Proposed Liberalization of Canada’s Foreign Ownership Rules

New regulations to liberalize Canada’s foreign ownership rules in connection with Canadian air carriers are expected to come into force in 2010.  The changes are contained in Bill C-10, the Budget Implementation Act, and will apply to all air carriers (i.e. public, private, fixed-wing, rotary-wing, etc.).

The legislative changes stemmed from recommendations of the Competition Policy Review Panel, which was established in 2007 by the Minister of Industry to examine and report on laws affecting competitiveness of Canadian businesses, especially those in the aviation sector.

The new regulations will give the federal cabinet the power to allow non-Canadians to own and control up to 49% of the voting interests of a Canadian air carrier.  Currently, non-Canadians are only permitted to own and control up to 25% of the voting interests of a Canadian air carrier.

Consultation on the regulations is underway.  The Canadian Transportation Agency has extended the deadline for submissions until December 22, 2009.

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