Ottawa may loosen airline ownership rules

Foreign stake could increase to 49%

The federal government wants to loosen longstanding foreign ownership restrictions for Canada’s air carriers, arguing the move would make airlines more competitive by giving them access to a bigger pool of investors.

Jean Lapierre, the federal Transport Minister, said yesterday he wants to allow foreign investors to own up to 49% of airlines, up from 25% now. He plans to bring the issue before Cabinet in the “near future.”

“It will give Canadian air carriers more access to more funds,” said Mr. Lapierre, who was in Toronto to deliver a speech at an airport industry conference.

Last year, the Minister said he was looking at making changes to foreign ownership rules.

The federal government has historically sought to limit foreign control of airlines because they are viewed as providing an essential service to Canadians.

However, in recent decades the federal government has gradually adopted a less protectionist stance for the industry.

For example, it allowed for the privatization of the country’s flag carrier, Air Canada, and has agreed to a more a liberalized air services agreements with several countries, including the United States and, more recently, India and China.