The federal government on Monday offered a loan lifeline to airlines struggling to cope with the soaring price of jet fuel, garnering a mixed response from the country’s carriers.
The new program will let airlines borrow up to $150 million each, as fallout from the Iran war forces them to slash flight schedules and cut profit forecasts.
Ballooning fuel costs have put severe pressure on airlines’ balance sheets, said Finance Minister François-Philippe Champagne, who framed the relief effort as a way to ensure “reliable and affordable” travel for passengers.
“By building on existing relief measures with targeted and temporary support for Canada’s airline sector, we are helping maintain connectivity, protect Canadian jobs and reduce pressures on travellers during this period of elevated fuel costs,” Champagne said in a news release.
Airlines that sign up must commit to “buy Canadian,” restrict dividends and executive compensation and maintain existing jobs in the country, the government said. The government did not spell out what buy Canadian refers to in the context of the loans.

John Fragos, Champagne’s press secretary, said in a phone interview there was no “blanket formula” for interest rates or loan amounts, and that relief would be worked out on a case-by-case basis.
However, the two biggest airlines appeared either indifferent or hostile to the government’s largesse.
“Air Canada has a very strong balance sheet built in anticipation of events such as the recent spike in fuel prices and we are able to adapt in response and manage this situation,” the company said in an email.
WestJet adopted a more strident stance.
“WestJet strongly opposes the government’s proposal to issue loans to airlines amid the rising fuel costs. The government faces a choice: continue with costly and market-distorting subsidies or build a sustainable future for Canadian aviation,” said spokeswoman Jen Booth in an email.