WestJet is shutting down its budget airline, Swoop.
The company made the announcement in a news release Friday, noting that the ratification of its recent deal with its pilots allows it to integrate all of its staff at various airlines into a single banner.
“As negotiated in the collective agreement, the WestJet Group will now begin integration efforts of its ultra-low-cost airline, Swoop,” the airline said.
“Through an expedited process, the airline anticipates a full integration into its mainline operations by the end of October. To avoid traveller impact, Swoop will operate its existing network through to the end of its published schedule on October 28. Swoop employees will move to WestJet.”
The move comes as the Air Line Pilots Association (ALPA) announced its members had ratified their recent pact with the airline, one that brings in 24 per cent raises over four years, and puts Swoop pilots on a similar footing as WestJet’s in terms of seniority and compensation issues.
The union said 87 per cent voted in favour of the deal, “which goes a long way to recognizing the value and expertise the pilots bring to their airline and will help solve many of WestJet’s pilot attraction and retention issues.”
Swoop was launched nearly five years ago, in June 2018. It offered heavily discounted rates with few frills to cost-conscious travellers. A handful of other so-called ultra low-cost carriers have taken to Canada’s skies in recent years, including Flair, Lynx and Canada Jetlines.
While Swoop’s demise will remove a major player in Canada’s discount travel space, WestJet CEO Alexis von Hoensbroech says the airline will continue to offer affordable options.
“This integration will enhance our ability to serve a broader spectrum of guests,” he said. “Instead of only 16 aircraft serving the ultra-low-cost market, each aircraft, in our 180-strong fleet, will offer ultra-affordable travel options through to a premium inflight experience.”
But ultimately the news is a bad development for consumers, according to John Gradek, a lecturer at McGill University who studies the airline industry.
“It has implications in terms of the choices that Canadians will have in terms of an alternative ultra-low-cost carrier,” he told CBC News.
Although it started in 1996 as a regionally focused airline with generally cheaper prices, WestJet is no longer a discount airline, Gradek says. “The loss of Swoop basically eliminates a carrier that was specializing in low cost and it’s going to be a loss to Canadian travellers.”
More moves to come?
Gradek says it is not surprising to see WestJet make the move, as one of the main advantages of Swoop in the first place was its lower cost base.
“One of the conditions for creating Swoop was to have a different salary scale,” he said. “With the ALPA agreement that differential that allows you to have some competitive advantage price wise disappears.”
“WestJet has choices — they’re now looking at Sunwing and that’s the next shoe that’s going to fall,” he said. “how far do you take this integration that started with Swoop — do you do the same thing with Sunwing?”
At least two members of the group that recommended a pause on coal mining in Alberta’s Rocky Mountains are concerned the province’s regulator appears to have accepted applications to renew an already twice-denied project, in seeming contradiction of government policy.
“It is very concerning that this application appears to have been accepted,” said Ron Wallace, who headed a nine-month public investigation into how Alberta should deal with proposals for open-pit coal mines on the eastern slopes of the Rockies — a commission that recommended a moratorium on such development the government quickly enacted.
Last week, the Australia-based company Northback Holdings resurrected a proposal for the Grassy Mountain steelmaking coal mine in the Crowsnest Pass region of southern Alberta, applying for three licences from the Alberta Energy Regulator allowing them to divert water, drill, and run a coal exploration program.
That’s despite a ministerial order issued under former environment minister Sonya Savage. That order says no new applications will be accepted until land use planning for the area is complete or until the regulator receives a letter from either the province’s energy or environment ministers authorizing it.
“The recommendations from the coal committee were very clear,” said Wallace.
Neither condition has been met.
Bill Trafford, another former member of the committee and an area landowner, said the regulator’s reception of Northback’s application appears to be going against government policy.
“Nobody can figure out how the [regulator] could possibly accept an application from these guys,” he said. “They should have told these guys there’s no point in putting in an application because you can’t get past [the process].”
The ministerial order contains an exemption for advanced projects, defined as projects that have sent a summary to the regulator to determine whether an environmental impact assessment is required. Northback has submitted no such documents.
A previous version of the project, then proposed by Benga Mining, did submit those documents. However, that plan was rejected in 2021 by both provincial and federal regulators as not being in the overall public interest.
Nigel Bankes, a professor emeritus of resource law at the University of Calgary, said those decisions killed that project along with any documentation that accompanied it.
“In my mind, there is no live application,” he said.
“Benga used to qualify as an advanced project. But when its application was denied, I don’t think it continues to benefit from that exception.”
Teresa Broughton, spokesperson for the regulator, said that issue is being considered.
“The [regulator] can accept and process applications for matters related to coal mining if they are considered to be an ‘advanced coal project,”‘ she wrote in an email. “Whether this project is an ‘advanced coal project’ is something that will be considered as part of the [regulator’s] full technical review of the application.”
Craig Snodgrass, mayor of the southern Alberta town of High River and an opponent of Rockies coal mining, said both Environment and Protected Areas Minister Rebecca Schulz and Energy Minister Brian Jean have assured him they didn’t authorize the regulator to accept Northbank’s applications.
“They have not granted any written permission for Northbank to apply to the [regulator] for anything,” he said.
Coal mining became a contentious issue in the province in 2020 when the United Conservative government quietly reversed a policy that protected the Rockies from coal mining. Within months, the province had issued exploration permits for thousands of hectares, sparking a public backlash that led to Wallace’s commission.
Some welcome Grassy Mountain’s return.
“[We] are thrilled,” said Eric Lowther, a board member of Citizens Supportive of Crowsnest Coal, a group of people mostly from the proposed mine area who seek the economic benefits they say the mine would bring.
He said the group has met with Northback.
“They are more committed than ever,” Lowther said. “This is a great opportunity for our part of the world and we need it badly.”
Others remain opposed to further coal development in the region.
“I think [Northback] might think they have potential to move forward with this [application], because what we’re seeing is some inaction by our provincial government,” said Rachel Herbert, a rancher in the area.
“We’re not seeing clear messaging that Albertans do not want coal development in our headwaters. The citizens have spoken out, what we need now is some leadership.”
Herbert said she’s concerned coal development would impact already low water levels in the region, as well as erode soil and air quality.
Spokespersons from Northback or the Alberta government were not immediately able to provide comment.
Katie Morrison of the Canadian Parks and Wilderness Society said if the regulator allows Northback’s applications to proceed instead of throwing them out, it risks weakening the government’s moratorium on coal development everywhere in the province.
“If the [regulator] accepts and approves this application, it begs to question the strength of the ministerial order in actually preventing other new coal exploration applications anywhere across the eastern slopes of the Rockies,” she wrote in an email.
Trafford said he can’t understand why the issue is back.
“You actually want to start this up again?” he asked.
“It’s hard to believe these guys would actually try this.”
TORONTO — The narrow vote of support by Unifor members for the proposed contract with Ford Motor Co. has experts saying that reaching deals with General Motors Co. and Stellantis NV could prove more challenging
Unifor members at Ford voted 54 per cent in favour of a new three-year collective agreement over the weekend, a sharp contrast to the 81 per cent support their last contract received.
The union has said the deal will set the pattern for contract talks at GM and Stellantis, but Steven Tufts, a labour expert at York University in Toronto, said the relatively low support raises the question of whether workers will accept the template.
“The wild card here is … GM and Stellantis workers, will they ratify an agreement that’s based on the Ford pattern, or will they want more, given their companies are bigger and more profitable?”
The Ford deal already does mark notable gains for the union, including a 20 per cent base wage gain for production workers over the contract, a move back to defined benefit contributions for pensions, and electric vehicle-related commitments, but it comes amid rising cost of living pressures.
“No one is saying that significant gains weren’t made, but those significant gains were made at a time when workers’ expectations have increased, and in a period of growing inflation,” said Tufts.
It also comes as autoworkers in the U.S. push for much more, including at least 30 per cent wage gains, which will also have affected the Ford vote, said Stephanie Ross, an associate professor at McMaster University in Hamilton, Ont.
“Even though the context of U.S. autoworkers is very different, their ambition and more militant approach has affected Canadian autoworkers’ sense of what they could or should be doing,” she said by email.
Autoworker negotiations in Canada have long followed the convention that the first contract sets the terms for the other two among the Detroit Three, but the voting results mean that might not happen.
“Extending the pattern in Canada may be tougher than anticipated, especially if workers are divided over this deal,” said Ross.
In announcing the deal, Unifor hailed the results as the highest wage increases in the history of Canadian auto bargaining that met all the key priorities of the union.
The contract also includes $10,000 productivity and quality bonuses for full-time employees and $4,000 for part-timers, the reactivation of a cost of living allowance that helps with inflation, increases in health benefits, and the addition of two new paid holidays.
In the U.S., workers at General Motors and Stellantis plants have been participating in limited strikes, and on Friday expanded the work action to 38 locations in 20 states.
The new Ford contract in Canada will help the United Auto Workers (UAW) union in the U.S., said Jim Stanford, a labour economist and director of the Centre for Future Work.
“These are two separate countries and two separate unions with separate histories,” he said. “Now that Ford has an agreement with Unifor (in Canada) … I think that will help the UAW reach a very good settlement south of the border as well.”
Renting in the Greater Toronto Area is becoming increasingly perilous for many tenants.
The average cost of rents in Toronto hit $2,898 in August, while throughout the region prices have generally skyrocketed by over 30 per cent in the last two years alone.
It’s not a mystery why. Demand is far outpacing supply, particularly when it comes to purpose-built rentals. That is, housing built specifically for stable, long-term rental accommodation that is usually professionally managed.
The shortage has been decades in the making. And now a “perfect storm” of factors has made the impact on the rental market and rent prices especially acute, says Shaun Hildebrand, president of real estate consulting and data firm Urbanation.
“There’s an intense level of competition among renters. Demand is growing on a number of fronts and there’s extremely limited amounts of supply,” he said.
In 2018, Ontario’s Progressive Conservative government took a controversial step to try to address a dearth of purpose-built rentals. Fresh off his election win, Premier Doug Ford rolled back rent controls on all units built or occupied after Nov. 15 that year, saying the move would provide “market-based incentives for supply growth.”
The government wagered that scrapping rent controls on newer units would encourage developers to build more purpose-built rentals, since the absence of rent controls, at least in theory, makes those projects more financially attractive.
Given the current circumstances for renters in the GTA, it may seem obvious the government’s rent control revisions did little to create more supply. But the reality is more complicated.
A February report by industry groups and Urbanation found the changes did initially generate more developer interest in purpose-built rental projects. Between late 2018 and the end of 2022, the number of proposed rental units throughout the GTA nearly tripled from about 40,000 to more than 112,000, though less than a third were approved.
In the City of Toronto specifically, applications for purpose-built rentals more than doubled in 2019 from the previous year, according to a staff report.
Meanwhile, GTA rental starts (the number of units included in projects with shovels in the ground) hit a three-decade high of 5,958 in 2020, according to the industry report. That’s about triple the average pace of rental construction starts of the preceding two decades, it said.
But then the momentum stalled, and progress has remained largely stagnant since.
In 2018 Ontario rolled back some rent controls to incentivize developers to build more purpose-built rental units. But as CBC Toronto’s Shannon Martin found out, that’s not exactly what happened.
The COVID pandemic hit and along with it supply chain constraints. That coincided with an ongoing skilled labour shortage. Then came progressively higher interest rates. Since 2020, average construction costs have increased four times faster than rents, according to Urbanation.
Many proposed rental projects became commercially unfeasible very quickly, Hildebrand said.
Unfortunately for renters, this all corresponded with intensifying demand-side pressures.
High interest rates and astronomical house prices have kept would-be homebuyers in the rental market. Those who do live in rent-controlled units are reluctant to leave, fearing huge increases in rent if they move into a new place. Landlords in Ontario can charge new tenants whatever the market may bear for a previously vacated unit, a practice known as vacancy decontrol.
The GTA continues to be a primary destination for new Canadians and has also seen a post-pandemic influx of international students, two demographics that typically rent.
Huge demand over next decade
A significant majority of purpose-built rentals in the GTA went up more than 40 years ago, according to the Canada Mortgage and Housing Corporation (CMHC). Construction slowed significantly in the intervening years, with investor-owned condos becoming the dominant source of rental supply in the region by far.
“We’re now paying the price of not building,” said Steve Pomeroy, a professor at McMaster University’s Canadian Housing Evidence Collaborative, about the pressures on renters.
Toronto’s rental market has several pain points. CBC Toronto’s Shannon Martin speaks to several housing experts to better understand how Canada’s largest city has been pushed into a rental crisis.
Urbanation projects that demand for purpose-built rentals in the GTA will grow by about 300,000 units in the next decade. Even under a “pretty optimistic scenario,” the firm forecasts a deficit of more than 170,000 units over that same time period.
Notably, though, those projections were made before the federal government announced it is waiving the GST on long-term rental construction — a policy to spur development that’s long been favoured by housing experts and industry insiders.
Critics of rent control argue that it deters both new construction and upgrades to existing rental units by landlords. Those who support it say the benefits to tenants, particularly a sense of financial stability, outweigh any potential negatives.
According to Pomeroy, the evidence from past decades presents a mixed picture. Rollbacks to rent controls in both Ontario and B.C. in the 1980s and 1990s, for example, did little to fuel construction of rental projects, he says.
That said, the lack of purpose-built rental housing in the GTA has quickly reached a critical point, with demand only forecasted to increase in coming years. Pomeroy says an ideal approach would limit the volatility of rent increases for non-rent controlled units, while ensuring new projects still make financial sense for developers.
“We have an under-supply of purpose-built rentals. And now we have to play catch up,” he said.