Canada brainstorms ways to keep its citizens from crossing the border for cheaper flights

Slashing the fees and taxes that account for roughly 40 percent of the difference between Canadian and U.S. air fares, would have a significant impact, but doing so looks unlikely given tight government budgets, the Conference Board of Canada report said.

"The fact that Canada's largest airports are losing traffic to cross-border competitors matters because it undermines their role as national and international hubs," David Stewart-Patterson, the Conference Board's vice president of public policy, said in a statement.

"When a Canadian hub airport loses passengers, it can lead to reduced flight frequencies, higher travel costs and poorer service for all Canadians."