Trudeau promises 'relaxed' rules for wage subsidy, more support for student jobs

Daniel Fowler
April 8, 2020

The government unveiled the program one day after Air Canada temporarily laid off 16,500 employees - about half of its workforce - after its seat capacity and operations dropped by 90 per cent due to closed borders and stay-at-home orders.

The Montreal-based airline said rehired employees will benefit from the subsidy for the length of the program - now slated to last for up to 12 weeks, retroactive to March 15 - or until they can resume their usual duties, whichever comes first.

On Wednesday, the company said those workers would be retained or returned, keeping them on the payroll.

Air Canada says it will tap a government wage subsidy program to rehire workers laid-off after most global airline traffic was halted amid the COVID-19 pandemic.

Canada's airline industry, including its largest players Air Canada and WestJet Airlines Ltd., has been pressing the government for assistance during a devastating time for the air travel sector.

Anticipating a second parliamentary recall to pass the expanded wage subsidy, the prime minister said he is calling on the opposition to join them in bringing back the House "as soon as possible" to enact these changes.

Exact details of the emergency wage subsidy are still unclear and legislation supporting it has yet to be passed, but Air Canada believes it qualifies and has the support of the five unions representing its employees in Canada. As a result of the crisis, Air Canada has abruptly reduced its seat capacity by 85 to 90 per cent and is incurring significant revenue losses.

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More than 18,500 employees at Canadian airlines have lost their jobs over the past three weeks, not including Air Canada workers.

He again praised those who are following the recommendations of public health officials, and implored those who are flouting the guidelines to follow them and stop putting others at risk.

Calin Rovinescu, Air Canada's president and chief executive officer, and Michael Rousseau, Air Canada's deputy chief executive and chief financial officer, have agreed to forgo 100 per cent of their salary.

Senior executives will also forgo between 25 and 50 per cent of their salaries while members of Air Canada's board have agreed to a 25 per cent reduction.

A company-wide cost reduction and capital deferral program, now estimated to be at least $750 million for the year, increased from the previous target of $500 million.

Air Canada suspended its share repurchase program in early March 2020.

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