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GN ‘missed opportunity’ by not taking ownership in airlines during bailout, MLAs say

The Government of Nunavut should have partial ownership in Canadian North and Calm Air after close to $100 million in government financial aid was provided during the COVID-19 pandemic to help keep the airlines in business, MLAs John Main and Adam Arreak Lightstone agreed.
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“I’m a bit disappointed that we find ourselves more than a year into the pandemic and we are still putting money towards the airlines, of which some of that money does come from the Nunavut government’s own budget, and we are not receiving equity stake or recognition of that contribution in return,” says MLA John Main. photo courtesy of Canadian North

The Government of Nunavut should have partial ownership in Canadian North and Calm Air after close to $100 million in government financial aid was provided during the COVID-19 pandemic to help keep the airlines in business, MLAs John Main and Adam Arreak Lightstone agreed.

“This was a missed opportunity and likely $100 million wasted,” Arreak Lightstone said in the legislative assembly on June 1.

Main acknowledged that the territorial government’s money did some good because many flights continued to be offered that otherwise would have been cancelled by the airlines, “but I do feel that it would be appropriate for the government to receive an equity stake in the airlines in question, Canadian North and Calm Air, in return for this support.

“I’m a bit disappointed that we find ourselves more than a year into the pandemic and we are still putting money towards the airlines, of which some of that money does come from the Nunavut government’s own budget, and we are not receiving equity stake or recognition of that contribution in return,” said Main.

Arreak Lightstone added: “Canadian North has been profiteering off of the Government of Nunavut for decades, for quite a considerable amount of time and it would have been ideal if the Government of Nunavut had taken advantage of the opportunity and used this $100 million to buy in to the corporation and allow the corporation to then reinvest those funds to support its operations.”

He said he understood that the GN’s recently signed duty and medical travel contract forced the airlines to provide a minimum number of flights and that the airlines would have been liable by not fulfilling those terms and ran the risk of becoming defunct.

Finance Minister George Hickes said the possibility of the airlines becoming insolvent was the GN’s foremost concern.

“If they were to fold it up and walked away, we calculate that it would have taken at least two weeks to put measures in place to get people and cargo moving again. When you look at the opportunity that has been alluded to as being a missed opportunity, by providing this funding as the bare-bones operational requirements, we would have had to provide excess funding if we were looking at purchasing portions of the airline,” Hickes said. “We didn’t know at that time, and in some respects, we are still figuring out what the impact of COVID is on our fiscal situation. We weren’t willing to put Nunavut’s money again in jeopardy with a contracted entity that we have arrangements with.

“We do our due diligence in these types of negotiations to do what’s best for Nunavummiut. The decision was made by cabinet and FMB at different stages of the discussions on how to provide that minimal level of service for transportation of cargo and people within the territory and to the first points of exit, being like the Ottawa, Winnipeg and Yellowknife. We had to take all those factors into consideration and our unknown fiscal situation in a lot of respects. We didn’t know how much assistance the federal government was willing to provide at that time. We had to do what’s best for Nunavummiut,” said Hickes.





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