The Ontario government is planning cut the aviation fuel tax in Northern Ontario by two-thirds in 2020. The proposal, announced at the Canadian Bushplane Heritage Centre in Sault Ste. Marie on Tuesday, would slash the provincial tax from 6.7 cents per litre to 2.7 cents per litre effective Jan. 1. “Living in Northern Ontario can bring with it a higher cost of living, in part because of greater reliance on air travel and air freight,” said Finance Minister Rod Phillips. “That is why we are helping reduce costs in this region by cutting the aviation fuel tax rate.”
The government has done some calculations on how the tax cut should benefit Northern Ontario residents, suggesting a family of four in the North should save $230 a year on groceries while a monthly traveler from Thunder Bay to Red Lake should see a $135 reduction in airfare over the year. The announcement did not say how it would ensure the savings would be passed along to consumers instead of just being pocketed by operators. The tax cut would apply to aviation fuel purchased in Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay and Timiskaming districts.