The federal government and Canada’s airlines are at a critical stage in backroom negotiations that could soon end months of haggling and result in a multibillion-dollar rescue plan for the pandemic-hobbled industry.
According to several unnamed sources cited by The Globe and Mail in a report Tuesday, Michael Sabia is close to finalizing a bailout package for the country’s airlines.
Sabia, a veteran executive, was recently recruited to become deputy minister of finance in order to lead talks with the airline industry which have been going on for weeks.
Ottawa has insisted from the beginning that any government rescue package would require the airlines to refund customers for flights cancelled because of the pandemic, that no bailout money go to executive bonuses, key regional routes be maintained and that airlines not cancel orders for aircraft that would affect jobs in Canada.
According to the Globe report, the government has taken off the table its demand for board seats, but it remains open to some form of equity ownership in return for low-interest loans.
While the talks continue, industry observers and stakeholders continue to apply pressure on Ottawa.
In a Financial Post opinion piece published Wednesday, Michel Kelly-Gagnon, president and CEO of the Montreal Economic Institute, and Peter St. Onge, an associate researcher, argue that there is a strong moral case for the government to offer grants instead of loans to the airline industry.
They said that thousands of small businesses and millions of individual Canadians have been receiving government grants, partly on the logic that if government policies close down your business or your job you should receive compensation so it is only fair that airlines be treated in the same way.
“It is very easy to neglect airlines, of course. They seem big and able to handle a crisis. But the fact is that airlines worldwide operate on extremely thin margins,” they said.
Meanwhile, the union representing 15,000 flight attendants in Canada has upped the ante in its call for the government to act to save Canada’s airline industry.
The Airline Division of the Canadian Union of Public Employees (CUPE) has launched a ‘Mayday’ campaign. It targets government decision makers with billboards posted in the capital and in home ridings of key ministers, as well as through an email drive that’s already delivered upwards of 6,000 messages to the Prime Minister.
“The government called on us to help bring Canadians home when COVID-19 first struck, but they have ignored us at every turn ever since,” said Wesley Lesosky, President of the Airline Division of CUPE in a press release. I. “We’re tired of being ignored, and we’re tired of being used as a political football by the airlines and the government.”