Airlines and aerospace firms call for aid package to help them recover from pandemic

Organizations representing a large portion of Canada's aerospace manufacturing and service industry are calling on the federal government to implement a sector-specific strategy that would include a financial aid package to help the industry recover from the pandemic.

Industry says current support programs are too general, insufficient

Organizations representing aerospace manufacturers and Canada's smaller airlines say the industry contributes $25 billion to GDP annually. (David Donnelly/CBC)

Organizations representing a large portion of Canada's aerospace manufacturing and service industry are calling on the federal government to implement a strategy that would include a financial aid package to help the sector recover from the pandemic.

Aerospace manufacturers and airlines have watched their revenue streams crater due to pandemic-driven restrictions on travel. Many have laid off workers, while some airlines have cancelled routes or temporarily stopped service.

The Aerospace Industries Association of Canada (AIAC) — which represents various manufacturers and airport associations — and the Air Transport Association of Canada (ATAC) — which represents Canada's smaller airline companies, such as Porter and Flair Airlines — held a virtual press conference this morning to make their plea for a strategy.

Former deputy prime minister and Quebec premier Jean Charest said that aerospace manufacturing is an economic driver in Canada, contributing 215,000 jobs and over $25 billion to the country's annual GDP.

Charest — now acting as a chair of an AIAC initiative examining the future of the aerospace industry — said that other nations, including France and the U.S., have offered support for their own aerospace sectors. He warned Canada could lose aerospace jobs if the government doesn't follow their example.

ATAC president John McKenna said the Canadian government has been slow to help the airline industry, pointing out that countries such as the U.S. have offered financial supports to their airlines.

"The [U.S.] government gave its industry $50 billion. We'd be happy to get 10 per cent of that. We'd be happy to get anything," McKenna said. He didn't cite a specific dollar for a financial aid package.

The National Airlines Council of Canada, which represents Air Canada, Air Transat and WestJet, has pushed the federal government for an airline bailout.

Current programs insufficient, industry says

McKenna said he would like to see three specific measure from the government to help his industry: more access to liquidity, a break on fees associated with the airline industry, and more loan guarantees.

The federal government has rolled out several programs covering liquidity and loan guarantees, such as the large employer emergency financing facility (LEEFF) — which offers bridge financing for big Canadian businesses across all sectors — and the business credit availability program (BCAP) — a business loan guarantee offered through Export Development Canada.

But McKenna said those programs are insufficient, noting that the LEEFF's requirements rule out 80 per cent of Canadian airline carriers, and that other programs like BCAP won't help ease the burden on the cash-strapped industry.

"These other programs are very, very expensive and very complicated and it's discouraging for people to engage in them," he said.

Charest agreed, saying the programs were implemented during the "survival mode" of the government's pandemic response, while what the sector needs now is a more tailored approach that would help stimulate the industry.

"[Other countries] have moved to the second phase, which are programs to help stimulate industry, growth, create wealth and get us out of this hole of debt," Charest said. "Canada is lagging way behind in doing that."

Feds to post $343B deficit

The request from ATAC and AIAC comes following the release of the federal government's "fiscal snapshot" on Wednesday, which projects Canada is facing a $343 billion deficit this year due to spending levels not seen since the Second World War.

But Charest said support for aerospace manufacturing would help with pandemic recovery because the industry's contributions to the economy.

"If there's any industry in this country ... able to create good paying jobs and prosperity, we're it," he said.

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