Air Canada may have broken laws in Aveos closure

The federal government says it will seek a legal opinion on whether Air Canada broke any obligations that may have led to the closure of an aircraft maintenance firm, leaving 2,600 jobless.

A House of Commons committee was convened on Tuesday to look into the closure and whether it means the former Crown corporation is in violation of the Air Canada Participation Act, the legislation introduced when it became a private company.

But the government added a considerable caveat: there won't be any bailout for Aveos Fleet Performance Inc. Federal Transport Minister Denis Lebel said what happened between Aveos and Air Canada was a private business matter.

"It's a business decision involving two companies. We're not contemplating a bailout for Aveos or Air Canada," Lebel said.

He said Air Canada must abide by the laws that allowed it to become a private company in 1988, then quickly added that the law was "vague."

Aveos employees contend that legislation compels the airline to keep maintenance jobs in Canada, but the law doesn't say who has to do the work.

Air Canada says that rule no longer applies since Aveos, its former maintenance division, became a private company in 2007.

The airline insists it is in full compliance with all aspects of the Air Canada Public Participation Act by maintaining overhaul centres in Winnipeg, Montreal and Mississauga, Ont.

Lebel said that Aveos's decision to shut its doors was a business decision.

"It's not a question for the government," Lebel said. "I can't go and manage the company for them."

Lebel said that a parliamentary committee will be tasked with determining whether Air Canada broke any rules.

"Air Canada must respect its privatization agreement and we'll assure this," Lebel said. "The law is the law. The law on Air Canada requires that we maintain the [maintenance] centres, and we will comply with the law."

Lebel pointed out that other companies in Canada could handle airline maintenance.

Hundreds of ex-Aveos employees protested on Parliament Hill on Tuesday for a second day, with many of them accusing the Conservatives of inaction in the wake of widespread job losses.

On Monday, union representatives met with Lebel without much to report, as the minister referred the issue to a parliamentary committee for study.

"The jobs are technical jobs ... and we want to keep these jobs in North America, and in Canada at minimum," said Nick Boucher, a Montreal-based worker who lost his job.

A union spokesman, Serge Gelinas, offered another solution to the job losses: "We're asking Air Canada to take back its former employees."

Aveos was once Air Canada's technical services division but was later spun off as a separate company. The airline was Aveos's largest customer, providing about 90 per cent of its maintenance overhaul work.

Aveos shut its doors last week.

Quebec Premier Jean Charest has threatened to sue the federal government and Air Canada. Manitoba has also threatened to sue.