Aviation Changes Pledged

High rents are responsible for high airfares says Maxime Bernier.
High rents are responsible for high airfares says Maxime Bernier.

A prominent contender for the leadership of the Progressive Conservative Party is pledging to overhaul Canada’s airline and airport system if he becomes prime minister.

Maxime Bernier said he’ll scrap foreign ownership requirements for domestic airlines, privatize airports and deregulate the industry to increase service and competition.

“Canada has a relatively strong air transportation industry and good infrastructure,” Bernier told a news conference.

“But like many other sectors of our economy, such as telecommunications and supply management in agriculture, it suffers from a lack of competition and from prices that are too high.”

Canadian airlines can only have 25 percent foreign ownership but proponents of new budget airlines have asked the government to lift that figure to 49 percent to help them attract investment.

Bernier said he’d allow airlines operating only in Canada to be 100 percent foreign owned but those flying outside the country would have to be majority owned by Canadians, likely because other countries have foreign ownership restrictions.

He said the restrictions prevent airlines from serving smaller centres.

“This is why I will eliminate the 25 per cent foreign ownership limits,” he said. “But why stop at 49 per cent? Australia and New Zealand allow 100 per cent foreign ownership for airlines that operate domestic services.”

Bernier said government-owned major airports are used as cash cows and contribute to high airfares in Canada. The airport authorities who run the airports do so as non-profit entities but the government charges a total of $5 billion a year in rent from 26 of those operators.

“These rents can represent up to 30 per cent of airport operating budgets, costs that are of course passed on to travellers.”