In Canada, only a "Canadian" air carrier is permitted
to operate a domestic air service between points within Canada.
Under the Canada Transportation Act (Act), there are three
requirements in order for an air carrier to be considered
"Canadian":
- it must be incorporated or formed under Canadian federal or
provincial laws;
- a minimum of 75 per cent of its voting interests must be owned
and controlled by Canadians; and
- the entity must be "controlled in fact" by
Canadians.
In May 2011, the Canadian Transportation Agency (Agency)
released two Interpretation Notes which clarify how the Agency
applies the Canadian ownership requirement under the Act. These
Interpretation Notes have important implications for businesses
which are considering acquiring an interest in a Canadian air
carrier as well as for those which currently have a financial stake
in Canadian airlines.
