The federal government did not study the impact on the airline industry of a new $24 user fee, despite concerns the air security charge would quash airline competition and dramatically discourage passengers from flying.

During debate before the House of Commons finance committee, government officials admitted yesterday that they hadn't fully assessed the fee's impact on airline passenger loads during consultations before last December's budget.

"If you're asking for extensive studies, I'll be honest, those studies have not been done," Finance general director of tax policy, Serge Dupont, told the committee.

"There was a consideration of the facts at our disposal," Mr. Dupont said.

But under questioning from Bloc Quebecois MP Yvan Loubier, Mr. Dupont allowed that his department hadn't really looked at the impact on passenger demand or how the fee might affect regions with limited air service.

"There might be a few pages, but don't expect 20- or 40-page studies," he said.

Transport Canada's assistant deputy minister of safety and security, William Elliot, told the committee that his department had not studied the possible economic effects of the fee, either.

Instead, the officials said, the $24 figure was calculated by dividing the number of trips passengers make into the projected $2.2 billion over five years it will cost to run new Canadian Air Transport Security Authority (CATSA). Mr. Dupont said that any drop in passenger demand from the higher cost could be balanced by travellers' renewed confidence in air security.

The fee of $12 on a one-way trip and $24 on a round-trip is set to come into force on April 1, although the new security agency won't be fully operational until as late as December.

Opposition MPs reacted angrily to the officials' remarks, later staging a joint press conference to denounce the lack of government assessment of the new fee.

"It's absolutely amazing that the government is bringing in a $2.5-billion tax without any studies done on the impact on the airline industry," said NDP finance critic Lorne Nystrom. "It's absolutely incredible."

Mr. Loubier called the officials' admission "stunning" and said it showed the government was "bringing in the tax blindly."

Over the past few weeks, the Finance committee has heard testimony from airline representatives, airport authorities, labour unions, and tourism industry groups who have been unanimous in their opposition to the new fee.

The Tourism Industry Association of Canada call the fee "punitive" and said it will seriously retard any rebound in the $54-billion Canadian travel industry. The Canadian Automobile Association produced an Ekos Research study that found 16 per cent of leisure travellers will fly less as a result of the new tax. The Canadian Chamber of Commerce projected a one-per-cent decline in passenger loads for every one-per-cent increase in ticket price resulting from the fee.

Discount airline WestJet said the fee would be particularly hard on short-haul carriers because the flat charge represents a larger percentage of the fare on short routes. This would have an anti-competitive effect and block new challengers to Air Canada's near-monopoly position, WestJet claimed.

Nevertheless, the committee narrowly voted to defeat an Alliance amendment that would have cut the fee in half. Liberal MP Shawn Murphy initially told the committee he would back an amendment to cut the fee to $12. His support would have given the Opposition a one-vote victory. But after a committee recess, Mr. Murphy returned to say that he had changed his mind and voted against the Alliance amendment.

"I have had recent assurances, in the last half hour, that a review (of the fee) will take place in the fall," he said, as Opposition MPs heckled loudly.

In a raucous exchange, Opposition committee members accused the government of "whipping" it's members to support the tax against their better judgment and "railroading" legislation through committee.

Alliance Transport critic James Moore said Mr. Murphy's sudden change of heart showed the "government's thirst for revenue is bigger than its appetite for democracy."

Angry Liberal MPs on the committee retaliated by quashing a Bloc Quebecois motion to have any studies or analyses of the security charge tabled before the committee.

During question period, Finance Minister Paul Martin defended the tax, saying "the government was facing an unprecedented situation and obviously had to respond. It was deemed necessary to ask those who were utilizing the services to do so."

The Opposition scored a small victory before the committee when Ontario Liberal MP Roy Cullen cast a deciding vote in support of Mr. Nystrom's amendment that would place two labour union representatives on the CATSA board.