QUESTION PERIOD — Finance
Pandemic Support for Air Canada
June 2, 2021
Senator Gold, in April when Minister Freeland announced a deal to provide Air Canada with almost $6 billion in repayable loans, the minister said dividends and share buybacks would be restricted and executive compensation would be capped. On Monday we learned that while Air Canada was negotiating with the Trudeau government to receive billions in taxpayers’ dollars, they were, in fact, paying their top executives $10 million in COVID-19 pandemic mitigation bonuses.
Leader, how could Minister Freeland ever negotiate an agreement like this? How could the Trudeau government say it capped compensation at $1 million but allowed Air Canada executives to collect bonuses of $2 million to $3 million each, leader, for having laid off most of their employees? How does this make any sense?
Thank you for the question. The negotiations and the agreement that was ultimately entered into between the government and Air Canada contained clear rules regarding limits on executive compensation. The agreement that was negotiated also included limitations on stock options. Those limitations are effective until 12 months after the loans have been repaid. In that agreement, as this chamber would recall, there was also a commitment by Air Canada to maintain April 1 employment levels.
The intent of this agreement and these negotiations was to provide Air Canada with the necessary liquidity to keep Canadians and Canadian marketplaces connected. The news that, before this agreement was actually signed and its terms were therefore legally in effect, Air Canada paid the bonuses is deeply disappointing to the Canadian government. It is the view of the Canadian government that Air Canada’s actions abused the spirit of the government’s support.
Somewhere in that answer you talked about that it had been very clear what they were doing. Obviously it wasn’t as clear to some people as to others.
Air Canada laid off well over 20,000 of its workers while giving its executives millions in bonuses, and you say the Trudeau government is troubled. The fact is that the Prime Minister and the Finance Minister didn’t seem all that troubled at their news conference.
I think taxpayers will take a different view, leader, about whether this is fine. The package brought forward in April helped just one airline while thousands of other workers in the aviation sector remain out of their jobs. Why wasn’t the Trudeau government capable of negotiating a comprehensive plan to help the workers — all the workers — in this industry?
Senator, thank you for your question.
To the first part of your question, the government is deeply disappointed in the actions of Air Canada; it is not pleased, far from it.
To the second part of your question, each company or sector within an industry has different challenges. The Canadian government worked with a number of airlines to help them with their particular challenges. I’ll mention just one airline from my home province and that is Air Transat. On April 29, 2021, Air Transat reached a bailout deal with the government which had, amongst other features, the requirement that Air Transat refund its eligible customers who found themselves with tickets but no place to go.
It remains the position of this government that the efforts it made in a time of crisis were made not only with the best of intentions to help Canadians and those industries struck by the pandemic but, in fact, despite the news of Air Canada’s decision to compensate their CEOs, which is against the spirit of the agreement, that they ultimately did sign with the government. Nonetheless the support of this government was to the benefit of Canadians and their need to stay connected through air.
