Overview
- The federal government announced a loan facility on Monday that offers up to C$150 million in repayable support per airline to help carriers cope with sharply higher jet-fuel costs.
- Ottawa has already suspended the federal excise tax on aviation fuel from April 20 to Sept. 7 to reduce fuel bills for carriers and lower near-term cash outflows.
- Any airline that accepts funding must make Buy Canadian commitments, cap dividends and executive pay, and maintain Canadian operations and jobs, the government said.
- Reports differ on administration of the program, with some outlets saying the Canada Enterprise Emergency Funding Corporation will provide the funds and others naming the Canada Development Investment Corp.; detailed eligibility, interest rates and monitoring rules were not published at announcement.
- Smaller and low-cost carriers are the main targets of the program while larger airlines have other tools such as hedging; the move follows route cuts, fare increases and profit downgrades by carriers and has already drawn public pushback from WestJet.