading scheme "under protest" and by early 2013, airlines will know how many carbon credits they'll have to buy under the European scheme.

Germany's Lufthansa expects its compliance costs to surpass $167 million, which it will pass on to passengers, while Air France/ KLM could be forced to shell out up to $130 million.

Canada's transport minister has already warned Canadian airfares to Europe could rise.

"This new tax will hurt an industry that is important to all of our economies and is expected to drive up prices on consumers by as much as $15 a ticket," Minister of Transport Denis Lebel said in a statement last month.

China has said its airlines refuse to pay an "emissions tax" while the state-run Xinhua News Agency has warned of a possible trade war over the issue.

The idea of Canada also threatening a trade war doesn't fly with Petsikas.

"Our view is that we hope it doesn't come to, obviously, a major trade war," he said. "Nobody wants that -- certainly not consumers, certainly not airlines."

Petsikas says he hopes the Europeans will change course and come to a carbon emissions agreement acceptable to non-EU countries in discussions with the

International Civil Aviation Organization.

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Source: http://www.stthomastimesjournal.com/ArticleDisplay.aspx?e=3439205

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