Today’s announcement that the Canadian government intends to provide the owners of Air Canada with a $5.9 billion bail-out is the wrong decision for Canadians. It’s wrong for laid-off airline workers, and it’s wrong for the public who will pay a steep price for earlier Liberal and Tory decisions to privatize Air Canada and deregulate the airline industry in Canada.
Fat profits for Air Canada, including $1.5 billion in 2019, and a doubling of corporate profits in 2017 over 2016, came from high seat prices and reduced services for travellers, and stagnant wages and working conditions for airline workers.
Government bailouts in 2004 and 2009, followed by massive CEWS (wage subsidy) and LEEFF payments in 2020, have not, and will not end non-stop public bailouts in the future. Privatization and deregulation has opened up the country like a sardine can to cut-throat international competition where bigger and bigger profits are the only goal, and the public’s transportation needs in a big country with a small population, are irrelevant. The only profitable stops in Canada for private for-profit airlines, are the biggest cities in the south, which are also financial centres. In other words, Vancouver, Calgary, Toronto, and Montreal.
Air Canada was created in 1937, as a publicly owned corporation, precisely because of the size of the country, and the need to rapidly transport people and goods to all parts of the country, at a reasonable cost. For 50 years, the main goal was affordable public transportation, until neo-liberal governments and policies of privatization, deregulation, free trade and corporate tax cuts arrived in the 1980s. Air Canada was privatized by Tory PM Mulroney in 1988, and “Open Skies” agreement deregulating air travel was passed by Liberal PM Chretien in 2003. The privatization of the carrier was a huge blunder in the first place – that’s the source of the crisis facing Air Canada today. Sequential public bailouts have kept Air Canada afloat during many bad years since, while profitable years have always been privately appropriated by the airline’s CEOs and shareholders.
The solution is not more bailouts by the public, and profiteering by Air Canada’s owners and shareholders. Nor is it more layoffs, increased seat prices, or domestic route cuts.
The solution is to bring Air Canada back under public ownership – and democratic control. This is the only way to guarantee that public funds are used to provide a necessary public service, not to increase corporate profits and personal fortunes. It’s the only way to ensure that transportation of people and goods to all parts of Canada, at an affordable cost, is permanently secured. It’s the only way to guarantee the jobs, wages and pensions of more than 30,000 airline employees in a profit-drive, capitalist economy.
In fact, the government has already pumped more money into Air Canada than the company is worth: the public has paid for it many times over but we’ve yet to receive the deed. Just like Bombardier.
The government’s proposal to buy $500 million in equity is less than 10% of the bail-out – a drop in the bucket that will have no effect on the direction and decisions of the company CEOs. The government’s equity stake in General Motors’ 2009 bail-out was nothing more than a PR stunt, while the cuts to autoworkers’ pensions and benefits lasted forever.
Finally, everyone knows that the gigantic ‘loans’ made to corporations during economic crises, are rarely, if ever, repaid to the public treasury. They get forgiven and forgotten, or ‘deferred’ forever. The $5.4 billion ‘loan’ will not be any different. It just sounds better than the ‘freebie’ it is, when it’s reported in the news and read by the millions of unemployed and under-employed, stripped of their jobs and savings, facing eviction and foreclosure, trying to get by on CRB or EI’s payout of $500 / week – gross.
But the cost of these massive financial gifts are always paid for by working people, who are themselves the victims of economic crisis, mass unemployment, and cut-throat corporate concentration and centralization.
What working people need now is a People’s Recovery, not another corporate bailout of Air Canada, Air Transat, Westjet, the oil and gas multi-nationals, and all those demanding corporate welfare.
A People’s Recovery requires urgent government action to:
- Make EI non-contributory, and accessible to all the unemployed for the full duration of unemployment at 90% of previous earnings
- Enact 14 employer paid sick annually for all workers
- Raise the minimum wage to $23 across Canada
- Substantially increase pensions and make them fully accessible at age 60
- Introduce a Guaranteed Annual Livable Income – not subsistence
- Enact full employment policies, creating good jobs now, raising wages, pensions and living standards across the country, building affordable social housing, and investing in value added manufacturing and secondary industry
- Enact public ownership and democratic control of key sectors of the economy including energy and natural resources, pharmaceuticals, banks and insurance companies
- Restore regulation and reverse privatization
- Enact progressive tax reform that shifts the tax load onto the corporations and the wealthy while providing tax relief to working people and the unemployed.
- Withdraw from USMCA and other corporate ‘free trade’ agreements in favour of multi-lateral and mutually beneficial trade;
- Withdraw from NATO and NORAD and cut military spending by 75% in aid of peace and disarmament, and civilian spending
- Act now to stop climate change by nationalizing energy and natural resources and introducing hard caps to carbon emissions
- Expand Medicare to include pharmacare, Long-term care, vision, dental and mental health care; expand social programs including universal, free and quality public childcare, free post-secondary education
- Expand labour, civil, social and democratic rights; end systemic racism
Central Executive Committee
Communist Party of Canada
April 13, 2021