Federal Government Is Planning to Help Air Canada With the Stimulus Package

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(Newswire.net — August 5, 2021) — A lot of countries, if not all of them all around the world, were affected by the global covid pandemic. Even the giant economies in the world appeared to be in a tough economic situation and all of their responses to the economic crisis were different. However, they also have mutual characteristics, most of them provided their population with stimulus packaged and they were in different fields and different amounts. It is no surprise that big economies were more generous to their own population, for example, president-elected of the United States Joe Biden imposed more than a trillion-dollar stimulus package and Canada is even planning to help those, who had canceled their flights due to the covid pandemic. 

Canadian Government Response to the Pandemic

The Canadian Pandemic Influenza Preparedness Preparation Guidelines, which identifies threats and strategies to manage an infectious outbreak, and the Federal/Provincial/Territorial Public Health Response Strategy for Biological Events, which involves recognizing, monitoring, and providing timely access to medical services, are the foundations of the federal government’s pandemic response. Additionally, the government was also involved in monitoring the economic situation which was very tough and a lot of people were forced to leave their jobs and try to find alternatives in these tough economic conditions. 

The federal government reported that it had added to Prime Minister Justin Trudeau’s March 11 announcement of $275 million in funding for a further 49 research projects, bringing the number to 96 research projects focused on designing and applying COVID-19 detection, management, and dissemination prevention initiatives. 

There were many restrictions on every industry but travel appeared to be one of the most restricted fields in order to stop the spread of the virus. Last year Canada was one of the countries that were having the most restrictions on traveling. However, this year travelers arriving in Canada will be expected to take a COVID-19 PCR test upon arrival and must quarantine at their own cost while awaiting test results or recovering. On February 12, it was revealed that at the conclusion of the 14-day isolation cycle, a third PCR test would be needed. The updated international travel regulations will take effect on February 22.

Stimulus package for Air Canada 

As we have already mentioned, many restrictions worked in a bad way on the living conditions. A lot of people were forced to leave their jobs and were left without income, this is when and why the demand on the financial market increased due to the fact that it gives people quicker and easier ways to gain and generate profits. This is why the demand for Canadian online crypto brokers, and not only was massively increased. Those brokerage firms were the only hope for those who were in need of economic assistance. However, since the restrictions are easing and the economy started its recovery process, the government is trying to refund the money of those who lost it due to the covid pandemic, in this specific situation, because of the flight cancellation. 

The federal government has announced that it would provide Air Canada with a multi-billion dollar assistance package to help the airline contend with significant financial damages and millions of passenger refunds for canceled flights as a result of the COVID-19 pandemic. Deputy Prime Minister Chrystia Freeland revealed the government’s intention to “move in and help Air Canada, its almost 15,000 working staff, and its customers” at a press conference Monday evening.

The funding would come in the form of a $4 billion loan and $500 million in bonds, according to Freeland, granting the government interest in the airline for the first time since it was privatized in 1989. A separate $1.4 billion loan will be used by Air Canada as a “voucher rebate service.” Both Canadian airlines, according to Freeland, are entitled to accept these loans in order to repay their passengers.

Prior to the deal’s announcement, the federal government issued a statement that announced the agreement but also listed some terms that the airline had to follow. The promises include: 

  • Regional cities such as Bathurst, Fredericton, Yellowknife, and Kamloops have maintained air links to the rest of Canada.
  • A promise that all Air Canada employment, pensions, and collective bargaining arrangements will be safeguarded.
  • In Canada’s aerospace market, the airline stays as a client.

Finally, the deal guarantees that all Air Canada passengers seeking a refund due to “pandemic-related cancellations” will be entitled to do so. Refunds will cover the tickets booked on or before March 22, 2020, as well as tickets purchased after February 1, 2020, that were either canceled by the customer or the carrier, according to Freeland. If the flight is canceled by Air Canada, refunds will be valid for tickets purchased after March 22, 2020, as well. 

In his statement, Transport Minister Omar Alghabra said that this initiative is a significant step forward in their efforts to assist Canadians and the country’s economy in terms of recovering from the effects of the global pandemic. More information on any subsequent agreements with other carriers, according to Freeland, will be revealed after talks with them are concluded. Alghabra shared this sentiment, saying that they were still in “active discussions” with other airlines. Air Canada has also confirmed that the agreement was made with the government about the above-mentioned issue. 

In his statement, Air Canada CEO Michael Rosseau said, “As vaccine deployments ramp up, we will continue to collaborate with the Government of Canada on the evolution of secure and science-based test and quarantine relief initiatives with the aim of safely restarting the industry.”

However, on the other hand, Gabor Lukacs, president of consumer protection organization Air Passenger Rights, told Global News that the federal announcement brought him “bittersweet news.” His main justification, in this case, was that it is good that the clients are receiving their money back, however, mainly, the stimulus package contains the money from people, taxpayers. The last thing he felt the contract lacked was any kind of personal responsibility for senior executives, whom Lukacs accuses of misappropriating public funds during the COVID-19 crisis.

According to a person familiar with the package’s specifics, the deal will not be a pure bailout for the airline.  The package’s confirmation also arrives as airlines have been forced to bear the brunt of the COVID-19 pandemic’s economic impact in Canada. Thanks to the outbreak, several airlines, including Air Canada and WestJet, were forced to suspend or refund flights. However, many specialists see that this plan is important on the road to economic recovery for Canada. 

There is no doubt that the relief package provides a strong balance of certainty for large and small cities, the corporation, and its employees. The officials also explained at the time, speaking with Global News, that a tentative deal between the airline and Ottawa, focusing on passenger returns or transfers,  will be in return for a loan, not a bailout. He also said at the time that the loan they were planning to take will be for $7 billion, with a 1% annual interest rate and a 10-year repayment period, but later clarified that the $7 billion “should now be the floor — not the ceiling.”