Last week, the Saskatchewan government announced it would subsidize a direct WestJet flight between Saskatoon and Minneapolis, but critics say taxpayers’ money shouldn’t be used that way.
This was announced by Trade and Export Secretary Jeremy Harrison on Friday at Saskatoon Airport. He said the province will provide the Saskatoon Airport Authority with a minimum revenue guarantee of up to $2.2 million over the next three years to support that flight.
Harrison said he expects high adoption.
“The connection will ensure that our province is a competitive place to do business and that Saskatchewan’s economy continues to thrive and grow. This announcement will significantly benefit the province’s outfitters, whose customers are primarily US anglers and hunters.”
The flights will be operated in partnership with Delta Airlines and will begin three times a week in June.
Delta Airlines ceased its direct service from Saskatoon to Minneapolis in 2016 and ceased the remainder of its service from Saskatoon in mid-2020.
“As the provincial government, we are absolutely ready to provide support to ensure this flight goes ahead,” Harrison said.
“I would really call it an insurance policy. This will ensure WestJet can operate this route efficiently with the knowledge that there will be an economic return.”
According to Harrison, Americans account for four percent of overnight visits to the province, but contribute eight percent of total overnight visitor spending.
“We’ve been involved in these discussions with WestJet essentially ever since [2020]hoping they can bring that flight back to us,” said CJ Dushinski, vice president of business development at Saskatoon Airport.
Economist says taxpayers are taking risks
Jason Childs, an associate professor of economics at the University of Regina, said he’s not a fan of politics
“We are transferring risk from a multi-billion dollar company to the Saskatchewan government.”
Childs said he would like to see the terms of the agreement and what the province would consider a success.
“You could be right, but that would mean that the provincial government understands the demand for flights better than WestJet, and I’m not sure what the basis for that expertise would be.”
Childs said the policy is political rather than economic and the province may feel pressure from Regina to reach a similar agreement.
“It’s always political, and the politics in it are incompatible with good economic policy.”
Taxpayers’ Association questions funding
The Canadian Taxpayers Federation (CTF) said it disagreed with the provincial government funding the direct route.
“I’m not happy about it. When you give taxpayer money to a company, they always end up coming back asking for more. It’s not a solution to any airline-related issues,” Gage Haubrich said. CTF Plains Director.
Haubrich said if the business case was there, WestJet wouldn’t need the government’s input.
He said the province doesn’t have to give revenue guarantees.
“Rather than giving money to private companies, taxpayers’ money, we should look to Ottawa to work to reduce flight regulations, fees and taxes to make it easier to operate an airline in this country.”
Opposition criticizes government’s economic record
Opposition NDP economic critic Aleana Young said Wednesday that minimum income guarantees are a concern.
Young said it was not a political issue but an economic issue.
“If everything went smoothly, we wouldn’t be asking taxpayers to support private companies to make these routes profitable for them.”
Young said she will seek transparency from the government regarding the deal with the airport authority and WestJet.
Regina direct US route next?
Harrison hinted that Regina could be next.
“What I can tell you is that we have also worked very, very closely with the Regina Airport Authority and they have had many discussions related to this, as has the Regina business community, the Regina political leadership and the Mayor we have Nothing to announce yet, but I can tell you that resources are on the table to that end,” Harrison said Friday.
On Wednesday, the Regina City Council unanimously approved a tax break of more than $1 million for the Regina Airport Authority. The tax break was originally approved in 2019 and was due to expire this year.
The council placed a condition on the tax break that the airport must serve a US hub daily year-round.
