NavCanada Retroactively Billing Operators for GST

 - September 9, 2008, 11:25 AM

Several U.S. operators of business aircraft report that they have received invoices this week from NavCanada for a retroactive 5-percent goods and services tax (GST) on air navigation service charges. The Canadian Revenue Authority (CRA) has assessed the tax to NavCanada, which is attempting to recover payments from aircraft operators who have flown in its airspace in the last five years, the length of the statute of limitations. NBAA said it disagrees with the applicability of the tax and is working with the Canadian Business Aviation Association to raise objections to the move. The CRA has adopted the position that only commercial operations are exempt from the GST. AOPA has also asked NavCanada to waive the tax collection for U.S. aircraft operators. “Chasing after customers who have paid for services in full is poor business practice,” said AOPA president Phil Boyer. “This burden shouldn’t be placed on the backs of pilots who rightfully believed that they had completely fulfilled their financial obligations to NavCanada.” Boyer also noted that this is “an excellent example of how fee-for-service or privatized air traffic control systems are flawed.”