H: Tax Revenues Attributable to Airport Users

YWG Passengers in 2019

In 2019, nearly 4.5 million passengers enplaned and/or deplaned at YWG. Table H-1 shows the passenger movements in 2019, including breakdown into sectors.

Table H-1: Passenger Movements at YWG, 2019

GST on Air Fares, Insurance Surcharges, and the Airport Improvement Fee (AIF)

Tax Base and Rate

The 5% Goods and Services Tax (GST) applies to all tickets purchased in Canada and includes all domestic, transborder, and international flights.

WAA charges all passengers originating their journey at YWG an Airport Improvement Fee (AIF) that is collected for the sole purpose of funding capital improvements at the airport. GST is levied on the fee.

Conceptual Issues. Taxes levied on the air fare should be shared among airports in Canada associated with the journey. The estimation method builds in a sharing assumption (50% YWG and 50% other Canadian airports).

Estimation Method and Results

GST is levied on all air fares; however, due to the sharing assumption stated above, only 50% of the estimated taxes per departing passenger are attributable to YWG. Total tax on airfares is estimated to be $8.1 million.

WAA collected nearly $49 million through the AIF in 2019. Tax revenue on this amount collected by the Federal government is approximately $2.4 million.

GST on Air Traveller Security Charge

The Canadian Government enacted the Air Traveller Security Charge (ATSC) on April 1, 2002 to help fund security improvements at airports across Canada, as a result of the terrorist attacks on September 11, 2001. There is a flat rate fee of $7.12 for each chargeable enplanement for domestic travel, $12.10 for transborder travel, and $25.91 for international travel.

Tax Base and Rate

The GST applies to the domestic and transborder ATSC.

Estimation Method

The volume of origin/destination traffic at YWG was estimated, assuming that 50% of non-connecting passengers was origin traffic at YWG. Each origin passenger pays the ATSC. An estimated $0.4 million in taxes was collected on the ATSC in 2019.

Tax on Airfield Fees

The GST and PST rates are applied to airfield fees.

Estimation Method and Results

Based on the information provided by WAA, net revenue from airfield fees was over $18.9 million in 2015. Total tax collected is estimated at over $2.4 million, including $950,000 GST and $1.5 million PST.

Tax on Passenger Processing Charges

The GST and PST rates are applied to passenger processing charges.

Estimation Method and Results

Based on the information provided by WAA, net revenue from passenger processing charges was $25.8 million in 2019. Total tax collected is estimated at $3.1 million, including $1.3 million GST and $1.8 million PST.

Tax on Concession Purchases

Tax Base and Rate

The GST and PST rates apply to most retail concession purchases by travellers at the airport.

Estimation Method and Results

Total taxes based on sales of $4.1 million (including airport restaurant/gift shop sales) is $0.5 million, of which approximately $200,000 is attributed to GST and the remaining $300,000 to the PST portion.

Tax on Ground Transportation, Parking, and Car Rentals

The PST and GST rates apply to taxi, limousine, and bus transportation, as well as to parking fees and car rentals.

Estimation Method and Results

Based on the information provided by WAA, parking and ground transportation revenues were $18.7 million in 2019. Tax on these expenditures is estimated at over $2.2 million.

Tax on Accommodation Costs

Tax Base and Rates. The 5% Goods and Services Tax (GST) and 7% Provincial Sales Tax (PST) applies to accommodation costs by non-local visitors to Winnipeg staying in hotels.

In addition, according to Tourism Winnipeg, a hotel tax of 5% is also levied on accommodation expenditure in Manitoba.

The Winnipeg Barometer Report published by Tourism Winnipeg indicates that the average daily room rate forecast for 2019 is $127.00.

Estimation Method and Results

In order to estimate the total accommodation costs of non-local visitors in Winnipeg, the average daily room rate was applied to the estimated total crew layover nights and connecting passenger nights determined from the hotel survey conducted. The total accommodations expenditure amounted to an estimated $24 million, with revenue from total crew layover nights accounting for $1.9 million and revenue from total non-local passenger nights accounting for over $22.0 million.

PST and GST based on the expenditure for airline crew accommodation of $1.9 million is approximately $0.2 million, while the hotel tax is estimated to be $100,000. PST and GST based on accommodation costs of $22.0 million by non-local passengers is approximately $2.6 million, while the hotel tax is estimated to be $1.1 million.