Derek Vanstone, currently Stephen Harper's deputy chief of staff, will become Air Canada's vice-president of corporate strategy and government affairs in September, the Montreal-based airline announced Thursday.
The hire was vetted by Conflict of Interest and Ethics Commissioner Mary Dawson; both Air Canada (TSX:AC.B) and the prime minister's office said they were well aware of the ethical obligations facing Vanstone as he moves into the new role.
"Air Canada understands that there are a number of post-employment restrictions for Derek with respect to federal government relations," said airline spokeswoman Angela Mah.
"Derek will be fully compliant with these restrictions."
The hurdles Vanstone needed to clear to get the job include a five-year ban on becoming a registered lobbyist and a mandatory cooling-off period that prohibits involvement with any company with which he's had significant government dealings.
The commissioner's office wouldn't comment directly on the case, and declined to discuss even generally how an individual with direct access to the prime minister could accept a government affairs job without being in breach of the act.
NDP ethics critic Charlie Angus called the appointment unacceptable.
"What we are seeing here is again the old boys club, the revolving door," Angus said.
"It's a nudge-nudge, wink-wink system that you have a senior adviser to the prime minister who will just happen to be now coming back as the man opening the doors for Air Canada. This is what Mr. Harper said he would clean up — and he hasn't."
The Conservative government was first elected in 2006 on a promise to build a stronger wall between ex-political staff and Parliament Hill.
A slew of legislation followed, governing the activities of those seeking private sector jobs that could connect them with the government.
Deputy Liberal leader Ralph Goodale said it is too easy for both the PMO and Air Canada to hide behind the approval of the ethics' commissioner's office.
"Being technically in compliance with the rules is not the same thing as being appropriate," Goodale said.
"This doesn't pass the smell test."
Goodale said his party will be writing to Dawson's office to request a detailed explanation for the ruling.
"She should explain to parliamentarians exactly how this is OK," Goodale said. "And if does fit within the law, most certainly there are exemptions or exceptions that should be plugged."
Dawson has raised issues with some of the provisions contained in the act before.
"...Ensuring compliance with the act’s post-employment provisions remains a challenge," she wrote in her 2010-2011 annual report.
Her office acts in concert with the lobbying commissioner, who found earlier this year that another of Harper's deputy chiefs of staff had broken the rules. Karin Shepard concluded that Keith Beardsley broke a five-year ban on lobbying that applies to former public office holders.
Beardsley was turned in by Harper's then-chief of staff Guy Giorno.
A House of Commons committee recently recommended 11 changes to the Lobbying Act to make it stronger.
Vanstone will have responsibility for Air Canada's relationships with all levels of government as well as community and industry affairs, company CEO Calin Rovinescu said in a statement.
"I am pleased to announce Derek's appointment to this key corporate strategy, industry and government affairs role," Rovinescu said.
"His solid experience and track record in the private sector and at the highest levels of government will further strengthen the management team's ability to execute our corporate priorities."
Air Canada has been engaged in an often bitter labour dispute with most of its unionized employees in recent months.
The threat of a lockout of pilots and a strike notice from the mechanics and baggage handlers prompted the Harper government to intervene with back-to-work legislation in both disputes.
A spokesman for the prime minister said Vanstone was not involved in that legislation.
"Derek had no involvement with Air Canada on any aspect of Bill C-33 or any other legislation affecting Air Canada," said Andrew MacDougall.
"We wish Derek well in his new role — he will be missed."
The Air Canada Pilots Association said the appointment wasn't surprising.
"It's been evident to us for some time that Air Canada and the Harper government co-ordinate very closely," said ACPA president Paul Strachan.
"This appointment confirms that absolutely nothing has changed," Strachan said. "Certainly, it will present excellent opportunities for further co-ordination between the government of Canada and the national airline."
Strachan said Vanstone spoke on behalf of Flaherty's office in 2009 when a special pension funding protocol for Air Canada was negotiated.
He was also working with Flaherty when other private sector companies, including The Canadian Press, were granted longer periods to pay back their pension obligations.
Vanstone will fill a role currently performed by Duncan Dee, who is taking early retirement. His departure, following 15 years with the airline, was announced on June 6.
Dee has been Air Canada's chief operating officer, a position that's often seen as second-in-command to the CEO and a potential successor to whoever is the chief executive.
McGill University professor Karl Moore said Vanstone's appointment will benefit Air Canada.
"He has wonderful contacts and knows how the government runs," said Moore, an associate professor at McGill's Desautels Faculty of Management.
"It's a win for Air Canada," Moore said. "I don't see any downside from an Air Canada viewpoint."
He said the unions also need to understand how the government operates and "how to appeal to it, which I think the unions are pretty good at, actually."
Last month an arbitrator decided in favour of the airline in the case of the mechanics and baggage handlers, putting in place a new collective agreement.
The airline's 3,000 pilots are still in the process of working through their dispute with a separate federal arbitrator. A decision is required by the end of this month.
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