Ottawa Announces Help for Canadian Airlines, But Refunds and Other Conditions Apply

November 8, 2020 Jim Byers

The Trudeau government says it will begin financial bailout talks with Canadian airlines, which have been devastated by COVID-19. But they say any rescue of Canada’s aviation industry will require strict conditions, including refunds for passengers who had their flights cancelled and restoration of regional routes.

Canadian airlines have been helped by a number of over-arching Canadian government programs, but this is the first time the government has announced potential terms for a bailout for Canada’s aviation industry.

Minister of Transport Marc Garneau said in a Sunday announcement that the Government of Canada is developing a package of assistance to Canadian airlines, airports and the aerospace sector.

“A strong and competitive air transport industry is vital for Canada’s economy and the well-being of Canadians,” Garneau said. “Due to our vast geography, Canadians rely more heavily on air travel than other countries. 

“Canada has successfully built a strong air travel system that connects communities across regions, supports a green, world-leading aerospace supply chain, the tourism sector and regional economic development, and directly employs over 100,000 Canadians.”

The pandemic has hit the air sector harder than any other and it is facing a delayed and slow recovery.  With passenger levels still down almost 90 per cent, air carriers and airports have been forced to take drastic measures to remain viable.  Broad-based government supports like the Canada Emergency Wage Subsidy have helped to mitigate the severe impact on employees in the sector,” Garneau said.

“However, we have heard from many Canadians who have been negatively affected. When this unprecedented pandemic broke out in the spring, Canadians who had already booked travel ended up stuck with vouchers for trips they could not take instead of getting refunds.  They found themselves in a situation where they have given thousands of dollars in interest-free loans to airlines.

“We have heard from Canadians in the air travel and related industries who have lost their jobs or fear for their job security.     

“We have heard from Canadians who have lost air service to their regional communities. 

“Canadians are rightly angered by these developments.

“The air sector cannot respond to these challenges on its own, given the unprecedented impacts on its operations.  To protect Canadians, the Government of Canada is developing a package of assistance to Canadian airlines, airports and the aerospace sector.

As part of this package, we are ready to establish a process with major airlines regarding financial assistance which could include loans and potentially other support to secure important results for Canadians.  We anticipate beginning discussions with them this week.

Before we spend one penny of taxpayer money on airlines, we will ensure Canadians get their refunds. Regional connectivity is important to Canadians travelling now and in the future. We will ensure Canadians and regional communities retain air connections to the rest of Canada, and that Canadian air carriers maintain their status as key customers of Canada’s aerospace industry. 

Any assistance the Government of Canada provides will come with strict conditions to protect Canadians and the public interest.

WestJet issued comments almost immediately.

“We will evaluate this afternoon’s statement from the Government of Canada and will await greater clarity on what support for the aviation sector might include.

As we determine how to proceed in the best interests of our guests, our people and the communities we serve, we won’t be making any further comment.”

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