Trudeau non-committal on airline bailout as Air Canada lays off 20,000 workers

Prime Minister Justin Trudeau says he plans to keep working with airlines hard hit by the COVID-19 pandemic but wouldn’t address whether a bailout of the beleaguered industry is on the table.

His comments came one day after Canada’s largest airline revealed it was preparing to slash its workforce by at least half.

“We’re going to continue to work with sectors and industries to try and support them as they get through this pandemic,” Trudeau said, referencing the federal government’s offer this week of bridge financing for large employers to keep workers on the payroll. 

“It is not a bailout, it is a loan that is going to help [businesses]…but we are still working with companies to see who is taking that up and how the format of it will be worked out.”

Travel restrictions put in place to limit the spread of COVID-19 across Canada — and the world —  have paved the way for a bleak summer for the country’s tourism and travel industry.

In a memo sent to staff Friday, Air Canada said it expects to lay off “approximately 50 to 60 per cent” of the company’s 38,000 employees in an effort to rebuild after the crisis. 

“COVID-19 has forced us to reduce our schedule by 95 per cent and, based on every indicator we have, our normal traffic levels will not be returning anytime soon,” the company wrote in a statement. “Our current workforce supports an operation transporting 51 million customers a year with 1,500 flights a day and 258 aircraft. With current realities, this is simply not sustainable going forward.”

The news follows the company’s efforts last month to rehire thousands of employees it had previously laid off because of the pandemic, after Ottawa confirmed the airline would qualify for the federal government’s wage subsidy program.

According to an internal bulletin to members from the Canadian Union of Public Employees obtained by The Canadian Press, the union is in talks with the company about continuing the emergency wage subsidy, which has been extended until the end of August.

Prime Minister Justin Trudeau said the federal government planned to speak with Air Canada and other airlines to help steer companies through the pandemic. (Justin Tang/The Canadian Press)

Air Canada has not disclosed whether it planned to access Ottawa’s bridge loan program, which comes with a number of conditions including requiring applicants to share their climate action plans and sustainability goals.

During his Saturday briefing, Trudeau acknowledged that the crisis was particularly difficult for companies tied to the travel and tourism industries. 

“I think we all know that this pandemic has hit extremely hard on travel industries and on the airlines particularly,” he said. “That’s why we’re going to keep working with airlines, including Air Canada, to see how we can help even more than we have with the wage subsidy.”

Health Canada approves first clinical vaccine trials

The prime minister also revealed that Health Canada has now approved the first clinical trials for a potential COVID-19 vaccine, work that will be undertaken at the Canadian Centre for Vaccinology at Dalhousie University.

“Research and development take time and must be done right, but this is encouraging news,” Trudeau said.

During his update, Trudeau highlighted the federal government’s one-time top-up to the Canada child benefit, which will see eligible families receive an extra $300 per child on Wednesday as part of their regular May payment.  

He added that starting July 20, the benefit will be increased for the upcoming year to keep pace with the cost of living.

The prime minister reiterated Ottawa’s pledge for $350 million in emergency funds to community groups and national charities, and announced an additional $100 million for the Red Cross to prepare for potential floods and wildfires on top of the organization’s COVID-19 response efforts.

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