Quebec said on Tuesday it is suing Air Canada, arguing that the airline breached its legal obligation to keep a maintenance facility open in the Canadian province after the closure of a facility in Montreal.
Quebec Justice Minister Jean-Marc Fournier said earlier this month he had asked Air Canada to explain exactly how it would continue to meet its obligation, and would take legal action if he did not receive a satisfactory response within 10 days.
The facility was operated by Aveos Fleet Performance, an important Air Canada contractor. Aveos obtained creditor protection and laid off its 2,600 Canadian employees in March, including about 1,700 workers in Montreal.
"The response to our notice of April 3 was far from satisfactory. We therefore ask the Superior Court to recognise that Air Canada contravened its obligation to maintain the heavy maintenance centres in the Montreal region..," Fournier said in a statement.
Air Canada said they had received notice of the suit. "Air Canada intends to vigorously contest this procedure by the Government of Quebec," spokeswoman Isabelle Arthur said in an email.
The Air Canada Public Participation Act, the law that has governed Air Canada's operations since its 1988 privatisation, says the airline must maintain overhaul centres in Quebec, Manitoba and Ontario.
Air Canada argues that it has more than 2,000 in-house maintenance employees, including some in the three required centres, and that meets the requirement of the Air Canada act. Testifying before a parliamentary committee last month, a federal Department of Justice official broadly backed that interpretation.
Aveos was once the in-house maintenance division at Air Canada, before the airline spun it off as a private company. It blamed much of its financial difficulties on the airline, arguing that Air Canada reduced the work it sent to Aveos, particularly in recent months, precipitating a crisis.
Air Canada has suffered several work disruptions in the past 10 months as it tries to seal new contracts with its unionised employees. It also faces stiffer competition from a new regional airline planned by rival WestJet Airlines.