Q1 Will the government be bailing out Air Canada and other airlines?
A1 As noted in Fall Economic Statement, engagement with air carriers has been established regarding financial assistance. Strict conditions would be applied to any federal assistance to ensure that public policy objectives are met. The objective is to ensure Canadians continue to have access to affordable air services that connect them to other parts of Canada and the rest of the world, and to achieve important policy goals, such as ensuring refunds for tickets cancelled due to the pandemic.
Q2 Why is the government providing specific sector support, particularly when the same is not being done for other sectors?
A2 The pandemic has hit the air sector harder than any other and it is facing a delayed and slow recovery. The air sector cannot respond to these challenges on its own, given the unprecedented impacts on its operations. The air sector provides a utility-like essential service for many Canadians, and our support is focused on attaining specific policy objectives, like refunds for cancelled tickets and maintaining regional connectivity.
Q3 Why is Canada so far behind other countries in giving support to its air sector?
A3 The approach announced thus far was developed to address the specifics of the situation in Canada. Each country has its own challenges and addresses these in a way that meets its needs. In addition to the measures announced in the Fall Economic Statement, support has already been available through non-sector-specific programs such as the Canada Emergency Wage Subsidy, which has provided total payments of $1.83 billion to the air transportation sector as of January 18th, 2021. Other programs that were announced to provide support to all sectors of the economy include the Business Capital Availability Program (BCAP) and the Large Employer Emergency Financing Facility (LEEFF).
Q4 Does the government anticipate airline or airport failures, and is the current support intended to avoid this?
A4 I will not conjecture on the situations of specific operators. The objective is to protect Canadians’ interest by preserving connectivity, while meeting specific policy objectives such as ensuring that Canadians receive refunds for tickets cancelled due to the pandemic.
Q5 Why don’t air sector operators rely on existing, non-sector-specific federal support?
A5 Existing programs such as the Canadian Emergency Wage Subsidy have provided important help to air sector operators. However, given the unprecedented impacts on its operations of COVID-19, the air transport sector cannot respond to these challenges on its own. Therefore, support announced in the Fall Economic Statement is important to mediate some of the impacts on Canadians from the challenges faced by the air sector due to the pandemic.
Q6 To what extent has the air industry benefited from existing economic supports? For instance how many air sector workers benefits from the Canada Emergency Wage Subsidy (CEWS) of the Canada Emergency Relief Benefit (CERB)?
A6 Existing programs have provided important help to air sector operators. However, these programs are administered by the Department of Finance and their officials would be better placed to speak to such details. I can inform you that the wage subsidy has provided total payments of $1.83 billion to the air transportation sector as of January 18th, 2021.
Q7 Would environmental commitments be part of government support for the air sector? Will jobs be protected?
A7 As noted in the Fall Economic Statement and in Minister Garneau’s November 8 statement, any assistance the Government of Canada provides for airlines will come with strict conditions to protect Canadians and the public interest. We are currently engaged with airlines as committed in the Fall Economic Statement. Details around any new supports will be announced in due course.
Q8 What is the status of the Remote Air Services Program?
A8 The Remote Air Services Program (RASP) was announced on August 6, 2020. Under the RASP, the federal government intends to provide funding of up to $174 million to ensure continuity of service for at least six months and for up to 18 months, considering the state of recovery of the air sector serving remote communities through bilateral agreements with provinces, territories, and, as appropriate, regional Indigenous governments.
Agreements have been concluded with the Northwest Territories (NWT), Yukon (YK) and Nunavut (NU), British Columbia (BC), Manitoba (MB), and Ontario (ON).
Discussions with Alberta and two regional indigenous governments in Newfoundland and Labrador are ongoing and Transport Canada is optimistic that agreements will be reached for all 10 jurisdictions that have remote communities.
Q9 Why would you provide support for Air Canada to fly to the North if this is only limiting the viability of northern carriers?
A9 As committed in the Fall Economic Statement, we have established engagement with air carriers regarding financial assistance to ensure that communities across Canada remain connected to the air transportation network. The precise nature as how the help will be distributed among carriers is still to be determined, and will take many factors into account.
Q10 How can we ensure that potential public funding will not just benefit executives, shareholders or creditors?
A10 While it is premature to talk about specifics, I can assure you that any assistance the Government of Canada provides will come with strict conditions to protect Canadians and the public interest.
Q11 Why isn’t the Government considering any support for NAV Canada to avoid further closures of air navigation facilities at small airports and more lay-offs, which raise safety concerns?
A11 Our primary focus is to avoid service cuts to Canadian travellers, maintain regional service, and achieve policy objectives like ensuring refunds for passengers whose tickets were cancelled due to the pandemic. This is best achieved by focusing on air carriers and airports, which provide service directly to Canadians. The air sector is interconnected and by supporting the maintenance of services, entities throughout the sector can benefit, including NAV Canada.
Safety is always the primary concern for Transport Canada and for NAV Canada. Under our existing rules, before any service level changes can be made NAV Canada must ensure it will be able to maintain rigorous aviation safety standards. Transport Canada will continue to work closely with NAV Canada to ensure the safety of air transportation in Canada.
It is important to remember that NAV Canada is an independent private entity responsible for its own operational decisions, internal affairs, and labour relations. Transport Canada’s primary role is ensuring safety and regulatory compliance.
Q12 The previous Minister mentioned support for the aerospace sector. What does this mean?
A12 Through our engagement with major air carriers we are committed to achieving benefits for Canadians and this includes our carriers remaining good customers for the Canadian aerospace industry.
Q13 We understand that there will be funding for the REM station at Trudeau Airport – please elaborate on this and tell us what other projects would be covered?
A13 The Fall Economic Statement provided funding to support large airports in making investments in critical safety, security, and transit infrastructure. Transit projects such as the REM station at Montreal Airport will be eligible for support under the new transfer payment program that is being established.
Fall Economic Statement
Q14 When will the funding announced in the Fall Economic Statement be allocated?
A14 Government officials are currently developing the programs necessary to implement the Fall Economic Statement measures and have begun discussions with eligible recipients such as airport operators. We plan to have further details available this spring.
Q15 The Fall Economic Statement announced $65 million to further assist airports to manage the financial implications of reduced travel. Can you provide additional details on how this funding will be used?
A15 This funding is meant to be complimentary to others announced in the Fall Economic Statement. The government will implement this in a way that is focused on clear eligibility, ensuring fairness, flexible use of funds, and simple delivery. Further details should be available this spring.
Q New What support is being provided to small airports?
A New The Fall Economic Statement announced a number of measures that will provide much-needed support to the regional and small airports that link Canadians from coast to coast.
The Airports Capital Assistance Program (ACAP) is a long-standing federal program that provides up to $38 million per year in funding to support small airports with safety-related maintenance projects. In order to provide additional support to small and regional airports during these challenging times, the government will provide additional funding of $186 million over two years, starting in 2021-22, for the Airports Capital Assistance Program. In addition, airports will benefit from an increased minimum federal cost share (50%). This significant increase in available funding will improve the ability of regional and small airports, the majority of which are owned and operated by provinces or municipalities, to address immediate and key safety related capital projects and investments.
To support regional air transportation, including regional air carriers, the government will provide up to $206 million over two years, starting in 2020-21, to the Regional Development Agencies for a new Regional Air Transportation Initiative. This initiative will maintain and enhance service and operation of the Regional air transportation ecosystem.
Q16 How will the government decide what projects are supported for with the additional funding provided for the Airports Capital Assistance Program and new funding for critical infrastructure investments at large airports?
A16 The Airports Capital Assistance Program has well established application processes and evaluation criteria that will continue to be used to distribute the additional funding. The program is focused on safety investments and this will continue to be the case, and as such those projects deemed most urgent from a health and safety perspective will continue to be prioritized for funding. A merit-based assessment process will be used to select which projects receive funding. Projects are prioritized based on the following three priority levels:
- Priority 1: Safety-related airside projects such as the rehabilitation of runways, taxiways, aprons, etc, and aircraft firefighting equipment required by regulation;
- Priority 2: Heavy airside mobile equipment (safety related) such as runway snow blowers, runway snow plows, etc., and heavy airside mobile equipment shelters; and
- Priority 3: Air terminal building/groundside (safety related) such as sprinkler systems, asbestos removal, and barrier-free access.
For 2021-22 and 2022-23, ACAP eligibility is being expanded to include the 8 smaller National Airports system airports (i.e., those with annual passenger volumes less than 1 million pre-pandemic).
As announced in the December 2020 funding decision, Transport Canada is in the process of establishing a new contribution program that focuses on mitigating the risk of deferral or cancellation of critical infrastructure investments at airports. Financial support will be provided to fund critical infrastructure airports that contributes to safety, operational efficiencies to enhance security as well as mass transit connections. The department will issue a two phase call for proposals process to assess eligibility and merit of a project through an open, continuous, competitive and merit based application process to ensure that the funding is allocated to the most critical projects, while considering and addressing the unique challenges faced by each applicant, the short and long-term benefits of the project, financial viability of the applicant, and the related benefits to the communities and air travelers.
Q17 How impactful is rent relief given that airport rent is revenue-based and revenues continue to be severely depressed?
A17 Rent relief in the form of waivers and deferrals to alleviate rent burdens is one of the most simple and direct ways to offer financial flexibility to airport authorities. When layered with additional support measures announced in the Fall Economic Statement we believe it can effectively mediate some of the negative financial impacts of Covid-19 in the air sector.
Q18 How can airports afford infrastructure projects given their lack of current revenues and challenges meeting their existing financial obligations?
A18 The infrastructure funds are not intended to support expansion and new facilities. They are designed to support necessary operational projects, which cannot be cancelled for a variety of reasons, and projects that provide a broader societal benefit, such as transit projects like the REM station.
Q19 What is the status of the government’s engagement with airlines regarding financial assistance?
A19 The Fall Economic Statement announced that the government would establish a process with major airlines regarding financial assistance which would include assurances that Canadians get refunds for cancelled flights. The Department of Finance is leading this effort and has been working with Transport Canada and Innovation, Science, and Economic Development Canada to implement this process. The government is actively engaged with airlines and we hope for successful conclusion in the near term. Given commercial sensitivities, I cannot provide further details at this time.
Q20 How will the funding for Regional Development Agencies support regional air transportation?
A20 As recognized in the Speech from the Throne last fall, we understand the important role of regional air transportation. As this funding will be delivered by Regional Development Agencies, I cannot speak to specifics and must defer to my colleague, the Minister of Economic Development and Official Languages.
Vouchers / Refunds
Q21 Will the federal government be financing air carriers’ refunds to passengers?
A21 Refunds for passengers whose tickets were cancelled due to COVID-19 is a requirement for any support to air carriers, and this matter is part of our discussions with the carriers regarding support. I cannot provide any more details at this point.
Q22 Why don’t the current regulations mandate refunds for mass flight cancellations?
A22 The Air Passenger Protection Regulations do not provide any guidance with respect to refunds for situations outside the carrier's control, including cancelled flights due to a global pandemic such as COVID-19. Rather, carriers have an obligation to complete the passenger’s itinerary, and otherwise address this issue as part of their respective terms and conditions of carriage (tariffs). The intention of this was to a avoid a situation where the air carriers would be subject to a financial burden for a situation that they cannot control; but a situation of the scope of COVID-19 was not contemplated.
In December, my predecessor provided direction to the Canadian Transportation Agency regarding the development of new regulatory requirements for airlines to provide passengers with refunds when flights are cancelled, or there is a lengthy delay, for reasons outside airlines’ control and it is not possible to complete the passengers’ itinerary within a reasonable time. The Agency is currently undertaking consultations and in the future there will be greater clarity on this matter.
Q23 Can’t we just force the airlines to pay out vouchers?
A23 Canada’s passenger rights regime does not include specific obligations when travel is cancelled for factors outside of a carrier’s control. Specific refund policies are not stated in the Air Passenger Protection Regulations and thus obligations are dictated by what is included in the ticket tariff that is provided to all passengers. In some instances, air carriers are going beyond their obligations by offering vouchers. Creating a retroactive legal obligation for tickets that have already been cancelled would require a change in legislation. Furthermore, this would add to the already severe financial difficulties that Canadian air carriers are facing due to the pandemic.
Q24 When will Canadians be receiving their refunds?
A24 It is not possible to give an exact timeline for the issuing of refunds. This is a clear priority and criterion of any support that air carriers might receive, and we are seeking to have these refunds provided as soon as possible.
Q25 What will happen going forward – will air carriers be required to provide refunds for cancellations?
A25 While our focus is on the immediate challenge posed by COVID-19, federal officials are also considering means of addressing this matter in the Air Passenger Protection Regulations, and intend to work with the Canadian Transportation Agency to this effect. We have indicated our intention to provide the Agency with the authority needed to move ahead with regulations around refunds and the Agency is currently undertaking consultation on the matter.
Q26 What is being done to provide enough resources to the Canadian Transport Agency to process passenger rights complaints?
A26 The Canadian Transportation Agency is an independent, quasi-judicial tribunal and regulator that oversees the very large and complex Canadian transportation system, which is essential to the economic and social well-being of Canadians. The Government of Canada provided additional resources to the Agency in 2018 and 2019, to account for anticipated increases in air passenger complaints. This funding was based on best projections available at the time, and was provided prior to the coming into force of the Air Passenger Protection Regulations. In 2020, through the Government of Canada's Economic and Fiscal Snapshot 2020, the Agency was further allocated $18.5M in new funding for 2020-21 and 2021-22 ($8.3M in 2020-21 and $10.2M in 2021-22). With these additional funds, the Agency will have an increased capacity to assist Canadians with air travel complaints related to the Air Passenger Protection Regulations (e.g., cancellations, delays, lost baggage), when they are unable to resolve issues directly with service providers. Transport Canada continues to work with the Agency to address its financial requirements to ensure it is resourced appropriately to carry out its mandated functions, specifically with regard to the Air Passenger Protection Regulations.
Q27 How will you ensure that communities that have lost their service have this restored?
A27 Further to the November 8 announcement by my predecessor and in keeping with the commitment made in the Speech from the Throne, the Government of Canada will ensure Canadians living in regional communities retain air connections to the rest of Canada, recognizing that regional connectivity is important to Canadians travelling now and in the future.
As such, any future assistance to Canadian air carriers will be conditional on them ensuring that regional communities remain well connected and that no regions are without adequate and essential air transportation services. The Fall Economic Statement announced various measures for airports and included funding for Regional Development Agencies to support regional air transportation.
Q28 Has COVID-19 caused any issues for the transportation industry regarding its accessibility obligations?
A28 In spring 2020, the Canadian Transportation Agency received applications from transportation service providers requesting delays to the coming into force dates of select provisions under the Accessible Transportation for Persons with Disabilities Regulations (ATPDR). Reasons for these requests varied, but fell largely under the categories of severe financial and operational burdens, thereby preventing compliance with these provisions. In response, the Agency, pursuant to subsection 170(3) of the Canada Transportation Act, and with my predecessor’s approval, produced an exemption order for approval by the Governor in Council. This order came into effect on June 25, 2020, delaying select provisions from coming into force until December 31st, 2020.
In fall 2020, the Agency received new applications seeking further delays to those same provisions, largely for the same reasons. Given the timing of these requests, and the fact that the exemption order was about to expire, it was decided that a different approach would be taken, to allow for consultations from the community of persons with disabilities, and to allow for the Agency to take additional time to decide on next steps. The government is continuing to work with the Agency on this initiative and to ensure alignment with departmental policy objectives.
Q29 What considerations are the department undertaking for persons with disabilities who need to travel during COVID-19?
A29 In recognition of the unprecedented challenges to the transportation sector, as well barriers faced by persons with disabilities who travel, specifically, new, unintentional barriers created by decisions needed to mitigate the spread of COVID-19, the government is working with the Canadian Transportation Agency and the National Research Council’s Centre for Air Travel Research to develop guidance material that will eventually be published on the Agency’s website. This guidance aims to provide best practices for transportation service providers and persons with disabilities who travel during COVID-19.