Government Pledges Help for Canada's Tourism Industry: Airlines Disappointed

The Canadian government will offer tourism businesses and others loans of up to $1 million to help them cope with the COVID-19 pandemic. But news of an assistance package for Canada's major airlines will have to wait, and they don't appear happy about it

Finance Minister Chrystia Freeland on Monday issued a fiscal update on behalf of the Justin Trudeau government and said there will be sector-specific help regional airlines and airports, and also for tourism and hospitality businesses. But there's still nothing official for Canada's major airlines.

"We are disappointed that the Fall economic statement 2020 was not an opportunity to announce a robust plan to support Canada's airline industry to ensure it remains competitive and can play its part in Canada's economic recovery,' Christophe Hennebelle, Air Transat's Vice President Human Resources and Corporate Affairs, said in an email. "We are still awaiting the start of discussions on the assistance announced on November 8, while significant support for the sector has already been provided in many countries around the world for months."

Also responding by email, Sunwing officials issued the following statement to TravelPulse Canada:

"Since March, when Sunwing halted flight service and made dramatic changes to our workforce in response to the pandemic, we have continued to tirelessly advocate for the interests of our industry and the thousands of Canadians it employs. We appreciate the attention that has been provided to this matter from senior Government of Canada officials, as well as a range of important and necessary business supports, including the Canada Emergency Wage Subsidy. Having said that, we are disappointed that today's fiscal update did not contain dedicated relief for Canadian airlines.

"We have cooperated with government directives and patiently waited for a lifeline that would preserve our business over the months ahead. We remain hopeful about the government's comments in relation to airline support, but the message to keep waiting for details is a difficult one for our industry.

"To date, the government has not provided a proposal on airline-specific assistance, so it would be premature to comment on how this relates to our refund policy. Nonetheless, we remain open to collaborating in good faith on any solutions that benefit our industry, its employees, and consumers," officials said.

Daniel-Robert Gooch, head of the Canadian Airports Council, also issued a release.

"While it is good to see the air sector get direct attention in today's Fall Economic Statement, what was announced for Canada's air sector appears to fall short of what Canada's airports and our industry partners need to endure COVID-19." he said. "We will spend the next few days gaining additional insight into what was announced today and how it fits into the federal government's overall plan to support the ongoing viability and competitiveness for Canada's airports and recovery of our air sector.

"Meanwhile, Canada's airports await federal plans for COVID-19 testing at airports. We have 3-4 months to get it right if Canada is to participate in the recovery of global tourism we expect to see start in other northern countries next summer. The Canadian Airports Council will have a more detailed assessment of the Fall Economic Statement in the coming days."

Air Canada declined comment, while WestJet referred TravelPulse Canada to the National Airlines Council of Canada (NACC).

The NACC noted in a statement that, while other countries have come to the aid of their airlines, "Canada remains a global outlier and is ostensibly stuck at Stage Zero on the government planning process. This lack of action does not reflect the economic importance of the sector to Canada's overall recovery, nor the need to ensure Canada's largest carriers can continue to compete internationally."

Speaking on CBC News, Freeland said her plan did contain $1.2 billion for airports, airport infrastructure and regional airlines.

"When it comes to the big airlines, we have already initiated a process of conversation with those airlines in order to know exactly how to support them. We need to really see what their financial position is, and we're having those conversations ... right now."

Freeland reiterated that Canadians who bought tickets for cancelled flights need to be reimbursed.

New Democratic Party Leader Jagmeet Singh told the CBC that Freeland is offering only "small gestures" and that there's not enough being done for flight attendants, aircraft maintenance workers and others in the aviation industry.

Tourism Industry Association of Ontario president and CEO Beth Potter, however, praised Freeland's update.

"We are pleased to see further support for small businesses and the tourism industry as a whole included in the fiscal update by Finance Minister Chrystia Freeland today," said Potter. "TIAO welcomes the Highly Affected Sectors Credit Availability Program, which offers low-interest loans to hardest hit businesses of up to $1 million, the extension of and additional $20,000 top-up for the Canada Emergency Business Account (CEBA) loans, which will now also apply to the RRRF program, and the increase of Canada Emergency Wage Subsidy (CEWS) program to 75 per cent."

For Canada's hardest-hit businesses, including tourism, hotels, hospitality, hotels, arts and entertainment, the Freeland update announces a Highly Affected Sectors Credit Availability Program. This will offer government-backed loans of up to $1 million at below-market interest rates.

CTV reports the program will " allow those who need it to access 100-per-cent government-backed loans, with better terms for those who have lost revenue due to people staying home to limit the virus' spread.

These new loans are being offered for as much as $1 million, for up to ten years, with more details promised soon," the network said.

The Hotel Association of Canada also was pleased with Freeland's statement in the House.

"The hotel industry is one of the hardest hit by COVID-19," said Susie Grynol, President & CEO of the Hotel Association of Canada. "The government is taking action to keep our sector alive. Today's plan will help hotels continue employing hundreds of thousands of Canadians when this crisis is over."

While the government continues to negotiate an aid package for Canada's major airlines, the update announced support for large and small Canadian airports. An Airports Capital Assistance Program will receive $186-million over two years, and a new direct transfer program to large airports will be worth $500-million over six years. This can be used for transit projects such as the planned light-rail link to Montreal airport, the Globe reported.

The airline industry has been waiting for months for relief that specifically targeted Canada's aviation sector. But Freeland appears to be waiting for the government's talks with major airlines to bear fruit before any news is announced on that front.

The government's overall short-term stimulus package is valued at $70 billion to $100 billion over roughly three years, the CBC reports. The government says the stimulus spending will launch after a vaccine is distributed and life begins to return to normal.

"When the virus is under control and our economy is ready for new growth, we will deploy an ambitious stimulus package to jump-start our recovery," Freeland said.

The minister said Ottawa will run a $382 billion deficit for 2020-21, but that the government expects that number to drop to $51 billion by 2022-23.

The Globe and Mail reports the current subsidy rates under the Canada Emergency Rent Subsidy will be extended until March 13, 2021, and a new Lockdown Support program will allow for an additional 25 per cent top-up until Dec. 19, 2020.

Stay tuned for reaction and more details as they become available.

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