Travel Industry, Airlines MIA In Liberals Fiscal Update
Lynn Elmhirst, Open Jaw Trends Editor
The federal government announced $796 million in new support for some sectors of the travel industry in its fall economic statement issued yesterday.
Here’s a breakdown of how those funds will be allocated:
Regional air transportation - $206 million in 2020 and 2021
Small and regional airports - $186 million over two years, starting in 2021
Larger airports - $500 million over six years
Major airports and YTZ operator Ports Toronto will receive continued support via an extension of the $229 million in additional rent relief. This includes waiving rent payments for small- and medium-sized airports, while allowing larger hubs to defer rent payments in 2021, with repayments staggered over a decade beginning in 2024.
Airport authorities - $65 million in new funding in 2021 and 2022
$188 million in funding for VIA Rail Canada.
Financial aid for major commercial airlines, funds for concrete steps to restart travel - or any specific support for the travel agency community - were glaring omissions in Finance Minister Chrystia Freeland's speech.
The New Program Acronym You Need To Know: HASCAP
In the government’s fiscal update, Freeland did announce a new lending program called Highly Affected Sectors Credit Availability Program (HASCAP).
HASCAP provides low-interest loans of up to $1 million for sectors – including travel and tourism - that have been devastated by the COVID-19 pandemic.
“We know that businesses in tourism, hospitality, travel, arts and culture have been particularly hard-hit. So we’re creating a new stream of support for those businesses that need it most — a credit availability program with 100% government-backed loan support and favourable terms for businesses that have lost revenue as people stay home to fight the spread of the virus,” Freeland said.
The tourism sector will have access to one-quarter of the more than $2 billion of loan funds that Ottawa is doling out to regional development agencies through JUN 2021.
NACC Calls Out Feds For “Lack of Action” For Airlines - Or Restarting Travel
Freeland's fiscal address failed to mention direct support for large airlines.
"Canada remains a global outlier and is ostensibly stuck at Stage Zero on the government planning process. This lack of action does not reflect the economic importance of the sector to Canada’s overall recovery, nor the need to ensure Canada’s largest carriers can continue to compete internationally," Mike McNaney, President and CEO of the National Airlines Council of Canada (NACC) said in a statement yesterday.
The NACC represents Canada’s largest air carriers, including Air Canada, Air Transat, Jazz Aviation and WestJet.
"As other countries continue to provide a clear path forward, now that the Fall Economic Statement has been issued it is time for the federal government to follow the global approach and move urgently to finalize Canada’s path to supporting financial assistance for airlines, and in turn ensure aviation can support Canada’s overall recovery,” McNaney said.
“Hundreds of thousands of jobs in communities large and small across the country will be impacted by how the government proceeds."
The Finance Minister’s reply was non-committal. “We’ve initiated a process of conversation with those airlines in order to see how to support them. We need to see what their financial position is.”
Barton queried, “What does that mean?” But she got no further details, with Freeland simply stating, “That means we are having detailed conversations with them right now.”
The interview goes on to address the issues of refunds for cancelled flights, which Transport Minister Marc Garneau had linked to any possibility of government aid when he announced the commencement of talks with the airlines a month ago.
You can watch the full interview here.
Yesterday’s economic statement leaves travel advisors and agencies still waiting to see if the two largest issues affecting them: government support and initiatives that lead to a safe restart of travel – as well as measures to protect them from recalled commissions – will yet be addressed by the federal government.