HALIFAX – A $16.5-million funding package from the Nova Scotia government helped influence Chorus Aviation Inc.’s (TSX:CHR.B) decision to keep its Halifax heavy maintenance base open over its London, Ont., facility, the president of the airline operator said Monday.
Joe Randell said Jazz Aviation, a subsidiary of Chorus, was strongly swayed after the provincial government offered financial incentives to expand its heavy maintenance operations in Halifax.
“This assistance from the province was a significant factor in making the decision to consolidate our heavy maintenance here,” Randell said following a news conference at the Halifax Stanfield International Airport to announce the funding.
The five-year funding deal includes a $12 million interest-bearing repayable loan, a $2.5 million forgivable loan and $2 million to recruit and train new workers. It is expected to create 150 maintenance, management and technical support jobs, Premier Darrell Dexter said.
Dexter said the agreement was an example of his government’s commitment to create jobs in his province.
“The province everyday competes with other jurisdictions for jobs, for economic investment, and frankly, I like to win,” Dexter said.
Randell said Chorus also had discussions with the Ontario government, but concluded that expanding in Nova Scotia was in the company’s best interests.
“I’m not going to get into the details of that,” he said. “But clearly we had several alternatives that we had to evaluate and this one for us … was the best one.”
But a spokesman for Ontario’s economic development minister said the company did not give officials in that province a chance to find a way to keep the London, Ont., facility operating.
“We were aware that Jazz had been conducting a strategic facility review, but Ontario officials were not given an opportunity to engage in this review or offer support to retain the facility in London,” Andrew Block said in an email.
“We understand that one significant consideration for Jazz had been physical limitations at their site in London driven by significant fleet changes.”
The announcement comes days after Chorus announced it would add six new planes to its fleet, but in doing so will close its London, Ont., site next summer, a move that will affect about 200 workers. Randell said some of them will be offered employment in Halifax.
The Canadian Auto Workers union said about 100 unionized employees, which includes aviation maintenance and shop workers, will be offered work in Halifax. But about 50 workers could lose their jobs as a result of the move, said Ron Smith, the CAW’s transportation director.
“Closing either base is a hardship on our membership,” Smith said from Toronto, adding that members may also be able to relocate to other facilities across the country.
“People are in the part of the country they’re in because that’s where they would like to be … so obviously our members in London are not happy about this issue.”
Smith said the union will begin talks Tuesday with Jazz Aviation to look at relocation packages, retention payments and voluntary separation packages.
The consolidation will make the Halifax facility Jazz’s only heavy maintenance base and help the company be more efficient, Randell said.
In addition to an expansion of its base at the Halifax airport, the government funding will also help Jazz Aviation set up an office in the city, he added.