The federal government is getting out of the aviation-insurance business, despite a plea from Canadian airlines that will see their premiums rise as a result.
Ottawa was pressed into providing aviation insurance almost 15 years ago, following the 9/11 attacks in the United States that within days spooked insurance companies into cancelling their so-called "war risk insurance" policies for air carriers around the world. It marked the first time blanket, global notice had ever been issued by the industry.
Washington ended its war-risk insurance program in December 2014, as has every other country in the world – except Canada, which late last year renewed its government-provided coverage to June 30 this year.
Last year, Canadian carriers lobbied Transport Minister Marc Garneau to keep Canada's system in place, saying that the threat level from terrorism is much lower than for their U.S. counterparts — and that the feds never had to pay out a claim.
But last November, Garneau delivered only a brief reprieve, extending by six months coverage that was to have expired New Year's Eve, to give enough notice to aviation players about lining up private war-risk insurance.
A Transport Canada spokeswoman confirmed the program would not be renewed when it expires in June.
