March 27, 2012 / 10:23 PM / in 6 years

Pressure grows on Ottawa to lean on Air Canada

OTTAWA (Reuters) - Canada’s opposition parties stepped up pressure on the Conservative government on Tuesday to force Air Canada to maintain aircraft overhaul facilities that were shut down last week.

An employee of Aveos Fleet Performance Inc. demonstrates at the National Assembly in Quebec City, March 21, 2012. The sign reads: "10 years of concession is too much". REUTERS/Mathieu Belanger

By allowing the facilities to shut down, Air Canada is violating a law that requires it to keep open fleet service stations in three Canadian cities, said opposition members of Parliament and unions representing 2,600 workers who have lost their jobs.

But Transport Minister Denis Lebel says the situation is “complex” and that on Thursday he will reveal to a parliamentary committee the legal advice he has received on the matter.

“It’s an unbelievable situation,” said Thomas Mulcair, the newly elected leader of the main opposition New Democratic Party.

“This is the law and order government and the law is quite clear. Those jobs had to be kept in those three cities that are specifically named. They can’t simply be disappeared or moved elsewhere and the government has to be applying the law,” he told reporters.

The law under which Air Canada was privatized in 1988 contained a provision requiring the airline to maintain maintenance operations in Montreal, Mississauga, Ontario; and Winnipeg, Manitoba.

The airline later spun off the heavy maintenance work to a private company called Aveos. Saying that Air Canada had not given it sufficient work, Aveos obtained bankruptcy protection last week and closed its operations, causing outrage among its employees.

Air Canada has since identified other facilities in Canada and the United States that could do the work once performed by Aveos.

The airline is engaged in a separate labor disputes with two unions and in a highly controversial move, the government has stepped in to prevent any disruption of its flights by sending the disputes to binding arbitration.

Facing labor protests on the street and attacks in Parliament, Lebel said on Monday he was asking the House of Commons transportation committee to hold hearings into the Aveos situation.

Lebel’s punting of the issue to committee has raised concerns that Ottawa may consider changing the 1988 law, which could put Air Canada in the clear and allow the stations to be moved elsewhere or even abroad.

Lebel described the conflict on Tuesday as being primarily between two private companies, saying the government had no intention of bailing out either Aveos or Air Canada.

Earlier on Thursday, lawmakers from the three opposition parties and leaders of the International Association of Machinists and Aerospace Workers, representing Aveos workers, held a joint press conference accusing Prime Minister Stephen Harper of failing to enforce the law and favoring Air Canada over the displaced workers.

Reporting By Louise Egan; Editing by Peter Galloway

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