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PBO estimates federal government will net $177 million from Air Canada aid deal


August 12, 2021
The Canadian Press


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Air Canada Boeing 787-9 Dreamliner. (Photo: Air Canada)

OTTAWA — The Parliamentary Budget Officer says the federal government could make about $177 million over ten years from a support deal it reached with Air Canada.

The PBO estimate is based on Air Canada using only part of the $5.9-billion aid package that the airline agreed to with the government in April.

The package included the government taking a six per cent stake in the airline for $500 million, $1.5 billion in secured credit, $2.475 billion in unsecured credit, plus another $1.4 billion in unsecured credit intended to refund travellers impacted by COVID-19.

The PBO forecast is based on Air Canada using about $1.2 billion of the funds intended to refund travellers, but not using the other available credit.

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Air Canada has said it would keep the government credit as insurance while going ahead with other refinancing options. On Wednesday, the airline announced it had completed a $7.1-billion refinancing transaction.

The deal with Ottawa required that Air Canada refund passengers whose flights were cancelled due to COVID-19, while further restrictions would be imposed if the airline were to access the other credit facilities.

This report by The Canadian Press was first published Aug. 12, 2021.

News from © Canadian Press Enterprises Inc., 2021