Air Canada cuts are proof it’s time for re-regulation

Air Canada celebrated the country’s birthday this week by indefinitely suspending flights on 30 domestic routes. It will also close its operations entirely at eight small airports.

The carrier said it was acting in response to the drop in air travel resulting from the COVID-19 pandemic. But the move is part of a pattern that predates the coronavirus — a pattern that has seen public carriers of all types reduce their services to Canadian communities.

In November 2018, for instance, Greyhound Canada cancelled virtually all of its routes in Western Canada, leaving most of the region without bus service.

This May, citing the pandemic, Greyhound suspended all bus service in the rest of Canada.

In some cases, the Air Canada cutbacks announced this week make sense. In Ontario, for instance, the carrier is suspending flights between North Bay and Toronto — a short hop that, for now at least, is adequately served by bus.

Ditto for Air Canada’s cancelled Toronto-Kingston route. Buses and trains run regularly between these two communities.

But 22 of the 30 suspended routes lie in the Atlantic Provinces and Quebec. It is not at all clear that the communities affected, such as Bathurst, N.B. or Val d’Or Que., will have much to fall back on once Air Canada pulls out.

In that sense, Air Canada is running afoul of the implicit understanding made 31 years ago when the crown corporation was allowed to go private.

While never spelled out, the political understanding then was that Air Canada would not abandon smaller communities entirely in its quest for profits.

Theoretically, the carrier could reinstate the 30 cancelled routes once the pandemic is over. But in its announcement Tuesday, it gave no indication of doing so. Indeed, its decision to shutter operations entirely at some airports suggests the opposite.

That, in turn, leaves Prime Minister Justin Trudeau’s Liberal government in a bind. The Atlantic Provinces and Quebec are key to its re-election plans. Can the Liberals afford the political cost of allowing these cutbacks to go ahead?

Air Canada was already lobbying the government for a bailout that would allow it to ride out the pandemic. The route cancellations announced this week ramp up the pressure on Ottawa to deliver more help.

But rather than just hand over money to the airlines, the government may want to rethink its entire approach to transportation.

Deregulation and privatization were the building blocks of this approach. They were supposed to provide those travelling by bus, train or plane with plenty of choice. They were supposed to provide high quality at low cost.

But they didn’t. Even before the pandemic, air travel was a nightmare, characterized by long waits and impossibly uncomfortable seats.

Even before the pandemic, you couldn’t get a bus to, say, Stratford, Ont. There were none. Even before the pandemic, there was no train service in most of Canada.

Now, matters promise to get even worse. Small communities that enjoyed some measure of air service will have it no longer.

Air Canada and other carriers want public money to tide them through the pandemic. Fine. But make any bailout conditional on re-regulating the industry. Insist that in return for being allowed to operate in high profit markets, air carriers, bus companies and railroads provide reasonably priced services to smaller communities.

None of this is impossible. In fact, before Canada was lured by the siren call of deregulation, it was the norm.

It could be again. For a political leader with nerve, the opportunity is there for the taking.

Thomas Walkom is a Toronto-based freelance contributing columnist for the Star. Reach him via email: walkomtom@gmail.com Air Canada is running afoul of the implicit understanding made 31 years ago when the crown corporation was allowed to go private