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Letter: Urgent action is needed to help seasonal tourism operators and air carriers

Northern MPs say companies face significant challenges in face of COVID-19 crisis

Editor’s note: The following is an open letter to Minister of Finance Bill Morneau, Minister of Transport Marc Garneau, Minister of Indigenous Services Marc Miller and and Minister of Economic Development and Official Languages Mélanie Joly.

We are writing today as Members of Parliament from Northern Ontario in order to bring to your attention the significant financial challenges facing seasonal tourism operators and air carriers servicing remote First Nations in our region. 

Both of these industries are critically important to the economies of our respective ridings, and we wish to request urgent action that will help these businesses weather the COVID-19 crisis.

In all three of our ridings, there are a large number of small businesses that earn livelihoods through tourism, including fly-in fishing companies, lodges, and recreational equipment manufacturers. 

However, due to the COVID-19 pandemic and resulting travel restrictions within the province and at the border, all tourism to our region has stopped. These businesses, which would normally be preparing to open at this point in the year, are looking towards a summer with likely little to no revenue if the restrictions continue. 

This is on-top of the fact that many of these businesses – particularly the fly-in fishing companies and lodges – have to pay very high start-up costs and insurance fees at the beginning of the season.

Existing supports are not adequate for these businesses. Due to the payroll requirements on the Canada Emergency Business Account and limited-time frame on the Canada Emergency Wage Subsidy (CEWS), these supports are not accessible to many of these small companies.

Additionally, quite a few of the tourism operators in our region are start-ups who do not qualify for the new loan programs, and are facing financial ruin as a result. Many tourism operators also rely on funding from programs like the Canada Summer Jobs program – funding which they will not be able to access if they don’t open or are forced to open later than usual.

Along with seasonal tourism businesses, the larger air carriers servicing remote communities in Nishnawbe Aski Nation (NAN) are also facing severe financial challenges. These companies are struggling to meet payroll and operating costs due to the dramatic drop in demand for passenger service due to COVID-19 – in some cases, a drop of over 70 per cent.. For example, Wasaya Airlines, a 51-per-cent First Nations-owned-and-operated airline that has been transporting food, equipment, and health-care providers and patients to remote communities for over 30 years, has reported that their ability to continue operating will be threatened without emergency funding. A similar situation is facing North Star Air, Bearskin Airlines, and a number of other carriers.

Many communities in NAN are already highly vulnerable to COVID-19 due to drinking water advisories and limited health services. Allowing these air carriers – which are the lifelines for these communities – to cease operations at this time due to costs would only add to the challenges they are facing, and potentially put lives at risk.

Accordingly, we are requesting the following supports on behalf of the seasonal tourism businesses and the air carriers servicing remote First Nations:

- Immediate relief to help cover start-up costs for seasonal tourism businesses, particularly insurance costs for air-carriers. Many of these businesses must pay their insurance by May 1, or else lose their charters for the season – effectively shutting down their businesses. These costs can run upwards of $180,000. Significant support is needed, and fast.

- Non-repayable loans to help these businesses cover costs throughout the summer. Both types of businesses are facing potential months of severely reduced revenue. Accordingly, these businesses are wary of taking on more debt in the form of loans. Grants would alleviate much of the uncertainty facing these businesses going forward. Such a program could be modeled on the funding for air carriers provided to the territories earlier this month.

- An expansion of the CEWS beyond June. Many of the seasonal tourism businesses do not normally start operating until May. Having only one month to access the CEWS is not adequate – they need this support extended if they will be able to continue employing their staff.

- Help address the fact that many seasonal pilots over the age of 40 cannot get medically certified to fly commercial this season. Many of the seasonal tourism companies fly floatplanes, which due to the associated insurance costs and expertise needed to fly these aircraft, are often piloted by individuals over the age of 40. Since many of these pilots cannot get the needed physical to be certified for the new season due to COVID-19, a number of these companies are facing significant staffing challenges. 

We hope this letter helps convey the gravity of the situation facing these two groups of businesses. Urgent action is needed now.

Marcus Powlowski, Member of Parliament, Thunder Bay-Rainy River

Charlie Angus, Member of Parliament, Timmins-James Bay

Eric Melillo, Member of Parliament, Kenora