Air traffic controllers are being warned that layoffs are coming as Nav Canada pursues a “full restructuring” in response to a revenue slump caused by the COVID-19 pandemic, CBC News has learned.
CBC News has obtained a confidential memo sent internally to air traffic controllers on Thursday. In it, Ben Girard, Nav Canada’s vice-president and chief of operations, told staff that the company has seen a $518 million drop in revenue compared to its budget.
He said he’s been pushing the federal government for help, but — unlike some other countries — Canada has not released an industry-specific bailout package yet.
“We anticipate that until air traffic returns to higher levels, which will not occur until the end of this fiscal year, we will continue to operate in a daily cash negative position and this will be made worse as funding from the [Canadian Emergency Wage Subsidy] program is ratcheted back,” Girard wrote.
Girard did not say in the memo how many air traffic controllers will lose their jobs or which locations will be affected. The memo said it’s looking to reduce the number of “IFR controllers.” These controllers are higher on the pay scale and work at area control centres in Gander, N.L., Moncton, N.B., Montreal, Winnipeg, Toronto, Edmonton and Vancouver.
The workers are responsible for controlling large amounts of airspace between airports using radar. Their job is to make sure planes keep proper distance from one another.
“I know this is very difficult news to hear. It is also very difficult news to deliver,” Girard wrote. “This is a decision that has been made at my level based on what needs to be done to ensure Nav Canada’s financial sustainability.”
Nav Canada manages millions of kilometres of airspace over Canada and used to provide air navigation services for more than three million flights a year. It’s funded through service fees paid by air carriers.
The Canadian Air Traffic Control Association said it is very concerned with the memo.
“It is the opinion of this union that safety is not being taken into consideration in making sound decisions,” president Doug Best and executive vice-president Scott Loder wrote in a letter to members.
“Safety is the number one priority for Nav Canada and it has somehow taken a backseat to cost containment as the number one and only priority.”
‘We’re facing years of a downturn in air traffic’
In November, Canadian air traffic was down 54 per cent compared with the same time period in 2019, according to the memo.
“Over the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we’re facing years of a downturn in air traffic that is much larger and broader in scope than we all initially believed, and will be much deeper and longer than any downturn in the history of the industry,” Girard wrote.
Nav Canada says it is conducting studies of air traffic control towers in Whitehorse, Regina, Fort McMurray in Alberta, Prince George in B.C., and Sault Ste. Marie and Windsor in Ontario that “will result in workforce adjustments.” The company is also looking into closing a control tower in St. Jean, Que.
Nav Canada air traffic controllers were told on Thursday that a workforce adjustment is coming because ‘the aviation industry has deteriorated significantly.’ (Jonathan Hayward/The Canadian Press)
Government ‘pressed’ for help
The company has been focused on securing liquidity and tapped into the Canada Emergency Wage Subsidy (CEWS) to pay up to 75 per cent of employees’ wages, he wrote. Girard added that these payments are being reduced and will run through December, but Nav Canada isn’t sure if it can continue receiving that wage support.
“While an extension for the CEWS program through June 2021 was recently announced, NAV CANADA’s eligibility is uncertain,” he wrote.
Girard said the federal government has so far failed to come up with a bailout package for the airline sector, despite “significant lobbying.”
Last month, the Globe and Mail reported that the federal cabinet is working on a package for the airline sector that would include low-interest loans.
Since Sept. 22, Girard wrote, the company has cut more than 700 managers and employees — 14 per cent of its workforce. It also let go of 159 students earlier in the pandemic, he added, and in November cut even more, “leaving just a few in the system.”
Along with the cuts, seven air traffic control towers are being considered for a downgraded level of service, and another 25 sites that are already Flight Service Stations — which provide only advisory services — could face more cuts.
Nav Canada’s board of directors has cut its fees by 20 per cent, and executives and managers have dropped their salaries by up to 10 per cent, Girard wrote.
These cost reductions, as well as access to government support through the wage subsidy program, have saved the company $200 million since March 1, he added.
“However, that number still pales in comparison to the $518 million reduction in revenues as compared to budget,” Girard wrote.
“Despite these cost-containment efforts, we find ourselves in a situation where we expect our revenues to continue falling far short of our costs for several years, and we continue to require further cost-containment measures and indeed, a full restructuring of our business.
“In an environment where 30 per cent of costs are associated with ‘things’ and 70 per cent of costs are associated with ‘people,’ when all possible cuts with ‘things’ have been done, any further cuts will directly affect people.”
Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic passes.
The Canadian Air Traffic Control Association said it will continue to challenge Nav Canada. The union hopes there will be “enough interest” in departure incentives for older controllers to offer them a package to retire.
“The views of Nav Canada at this point are violating the vision, mission and overarching objectives of this company,” Best and Loder said in their letter to members.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
