An operating budget committee comprised of North Bay City Council members has moved forward a proposed subisdy of up to $840,000 in 2021 to the North Bay Jack Garland Airport Corporation.
This pushes the service level change to the final approval stage of the 2021 budget process and follows the City staff recommendation to help support the local airport's operations.
"As much as we would like to see the resumption of services at Jack Garland Airport, they are expecting challenges for the next three to six months, easily," said Coun. Chris Mayne, who also sits on the airport's board.
In April, there were many unknowns when it came to the effects on the airline industry and travel of the COVID-19 pandemic. When Council moved to support Jack Garland financially, the airport corporation initially forecasted it would require $200,000 per month.
Then came the late-June bombshell from Air Canada, as the airline announced plans to indefinitely suspend service on 30 domestic regional routes and close eight stations at regional airports in Canada, including the station in North Bay.
Six months later, Air Canada cuts have affected some 20,000 jobs and the airline is examining the suspension of another 95 routes and the closure of nine more Canadian stations.
See related story: Chamber: 'No service, no support' for Air Canada
By July, Council had pledged to support Jack Garland Airport with up to $1.5 million in funding.
Mayne observed there has been "nominal service," at Jack Garland but it continues to be "about 90 per cent down," something expected to continue for the "foreseeable future."
He added, "They have been looking for new partners to replace the service that was discontinued by Air Canada in the summer but nothing has been finalized to date."
Chief Financial Officer Margaret Karpenko clarified $600,000 has already been provided to the airport from the Phase 1 Safe Restart funds in 2020.
"To date, the Airport has demonstrated prudent financial responsibility by reducing costs, applying for wage subsidy grants and implementing service level reductions in order to reduce their overall deficit," she reports. "As a result, the Airport has not yet used any of the redirected capital dollars as approved."
Karpenko advised, "The Airport is preserving $600,000 in their reserves in 2020 and will use these in 2021 prior to requesting funds from the City."
According to the CFO, "The service level change [of up to $840,000 from economic development reserves] to help the airport in 2021 has a zero net levy impact. Council passed a resolution of up to $1.5 million to support [the airport]. The mandate was that they use their reserves first and then the City would help them in 2021."
The agreement states North Bay Jack Garland Airport will update the City at their board meetings and in bi-annual reports on their year-to-date and projected financial status through 2021.
The lone holdout with respect to the airport subsidy was Coun. Mark King. He has stood his ground when it comes to pursuing funding from senior levels of government.
In July, he said, "If you go ahead and support the motion the way it is written, you will actually take both the federal and provincial governments off the hook as far as funding is concerned. You might as well figure on funding this for the foreseeable future."
Mayor Al McDonald also said in July, "We’re hopeful the federal government steps in to assist us, and if it does, that [municipal subsidy] number obviously would go down. I am in conversation with our MP Anthony Rota for support for our airport. He understands how important the airport is, so we’ve written a letter and I’ve had conversations with Anthony about federal government support."
There is still much to be decided when it comes to airlines and airports. When the federal government recently released details of its budget, it included proposals aimed at establishing a financial assistance model for major airlines contingent on rebates for cancelled flights, among other items.
See: Ottawa beefs up loans for hard-hit sectors — but big airlines not included for now
And, there is nearly $1 billion in funding identified — including $186 million earmarked for the Airport Capital Assistance Program over two years to aid small and regional airports — but no details on how those funds will be allocated.
With files from The Canadian Press
