Government promises support for travel and tourism
Throne Speech lays out plan to work with aviation industry on regional routes
The federal government laid out measures of hope for Canadian aviation in a Throne Speech offering few specifics about the path forward for a beleaguered industry. Governor-General Julie Payette outlined the government’s plans for the coming session of Parliament Wednesday in Ottawa.
“To further link our communities together, the Government will work with partners to support regional routes for airlines,” read Payette to a physically distanced audience in the Senate chamber. “It is essential that Canadians have access to reliable and affordable regional air services. This is an issue of equity, of jobs, and of economic development. The Government will work to support this.”
This was the government’s only mention of aviation in its plan.
Airlines and airports have seen business evaporate as a result of the global pandemic. Passenger loads through the summer were down 85% or more over last year. Airlines have responded by cutting services and staff. Airports have been faced with massive deficits this year and next.
Many in the industry welcomed the government’s words.
“It’s good to see recognition that travel and tourism have been particularly hard hit and we look forward to better understand what that means,” wrote Daniel-Robert Gooch, president of the Canadian Airports Council, in an email. “The air sector needs more than loan programs, which have been this government’s go-to approach for supporting the sector so far.”
Billions in losses
Airlines are calling for government support for the industry. At the very least, they want Ottawa to help break down barriers and normalize air travel. Canada’s borders remain closed to most foreign travellers and anyone entering the country must quarantine for 14 days. Payette did not indicate the government was considering any changes to these policies.
“The aviation sector needs the government to immediately come forward with a coherent and concrete plan to support the industry and allow its recovery,” said the National Airlines Council of Canada in a statement.
The NACC represents the largest airlines, including Air Canada and Westjet. It estimates members are operating at only 15% capacity. Despite this, Canada has offered little in the way of direct support.
“Canada’s major trading partners and every major trading nation introduced support for their aviation sector months ago, precisely because of the critical role aviation must play in the economic recovery and the need to ensure their aviation sectors remain globally competitive,” said the NACC. “Some countries are now preparing a second sectoral support plan.
“We need to get moving.”
Airports facing closure
The CAC projects airports large and small will lose $4.5 billion in revenue this year and next. On top of that, they expect to add $2.8 billion to their already massive debt load. In Canada, the largest airports cover their own operating and capital projects through fees and leases.
“We were all hoping that we would be out of the worst and be able to focus on recovery by now,” said Gooch. “In fact, the financial situation is much worse now than it was in the spring, as airports continue to pile up costs and debt to provide enhanced safety and health measures on limited revenues, while continuing to supply services that communities and governments count on – such as movement of essential workers, cargo, medevac and firefighting to their communities.”
Some small regional airports are already facing closure. The municipal council in Golden, British Columbia is examining the future of their small facility. Across the country in Sarnia, Ontario, consultants have advised the city to sell its airport. Air Canada pulled its service to the city early in the pandemic and has yet to return.
The CAC is calling on Ottawa to forgive ground lease payments for the country’s 22 largest airports. It also wants interest-free loans for large facilities and infrastructure funding for airports with fewer than 525,000 passengers.
“We believe that our recommendations are not only reasonable, but they are simple to implement and support,” said Gooch. “Airports are essential to their communities, and are a big part of their recovery and growth. We believe that the federal government knows this already. We all know the way forward, and what’s at stake. The time to act is now.”
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