Nunavut government approves another $22M in airline support
Mar 22, 2022
Government has paid $109 million in subsidies so far.
A Canadian North Flight lands in Iqaluit. The government of Nunavut has approved another $22 million in subsidies for the territory’s airlines to help them break even. (Jackie McKay/CBC)
Nunavut’s lawmakers have approved another $22 million to help the territory’s airlines break even to operate in Nunavut.
Finance Minister Adam Arreak Lightstone made the request in the Legislature on Monday to cover the airlines from January to March, 2022.
He said the extra money is necessary to help the airlines continue to maintain minimum service to Nunavut’s communities.
“We’re now at the point where the airlines are equally dependant on our subsidies as we are on their crucial services that they provide to our communities,” Arreak Lightstone told the House, adding it’s a safe assumption the airlines are not profiting from the subsidies.
“We cannot just abruptly end these financial supports that we have been providing. Otherwise that would have a detrimental impact on our communities.”
To date, Nunavut taxpayers have paid $109 million in subsidies to the airlines, Arreak Lightstone said. But he clarified the airlines have repaid $53 million through duty and medical travel ticket reimbursements and cash surpluses.
“We’re providing a subsidy to assist the airlines to break even with their Nunavut operations,” he said.
Buying a stake in the industry
Iqaluit-Tasiluk MLA George Hickes pressed the minister of finance on whether the government has explored buying a stake in the airlines, given the subsidies it has paid to them.
Arreak Lightstone himself had raised the idea in the previous assembly when he was a regular MLA, before becoming finance minister after October’s territorial election.
Still, it’s not a plan the government has looked into.
“If we were to consider looking into buying ownership of the airline, it would cost a significant investment. Something that $22 million would not cover,” Arreak Lightstone said.
Speaking with CBC News, Arreak Lightstone highlighted how it was the previous government’s decision to start paying subsidies to airlines, saying the current government has been “left in this position where we can’t just put an abrupt end to it.”
“I still think that the amount of money that has gone to those airlines could have been potentially utilized in a better way,” Arreak Lightstone said.
He said he hopes this is the end of the need to subsidize the airlines, but said it was “hard to say” given the fluctuating nature of the pandemic.
The original article can be found on the CBC news website
