Canada isn't ruling out taking a stake in Canadian airlines: Leblanc
OTTAWA -- The Canadian government isn't ruling out the possibility of taking a stake in Canadian airlines, like WestJet and Air Canada, as ministers consider how to help the sector in its struggles amid the COVID-19 pandemic.
Intergovernmental Affairs Minister Dominic Leblanc confirmed the possibility during an interview with CTV Question Period Host Evan Solomon, airing Sunday.
During the interview, Solomon pointed out that in a bid to save their own airlines, Germany took at 20-per-cent stake in Lufthansa. When he asked Leblanc if Canada is considering taking such a step here, Leblanc said the government "is very much discussing that."
"I know, my colleagues, [Transport Minister] Marc Garneau, and [Finance Minister] Chrystia Freeland, are looking at a whole series of options of what government support might look like for the sector. So we haven't made any decisions in that level of detail yet, but they're very much discussing that," Leblanc said of the action Germany took.
Air Canada was partially owned by the government until 1989. WestJet was a publicly-traded company, but went private in a $5 billion deal last year.
Leblanc's comments come as WestJet announced on Wednesday its decision to suspend flights to four cities in Atlantic Canada and to "dramatically" pare down service to Halifax and St. John's, N.L.
"The lack of travel demand combined with domestic quarantines means that sadly we can no longer maintain our full Canadian network of service," CEO Ed Sims said, speaking in a video post on Wednesday.
The company said the cuts remove 80 per cent of WestJet's seat capacity from the Atlantic region, and slash more than 100 weekly flights. The airline has also announced 100 additional layoffs, and the suspension of service between Toronto and Quebec City.
Air Canada had also said in June that it would suspend service to 30 regional routes, which mainly impacted travellers in the Maritimes, Quebec and Saskatchewan.
Leblanc told Solomon WestJet's latest announcement is "obviously difficult" for the Atlantic provinces, as well as for Quebec.
"There's no doubt that Canadians expect that, when the economic recovery is concluded, that we're left with a competitive air transportation system across the country," Leblanc said.
Meanwhile, as the government considers how it can help airlines, Leblanc pointed out that the airlines still have to answer for the way they decided to compensate passengers as COVID-19 forced a mass cancellation of huge swaths of flights.
Many Canadians were compensated in the form of a voucher as opposed to getting their money back.
"Canadians also expect us not to simply write blank cheques or bail out large corporations without addressing, as you said, the issue of vouchers," Leblanc told Solomon.
"I hear from a number of people how upset they were that thousands of dollars on a credit card turned into a voucher they may or may not be able to use that up to an unknown time."
Leblanc said these are all "necessary parts" of the conversations the government is having with airlines — though he assured that the government is "committed to working with" the sector to ensure the economic recovery keeps Canada's air transportation system afloat.
"Those discussions will necessarily happen. And I hope quite quickly," Leblanc said.
To date, Canada has fallen out of lockstep from its G7 counterparts with respect to financial aid for the airline sector, choosing instead to offer broad measures including the federal wage subsidy -- measures that are available to other sectors as well.
With files from The Canadian Press