5 Tax Impacts
The ongoing operation of YWG and associated economic activity in the region generate a significant amount of tax revenue for the federal, provincial, and municipal levels of government. Tax impacts are estimated separately from economic impacts, as the tax revenues generated by the airport’s operations are different from its economic output. Tax impacts include income taxes and sales taxes, while economic output measures the spending of firms and individuals. This section summarizes the government revenues resulting from current YWG operations and associated economic activity.
Revenue impacts are presented based on who is making the payment:
Taxes paid by employers and employees. These are taxes paid by the airport employers and employees. They include income and payroll taxes, social insurance contributions (such as employment insurance premiums), and federal fuel taxes.
Taxes paid by passengers. Visitors pay various taxes and fees. For example, these include taxes on personal expenditures at YWG such as taxes on food and beverages, taxes on airline tickets, and taxes on single night hotel stays by connecting passengers and overnight flight crews, as well as the Airport Improvement Fee (AIF).
Taxes paid by WAA. WAA pays taxes in the form of property taxes. WAA also makes a federal ground lease payment to the federal government.
For each of the tax revenue sources, taxes paid to the federal, provincial, and municipal levels of government are identified separately.
The purpose of this section is to present the government tax revenue impacts resulting from economic activity that can be attributed directly to YWG. As with all economic impact studies, a conceptual decision must be made as to how broad a definition of economic activity should be used in measuring the impacts. For this study, a relatively narrow definition has been taken, for example, the following have not been included:
Taxes associated with indirect or induced employment (i.e. multiplier effects).
Consumption taxes paid by employees when they spend their income/wages and benefits.
Taxes paid by airport users outside of the airport.
Property taxes paid by employees.
It would be exceedingly complex to broaden the scope of the tax base in this analysis to include taxes generated by indirect and induced employment. The level of detail collected on direct employment by the survey administered by InterVISTAS is critical to the tax impact analysis; however, such information is not available for the indirect and induced employment. Estimating the tax impacts associated with indirect and induced employment would be a complex process, requiring speculation about the general economy and resulting in averages that would not necessarily be accurate. Therefore, the tax impact analysis in this report is limited to government revenues generated from direct employment associated with airport operations only.
- 1 For the most part, this study estimates (some tax envelopes were measured directly, e.g., tenant property taxes) taxes paid from information on the passengers, employers, and employees at the airports. In a few situations, such as the corporate income tax paid by employers, an approximate method was used to estimate taxes paid. In every case conservative methods were used. No major tax has been excluded.