Where is your $55 going?

[KK7]

So there has been some talk lately regarding the $55 we all pay Transport Canada every time we get a medical. Some people pay every time, some people let the Canada Revenue Agency take care of paying it for you, some people have been getting calls from collection agencies. Fair enough, one way or another, we all pay it eventually.

So where is this money going, and what is it paying for? It used to be for AIP amendments, or so it was claimed. No AIP amendments anymore, so is it paying for the salary of doctors who review medical application forms at the Medical devision of Transport Canada, or is it simply paying a clerk to file papers into a filing cabinet?

We are paying a user fee for a service we are not aware of, and Transport Canada has been elusive about answering where it is going. I'd like to find out something more concrete rather than paying it blindly. Maybe it is justifiable, maybe it isn't, but we have the right to know what service we are supposedly paying for. Next time I get a bill in the mail, I pick up the phone and ask them.

I wanted to look at this from a different perspective. I took a look at licensing statistics from September 2010 to see how many pilot licences we have in force, and compiled the numbers to come up with the rough number of medicals that are performed each year and the amount of money Transport Canada collects from us. For simplicity sake, I have only taken to account Aeroplane licences (Private, Commercial and Airline Transport) to avoid some duplicity that might occur from people who hold both an Aeroplane Licence and another type of licence like Helicopter or Air Traffic Control.

Here are the numbers based on statistics as of September 2010:

No. of Aeroplane Licences in Force:
47 662 (18 914 Under 40 yrs old / 28 748 Over 40 yrs old)

Average number of medicals performed for Aeroplane Licences every year:
42 450

The amount pilots pay doctors in a year to perform medicals at an average price of $100 each:
$4.2 million

Revenue made from $55 medical fees charged by Transport Canada per anum:
$2.3 million
Note: This does not include revenue from addition medicals for Helicopter Licences (Private/Commercial/Airline), Recreational Pilot Permits, Student Pilot Permits, Ultralight Permits, Glider Licences, Air Traffic Control Licences, Flight Engineer Licences, Balloon Licences and Gyroplane Permits. Aeroplane Licences represent 65% of all aviation licences and permits, however some Aeroplane pilots hold more than one type of licence or permit.

So, how does Transport Canada justify $2.3 million+ worth of user fees every year?

[LegoMan]

All they need to tell you is its administration fees and are not required to say anymore. You want to play the game you gotta follow the rules.

[trey kule]

Thats some nice stats you have there. I will share them with my MP if that is alright with you..Maybe some others want to also.

The thing is the governments have taxed us out..There is a limit and they know it. so when they hit the limit,some smart people came up with the idea of user fees. And everyone jumped on the bandwagon, not only in aviaition. I just rented a car..It has a concession fee, return fee..etc.etc..cell phones have access fees...It is all a big scam.

When it is the government it is nothing more than another form of taxation, and they know that the few who wont be good Canadians and just roll over and take it, wont get very far. You cant do much of a court challange for $55.00. class action. the best class action in this case would be for people to not pay it. And complain to their MP..How many here are willing to do that.

for what it worth, I just renewed a foreign license..Used to be $150 every six months to take your license in and have it signed....even in a third world country they realized that was nothing but a tax grab and have now waived it. I doubt that will happen here. To many sheep willing to pay whatever they are told to.

[Chris]

As posted in the other thread....

http://www.tc.gc.ca/eng/corporate-servi ... 06-356.htm

Small Excerpt from the above link....

Transport Canada (TC) issues private and commercial pilot licenses to individuals who have completed the required training and who have passed an initial medical evaluation. While the license is issued for an indefinite period, the pilot must maintain its currency by undergoing periodic medical evaluations at prescribed frequencies. The Recurring Pilot Fee (RPF) is applied each time a pilot passes the required medical assessment as evidenced by the issuance or endorsement of a medical certificate. The Department issues approximately 40,000 medical certificates annually and generates approximately $2.2M from the provision of this service.

In addition, while a policy has been issued, promoting the adoption of a risk management approach to the review of medical assessments, some regions continue to review a majority of these documents.

Compliance to Treasury Board (TB) policy has been achieved with respect to exclusion of the costs of publications and those related to Safety Programs. ATIP REMOVED

The RPF generates approximately $2.2M annually, which is vote netted to the Department, and is intended to recover the majority of the cost of processing medical certificates.

It is recognized that there are some structural and legal impediments to achieving greater efficiencies in the administration of the RPF, and any action taken must be balanced in terms of the modest amount of revenue generated from the fee.

The RPF continues to be characterized by a high volume of transactions requiring significant processing and collection effort to generate a relatively low volume of revenue. While the annual cost of administering the RPF has not been quantified, the necessity to compute, invoice and collect a high volume of low dollar value transactions is still disproportionately high compared to the amount of revenue generated. In particular, it was noted that the RPF comprises 73% of the approximately 107,000 customer accounts currently in Oracle 11i. In addition, this fee was responsible for 59% of the total invoices generated by the Department in 2004-05 but only generated 5% of the invoiced revenue.


Services Invoiced...........# of Invoices(2004/2005).......Invoiced Revenue(2004/05)
Recurring Pilot Fee.............. 40,360 (59%).........................$2.2M (5%)
Other............................... 28,620 (41%).........................$46.5M (95%)
Total................................ 68,980 (100%).......................$48.7M (100%)


Since interest is rarely charged on unpaid RPF accounts, as they do not individually meet the necessary dollar threshold established by departmental policy, there is little incentive for the pilots to settle their accounts in a timely fashion. In addition, their credit ratings are not affected by the non-payment of the RFP.

The RPF is based on costs that were not directly related to medical assessment and therefore not compliant with Treasury Board policy. Conversely, the RPF cost base excludes certain costs that could have been recovered in the fee.

• the TB policy on Cost Recovery and Charging requires a relationship between the fee charged and the cost of the goods or service rendered
• the cost base upon which the RPF fees are computed included certain elements (i.e. the cost of publications and aviation safety programs) that were not associated with the provision of this service
• the RPF was computed on a cost base established in 1995-96 and did not incorporate cost increases such as those associated with the transfer of Civil Aviation Medicine from Health Canada ($2M) and system capital costs and the increase in administration and system costs relating to the billing system revisions
• the RPF is not applied to certain categories of aviation personnel (Air Traffic Controllers and student pilots) who also require medical assessments to maintain their licensing privileges
• there are no mechanisms in place for making adjustments to the cost base where appropriate and ensuring that all applicable costs (i.e. systems costs) are being captured.

[North Shore]

The thing is the governments have taxed us out..There is a limit and they know it. so when they hit the limit,some smart people came up with the idea of user fees.

Really? I don't think so. Since the last few years of Martin's government, and into the Harper years, income tax rates, and GST have dropped. The government has to pay for things somehow, so they've instituted user fees. The people who use services are being asked to pay for them. I'd hazard a guess that the $2.5 Mill that the government collects from our medical fees every year comes nowhere near to covering the cost of the system.

[PanEuropean]

Guys:

$55 ain't what it used to be. $55 today is like $20 back in 1985. So, if you are of an age where you have to renew the medical twice a year (like I am), let's keep the perspective accurate - we're paying what is equivilent to $20 in the old days to have our paperwork processed. Although I do agree that it would be nice to get it free, $55 ain't much of a hit. I hold licences from Europe and other countries, and they charge similar fees for paperwork administration.

Michael

[mduffy]

A lot of guys here made more in 1985 than they do today.

- sorry, had to bring it up.

[KK7]

You want to play the game you gotta follow the rules.

I'm not talking about abolishing the fee, even though I wish I didn't have to pay it. The fact is it is government, a public organization, and must be transparent to the citizens that support it.

I follow the rules, but that doesn't mean I can't question the rules.

Luckily, Chris found the audit results from 2006, obtained through an ATIP (Access to Information) request. That is almost exactly what I was looking for. It goes further to explain where the fees go and the decisions behind how they justify it. But it also shows that a significant portion of those fees are wasted on invoicing and trying to recoup those fees. This suggests that another method might be more useful, and either allow them to better allocate the money to good use, or reduce the fee due to the rection in cost related to processing it (although I doubt the latter would occur). It was suggested in another thread that it could be included in the doctor's fee, which could be submitted directly with the medical report. This eliminates the invoicing requirement and puts the onus on the doctors (who are making significant cash on each medical) to ensure the pilot pays. I think the doctors would have much more success with this since they are the ones stamping your medical.

Although I do agree that it would be nice to get it free, $55 ain't much of a hit.

Even without the $55 owed each medical, the medical is not free! Personally, these medical fees are covered by my company, but I am at a point in my career where I work for decent operator and I make a comfortable living. The guys who have to pay this out of their pocket amongst Commercial Pilot Holders are the guys working for very little income for companies who won't cover the cost of the medical (instructors come to mind). You can argue that the company should be paying to maintain the licences of their pilots, but the reality is that they don't. At these rock bottom pay cheques, that $55 can mean the difference between putting gas in your car to drive yourself to work this week, or having to hitchhike to work in -30 degree conditions.

Thats some nice stats you have there. I will share them with my MP if that is alright with you..Maybe some others want to also.

You sure can, however the link that Chris posted has more official results (although 4 years old). I'm glad to see my numbers aren't too far off. These are some of the assumptions I made in my calculation:

- I used the Pilot Licences/Permits In Force statistics TC puts out regularly. I took the numbers from September 2010. They give a break down of each licence by age.

- I totalled up the numbers by licence for over 40 and under 40.

- I assumed that PPL holders under 40 go every 5 years, so (total number of PPL <40) X $55 / 5. For PPL over 40, every two years and so on for each category.

[Brown Bear]

All they need to tell you is its administration fees and are not required to say anymore. You want to play the game you gotta follow the rules.

Spoken like a true Canadian SHEEP! That's why Canadians keep getting screwed. We let'm screw us. It's like TSA. It's Okay. You go ahead and shove that big camera up my ass. That's just the way it is. Baaaaa Baaaaa.
Canada.....the world's largest Sheep Farm!

[North Shore]

The guys who have to pay this out of their pocket amongst Commercial Pilot Holders are the guys working for very little income for companies who won't cover the cost of the medical (instructors come to mind). You can argue that the company should be paying to maintain the licences of their pilots, but the reality is that they don't. At these rock bottom pay cheques, that $55 can mean the difference between putting gas in your car to drive yourself to work this week, or having to hitchhike to work in -30 degree conditions.

Assuming (probably fairly safely) that most of these guys are under 40, that means ~$1.06/week over the course of a year - and that's unaffordable?! Spare me! Just avoid Tim Hortons and drink company coffee for a few months, and save the difference..

[Brewguy]

Even without the $55 owed each medical, the medical is not free! Personally, these medical fees are covered by my company, but I am at a point in my career where I work for decent operator and I make a comfortable living. The guys who have to pay this out of their pocket amongst Commercial Pilot Holders are the guys working for very little income for companies who won't cover the cost of the medical (instructors come to mind). You can argue that the company should be paying to maintain the licences of their pilots, but the reality is that they don't. At these rock bottom pay cheques, that $55 can mean the difference between putting gas in your car to drive yourself to work this week, or having to hitchhike to work in -30 degree conditions.

Ever work a job (outside of aviation) that required you to wear steel toed shoes/boots? There are lots of work related expenses in this world that some employers cover (usually bigger employers - often the ones who pay better) and other employers don't. When I worked as a shipper/receiver right after leaving school, I had to cough up $80-$120 for a pair of work boots roughly twice a year. And that was for a job that paid just slightly over the minimum wage.

A family member recently started having cancer treatment, and I was chatting with the hospital staff about how I thought the parking fees at the hospital were insanely high (compared to our local health system). $15 per day. The nurses told me that they have to pay the same as the general public, and can't even claim the expense (specifically parking) on their taxes.

Many, many people out there pay a lot of their hard earned money for job related expenses. I think some of the members of this board are blowing this $55 fee way, way out of proportion. $55 (or $110 for the older crowd) a year ... suck it up. It's less than a single pair of work boots.

[Brown Bear]

Ever work a job (outside of aviation) that required you to wear steel toed shoes/boots? There are lots of work related expenses in this world that some employers cover (usually bigger employers - often the ones who pay better) and other employers don't. When I worked as a shipper/receiver right after leaving school, I had to cough up $80-$120 for a pair of work boots roughly twice a year. And that was for a job that paid just slightly over the minimum wage.

A family member recently started having cancer treatment, and I was chatting with the hospital staff about how I thought the parking fees at the hospital were insanely high (compared to our local health system). $15 per day. The nurses told me that they have to pay the same as the general public, and can't even claim the expense (specifically parking) on their taxes.

Many, many people out there pay a lot of their hard earned money for job related expenses. I think some of the members of this board are blowing this $55 fee way, way out of proportion. $55 (or $110 for the older crowd) a year ... suck it up. It's less than a single pair of work boots.

Are you brain dead? WTF does a pair of work boots got to do with the 55$ (for folks over 40, it's 110$!!)a year that TC sucks out of us for NOTHING?? You at least got the work boots! They're a tangible. The screwing from TC is an intangible. For most "job related" expenses , there is AT LEAST some sort of explanation as to where the money is going. Union dues etc.? Sorry Wassaya, in your case, even your union dues are an intangible.

[tired of the ground]

$55 ain't what it used to be. $55 today is like $20 back in 1985.

Michael

Actually, according to most people that I've talked to, salaries have not only been stagnant but have even possibly declined. So the $55 is actually probably more today than it was in 1985.

I hate everything there is to hate about the fee. My employer now pays for it and I have lots of other things to worry about. I've done the MP thing. They don't care. I haven't paid and it just got phone calls from collectors. A professional association (another discussion) is probably the only way to get rid of it or at least put it to good use.

Unfortunately you can't win with transport. The best you can hope for is that they can hate you for doing something legal that they don't like.

[Nark]

I'm wondering how foriegn pilots like myself are able to safely fly into Canada?
I don't pay the FAA a service fee, yet I have the same class medical as you.

You are sheep for accepting it.

Back on topic: if TC is using this fee to audit the AMEs(docs) what is the point of going to the doctors in the first place? I'd rather go to Thailand and pay the $55, at least I'll get a "tangible"'service for the fee.

[Brewguy]

Why is it so difficult for some of you fine folks to wrap your heads around the concept of a "user pay" system? It is an administrative fee, or if you prefer, go ahead and call it a tax. The government has agencies in place to govern aviation (TC, the CTA, etc.). These agencies cost money to run. In order to reduce to tax burden on the non-flying general public, those that use the system (e.g. pilots) are charged fees (taxes, whatever) for every damn thing they can think to charge a fee for.

It's ultimately not a lot of money, so quit whining about it. Or, whine about it to your MP's and see how much of a damn they give. But as it stands now, the fee is in place, and it's mandatory that you pay it. What's not mandatory, is for you to be a pilot. Nobody put a gun to any of your heads and told you you had to fly (for a living, or for pleasure).

If you fly commercially, it's a work expense like any other.

If you fly for personal / recreational use, it's no more than any other fee you'd pay to join a gym, etc. If you're a person who travels, you also pay for a passport. Nobody is forcing you to do any of these things, but if you choose to, you pay.

And for those who keep lamenting the fact that this fee was 'originally' implemented to pay for the AIP, well, get over it. Once a government gets accustomed to an income stream from something, they tend not to let it go. Do you honestly think that gasoline tax goes into maintaining roads and nothing else? The money goes in a big pot, and they spend it however they choose. Your bitching about not receiving paper AIP amendments anymore isn't going to change anything.

[Brown Bear]

Why is it so difficult for some of you fine folks to wrap your heads around the concept of a "user pay" system? It is an administrative fee, or if you prefer, go ahead and call it a tax. The government has agencies in place to govern aviation (TC, the CTA, etc.). These agencies cost money to run. In order to reduce to tax burden on the non-flying general public, those that use the system (e.g. pilots) are charged fees (taxes, whatever) for every damn thing they can think to charge a fee for.

It's ultimately not a lot of money, so quit whining about it. Or, whine about it to your MP's and see how much of a damn they give. But as it stands now, the fee is in place, and it's mandatory that you pay it. What's not mandatory, is for you to be a pilot. Nobody put a gun to any of your heads and told you you had to fly (for a living, or for pleasure).

If you fly commercially, it's a work expense like any other.

If you fly for personal / recreational use, it's no more than any other fee you'd pay to join a gym, etc. If you're a person who travels, you also pay for a passport. Nobody is forcing you to do any of these things, but if you choose to, you pay.

And for those who keep lamenting the fact that this fee was 'originally' implemented to pay for the AIP, well, get over it. Once a government gets accustomed to an income stream from something, they tend not to let it go. Do you honestly think that gasoline tax goes into maintaining roads and nothing else? The money goes in a big pot, and they spend it however they choose. Your bitching about not receiving paper AIP amendments anymore isn't going to change anything.

Baaaaa Baaaaaaa Baaaaaaaa Baaaaaaaaaaa
SHEEP!
You "pay" for a Passport...you get a Passport.
You pay tax with your fuel......you get fuel. We pay tax for bread too....what's your point?
"Reduce the tax burden on the flying public....." are you on drugs?

[tomajet]

Don't forget that before this retarded $55 fee came into affect years ago, when you renewed your medical every year they gave you an actual new medical. You waited by the mail box for some lucky goverment employee to mail you your brand new medical. So if they could give you a new medical every year with out the fee, and now giving you a sweet little maple leaf stamp in the back pages for the next 4, 5 or 6 years what ever it takes to fill your book and that cost $55, then that is just a legal way of stealing money. TC can sprinkle sugar all over it but it is crap. My company does pay it and I understand things cost more now, but I think the big thing is that you sheeps need to think of is this. When you ask a question which one do you believe...the short and to the point answer or the long dragged out answer. Governments alway give short and to the point answers because they are there to take care of us and protect us. That last part was sarcasm by the way.

It's not just the $55 it's all the little pain in the ass fees we pay blindly everyday for this or that. You think just because you put the word service fee, luxury fee, not paying attention fee at the end of a bill that makes it ok.

You can only take so much before revolution. Cheers

[KK7]

Brewguy, I don't think you understand the point of this thread. This isn't complaining about it for the sake of complaining about it. It's about seeing where this money goes and making sure the user fees I pay, if I have to pay them, are in fact going to good use to provide a quality service from the government. When you realize that a significant portion of your $55 goes towards sending you an invoice for the $55 and collecting the money, and only a small part of it actually goes towards anything medical related, maybe something should change.

[aviator2010]

TC can sprinkle sugar all over it but it is crap. My company does pay it and I understand things cost more now, but I think the big thing is that you sheeps need to think of is this.

if those of us who pay it are sheeps and you follow the heard what does that make you?

[mbav8r]

Brewguy
Why is it so difficult for some of you fine folks to wrap your heads around the concept of a "user pay" system? It is an administrative fee, or if you prefer, go ahead and call it a tax. The government has agencies in place to govern aviation (TC, the CTA, etc.). These agencies cost money to run. In order to reduce to tax burden on the non-flying general public, those that use the system (e.g. pilots) are charged fees (taxes, whatever) for every damn thing they can think to charge a fee for.

So why is flying for a living(tongue firmly in cheek) a user pay system, but if you own a house you pay school taxes, even if you don't have or never have had children in the school system. If you rent an apartment and fart out 10 kids who all go to school you don't pay a dime. I'm all for a user pay system, but not just when it's convienient for them. I guess if you tax only the people who have children "using" the sytem, you could'nt say we have a free education system could you.
On another note, you can write off the licence fee as an employment expense as well as the medical fee.

[Brewguy]

"Reduce the tax burden on the flying public....." are you on drugs?

Nice mis-quote Brown Bear. Thanks for putting those words in my mouth. Although, it shows me just how well some of you read & comprehend, or not as the case may be.

What I actually wrote, was:

...to reduce to tax burden on the non-flying general public...

Meaning, that those who fly should pay for aviation, so that those who don't fly won't have to pay as much for something they don't use.

KK7 I understand what you're getting at. What exactly does that $55 go towards. And from that report/stats that someone posted, it does appear that a lot of it goes towards simply charging and collecting the fee. But I have to wonder if that high cost of administering the fee is largely due to the number of dead beat tax evader types, who don't pay, ignore the bills and have to get the bill collectors after them. I must say that I'm quite surprised by the number of people on this forum who advocate not paying and 'letting them come after you' or something to that effect. Surely that jacks up the administrative costs big-time.

[Brewguy]

So why is flying for a living(tongue firmly in cheek) a user pay system, but if you own a house you pay school taxes, even if you don't have or never have had children in the school system. If you rent an apartment and fart out 10 kids who all go to school you don't pay a dime...

I don't think it's fair that those without kids should pay school tax. On the other hand, you probably did attend school as a child .... so perhaps schooling is one of those things that all of society should pay for because everyone does access it at some point in their lifetime (unlike aviation). But as far as the school tax goes, renters do pay (although not directly). Their landlord pays school taxes along with their property tax. So it's ultimately included in the rent.

[WetJet]

Egg management fee.

[mbav8r]

Ok, I did go to school, you got me. My parents owned a house therefore are one of the ones who paid for me to use the "free" education system we have. Just looked at my most recent tax bill and 2351.37 was the portion for school tax. So I understand that the owner of an apartment building is assessed taxes on the property and obviously has the cost recovered from the renter, but I doubt very highly that each apartment is taxed to that extent. The whole building would share the cost of the taxes based on the value of the property. The only fair way would be to include the school taxes in the income tax, and everybody pays.

[alctel]

Things like aviation and navigation services cost money.

It either gets paid spread over the entire population via taxes (which adds up to very little per person spread over the whole country) or people who use the service pay direct in the form of user fees.

Taxes are the LOWEST they have ever been, especially for the top 5% earners which means that the difference in cash shortfall comes from user fees - its not going to change either, since suggesting raising tax, even on only the top 1-5% is electoral suicide.

Don't like paying user fees and watching aviation services get reduced? Don't vote in people who slash taxes and claim that services will not be affected, or that giving government services over to 'for profit' private companies will lead to greater efficiency.