Budget 2001 - Budget Plan
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Annex 8
Air Travellers Security Charge:
Supplementary Information and Notice of Ways and Means Motion

Supplementary Information

Air Travellers Security Charge

The budget proposes to introduce an Air Travellers Security Charge to fund the new air security expenditures. The charge will be paid by air travellers – the primary users of the enhanced air security measures.

The Air Travellers Security Charge will apply in respect of emplanements in Canada, other than emplanements on connecting flights. The application and rate of the charge will depend on where the airline ticket is purchased and the location of the travel – that is, whether it is domestic, transborder or other international travel. For this purpose, "transborder" travel refers to travel between Canada and the continental U.S. (that is, not including Hawaii), or the Islands of St. Pierre and Miquelon, that does not include any other international travel. The rate of the charge for transborder travel takes into account that U.S. taxes also apply.

The total cost of the security charge indicated below represents the combined amount of the security charge and any applicable goods and services tax (GST), or federal portion of the harmonized sales tax (HST). Where the GST/HST applies to air travel, that tax will be calculated on the total cost of the travel, including the Air Travellers Security Charge. The GST/HST applies to passenger air travel that is wholly within Canada and to transborder travel that originates in Canada. The GST/HST does not apply to other international passenger air travel.

Air Travel Purchased in Canada

If the air travel is purchased in Canada, the Air Travellers Security Charge will be payable by the purchaser and collected by the air carrier or its agent at the time of payment for the air travel.

The Air Travellers Security Charge will apply to purchases in Canada that include air travel occurring on or after April 1, 2002 for which payment is made on or after that date. In this case, the total cost of the charge, including the GST (or federal portion of the HST) where applicable, will be as follows:

• For travel wholly within Canada – $12 per emplanement, to a maximum of $24 per ticket (for example, $12 for a one-way trip with no stopovers and $24 for a round trip).
• For transborder travel – $12 per emplanement in Canada, to a maximum of $24 per ticket for two or more emplanements in Canada.
• For travel from Canada to another international destination (including such travel involving connections or stopovers in the U.S.) – $24.

Air Travel Purchased Outside Canada

If the air travel is purchased outside Canada, the Air Travellers Security Charge will be payable by the passenger at the time of emplanement at a Canadian airport on a flight leaving Canada, unless the air carrier or its agent has collected the charge at the time of the ticket purchase and evidence of the payment is submitted by the passenger at the time of emplanement.

The security charge will apply to purchases made outside Canada for which payment is made on or after April 1, 2002 for air travel that includes an emplanement in Canada after May 31, 2002. In this case, the total cost of the charge will be as follows:

• For transborder travel – $12 per emplanement on a flight leaving Canada, to a maximum of $24 per ticket if it includes more than one emplanement on a flight leaving Canada.
• For other international travel, including such travel involving connections or stopovers in the U.S. – $24.

Additional Information

Passenger air transportation services provided on aircraft with a maximum certified take-off weight of not more than 2730 kilograms will be exempt from the Air Travellers Security Charge. Exemptions will also be provided for certain other specialty air services, such as air ambulances.

The Air Travellers Security Charge will be implemented under a new statute. The Minister of National Revenue will be responsible for the administration and enforcement of that Act, which will be carried out by the Canada Customs and Revenue Agency (CCRA).

Air carriers that collect the security charge will be required to be registered for purposes of the new Act, and to account for and remit the charges collected to the CCRA. The Act will provide for all necessary collection, enforcement and appeal mechanisms.

Notice of Ways and Means Motion

Notice of Ways and Means Motion to Introduce an Act to Implement an Air Travellers Security Charge

That it is expedient to introduce an Act to implement an Air Travellers Security Charge and to provide among other things:

(1) That every person who acquires in Canada from an air carrier an air transportation service that includes transportation provided on or after April 1, 2002 and for which consideration is paid or becomes payable on or after that day be required to pay to Her Majesty in right of Canada a charge in respect of the service at the time the consideration is paid or becomes payable, whichever is earlier.

(2) That every person who, on or after June 1, 2002, emplanes in Canada on an aircraft used in the transportation of the person to a destination outside Canada that is part of an air transportation service acquired outside Canada for which consideration is paid or becomes payable on or after April 1, 2002 be required to pay to Her Majesty a charge in respect of the service at the time of the emplanement.

(3) That an air transportation service not be subject to the Air Travellers Security Charge if

(a) all of the transportation included in the service is

(i) provided on aircraft whose maximum certified take-off weight does not exceed 2,730 kg,

(ii) provided on aircraft referred to in subsection 56(1) of the Canada Transportation Act, or

(iii) listed in, or prescribed under, subsection 56(2) of the Canada Transportation Act; or

(b) the service is a prescribed service.

(4) That an air transportation service be defined as all of the transportation of a person by air for which a single ticket is issued and that includes an emplanement in Canada.

(5) That an emplanement be defined as an embarkation on an aircraft, other than an embarkation

(a) for the purpose of transferring to a connecting flight; or

(b) that results from the provision of emergency or ground services.

(6) That the continental zone be defined as Canada, the United States (except Hawaii) and the Islands of St. Pierre and Miquelon.

(7) That, where an air transportation service is acquired in Canada, the Air Travellers Security Charge in respect of the service be equal to:

(a) $11.22 for each emplanement in Canada included in the service, to a maximum of $22.43, if

(i) the service does not include transportation to a destination outside the continental zone, and

(ii) tax under subsection 165(1) of the Excise Tax Act is required to be paid in respect of the service;

(b) $12.00 for each emplanement in Canada included in the service, to a maximum of $24.00, if

(i) the service does not include transportation to a destination outside the continental zone, and

(ii) tax under subsection 165(1) of the Excise Tax Act is not required to be paid in respect of the service; or

(c) $24.00, if the service includes transportation to a destination outside the continental zone.

(8) That, where an air transportation service rendered to a person is acquired outside Canada, the Air Travellers Security Charge in respect of the service be equal to:

(a) $11.22 for each emplanement in Canada on an aircraft used to transport the person to a destination outside Canada but within the continental zone, to a maximum of $22.43, if

(i) the service does not include transportation to a destination outside the continental zone, and

(ii) tax under subsection 165(1) of the Excise Tax Act is required to be paid in respect of the service;

(b) $12.00 for each emplanement in Canada on an aircraft used to transport the person to a destination outside Canada but within the continental zone, to a maximum of $24.00, if

(i) the service does not include transportation to a destination outside the continental zone, and

(ii) tax under subsection 165(1) of the Excise Tax Act is not required to be paid in respect of the service; or

(c) $24.00, if the service includes transportation to a destination outside the continental zone.

(9) That an air carrier from whom an air transportation service is acquired in Canada be required to collect, as agent of Her Majesty, the Air Travellers Security Charge payable in respect of the service.

(10) That an air carrier on whose aircraft a person is transported from Canada to a destination outside Canada as part of an air transportation service acquired outside Canada be required to collect, as agent of Her Majesty, the Air Travellers Security Charge payable in respect of the service.

(11) That any person who collects an amount as or on account of the Air Travellers Security Charge in respect of an air transportation service be required to remit the amount to Her Majesty.

(12) That, if the Air Travellers Security Charge that an air carrier is required to collect at the time of an emplanement has been collected by another air carrier, the other air carrier be required to account for the charge and remit it to Her Majesty.

(13) That any air carrier that is required to collect the Air Travellers Security Charge be required to be registered for the purposes of the Act implementing the charge and to file returns accounting for amounts collected by the carrier as or on account of the charge in the prescribed form and manner and within the time provided to do so.

(14) That every air carrier that is required to collect the Air Travellers Security Charge and that fails to do so be made liable to Her Majesty for the amount of the charge.

(15) That authority be provided to impose interest or penalty in respect of any failure of a person to pay, collect or remit an amount as and when required under the Act implementing the Air Travellers Security Charge.

(16) That authority be provided to impose penalties on any person that fails to comply with any provision of the Act implementing the Air Travellers Security Charge.

(17) That all necessary administrative, assessment, collection, refund, enforcement and appeal provisions be enacted to enable the administration and enforcement of the Act implementing the Air Travellers Security Charge.

(18) That authority be provided for the Governor in Council to make regulations

(a) prescribing anything that, by the Act implementing the Air Travellers Security Charge, is to be prescribed or is to be determined or regulated by regulation; or

(b) generally to carry out the purposes and provisions of that Act

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