The 2012 provincial budget is offering hope for the Prince George Airport's ability to attract international cargo flights to refuel.
B.C. Finance Minster Kevin Falcon released the 2012 budget on Tuesday. The budget includes a refund of the $0.02 per liter jet fuel tax for international cargo and passenger flights, including flights to the U.S.
The tax break goes into effect on April 1. Currently air cargo carriers are required to pay the tax on all jet fuel, except the portion of a cargo flight which begins or ends outside North America.
"It makes us, on the big airplane program, more competition compared to the U.S. ... and Alberta, which also doesn't have this tax," Prince George Airport president John Gibson said. "On the big airplanes it's up to 100,000 litres of [fuel] uplift. That's $2,000. Multiply that by a couple flights a day, 365 days a year: it's significant."
The Prince George Airport has several hurdles to cross before it will be able to attract air cargo traffic for refueling stops, Gibson said, but this is one of the big ones.
"We're targeting having our fuel storage up and running in June. Then we'll be able to go to airlines and say, 'It's not a marketing pitch. It's a realistic operation,'" he said.
Gibson said the tax refund also makes Prince George for smaller, passenger flights to Mexico and U.S. tourism destinations.
In a media phone conference on Wednesday, Falcon said the the decision to eliminate the tax came after Vancouver International Airport petitioned the government. The Prince George Airport was a signatory to the request sent by the Vancouver airport.
"What they did is went out and did a bunch of work and came back with letters from 22 airlines pledging to increase service if we did this," Falcon said. "Since we know that each flights amounts to 150 to 200 jobs for people in B.C., we agreed to do this."
"The elimination of the jet fuel tax on international flights ... could be the lynchpin of Prince George's viability," Prince George-Mackenzie MLA Pat Bell said.
Prince George-Valemount MLA Shirley Bond said the jet fuel tax credit will help the airport take advantage of the significant capital investment made by the provincial and federal governments into it. The two levels of government supported a $36 million runway expansion, completed in 2008, and construction of a refueling apron in 2009.
"We want it to be a significant new driver for the economy," Bond said. "It's one of those tools to allow our regional airports to maximize the benefits to regional airports, including YXS."
Belt-tightening budget
Bond said the biggest highlight of the 2012 budget is the commitment of the government to be out of deficit by the 2013-14 fiscal year.
"Very few jurisdictions have the fiscal ability to do that," Bond said. "We still face economic uncertainty. Despite all that, we're going to balance the budget. There are challenges facing us, and it's very difficult to have the disciple not to just throw money at problems."
It's an approach which has drawn kudos from the Prince George Chamber of Commerce.
Chamber CEO Jennifer Brandle-McCall said the chamber has advocated for the government to balance the budget first, before introducing new measures.
"There was quite a few things in the budget ... to make B.C. competitive internationally," Brandle-McCall said.
Brandle-McCall said the tax credits for seniors to renovate their homes and new home tax credits will translate into additional business for location companies in the home renovation and construction sectors.
"I think any time the province provides tax credits, we do see the members benefit," she said.
