Air Canada issues Bill C-10 ultimatum

If proposed legislation isn't passed, airline threatens to kill job-creation pledge, cancel jet order

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OTTAWA — A senior Air Canada executive warned Tuesday if the federal government doesn’t pass legislation to give it control over where it does heavy maintenance work, the airline will cancel plans to buy Quebec-made jets and create new maintenance jobs in Montreal and Winnipeg.

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Hey there, time traveller!
This article was published 22/06/2016 (2245 days ago), so information in it may no longer be current.

OTTAWA — A senior Air Canada executive warned Tuesday if the federal government doesn’t pass legislation to give it control over where it does heavy maintenance work, the airline will cancel plans to buy Quebec-made jets and create new maintenance jobs in Montreal and Winnipeg.

Kevin Howlett, the senior vice-president for government affairs and regional markets, delivered the warning in an appearance before the Senate transport and communications committee, in which he urged the upper chamber to swiftly pass Bill C-10.

Air Canada has announced plans to create centres of maintenance excellence in both Winnipeg and Montreal, as well as to buy up to 75 new C-series jets from Quebec-based Bombardier. The centre in Winnipeg would create as many as 150 new jobs by 2017, with the potential for growth.

Francois Mori / The Associated Press FILES A Bombardier CS 300 does a demonstration flight during last year’s Paris Air Show. A centre for heavy aircraft excellence in Winnipeg would create as many as 150 new jobs by 2017.

While Transport Minister Marc Garneau has insisted all along the government struck no deal with Air Canada to introduce Bill C-10, Howlett was clear about the impact of not passing C-10.

“If this bill does not go forward, we will not create the centre of excellence in Manitoba, and we will not create a centre of excellence in Quebec,” he said.

Nor will the airline be buying new jets from Bombardier.

‘So in plain words, “‘You do what we want or we’re going to stick it to you’ “– Manitoba Sen. Don Plett 

“We are not prepared to make that scope of a financial commitment and do so in an environment of legal uncertainty,” he said. “There are other alternatives other than C-series.”

Manitoba Sen. Don Plett was angered by that response.

“So in plain words, ‘You do what we want or we’re going to stick it to you,’” he said.

All of this has come about because in 2012, Aveos Fleet Performance went bankrupt, throwing 2,400 people out of work, more than 400 of them in Winnipeg. The company was an Air Canada subsidiary that was created to do its heavy maintenance work, the kind of aircraft repairs that require a plane to be taken out of circulation to have major components overhauled or replaced, such as electrical systems and engines.

The Air Canada Public Participation Act required the airline to have some of that heavy work done in Winnipeg and Montreal, but when Aveos went bankrupt, Air Canada contracted with non-Canadian companies to do the work. Quebec sued, supported by Manitoba, and won. The case is on hold in the Supreme Court awaiting the outcome of agreements between the airline and the two provinces to create these centres of excellence.

Garneau introduced C-10 to give legal certainty to Air Canada. It would still ensure Air Canada has some line maintenance work in Winnipeg, but it would mean there is virtually no chance the higher-paying, heavy maintenance jobs will return to the city.

The Manitoba government Monday asked the Senate to delay passing C-10 until the province can get some promises from Ottawa that will result in a net benefit to the province, which the Free Press has learned includes a $20-million aerospace-training commitment allegedly made to the former NDP government by Employment Minister MaryAnn Mihychuk.

Mihychuk told the Free Press Monday she was “involved in some early discussions that were confidential” but said she was not able to provide any details.

“I’m a little surprised we’re talking about this in the media,” she said.

She added she is no longer part of the negotiations underway between Manitoba and Ottawa.

Garneau said Monday Ottawa will spend $10 million over the next five years to expand an aerospace technical centre at Red River College although details of that pledge appeared not to be signed yet.

The committee passed C-10 Tuesday, and it will come up for third reading in the Senate today. Plett said he has to decide whether he will speak to the bill right away or have it adjourned under his name, possibly delaying a vote on the bill until the fall.

mia.rabson@freepress.mb.ca

History

Updated on Wednesday, June 22, 2016 8:04 AM CDT: Attaches photo

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