Bains suggests Ottawa may draw on scorned federal loan program for airline bailout
Innovation Minister Navdeep Bains says a federal loan program rejected by industry will be among the options Ottawa weighs as it sits down with airline executives over a government aid package.
Bains says the program, called the Large Employer Emergency Financing Facility, or LEEFF, could play a key role in lifting carriers out of the dire financial straits caused by the COVID-19 pandemic.
The program offers loans of $60 million or more to large companies facing cash problems, but comes with an interest rate that jumps to eight per cent from five per cent after the first year, far above typical private-sector lending rates.
Groups ranging from the federal Conservatives to Unifor, a union representing 15,000 aviation workers, have criticized the program due to its operating restrictions and high interest rate.
On Sunday, Transport Minister Marc Garneau said federal aid to airlines will hinge on their refunding passengers for cancelled flights, a long-standing demand by opposition parties, passenger rights advocates and thousands of complaints to the Canadian Transportation Agency.
Garneau says talks with airline representatives are set to begin this week.