Guess you could call it a win-win.
The Parliamentary Budget Office (PBO) has revealed that the Government of Canada will earn a whopping $177 million from the taxpayer bailout of Air Canada earlier this year.
The Canadian Press reports that the profits will be accrued over the next 10 years.
Ottawa’s financial support package for Air Canada, inked in APR, was worth $6 billion. It included the government taking a 6 per cent stake in the carrier for $500 million, another $4 billion in secured and unsecured credit and an additional $1.4 billion of credit to refund travellers’ cancelled tickets due to the pandemic.
The report says the PBO forecast is based on the carrier using only part of that aid package, primarily the amount designated for refunds. Air Canada has said it would only draw on the government aid while it looks for other refinancing. This week, the airline announced it had successfully refinanced just over $7 billion of debt.
That’s just one of the airlines Ottawa has spent billions bailing out to ensure the survival of Canada’s aviation sector until the travel industry rebounds. But it's by far the largest financial support package in the industry.
There was no indication of whether - or how much - Canada’s taxpayers would profit from Ottawa’s aid packages to other airlines and operators.
Last month, WestJet announced it and the government had mutually agreed to put bailout negotiations on hold, with the airline declining support from Ottawa. The airline indicated that it believed Canada’s success with vaccinations would allow it to focus on restarting travel, which would allow it to forgo government support.
Earlier this year, operators Sunwing and Transat each received $375 million and $700 million in aid from the federal government respectively.
Porter Airlines also received just under $300 million in loans from the federal government which it also said it would use to issue refunds, keeping the bulk in reserve while recovering from pandemic shutdowns.
iPolitics reports that Deputy Prime Minister Chrystia Freeland’s press secretary told it in an email Thursday that all of Ottawa’s airline and operator support packages were made while keeping the interests of Canadians in mind.
“We are committed to supporting Canadian airlines and people who work in the air sector during this unprecedented and difficult time for the industry,” she said.
“Since the beginning of the pandemic, the air sector has already received over $2.5 billion in support through the Canada Emergency Wage Subsidy. In the Fall Economic Statement, we announced over $1 billion in support for airports and smaller airlines.”
Between airlines and airports, an estimated nearly quarter of a million Canadians work directly in the aviation industry.
