Trudeau still hashing out details of airline relief package

Prime Minister Justin Trudeau said his government is in “continual discussions” with airlines over aid for an industry buckling under the financial strain caused by Covid-19.

His comment Friday suggests the government is getting close to delivering on industry-specific funding it first pledged in March, as it shut down large swathes of the economy in response to the pandemic.

“The details are still very much under discussion and in reflection,” the prime minister said at an Ottawa news conference, when asked about a Globe and Mail report his cabinet is weighing an airline bailout package.

“There are certain industries that are harder hit than others because of this pandemic. Travel and tourism is certainly one of them,” Trudeau said, promising he’d work “to ensure that we’re going to have a strong airline industry coming back.”

Carriers like Air Canada and WestJet Airlines Ltd. have been racing to cut costs by eliminating unprofitable routes and shedding workers. The moves have left Atlantic Canada in the lurch, which could prompt the government to attach strings to any funding, according to the Globe.

Regional Woes

“My largest preoccupation is always going to be for Canadians themselves for workers and for people in rural and remote—and not even so rural and remote regions, like Atlantic Canada—that are seeing significant reductions in airline service,” Trudeau said.

A stipulation that government funding not be used to compensate executive is also under consideration, the newspaper said Friday morning, citing an anonymous government official and three unnamed industry sources. The money would come through low-interest loans and rollbacks of airport fee increases, the Globe said, adding the package could be announced in a budget update expected next month.

Industry leaders have been pressing Trudeau for months to deliver an aid package, or at least loosen travel restrictions to allow tourists into Canada. The government has yet to act despite former Finance Minister Bill Morneau’s promise in March of rapid relief for airlines and other hard-hit sectors.

Trudeau said airlines have already received over a C$1 billion ($761 million) in direct aid through programs such as the government’s wage subsidy, which covers up to 75% of employee pay.

Separately Friday, Statistics Canada began to put a price tag on pandemic travel restrictions. The moves could cost the country between 400,000 and 500,000 jobs and shave off as much as 1.7% from total economic output this year, the agency said in a study.