Canada's Transport Minister confirmed the Liberal government will not allow passenger jets to fly out of Toronto's island airport, throwing a wrench into Porter Airlines Inc. expansion plans and its deal to buy more than $2-billion worth of Bombardier Inc. planes.
Marc Garneau took to Twitter Thursday night to say that the Liberals will stick to their election campaign pledge not reopen a three-party pact necessary to expand operations at Toronto's Billy Bishop City Centre Airport.
"We will not reopen" the agreement, Mr. Garneau tweeted.
The airfield, located on an island in Lake Ontario near the shore, is hailed by many for its convenience to Toronto's financial centre and backers of Porter's growth plans say allowing jets there could stimulate even more new business and tourism for the city. Opponents argue any more industrial activity at the site would undermine efforts to reclaim Toronto's mixed-use waterfront.
As part of an ambitious expansion plan outlined in 2013, Porter was seeking changes that would lengthen the runway at Billy Bishop by about 200 metres in each direction to allow jets to take off and land. Authorization for such a runway extension would require opening and renegotiating a three-party agreement between Ottawa, Ports Toronto and the City of Toronto.
Porter signed signed a conditional purchase agreement with Bombardier for as many as 30 C Series jets it planned to use at Billy Bishop. The airline currently flies a fleet of Bombardier Q400 turboprop planes from the airport. Having the C Series would allow the carrier to offer longer flights, from Toronto to Western Canada for example.
The order is for 12 CS100 planes and options for another 18 of the same jets, worth $2.15-billion (U.S.) at 2015 list prices if it exercises all purchase rights and options. Porter said the airliner in a 107-seat configuration would be ideal for its planned operations.
Ottawa's decision doesn't mean Porter's growth ambitions are dead, said industry analyst Robert Kokonis, who heads consulting firm AirTrav Inc.
"I'm sure they're busy trying to fine-tune what a plan B could be," he said, including looking at a scenario where they might operate larger Bombardier CS300 jets out of Toronto's Pearson airport as part of a split-hub strategy.
A spokesman for Porter declined to comment Friday. Officials with Bombardier did not respond when contacted for comment.
Bombardier had not counted the sale as firm on its order book. Still, securing the Porter deal would have been a big boost for plane maker and its C Series program, which has struggled over the past year to win orders amid shaky finances and low oil prices. The company has 243 firm orders for its C Series jets but hasn't signed a new deal since September, 2014.
A city spokeperson said staff will continue to study the airport expansion until called off by council. "City staff will seek Council's direction on next steps if the direction from the Minister of Transport involves a firm change of policy," said Jackie DeSouza, director of strategic communications.
Councillors who oppose the expansion said it's time to move on quickly.
"If we're spending money on a file that we know is going nowhere, then that's kind of a waste of money," Mike Layton said. "What I think we should be doing is waiting for that confirmation [from Ottawa] and then likely the city can put that to rest. And we can move on to discussing how can we make those neighbourhoods and Toronto's waterfront better serve the community and the city at large."
Supporters, however, criticized the government for killing the proposal without more consultantion.
"Hold on a second, are we running major policy out of a tweeter account? Are we disrespecting the process that's started? The process that city council voted for?" asked Councillor Jim Karygiannis. "Let the [reports] come out. Let it come to council and let council decide. And then you [Ottawa] can have your say also."
Ottawa's decision puts the Trudeau government in a tough spot. Quebec had requested the federal government deliver financial aid to Bombardier in the wake of Quebec's own $1-billion investment in the company announced last month. At first glance, it would appear hypocritical for the government to dash Bombardier's hopes for a C Series order of that magnitude while also helping the company with a sizable level of funding.
With files from Oliver Moore