Canadian transport minister ‘miscommunicated’ on foreign ownership rules for cargo carriers
14 / 11 / 2016
Foreign owners will be able to take up to a 49% stake in Canadian cargo airlines, the government has confirmed after an earlier policy "miscommunication".
Canada’s transport minister Marc Garneau has clarified his earlier statement that seemed to suggest that a raising of the cap on foreign ownership, from 25% to 49% with accompanying safeguards, applied solely to passenger airlines.
In a statement, the government’s Transport Canada said that it “wishes to clarify the scope of the proposed legislative change”.
The statement continued: “The government of Canada proposes to liberalise international ownership limits that would apply to all carriers, including those providing all-cargo services.
“Under the government’s proposal, the only persons exempt from these new limits would be operators providing specialty air services, who would remain subject to the current 25% limit”.
The official statement added: “The Canada Transportation Act defines a carrier to be "a person who is engaged in the transport of goods or passengers by any means of transport under the legislative authority of Parliament"
“Transport Canada regrets any inconvenience that may have been caused by a lack of clarity on this matter”.
Canadian freighter carrier Cargojet, which originally welcomed minister Garneau’s implied retained cap on foreign ownership of cargo carriers, acknowledged Transport Canada’s press release on “the miscommunication and further clarification”.
Ajay Virmani, president and chief executive of Cargojet, said: "We remain committed to participating as a key stakeholder and to assisting the federal government to ensure that this initiative is implemented in the most responsible manner with accompanying safeguards to ensure that all Canadians continue to receive cargo and mail services at the most economical costs while maintaining a healthy Aerospace and Aviation sector.
"We will also continue our dialogue with the Minister of Transport to explore reciprocity with other countries to create business opportunities for Canadian carriers.”
In its original statement, welcoming the perceived interpretation of the minister’s speech, Virmani said: "We recognise and appreciate the extensive and exhaustive study undertaken by the Federal Government in consultation with stakeholders. Cargojet is completely and fully supportive of the initiatives announced."
Air Canada Cargo is continuing to expand its recently re-launched freighter network by wet-leasing 767-300 freighters operated by Cargojet.