Federal government launches $75M fund for essential air service to remote communities

Ottawa seeks bilateral agreements with provinces and territories to ensure service continues

The federal government has launched a $75-million fund to support essential air services to remote communities. (Photo by Meagan Deuling)

By Emma Tranter

(Updated, 3:25 p.m.)

The federal government has launched a $75-million fund to ensure that essential air services to remote communities continue during the COVID-19 pandemic.

Marc Garneau, minister of transport, along with Dan Vandal, minister of northern affairs, and Marc Miller, minister of Indigenous services, announced the new fund today.

The $75-million fund will cover the next six months and an additional investment of $174 million will be available to support essential air service for the next 18 months after that if needed, a news release said.

Additional funding will depend on the pace of recovery of air travel to remote communities, the release said.

Vandal said the new funding is an “excellent announcement” for the North.

“We understand that the COVID pandemic has created a real crisis for the country, but especially the North and the aviation industry,” Vandal told Nunatsiaq News.

The funding will be retroactive to July 1, Vandal said.

Vandal could not say how much Nunavut’s airlines will receive through the new program, but said precise details will be settled soon.

“It makes sense that those territories with more communities that are remote are going to receive more than those that have less remote communities,” he said.

Vandal said he hopes the money will start flowing in the next few weeks.

“There needs to be more investment. I understand that. I think everyone does. What’s important now is to make sure the money flows, to make sure that those supply chains aren’t broken,” Vandal said.

Under the new initiative, the federal government will also seek bilateral agreements with provinces and territories to ensure air service continues for at least the next six months.

Provinces and territories would be responsible for determining the minimum essential services needed to their communities and administering a program with air operators.

A fixed amount will be allocated to each jurisdiction based on historic passenger volumes, the news release said.

“This funding, in partnership with investments by the provincial and territorial governments, will ensure minimum levels of essential transportation services to remote communities, and ensure the continued supply of food, medical supplies, and other essential goods and services,” the release said.

The COVID-19 pandemic has had a devastating effect on Nunavut’s airlines, Canadian North president Chris Avery told Nunatsiaq News last month.

In a territory with no roads connecting communities, Nunavut’s airlines have to remain operational to provide passenger service for medical travellers and essential workers and to transport cargo, “whether it’s [to fly] hardware for a sewage truck or food to put bread on the table,” Avery said.

As of June, The Government of Nunavut had spent $24 million since March 30 to support Calm Air and Canadian North.

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(3) Comments:

  1. Posted by Consistency on

    Once again I am in support of ensuring the airlines dont go under… but once again the owners and shareholders and executives had better not get a single penny in bonus’ or profit while accepting this territorial and federal money. they have made lots in past years and will make lots once this COVID issue is sorted even if that is in a few years.

    • Posted by The Old Trapper on

      I agree that there should not be any executive bonuses while taking money from the government.
      .
      I will even grant that there were some years when the airlines did quite well, although if memory serves me correctly those years were few, long ago, and after years of losses.
      .
      Generally airlines have been a very poor investment in the last 30 years. They are capital intensive, don’t make money in most years, and it’s a very difficult business to run at a profit.
      .
      The nature of the beast is that most of what you make goes to pay capital, operating costs, and wages. You have to operate at 75 – 80% load factor just to break even. Sure if you can operate at 90 – 95% you can make a lot of money but that’s almost impossible to sustain. Just one flight at 50% means that you have to operate 3 other flights at 90% just to get back to your 80% break even mark.
      .
      I would wager that the airlines (First Air/Canadian North) have lost more money than they have made in the last 20 years. Nunavut is actually lucky that the new Canadian North is Inuit owned, if the ownership groups didn’t have a vested interest in the areas to be served I think that both airlines would have quit long ago.

  2. Posted by Jamie Audlakiak on

    As an beneficary of nunavut, i have seen for past several years, airlines in nunavut have been recieving millions in federal money, and yet they still charge us lots, i wonder where all the money going,

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