Friday,  January 21, 2022  2:58 pm

Ottawa, airlines in final stage of talks; bailout could cost up to $9B, says Unifor's Jerry Dias

Ottawa, airlines in final stage of talks; bailout could cost up to $9B, says Unifor's Jerry Dias
Ottawa is in the final stages of its negotiations with airlines, reports say.
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

Ottawa is reportedly in the final stages of its talks with airlines and the support package they're working on could cost as high as $9 billion dollars, according to a March 4 report by CBC News.

The story sources Unifor President Jerry Dias, who said the original $7 billion estimate of the federal aid is “now the floor, not the ceiling.”

"This isn't a bailout,” Dias told CBC. “I would argue this is a loan to the industry. Based on the time that has gone on and the added complexity to the negotiations.”

Dias, who made headlines this week after telling the Toronto Star that Air Canada had agreed to refund customers in exchange for federal aid, said the negotiations between the federal government and airlines have been "contentious and difficult."

READ MORE: "No developments" on passenger refunds, says Air Canada

Air Canada is disputing Dias’s claim that he spoke to Air Canada CEO Michael Rousseau about the airline reaching an agreement in its talks with federal officials.

According to the airline, no such conversation took place within the past week or beyond, as the Canadian Press reported on Thursday. 

Unifor President Jerry Dias. (Pax file photo)

Air Canada, also on Thursday, confirmed with PAX that there has not been a development on this file.

"We told the Star that there was no update since the Feb. 12 earnings release. It clearly says discussions are ongoing and that is still the case. There is nothing new since we issued this release,” said Pascale Déry, director, media relations at Air Canada. 

Prime Minister Justin Trudeau is addressing the nation Friday morning at 11:30 a.m. EST. at a press conference, where he may or may not share an update on Ottawa's support package for aviation. 

"Tensions at the talks"

Past reports have indicated that a federal aid package for Canada's airlines has reached a critical stage.

Word that Ottawa was preparing a bailout package for Canadian aviation first surfaced last October. Since then, negotiations between carriers and Ottawa officials have been ongoing, with few (if any) details being made public.

What we do know is that consumer refunds are playing a key part in determining how financial support for aviation will be distributed. 

Last November, then-Minister of Transport, Marc Garneau, said that future support for the airline industry is contingent on passengers receiving refunds for cancelled travel during the pandemic.

Sources told CBC that everyone involved in the talks have signed non-disclosure agreements barring them from speaking publicly about the details.

Deputy Finance Minister Michael Sabia is leading the negotiations for the federal government.

WestJet's demand for a plan to restart domestic air travel is reportedly causing some tensions at the talks, sources told CBC. 

WestJet president and CEO Ed Sims has previously indicated that WestJet doesn’t want a "bailout" but instead a recovery plan for the industry.

Commissions hang in the air  

Meanwhile, travel agents are left wondering what will happen to their commissions, which are subject to mass recalls if refunds are issued.

Both the Association of Canadian Travel Agencies (ACTA) and the Association of Canadian Independent Travel Advisors (ACITA) have been actively lobbying government officials for several months to include commission protections in any bailout package.

The estimate for a mass recall of all Canadian travel agencies and independent contractors totals $200 million, ACTA says, an outcome that would result in the bankruptcies of most travel agencies.

Of ACITA: Judith Coates, TTAND (left); Brenda Slater, Beyond the Beach (top, right); Nancy Wilson, TravelOnly (bottom, right)

ACITA has been urgently been mobilizing travel advisors since the summer, instructing members to schedule one-on-one Zoom calls with their local MP to personally explain how travel agent commissions work and why mass recalls are not the answer.

The grassroots group also launched a petition that demanded that Ottawa’s bailout for airlines be conditional on the protection of travel agent commissions.

That petition, which generated 5,322 signatures, was read into record in the House of Commons on Feb 7.

Ottawa’s interest in travel agents has grown in recent weeks, ACITA’s Judith Coates told PAX on Feb. 4.

"We've noticed a huge shift in interest recently," Coates said. 

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