Airport fees are often discussed as a reason for the cost of air travel in Canada. The reality is more complex. This page explains how airport fees work, why they are essential to the way Toronto Pearson is funded and why looking at a single fee in isolation can be misleading.
Key facts
- Toronto Pearson operates under Canada’s airport user-pay funding model. It is largely funded by airport users rather than taxpayers (which is the case in countries such as the United States).
- Toronto Pearson is run by a not-for-profit airport authority and reinvests its revenues in airport operations, infrastructure and long-term improvements.
- Like other Canadian airports, Toronto Pearson has three main sources of revenue:
- Aeronautical fees – Charged to airlines for the use of airport infrastructure and services.
- Airport Improvement Fees – Help fund infrastructure projects that maintain and improve airport facilities.
- Commercial revenue – Includes retail, parking fees and rents. It’s also known as non-aeronautical revenue, or NAR.
- Toronto Pearson’s aeronautical fees are competitive with the rest of the industry. They remained flat or decreased from 2007 to 2020. As of February 2025, they were just 94% of their 2007 level, despite years of inflation and rising costs.
- Airport fees account for only a small fraction of ticket prices and are not a major factor in rising fares, which are largely being driven by factors such as increasing fuel costs, algorithmic pricing models and airline ancillary fees. According to the Canadian Airports Council research, aeronautical fees and airport improvement fees together account for just 12% of the average Canadian airfare.
- The aviation industry commonly uses cost per enplanement to compare airport costs across different jurisdictions. At Toronto Pearson, cost per enplanement has dropped in recent years, from $32.16 in 2022 to $29.50 in 2025. This reflects increased efficiency and rising passenger volume.
The Canadian airport funding model
Canada’s large airports operate under a user-pay model. This means the people and businesses that use the airport help pay for its operation, maintenance and future growth. Taxpayers do not fund the day-to-day upkeep or major infrastructure investments at Toronto Pearson. In fact, Toronto Pearson supports public finances by paying ground rent to the Canadian government. In 2025, it paid $235.4 million to the federal treasury.
As a not-for-profit airport authority, Toronto Pearson funds its operations and infrastructure investments through a combination of:
- Airport Improvement Fees, which are paid by passengers and collected by airlines
- Aeronautical fees, which are paid by airlines
- Commercial revenue from activities such as retail, parking charges and rents
- Debt financing for major capital programs
Revenue generated by the airport is reinvested into improving its operations and preparing it for future growth.
What are airport fees?
Airport fees fall into two categories:
- Aeronautical Fees - These are charged to airlines for the use of airport infrastructure and services. These fees help cover the costs of operating runways, terminals, airfield infrastructure and airport systems.
- Airport Improvement Fee - These help fund infrastructure projects that maintain and improve airport facilities. At Toronto Pearson, Airport Improvement Fee revenue supports projects that allow the airport to meet growing demand for air travel and maintain safe and efficient operations.
Toronto Pearson consults regularly with airline partners and other stakeholders on its rate-setting framework and proposed capital investments. We set rates that support the airport’s long-term needs while keeping costs as low as possible.
What is not an airport fee?
Several charges on an airline ticket are added by airlines or other organizations that help facilitate a passenger’s journey. These are sometimes wrongly conflated with airport charges, but the revenues do not go airports. These charges include:
- Government taxes
- Airline fuel surcharges
- Airline baggage charges
- Airline change fees
- Air traffic control fees
- Security fees
What is cost per enplanement?
Cost per enplanement is the aviation industry’s preferred measure of airport costs and enables comparisons across countries with different funding arrangements. It represents the average airport-related cost associated with a departing passenger. Airlines, airports and industry analysts use it to compare airports because it captures more than a single fee or charge. In some countries, including the United States, airports receive taxpayer funding and rely less on fees. So comparing airport fees alone provides a misleading picture.
At Toronto Pearson, cost per enplanement has dropped in recent years, reflecting increased efficiency and rising passenger volume.
- Cost per enplanement at Toronto Pearson:
- $32.16 in 2022
- $29.50 in 2025
Common misconceptions
Misconception: Toronto Pearson is an expensive airport
This claim often stems from looking at a single fee rather than the total cost of operating an airport.
Using the industry’s benchmark standard – cost per enplanement – to compare airport costs, Toronto Pearson sits in the middle of a group of major North American airports frequently used for comparison. In 2022, our cost per enplanement was $32.16, which was comparable to that of Montreal ($30.27), Los Angeles LAX ($34.08) and Chicago O’Hare ($35.62).
Misconception: Airport fees are responsible for rising air fares
Airport fees are only small component of an airline ticket price. According to research by the Canadian Airports Council, aeronautical fees and airport improvement fees account for about 12% of the average Canadian airfare. Approximately 88% of the ticket price comes from other factors, including airline fares, security charges, airline surcharges, ancillary fees and taxes.
Overall airfares are influenced by many factors, including fuel prices, labour costs, supply chain pressures, aircraft availability, market demand and airline pricing decisions.
Misconception: Toronto Pearson's fees have increased faster than inflation
Toronto Pearson’s aeronautical fees were held constant or reduced from 2007 to 2020. As of early 2025, they remained approximately 94% of their 2007 level despite 18 years of inflation and rising operating costs. Indexed against inflation, these fees were approximately 55% below consumer price index growth over the same period.
Recent fee increases have been introduced to help maintain airport infrastructure and fund investments needed to support growing passenger demand and future capacity.
Misconception: Airport improvement fees are unusually high at Toronto Pearson
Airport improvement fees reflect Canada’s airport funding model. Unlike many U.S. airports that benefit from substantial government infrastructure funding, Canadian airports largely fund their own capital investments. In fact, Canadian airports contribute to government revenues by paying ground rent to the treasury, rather than drawing from ongoing government infrastructure subsidies. As a result, airport improvement fees play an important and intentional role in funding airport expansion and modernization projects.
Why airport investment matters
Toronto Pearson is Canada’s busiest passenger airport and one of North America’s most internationally connected airports. Maintaining and expanding that role requires continuous investment in infrastructure, technology and airport operations.
Airport fees help fund:
- Terminal modernization
- Runway and airfield infrastructure
- Safety and security systems
- Passenger processing technology
- Accessibility improvements
- Future capacity required to support passenger growth
Through Pearson LIFT, Toronto Pearson is planning for passenger volumes to reach approximately 65 million annually in the coming decade. These investments are intended to improve efficiency, support competition, expand capacity and strengthen Canada’s connectivity to the world.
Frequently asked questions
Does Toronto Pearson receive taxpayer funding for infrastructure projects?
Toronto Pearson operates under a user-pay model. Airport operations are funded by fees charged to airport users and airlines, as well as by commercial revenues. The taxpayer does not pay for Toronto Pearson’s operating costs.
Why does Toronto Pearson charge an airport improvement fee?
The airport improvement fee helps fund the construction, renewal and modernization of airport infrastructure that supports passenger travel and airport operations.
How should airport costs be compared?
Industry experts commonly use cost per enplanement because it reflects overall airport costs and provides a more meaningful comparison than looking at a single fee, especially when considering airports in different countries.
Are airport fees the biggest contributor to ticket prices?
No. Research by the Canadian Airports Council indicates that aeronautical fees and airport improvement fees account for about 12% of the average Canadian airfare. Most of the ticket price comes from other components.
Is Toronto Pearson competitive with other major airports?
Using cost per enplanement, Toronto Pearson compares favourably with many major hub airports in North America and falls within the middle range of peer airports used in industry comparisons.
Would privatization of Canada’s airports lead to lower fees?
Not necessarily. Research shows that full privatization in countries like Australia and Britain has not resulted in more efficient operation or lower fees. London Heathrow, an international hub often compared to Toronto Pearson, was fully privatized in the 1980s. Its airport improvement fee is roughly $15 more than Toronto Pearson’s. A 2023 U.S. National Bureau of Economic Research study found that when private equity funds buy airports, they expand terminal infrastructure quickly to expand passenger volume – then raise fees to recoup their investment.