Nov 30, 2020
Ottawa unveils new spending measures to assist airline, tourism industries
By Anne Gaviola
Ottawa unveils measures to assist airline, tourism industries in fall update
With the COVID-19 pandemic taking an outsized toll on certain sectors, the federal government plans to provide specific aid for the airline, tourism and hospitality industries as well as for live event operators in its fall economic statement. That aid will be provided in addition to other support measures, including low-interest loans, rent and wage subsidies for some of the country's hardest-hit businesses.
Here’s what you need to know about what aid is being offered to these sectors:
Airline and travel industry
- The pandemic restrictions and lockdowns have decimated airline traffic and revenue, forcing carriers to burn millions of dollars in cash, lay off thousands of workers and slash the number of flights offered.
- The fiscal update acknowledges that because Canada is a vast country, “we rely more on air travel than others” and that the sector is vital to the country's economy as it directly employs more than 100,000 people. While talks have begun on a bailout package, the fall economic statement indicates any sector-related aid would require the return of regional routes that were cut as well as refunding fares to passengers whose flights were cancelled because of COVID-19.
Here’s a breakdown of airline support, totalling $796 million:
- Regional air transportation - $206 million in 2020 and 2021
- Small and regional airports - $186 million over two years, starting in 2021
- Larger airports - $500 million over six years through a new transfer payment program
- Major airports as well as Ports Toronto - which operates Billy Bishop Toronto City Airport - to receive continued support via an extension of the $229 million in additional rent relief. This includes waiving rent payments for small- and medium-sized airports, while allowing larger hubs to defer rent payments in 2021, with repayments staggered over a decade beginning in 2024.
- Airport authorities - $65 million in new funding in 2021 and 2022
- $188 million in funding for VIA Rail Canada was also announced to offset operating shortfalls over the next two years.
Tourism and hospitality
Tourism accounts for about two per cent of Canada's GDP and employs 750,000 workers, many of whom are youth, women and Indigenous people. More than $500 million in support has been announced for the sector through the Regional Relief and Recovery Fund until June 2021. This means that the government is earmarking 25 per cent of the total Regional Relief Fund’s resources to support and boost tourism and hospitality.
Live events and arts
The pandemic forced the closure of nearly all live events, concerts, and art performances, affecting hundreds of thousands of workers, many of whom are precariously employed as they are freelancers or self-employed. The economic impact has also been felt in the drastic reduction of ad revenue across the board.
To address this double-whammy, the federal government has pledged $181.5 million until 2022 for the sector, through the Department of Canadian Heritage and the Canada Council for the Arts. This encompasses a one-year renewal of funding outlined in last year’s budget, the government said.
There is also support tailored for local TV and radio stations in the form of waiving some Canadian Radio-television and Telecommunications Commission (CRTC) broadcast licensing fees for this year and next. Waiving these annual fees could total $50 million in relief with the goal of helping them to keep operating and maintaining their broadcasts.
Some notable large-scale festivals and live events will be given additional “unique support” to “prevent the closing of unique and irreplaceable flagship events” across the country, but details weren't specified.
The feds also highlighted $50 million that was announced in September as part of a short-term compensation fund for film and TV productions across Canada. The initiative is designed to compensate for the lack of insurance coverage related to COVID-19 which has halted or interrupted filming and production of broadcast programming.
BNN Bloomberg is a division of Bell Media, which is owned by BCE.