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An Emirates aircraft lands at Pearson airport in Toronto on June 1, 2009. (NATHAN DENETTE/The Canadian Press)
An Emirates aircraft lands at Pearson airport in Toronto on June 1, 2009. (NATHAN DENETTE/The Canadian Press)

Morning Buzz

UAE airline gambit 'offended' Harper, source says Add to ...

1. Divisions over Dubai base. Former transport minister John Baird - now the powerful Government House leader - made the case around the cabinet table, persuading Prime Minister Stephen Harper to deny extra landing slots in Canada to airlines from the United Arab Emirates, according to a source.

"For the UAE to hold Camp Mirage up for ransom was the last straw for [the Prime Minister]" a source close to the issue told The Globe.

The decision has had diplomatic repercussions that were borne out over the weekend when the UAE closed its airspace to Defence Minister Peter MacKay and the Chief of Defence Staff, General Walt Natynczyk, as they left Afghanistan Monday after spending Thanksgiving with the troops.

The minister and his top general were also denied landing at Camp Mirage, the air base near Dubai from which Canada has operated since 2001. The pair had been able to land there on their way to Afghanistan last week.

Not all cabinet ministers are in agreement with the Baird-Harper decision, according to sources. There is concern this incident will hurt trade and, of course, be much more costly and cumbersome (perhaps even dangerous) for the Canadian military as its prepares to move troops and equipment out of Afghanistan.

But the Prime Minister would not budge. Sources say he recently shut down any more discussions on the issue - after Mr. Baird's entreaties - because he didn't like the idea of being pressured by the UAE to give more landing slots.

As former transport minister, Mr. Baird was very familiar with the issues and the file. The UAE had been threatening to close Camp Mirage to Canada if the Harper government did not provide more landing slots, sources have said.

"What really offended the PM was ... when the UAE made a direct link between the base and air rights," a source close to the issue said. "The way he sees it, Canadian soldiers are putting their lives on the line against terrorism, which not only targets Canada but also the Gulf States like the UAE."

Emirates Airlines prepared an economic impact study in February on additional flights between Canada and Dubai. Currently, Emirates is allowed to fly three times a week from Dubai to Canada. It wants to provide daily flights to Toronto as well as a direct daily flight to Vancouver and Calgary.

Emirates has been seeking greater access to Canada for over a decade. According to the study, the present schedule results in nearly 100,000 passengers a year, 515 full-time jobs, $17.2-million in direct economic activity at Pearson airport, $37.8-million in tourist spending and $10.7-million in tax revenues.

The "total direct economic impact" of allowing twice-daily service to Toronto, plus daily service to Calgary and Vancouver, would be 374,215 passengers, 1,937 full-time jobs, $132.6-million to airports, $120-million in tourism spending and $48.8-million in direct tax revenues. Sources on the Canadian side of the issue, however, have dismissed the Emirates study as being "full of holes."

2. Jim Flaherty's big show. It's break week on Parliament Hill and Stephen Harper's Conservatives are making the most of it. Senior cabinet ministers are in New Brunswick, Kitchener, Kingston, Winnipeg and Victoria making announcements about everything from innovation to seniors to infrastructure.

But the main announcement Tuesday comes from Finance Minister Jim Flaherty, who will deliver the fall economic update in the Toronto area. He is speaking at 1 p.m. to the Mississauga Chinese Business Association - an interesting choice given the Harper government has been repeatedly accused of ignoring its relationship with China.

According to reports, there is little new to his speech. Mr. Flaherty is expected to say the economy is the government's priority and that the global recovery remains fragile.

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