Government financial support for the air sector
LOCATION: OTTAWA, ON
Issue/Source: Government financial support for the air sector
Date: APRIL 30, 2021
Suggested Responses
- The Government of Canada understands the significant impact of COVID-19 on the air sector and is providing support during this difficult time.
- As part of the 2020 Fall Economic Statement, the Government announced $1.1 billion to support regional connectivity, critical infrastructure investments, and the continued operation of Canada’s airports. This builds on earlier funding for remote air services and airport rent waivers.
- The Government is providing repayable financial assistance to Canada’s major air carriers, while securing results for Canadians by requiring refunds of cancelled tickets, restoration of regional connectivity, following through on aircraft orders, and ensuring protections for existing employees.
IF PRESSED
- To date, the Government has finalized agreements with Air Canada, Sunwing and Transat, and discussions are ongoing with other carriers.
- The Government is also working with industry stakeholders for a safe restart and recovery of the air sector, which is a key step in supporting the sector’s economic recovery. Budget 2021 announced funding to support safety measures, such as testing infrastructure, for airport operators.
BACKGROUND INFORMATION
- The Government has put in place the following agreements with air carriers:
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- On February 1, 2021, the Government provided Sunwing Vacations Inc. and Sunwing Airlines Inc. access to $375 million of liquidity to protect jobs in Canada’s airline sector.
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- On April 12, 2021, the Government announced a deal with Air Canada which will ensure refunds for cancelled tickets, restoration of regional connecitivity, following through on aircraft orders and employee protections. The agreement is valued at up to $5.9 billion, which includes:
- Access to approximately $4 billion in loans ($1.5 billion as a secured loan, $2.475 billion in unsecured loans);
- Access to an additional $1.4 billion in loans to facilitate payment of refunds to eligible customers; and,
- $500 million equity investment.
- On April 12, 2021, the Government announced a deal with Air Canada which will ensure refunds for cancelled tickets, restoration of regional connecitivity, following through on aircraft orders and employee protections. The agreement is valued at up to $5.9 billion, which includes:
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- On April 29, 2021, the Government announced $700 million in loan financing for Transat A.T. As a condition of the loan agreement, Transat has agreed to:
- provide refunds for all pandemic-related cancellations to eligible customers—$310 million of the total financing
- maintaining active jobs as well as honouring collective agreements and pension benefits.
- On April 29, 2021, the Government announced $700 million in loan financing for Transat A.T. As a condition of the loan agreement, Transat has agreed to: