Trudeau silent on Air Canada bailout, nationalization

Airline to lay off half of 38,000 employees in June

Prime Minister Justin Trudeau will not say if Ottawa would nationalize or bail out Air Canada, which said May 15 it would lay off more than half of its 38,000 employees in June as it struggles with COVID-19 pandemic fallout.

The layoffs, announced for June 7, will affect at least 19,000 staff and could go as high as 22,800.

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Trudeau was repeatedly asked May 16 in his daily news conference if Ottawa would bail out or perhaps nationalize the struggling company, which has had to slash flight capacity by 95%, grounding 225 planes.

Trudeau said discussions remain ongoing with large companies such as Air Canada in order to assist them stay afloat.
“We know there is a big challenge right now for these companies – including the airlines,” Trudeau said. “We know that more needs to be done.”

Air Canada in March decided to let go of nearly half of its workforce in a cost-reduction scheme. It then rehired about 16,500 laid-off flight attendants, mechanics and customer service agents in April under the Canada Emergency Wage Subsidy. However, the company has not committed to participate in that program past June 6.

Trudeau said May 15 that Ottawa would extend the wage subsidy program to the end of August.

Trudeau said the federal government decided on the move because of the coming reopening of the Canadian economy, which may require some companies to start rehiring employees in earnest.

He said the extension was needed to ensure employers could rehire staff.

“Today, a lot of places are looking towards reopening,” he said at his daily press conference Friday. “And they need to be able to bring back workers or even hire more as this happens… Business owners, please take confidence from this announcement. You now have some runway to catch your breath as you get restarted.”

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