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Tourism industry has mixed reaction to government aid measures

MONTREAL — Ottawa's plan to provide aid for the struggling tourism sector was greeted with relief Tuesday, while Canada's airlines awaited word on support for their industry.

MONTREAL — Ottawa's plan to provide aid for the struggling tourism sector was greeted with relief Tuesday, while Canada's airlines awaited word on support for their industry.

The Liberal government on Monday announced the rollout of a new program, called the Highly Affected Sectors Credit Availability Program, that would provide low-interest loans to struggling businesses in the tourism, hotel and other sectors. The government also announced that the Canada Emergency Wage Subsidy would return to its original rate of 75 per cent.

“The [hotel] industry was at a breaking point, and there were some very important measures in the Fall Economic Statement yesterday that will provide a deeper level of support for this industry,” said Susie Grynol, president and CEO of the Hotel Association of Canada.

“These programs, assuming they can get rolled out quick enough, will clot some of that bleeding.”

Grynol said Ottawa’s measures show that the government had listened to the industry, which is among the hardest-hit by the pandemic’s economic toll. Still, she cautioned that the sector will need more targeted aid down the line, particularly after March, when Ottawa’s increase to the wage subsidy expires.

Daniel-Robert Gooch, president of the Canadian Airports Council, called the government’s announcement a good first step but said it doesn’t go far enough in addressing airports’ financial situation. Canada’s airports, which rely on fees from airlines and revenue from passenger expenditures inside the terminals, have had to cut expenses and lay off staff as the pandemic drastically reduces traffic.

The government’s plan included specific measures for airports, such as rent relief and increased funding for security and capital expenditures like runways. Still, the rent relief measures are limited in scope and some of the industry’s key asks are still missing from the government’s recovery plan, Gooch said.

“What we do still want to see is what the federal government’s plans are on [COVID] testing at airports,” Gooch said, adding that having a testing program in place will be critical for the industry if it is to take advantage of an anticipated recovery in demand for travel next summer. 

Ottawa said it would support regional travel with $206 million through a new initiative overseen by regional development agencies, but was vague about the details of the plan. Absent from the government’s announcement was any help for Canada’s major airlines, which are still struggling amid lack of demand for travel.

On Monday, the National Airlines Council of Canada, an industry group that represents the largest airlines, called on the federal government to move quickly in developing a targeted aid package for the companies and to roll out measures like rapid COVID testing at airports that would increase demand for travel.

“While other countries around the world moved forward months ago to provide sectoral support for airlines, Canada remains a global outlier and is ostensibly stuck at stage zero on the government planning process,” the group said in a statement.

In an interview, Mike McNany, the president and chief executive of the NACC, said he was unsure what was behind the government’s delay, adding that the industry was clear in its communications with Ottawa about what forms of aid it needed.

The government hasn’t offered the industry any timeline for distributing aid, he said. 

A spokeswoman for the federal minister of transport said last week that progress on targeted aid for airlines was ongoing and that it was a top priority.

This report by The Canadian Press was first published December 1, 2020.

Jon Victor, The Canadian Press

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