An Air Canada Jazz De Havilland DHC-8 takes off at Vancouver International Airport in Richmond, B.C., on May 30, 2011.

An Air Canada Jazz De Havilland DHC-8 takes off at Vancouver International Airport in Richmond, B.C., on May 30, 2011.
Photo Credit: PC / DARRYL DYCK

Ottawa aims to lower airfares by bolstering competition

The federal government plans to nearly double the cap on foreign ownership of Canadian airlines and adopt a passenger bill of rights in a bid to bring down fares and protect consumer rights of air travellers.

The proposed legislation would allow international companies to own up to 49 per cent of an airline in Canada, up from the current cap of 25 per cent, said Transport Minister Marc Garneau.

The government hopes that loosening Canada’s strict foreign investment rules for airlines will help create more competition and allow the launch of low-cost carriers, Garneau  said.

“This can bring down airfares and it can also provide more destinations and more choice for consumers,” the former Canadian astronaut turned politician told reporters Thursday.

Until legislation is changed, Garneau said he is granting exemptions that will allow aspiring discount airlines Canada Jetlines and Enerjet to land more international investors, giving the companies what they have long requested.

Transport strategy unveiled

The measures unveiled by Garneau in Montreal are part the government’s larger transportation strategy, which includes promised action on railway safety, drones, transportation emissions, coastal protections and development of transportation infrastructure in the North.

“This plan addresses the needs for the future of transportation in Canada,” Garneau said. “It will move our transportation system forward and support the economic growth of our great country for the benefit of all Canadians, and particularly the middle-class and those looking to join it.”

The minister said the government will also work to reduce waits at airport security to international standards by looking at new equipment and technology.

Air passenger rights bill

As well, it will introduce the long delayed air passenger rights regime in the coming months that will establish clear, minimum requirements so Canadians know when they are eligible for compensation in cases of oversold flights or lost luggage.

“What we want to do is come up with something that will be very, very clear in terms of there being consequences if the rights of passengers are violated but at the same time that are reasonable,” Garneau said.

Canada is one of the few Western countries that has no air passenger rights bill.

Watchdog with teeth needed

The Canadian Automobile Association, which sells airfares and vacation packages, praised the move, saying it will provide a level playing field by ensuring all carriers follow the same rules.

“We think that Canadian air travellers deserve to be treated as well as American and EU passengers when they travel and we’re hopeful that today’s announcement will put us on the road towards that,” managing director Ian Jack told The Canadian Press.

Passenger rights advocate Gabor Lukacs welcomed the bill of rights but said it can only be effective if the Canadian Transportation Agency is given teeth to enforce the rules, as is the case in the United States which doles out hefty fines.

“If you have very good laws, but they get all ignored, what use will it have?” he said in an interview with The Canadian Press.

Lukacs, who has frequently challenged airline practices, said the quasi-judicial agency is biased in favour of airlines and does little to enforce existing rules under the Montreal Convention.

With files from The Canadian Press and CBC News

Categories: Economy, Politics, Society
Tags: , , ,

Do you want to report an error or a typo? Click here!

For reasons beyond our control, and for an undetermined period of time, our comment section is now closed. However, our social networks remain open to your contributions.