Home Finance Flair Airlines owes $67 million in unpaid taxes as CRA opens door to seize carrier’s property

Flair Airlines owes $67 million in unpaid taxes as CRA opens door to seize carrier’s property

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Court documents show Flair Airlines owes the federal government $67.2 million in unpaid taxes, prompting the Canada Revenue Agency (CRA) to obtain an order for the seizure and sale of the carrier’s property.

The money relates to import duties on the roughly 20 Boeing 737 Max jetliners that make up the budget airline’s fleet and “which were needed to meet the travel demand in a post-COVID world,” CEO Stephen Jones said.

However, he said the Federal Court order obtained by the tax agency in November has no impact on the carrier’s operations, which have expanded over the past year and ramped up competition with rival airlines, and that the company has agreed to settle the debt.

“We have a mutually agreed-upon payment plan with CRA to pay these importation duties, and we are current with that plan,” Jones said in an emailed statement to CBC News, adding that the terms of the deal are confidential.

The CRA said it cannot comment on specific cases for confidentiality reasons but that it looks to make arrangements with a company “based on their ability to pay” before it garnishees revenues or takes further steps to recover the money.

“As a last resort, we may take additional legal collection actions such as seizing property or assets to protect the interests of the Crown,” spokesperson Nina Ioussoupova said in an email to CBC News.

Flair planes repossessed last March

The court order from Nov. 23, first reported in the Globe and Mail, directs the “Sheriff of Alberta or any civil enforcement agency” to seize and sell Flair’s property and assets.

The writ marks the latest chapter in a multi-year struggle to stay solvent and within regulatory lines, as the airline repeatedly crossed paths with the courts.

Last March, Flair saw four of its planes repossessed in the middle of the night after aircraft leasing manager Airborne Capital claimed that the company regularly missed rent payments that amounted to millions of dollars over the preceding five months.

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