Federal Cabinet to Decide Airline Merger’s Future
Ottawa, Ont. – The fate of the on-again-off-again proposed merger between two of the North’s dominant airlines will soon be decided by Justin Trudeau’s Cabinet.
In a report released recently by Canada’s Competition Bureau to Transport Minister Marc Garneau, the Competition Bureau insists, “the proposed merger of First Air and Canadian North is likely to result in a substantial lessening of competition in the provision of passenger travel and cargo services,” across Northern Canada.
“The effects of the transaction are likely to include reductions in passenger and cargo capacity, increases in price, and reductions in flight schedules,” it adds in the report to Garneau. “The Commissioner is of the view that the Proposed Transaction can be characterized as a merger to monopoly in the vast majority of the Parties overlapping origin and destination pairs and is likely to lead to significant and materially higher prices and lower quality services for air passengers and cargo customers.”
Garneau now carries the issue of the proposed merger to the federal Cabinet table, which will decide collectively whether to let it go through or not. The airlines are owned by the business arms of Inuit Land Claims organizations – Canadian North is by the Inuvialuit Regional Corp. and First Air by Makivik Corp. – which have been discussing a possible merger for several years. This most recent attempt to unify began in July 2018.
First Air operates routes to 32 Northern communities, including the NWT, Nunavut and Nunavik. Canadian North serves 16 communities in Nunavut and the NWT.
Canadian North and First Air released a joint statement, in favour of the merger.
“It’s artificially restricted findings in this matter are of limited value and suggest a superficial understanding of the Inuit organizations proposing this solution for sustainable northern transportation,” they say. “Before Inuit can be meaningful participants in the national economy, they must be meaningful participants in the northern economy; an efficient Pan-Arctic airline is the only long-term viable answer that will provide immediate benefits.”
