Want to fix Canada's air industry? More foreign owners needed: watchdog
Canada's Competition Bureau is urging the federal government to allow for up to 100 per cent foreign ownership of domestic-only airlines as a way to spur more competition in the industry.
The recommendation is one of several made by the Competition Bureau in a new study looking at Canada's aviation industry, with the watchdog suggesting changes to the 'highly concentrated' market.
'With the right policy changes, governments can create the conditions for new airlines to grow and compete – and give Canadians access to more affordable, reliable options for flights,' Matthew Boswell, commissioner of competition, said in a statement.
Among the suggestions is to create a new class of airline that operates only in Canada but allows for owners to be from outside the country, with up to 100 per cent ownership, which it says would allow domestic aviation to benefit from 'greater global expertise and capital.'
Story continues below advertisement
The watchdog also recommends changing Canada's current single-investor foreign ownership limit, currently set at 25 per cent, up to 49 per cent.
'Allowing more foreign investment in Canadian airlines improves access to capital, drives growth, and promotes competition,' the report reads.
1:49
Manitobans travelling domestically this summer
That capital could be important for new airlines hoping to gain a foothold in Canada, as the study found that those who recently entered the market say foreign investment is 'critical' for them to launch and stay in the air.
Get daily National news
Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy
According to the bureau, adding just one extra competitor to a route can reduce airfares by about nine per cent.
The study outlined various challenges faced by both airlines and travellers, noting that airlines are struggling to enter the market, stay in business and grow, while passengers face higher costs and complex flight bookings.
Story continues below advertisement
The Competition Bureau says robust competition would result in better service and lower prices.
The study says while airlines like Flair and Porter have succeeded and are expanding their services, others, like Lynx Air, have exited, with market concentration remaining 'extremely high' and competition from new entrants 'fragile.'
At major airports, Air Canada and WestJet account for roughly 56 to 78 per cent of all domestic passenger traffic.
'A concentrated market has few, large airlines,' the report says. 'They face less pressure to offer passengers a good deal because travellers have few choices.'
The report also says the federal government should remove barriers that prevent smaller airports from competing with major hubs for international flights.
Currently, international flight exclusivity clauses prevent more than one airport in a local area from hosting international flights, often restricting them to a major hub airport.
'Removing these restrictions would enable secondary airports to respond to market opportunities,' the study found. 'Passengers, workers, and airlines would then have more options.'
The watchdog also says a national working group should be established to focus on higher-quality and more accessible services to remote regions.
The report also says the minister of transport should no longer be able to override the federal review process and allow deals to move forward that have been deemed anti-competitive.
Story continues below advertisement
Over the past 20 months, four low-cost carriers have disappeared from the skies, as Lynx Air and Canada Jetlines shut down and WestJet folded subsidiary Swoop and the recently acquired Sunwing Airlines into its mainline service.
— with files from The Canadian Press
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Vancouver Sun
3 hours ago
- Vancouver Sun
Transportation Minister Chrystia Freeland 'dismayed' about BC Ferries' contract with Chinese shipyard
VICTORIA — Federal Transport Minister Chrystia Freeland says she is 'dismayed' that BC Ferries has contracted a Chinese state-owned shipyard to build four new vessels in the current geopolitical context that includes 'unjustified' tariffs on Canada. Freeland says in a letter sent to provincial Transportation Minister Mike Farnworth that she expects BC Ferries to inform her about all measures that it plans to take to 'mitigate any security risks,' including cybersecurity problems that might arise from the decision. BC Ferries announced earlier this month that it has contracted China Merchants Industry Weihai Shipyards to build four new major vessels following a five-year-long procurement process that did not include a Canadian bid. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. Freeland adds she is 'surprised' that BC Ferries does not have a mandate for an 'appropriate level' of Canadian content in the procurement given the value of the contract, although the dollar figure hasn't been made public. Farnworth says in a statement that the ministry is reviewing the letter, adding that he has spoken with Freeland about the need to bolster B.C.'s shipbuilding industry. BC Ferries says in a statement that the Chinese bid was 'the strongest bid by a significant margin' and that security is a 'top priority,' adding that all sensitive systems will be sourced separately and independently certified before the vessels enter service. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
Global News
3 hours ago
- Global News
Slowing sales raise questions about B.C.'s electric vehicle mandate
The British Columbia government is facing renewed questions about whether its aggressive electric vehicle (EV) sales mandates can be achieved. Under current B.C. law, 26 per cent of new light-duty vehicles sold in B.C. must be zero-emission by 2026, a figure climbing to 90 per cent in 2030 and 100 per cent in 2035. B.C. has, to date, been a Canadian leader in EV adoption, with 24 per cent of new vehicle shoppers snapping one up in 2024. But that momentum has run into trouble. Both Ottawa and B.C. phased out their EV subsidies earlier this year, and the auto industry says sales dropped quickly afterward. 2:24 BIV: EV sales in Canada plummet over last year 'The first quarter, we were pushing 19 per cent in adoption rate. In April, it was down to 15 per cent … in May it's about flat with 15 per cent again, so the math is just not there to achieve the 26 per cent in 2026,' said Blair Qualey, president and CEO of the New Car Dealers' Association of B.C. Story continues below advertisement 'The 2030 number is virtually impossible.' Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Powering British Columbia's roads under a fully electric scenario is another concern. Barry Penner, chair of the Energy Futures Institute, said his group modelled the electricity needs B.C. would face if it did meet its 100 per cent adoption target by 2035. 'It would require, at full implementation, two more site C dams worth of electricity. And this year, we have been importing electricity,' Penner said. 'In the last couple of years, on average, we've imported 20 to 25 percent. Of our domestic electricity needs from outside the province.' Penner said consumer behaviour has also been shifting towards plug-in hybrids, which are cheaper, but have typically not qualified for government rebates. 3:48 B.C. electric vehicle rebate pause The Ministry of Energy and Climate Solutions did not respond to a request for comment by deadline. Story continues below advertisement However, Global News obtained a technical review of B.C.'s Zero-Emission Vehicles Act and Regulation, which appears to show the government is open to adjusting the program. The document shows the province is considering 'several changes' to the legislation 'to respond to current economic conditions, support affordability for consumers, and lessen pressures on automakers.' Those changes include revising the 2030 zero-emission sales targets, amending compliance ratios for battery electric and hydrogen-powered vehicles, changing the percentage of plug-in hybrids dealers can sell under the law, and changing range requirements to ensure more vehicles qualify for credits. The document further notes that challenges to EV adoption still include range anxiety and vehicle price. 'They're more expensive on average than a non-electric vehicle. Some studies suggest about $8,000 per vehicle,' Penner said. 'Internal government polling shows almost 60 per cent of British Columbians say that's the number one problem buying an electric cars is the cost and yet what have they done? They've removed the rebate.' B.C. has been working to upgrade infrastructure; BC Hydro has installed about 600 fast chargers around the province, with more to come. 'And while the province has paused EV subsidies for now, the policy document hints that it is looking at 'new initiative agreement pathways to support affordability for consumers.' Story continues below advertisement The province is also conducting a wider review of its entire CleanBC program. Qualey said new rebates would help the situation, but argued that even with them in place, the targets are too aggressive. 'Ideally, we would like a pause on all of it right now to continue the conversation so the manufacturers, who are the obligated parties in all of this, can sit with government … (and determine) what targets are achievable,' he said.
Vancouver Sun
4 hours ago
- Vancouver Sun
Music streamer Spotify tells CRTC not to regulate it like radio
OTTAWA — Music streamer Spotify says Canada's federal broadcast regulator shouldn't impose rules meant for radio on streaming services. Appearing before a CRTC hearing Friday, company representatives compared regulating Spotify like a radio station to treating Uber like a horse and buggy operation. 'To apply yesterday's tools to today's platforms risks dulling Canada's success on the global music stage,' said Xenia Manning, Spotify's director of global music policy. 'It is essential to assess whether a real problem exists that justifies regulatory intervention. In our view, the evidence is clear. There is no market failure in audio streaming that would warrant intervention by the CRTC.' Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. In its written submission, Spotify argued the CRTC doesn't have the jurisdiction to extend rules governing commercial negotiations and disputes in the broadcast sector to online players. Spotify said the Broadcasting Act doesn't give the CRTC the authority to 'regulate the terms of trade between online undertakings, including good faith negotiations and commercial disputes.' It said the CRTC's proposals 'would see it imposing dispute resolution and commercial negotiation requirements on online undertakings that are plainly outside the scope of broadcasting.' The CRTC is holding a hearing on market dynamics as part of its work to implement the Online Streaming Act, which updated broadcasting laws to capture online platforms. During the hearing, large telecom and broadcasting companies like Bell and Rogers called on the CRTC to loosen existing rules for traditional players. They took aim at regulations governing how cable channels must be packaged and disputes about carriage of cable channels. Bell, which appeared Wednesday, asked the CRTC to get rid of the rule the regulator implemented nearly a decade ago requiring companies to offer a $25 basic cable package. In its opening statement Friday, Rogers asked the CRTC to dramatically reduce regulation of cable companies. Colette Watson, president of Rogers' media division, said less than half of Canadian households now subscribe to cable, satellite or IPTV service. 'Canadian ownership groups cannot survive another decade of disproportionate regulation,' she said. The CRTC is holding a series of hearings as part of its work under the Online Streaming Act. Spotify, along with Amazon and Apple, is fighting in court an earlier order requiring streamers to make CRTC-ordered financial contributions to Canadian content and news. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
