Ottawa ponders bending airline rules
Budget carrier seeks exemption
The federal government is working “very diligently” on a request from a prospective budget airline for an exemption from Canada’s foreign ownership rules, but can’t give a timeline on when it will make a decision, Canada’s transport minister said Tuesday.
Vancouver-based Canada Jetlines Ltd. wants to launch ultralow-cost flights to under-served Canadian cities and has a European investor lined up to help it do so. However, Canadian law currently restricts foreigners from owning more than 25 per cent of an airline, a limit that discourages investors who would like some say over how the company is run, according to the law’s opponents.
Jetlines CEO Jim Scott has petitioned for an exemption that would allow it to sell up to 49 per cent of the company to foreign investors. It warned in a letter to its stakeholders last week that it could lose its prospective investor if a decision isn’t made soon.
“Jetlines has spent a lot of time, money and effort to offer Canadians the opportunity to have more flights from under-served or unserved airports, and to stimulate new passengers with lower prices,” Scott wrote in the letter, dated Sept. 19.
“However, unless an exemption order is granted and a clear timeline provided by the minister in the coming weeks, this opportunity will simply be lost. Neither Jetlines nor its investment partners are in a position to wait for an overall policy change.”
The government is looking at the request “very carefully,” according to Transport Minister Marc Garneau.
“Believe me, it is very much on our plate at the moment and we are doing our due diligence on it,” Garneau said in an interview from Montreal. “It’s a process that requires quite a bit of thought in terms of the implications and then eventually it also requires internal discussion within Cabinet.”
Garneau added that he can’t predict what the outcome of those discussions will be, but “in a general way we’re interested in improving competition wherever we can.”
The transport minister was in Montreal to attend the opening ceremonies of the International Civil Aviation Organization’s general assembly.
The meetings, which begin Tuesday and run until Oct. 7, are focused on reaching a global climate accord for the aviation industry that would cap emissions at 2020 levels.
Canada has played a key diplomatic role in garnering support for the pact.