Alberta backs $5M subsidy for regional air service as Medicine Hat, Lethbridge lose flights
Premier Smith's program guarantees carrier revenue gaps to restore service to regions with military bases and defence investment potential.
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Alberta is backing regional air service with up to $5 million in subsidies over two years, targeting communities that lost scheduled flights and hoping to draw defence-sector investment.
Premier Danielle Smith announced the program at a Sept. 26 town hall in Medicine Hat. The province asked air carriers to submit proposals this summer, and six companies responded. The subsidies would guarantee shortfall in revenue for carriers — covering the gap between what they earn and what operations cost.
Medicine Hat and Lethbridge both lost scheduled service when WestJet shut down once-per-day flights to Calgary in June. Medicine Hat's loss cost the airport $250,000 annually in revenue. Lloydminster lost WestJet service in April 2024. The program is now in evaluation stages ahead of direct talks with carriers, though the province has not stated a timeline for deciding which carriers will receive funding or which routes will be prioritized.
Justin Wright, the Minister of Transportation and a Medicine Hat-area MLA, said the subsidies aim to support the aerospace sector. "You can't have a healthy aerospace sector without a healthy airport," Wright said. "Subsidies are on the table … the [Medicine Hat Regional] Airport isn't going anywhere."
The initiative targets regions with Canadian Forces bases. CFB Suffield near Medicine Hat operates a 2,700-square-kilometre testing range. CFB Cold Lake, which could be serviced by regional airports in Cold Lake or Lloydminster, is also targeted. Defence investors seeking to locate in these regions want regular flights for workers and executives, plus air freight service.
Cameron Prince, general manager of Lethbridge Airport, views air service as a major benefit for travellers and business development. John Gradek, who teaches supply chain management in air industry at McGill University, said after reviewing the province's outline: "I think they've done their homework."
Which of the six proposals will actually receive funding, and by what criteria?
Will the $5M cap mean some regions lose out, and if so, which?
What happens after two years if the subsidy ends and carriers can't operate independently?
We'll update this story as answers emerge.
The facts
How much is Alberta spending on regional air service subsidies?
Alberta is backing regional air service with up to $5 million in subsidies over two years.
Which cities lost WestJet flights?
Medicine Hat and Lethbridge both lost scheduled service when WestJet shut down once-per-day flights to Calgary in June. Lloydminster lost WestJet service in April 2024.
How do the subsidies work?
The subsidies guarantee shortfall in revenue for carriers by covering the gap between what they earn and what operations cost.
Why is Alberta targeting communities near military bases?
Defence investors seeking to locate in regions with Canadian Forces bases want regular flights for workers and executives, plus air freight service.
