The federal government is offering airlines access to up to $150 million in jet fuel loans at below-market interest rates, according to an internal Privy Council Office briefing note that reveals details not included when the program was announced last month.Blacklock's Reporter says Finance Minister François-Philippe Champagne unveiled the Airline Sector Resilience Facility on June 8, saying the initiative would help keep air travel affordable and protect jobs, but did not disclose that participating carriers would receive financing on terms more favourable than those available through private lenders."Canadians should continue to have access to reliable and affordable air travel," Champagne said when announcing the program. "We are helping maintain connectivity, protecting Canadian jobs and reducing pressures on travelers."A June 10 Privy Council briefing note states airlines will be eligible for loans with four-year repayment periods at interest rates above the federal government's borrowing costs but below commercial market rates."Loans are provided on commercial terms with a repayment period of four years at rates above the Government of Canada's borrowing cost but favourable relative to market rates for affected companies," the briefing note states.The document says assistance will be provided as needed and tied to increases in jet fuel prices and each airline's fuel consumption.The briefing note does not estimate the cost of the program to taxpayers.Ottawa also suspended the federal four-cent-per-litre excise tax on aviation fuel on April 20 in an effort to reduce costs for airlines.The government says rising fuel prices remain one of the industry's biggest financial challenges."Fuel prices, one of the largest cost drivers for airlines, have risen sharply, putting pressure on operations and ticket prices for Canadians," the briefing note states.It adds that jet fuel prices are expected to remain higher than they were in 2025, increasing operating costs across the sector.The program has already drawn criticism from within the airline industry..According to the briefing note, WestJet strongly opposed the new loan facility, arguing it could distort competition.The airline warned that, similar to pandemic-era airline assistance, some carriers may never repay the loans, effectively turning them into taxpayer-funded subsidies.WestJet instead urged the federal government to address structural issues affecting the aviation sector rather than introducing new financial assistance.The latest initiative follows Ottawa's 2021 bailout of Air Canada, which included $5.9 billion in financial support, including long-term loans, $1.4 billion in low-interest financing and the federal purchase of $500 million in Air Canada shares.The government later sold those shares in 2024, reporting an 8% profit.Internal Privy Council research conducted after the Air Canada bailout found Canadians were divided over government support for private airlines.According to focus group findings, some participants questioned why taxpayers should be required to rescue struggling private companies, while others raised concerns about the federal government purchasing equity in publicly traded corporations.The report found many opponents believed taxpayers should not be responsible for keeping airlines financially afloat.
