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Transat A.T. Inc. (Air Transat), Air Canada, WestJet, and Chorus Aviation Inc. have announced they will all seek shareholder approval to implement recent amendments to the Canada Transportation Act (CTA), which will increase the permitted level of foreign ownership at all four airlines.
Prior to the amendments to the CTA, no more than 25 per cent of the voting interests of a Canadian air carrier, and consequently the holding company of a Canadian air carrier, could be owned or controlled by non-Canadians.
The Government of Canada’s stated purpose in amending the CTA was to attract more foreign investment and encourage growth in the aviation sector by increasing–from 25 per cent to 49 per cent–the permitted level of foreign ownership of Canadian air carriers. At the same time, the CTA amendments introduced two new limitations on voting ownership and control, which capped the respective voting rights of any single non-Canadian and of the aggregate of non-Canadian air carriers at 25 per cent of the voting interests of a given Canadian air carrier.
Completion of the plan of arrangement is subject to shareholder approval and approval of the Quebec or Ontario Superior Court. Full details regarding the plan of arrangement will be included in the management proxy circular which will be made available to shareholders in connection with the shareholder meeting.
Full press releases are available from each company, respectively.
