Reform Party of Canada
Dissenting Opinion of the
Official Opposition for The
Standing Committee on Transport
The Restructuring of the Airline
Industry in Canada

The Official Opposition is in agreement with almost all of the Committee's report. We believe that the report has struck the right balance between fostering healthy competition in the airline industry and protecting the public interest. We are especially pleased, and pleasantly surprised, that the Committee recommended raising the foreign ownership restriction from 25% to 49%, ignoring the Minister's refusal to increase the restriction. We believe that had the government increased this restriction on foreign ownership earlier, the Canadian airline industry may not be facing its current dilemma.

The 10% Ownership Limit on Air Canada Shares

There is only one section of the report that the Reform Party takes exception to. The Official Opposition wholeheartedly supports the Committee's contention that "(r)ather than returning to a strict regulatory environment, the Committee believes that the most appropriate way to foster competition and protect the public interest is to remove, or to significantly lower, these barriers." Having come to this conclusion, we then find it inconsistent that the Committee recommends maintaining the restriction, albeit an increased restriction, on the ownership of voting shares of Air Canada.

The Reform Party supports the immediate repeal of section 6(1)(a) of the Air Canada Public Participation Act, which prevents any one individual, together with the associates of that person, from controlling more than 10% of voting shares. We do not see any benefit to the public interest in maintaining any limit. Neither Parliament nor the government should be placing any such restrictions on Canadian corporations. In today's global economy such a restriction only prevents Air Canada from obtaining the necessary capital and expertise to compete with foreign carriers.