The federal government is quietly preparing for a possible review of a new cross-border airline partnership, hiring outside consultants to assess the economic and financial impact of a proposed joint venture between two carriers.Blacklock's Reporter says a notice posted by Transport Canada says the department is seeking a contractor to provide independent economic, financial and accounting analysis to support the Minister of Transport if a public interest assessment is launched under the Canada Transportation Act.The procurement notice does not identify the airlines involved, and consultants selected for the work will be required to sign non-disclosure agreements. A final report is due by Nov. 1."Transport Canada requires the services of one contractor to provide economic and financial analysis including accounting expertise in support of a notification to the Minister of Transport regarding a transborder joint venture between two airlines," the notice states.The department added the contract is contingent on the government deciding to undertake a formal public interest review."In this case the Minister may elect to conduct a public interest assessment of the proposed joint venture within prescribed legislative timelines," the notice says. "To support this assessment, Canada requires independent economic and financial analysis."Canada's largest airlines already operate cross-border partnerships with major U.S. carriers.WestJet entered into a joint venture with Delta Air Lines in 2018, while Air Canada launched a similar partnership with United Airlines in 2022..Under the Canada Transportation Act, airlines must notify the federal government of mergers, acquisitions and joint ventures that could affect the public interest.Current legislation prohibits foreign airlines from operating domestic routes within Canada, while foreign ownership of Canadian commercial airlines is generally capped at 49%, with limited exceptions for cargo and specialty operators.The latest development comes a decade after a federal review recommended opening Canada's aviation sector to greater foreign participation.In his 2016 report Pathways: Connecting Canada's Transportation System To The World, former industry minister David Emerson recommended allowing significantly greater — though not complete — foreign ownership of Canadian passenger airlines to increase competition."Our goal is to see Canada join most other large aviation markets in allowing significant, but not full, foreign ownership of passenger air carriers," the report stated.The review also recommended privatizing federally regulated airports, arguing Canada's aviation system would struggle to become internationally competitive without structural reform."Canada cannot become a world leader in terms of cost competitiveness of air transport without heavy public subsidization," the report said, adding such models were unsustainable.Former transport minister Lisa Raitt, who commissioned the review, said at the time she had been approached by several American ultra-low-cost carriers interested in entering the Canadian market."I had at least two or three ultra low-cost carriers or small start-ups that wanted to come into Canada," Raitt said in a previous interview.She said many competing proposals were brought forward during her tenure, but argued Canada lacked a unified long-term vision for its transportation system.
