Air Canada/Transat Government Review Will Stretch Well Into Next Year

If anyone was hoping for a quick resolution of the Air Canada/Transat merger, it's not going to happen.

Government officials on Monday said they'll begin a review of the proposed deal on Nov. 4 of this year, and that they've been given until May 2, 2020 to make their report. The issue will then be handled by elected officials in Ottawa, but there's guarantee of a speedy decision. In fact, there's no set timetable for the decision whatsoever.

"The Minister of Transport has determined that the transaction raises public interest issues related to national transportation," officials said in their Monday release. "As such, a public interest assessment of the proposed transaction will be conducted with input from the Commissioner of Competition, who will assess impacts on competition."

A combined Air Canada/Transat company would control roughly 60% of the transatlantic market from Canada.

Transat shareholders voted overwhelmingly in favour of Air Canada's $720 million purchase proposal last week.

"The public interest assessment will include targeted consultations with the air industry and other stakeholders, other levels of government and the public, as well as an analysis of the economic benefits or challenges resulting from the proposed transaction. Consultation will begin on Nov. 4, 2019," officials said.

"Under the Canada Transportation Act, Transport Canada has up to 150 days to complete this public interest assessment. However, the Minister has the authority to grant an extension should extra time be necessary. Considering the size and scope of the proposed transaction, an extra 100 days has been granted to both Transport Canada and the Commissioner of Competition, to ensure sufficient time for thorough analysis and assessment.

"The Department now has 250 days (until May 2, 2020) to complete the public interest assessment and provide it to the Minister. The Minister would then provide a recommendation to the Governor in Council (Cabinet) concerning the proposed purchase," officials said.

"The Minister's recommendation would incorporate the findings of the Commissioner's report on competition considerations. There is no legislated timeline for the Minister to make his recommendation or for the Governor in Council to make a final decision."