MIXED REACTION: Not all aboard for government aid measures

Ottawa’s plans to provide aid for the struggling tourism sector were generally greeted positively Tuesday, though Canada’s airlines awaited word on support for their industry.

The government on Monday announced the roll-out of the Highly Affected Sectors Credit Availability Program, which 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 percent.

Hotel Association

“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.

ACTA

ACTA too, said it was pleased to see that several initiatives it has been lobbying the federal government for have been addressed in the federal Fall Economic Statement (FES).

The statement, the association said in a release, includes some big wins that will definitely help travel agencies including:

• The government to increase the Canada Emergency Wage Subsidy (CEWS) to 75% from December 20 through to March 13, 2021. This increase is definitely a positive step for travel agencies and travel agents currently on the CEWS program, or might be once business starts to return more robustly.

• The Canada Emergency Rent Subsidy (CERS) program will be extended at the current 65% base rate through to March 13, 2021. This support measure is very important, as over 70% of travel agencies were not able to tap into the original rent subsidy program. There is also a top up to 90% for businesses shut down due to public health guidelines and ACTA will continue to lobby to have Travel Agencies eligible for the higher amount.

• The government will work with financial institutions to create the Highly Affected Sectors Credit Availability Program (HASCAP). This program will offer 100% government-guaranteed financing for heavily impacted businesses including Travel Agencies, providing low-interest loans of up to $1 million over extended terms, up to 10 years and at rates lower than those offered in the BCAP. ACTA and a number of Travel Agency leaders, along with the hardest hit industries coalition lobbied government extensively for this program. The vast majority of Canadian travel agencies who applied for the BCAP loan program were denied loans simply because the industry they worked in was considered too high risk.

• The Canada Emergency Business Account (CEBA) program will soon be expanded, allowing access to an additional interest-free $20,000 loan, with half of this additional amount forgivable if repaid by December 31, 2022. CEBA has been an extremely valuable program to many of the smaller travel agency businesses and independent contractors and increasing the amount with a forgivable portion is good news.

Travel agents and independent contractors

For travel agents and independent contractors, the government has not yet indicated it will extend the Canada Recovery Benefit (CRB) to June 2021. “However, it was already extended to the end of March and we have time to assertively lobby for an extension to June for the thousands of travel agents and independent contractors that are dependent on CRB for an income,” said Wendy Paradis, President, ACTA.

“While the FES does not go far enough to protect the thousands of Canadian jobs in the travel industry,” she added. “It does go a long way to answering some of our hard-fought advocacy on wage subsidy, rent and helping with liquidity through HASCAP with 10 years to repay and low interest.”

Details on airline aid still to come

No additional details on airline aid packages were included in the FES other than what the government has already indicated – that it is establishing a process with major airlines regarding financial assistance. The original statement said that the government will ensure Canadians are refunded for cancelled flights.

“We understand that discussions between airlines and the government are still going on about this very important financial support and that ACTA will continue to advocate that any airline aid package that is tied to refunds for cancelled flights must address the commission recall to travel agencies and travel agents,” said Paradis.

Vaccines & testing

The government also spoke about the importance of the procurement of vaccines and a 2021 plan to vaccinate Canadians which will be essential to a recovery for the travel industry.

As well, they have committed $565 million to procure rapid tests – another essential component to a restart for the industry and reduce the 14-day quarantine.

Airports

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.

Airlines

The National Airlines Council of Canada, representing Canada’s largest air carriers, (Air Canada, Air Transat, Jazz Aviation LP and WestJet), were not as positive in their reaction.

On Monday, they called on the federal government to move quickly on economic assistance and in developing a targeted aid package for the industry and to roll out measures like rapid COVID testing at airports that would increase demand for travel.

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.

Related article: Help for Hard Hit Sectors

Source: Travel Industry Today
MIXED REACTION: Not all aboard for government aid measures

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