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Bill C-26

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SUMMARY

This enactment amends certain statutes in order to implement specific elements of the ``Policy Framework for Airline Restructuring in Canada'' of October 26, 1999 and to make a consequential amendment. The key elements of the enactment include

    (a) amendments to the Canada Transportation Act authorizing the Governor in Council to approve mergers and acquisitions of airline undertakings after review by the Minister of Transport, the Commissioner of Competition and the Canadian Transportation Agency; increased authority for the Agency to review passenger fares and cargo rates on monopoly routes; authority for the Agency to review domestic terms and conditions of carriage; the requirement for notice of exit in cases of major passenger seating capacity reductions resulting from discontinuance of services on any domestic route; a prohibition of exclusive use clauses in confidential contracts for domestic services;

    (b) amendments to the Competition Act providing for exemption from sections 45 and 61 of that Act of agreements between or among travel agents respecting commissions on sales of airline tickets paid by a carrier with 60% of domestic service activity; a new regulation-making power to specify anti-competitive acts or conduct of a domestic air carrier; a new power to make temporary orders halting anti-competitive acts affecting domestic services;

    (c) an amendment to the Competition Tribunal Act to authorize a member of the Competition Tribunal sitting alone to hear and dispose of any application for review against a temporary order issued by the Commissioner of Competition for the purpose described in paragraph (b); and

    (d) amendments to the Air Canada Public Participation Act providing for the increase of the individual share ownership limit to 15% and authority for the Governor in Council to increase, by regulation, the foreign ownership limits; a duty for Air Canada to ensure that its subsidiaries provide services to their customers in both official languages; the deeming of the proposed acquisition by Air Canada of the shares of Canadian Airlines of December 21, 1999 to have been approved pursuant to the proposed new merger and acquisition review process.

EXPLANATORY NOTES

Canada Transportation Act

Clause 1: New.

Clause 2: New.

Clause 3: Subsections 64(1.1), (1.2) and (4) are new. Subsections 64(2) and (3) read as follows:

(2) A licensee shall not implement a proposal referred to in subsection (1) until the expiration of sixty days after the notice is given or until the expiration of such shorter period as the Agency may, on application by the licensee, specify by order.

(3) In considering whether to specify a shorter period pursuant to subsection (2), the Agency shall have regard to

    (a) the adequacy of alternative modes of public transportation available at or in the vicinity of the point referred to in subsection (1);

    (b) other means by which the point served by the service is or is likely to be served by air; and

    (c) the particular circumstances of the licensee.

Clause 4: Section 66 reads as follows:

66. Where, on complaint in writing to the Agency by any person, the Agency finds that a licensee who is the only person providing a domestic service has imposed an unreasonable basic fare or increase in the basic fare in respect of the service, the Agency may, by order,

    (a) disallow the basic fare or increase;

    (b) direct the licensee to reduce the basic fare or increase by such amounts and for such periods as the Agency considers reasonable in the circumstances; or

    (c) direct the licensee, where practicable, to refund amounts specified by the Agency, with interest calculated in the manner prescribed, to persons determined by the Agency to have been overcharged by the licensee as a result of the increase in the basic fare.

Clause 5: Subsection 67(3) reads as follows:

(3) The holder of a domestic licence shall not impose any fare, rate or charge for the domestic service offered by it unless the fare, rate or charge is set out in a tariff that has been published or displayed pursuant to subsection (1) and is in effect.

Clause 6: New.

Clause 7: Section 68 reads as follows:

68. (1) Sections 66 and 67 do not apply in respect of fares, rates, charges or terms and conditions of carriage applicable to a domestic service provided for under a contract between a holder of a domestic licence and another person whereby the parties to the contract agree to keep its provisions confidential.

(2) The holder of a domestic licence who is a party to a contract referred to in subsection (1) shall retain a copy of the contract for a period of not less than three years after it has ceased to have effect.

Clause 8: The relevant portion of subsection 86(1) reads as follows:

86. (1) The Agency may make regulations

    . . .

    (h) respecting traffic and tariffs, fares, rates, charges and terms and conditions of carriage for international service and providing for

      (i) the disallowance or suspension by the Agency of any tariff, fare, rate or charge, and

      (ii) the establishment and substitution by the Agency of any tariff, fare, rate or charge disallowed by the Agency;

Competition Act

Clause 11: New.

Clause 12: New.

Clause 13: (2) New. The relevant portion of section 78 reads as follows:

78. For the purposes of section 79, ``anti-competitive act'', without restricting the generality of the term, includes any of the following acts:

(3) New.

Clause 14: New. The relevant portion of section 94 reads as follows.

94. The Tribunal shall not make an order under section 92 in respect of

Clause 15: New.

Competition Tribunal Act

Clause 16: Subsection 11(1) reads as follows:

11. (1) The Chairman of the Tribunal, sitting alone, or a judicial member designated by the Chairman, sitting alone, may hear and dispose of applications for interim orders under subsection 100(1) or 104(1) of the Competition Act and any related matters.

Air Canada Public Participation Act

Clause 17: (1) The relevant portion of subsection 6(1) reads as follows:

6. (1) The articles of continuance of the Corporation shall contain

    (a) provisions imposing constraints on the issue, transfer and ownership, including joint ownership, of voting shares of the Corporation to prevent any one person, together with the associates of that person, from holding, beneficially owning or controlling, directly or indirectly, otherwise than by way of security only, voting shares to which are attached more than ten per cent of the votes that may ordinarily be cast to elect directors of the Corporation, other than votes that may be so cast by or on behalf of the Minister;

    (b) provisions imposing constraints on the issue, transfer and ownership, including joint ownership, of voting shares of the Corporation to prevent non-residents from holding, beneficially owning or controlling, directly or indirectly, otherwise than by way of security only, in the aggregate voting shares to which are attached more than twenty-five per cent of the votes that may ordinarily be cast to elect directors of the Corporation, other than votes that may be so cast by or on behalf of the Minister;

    (c) provisions respecting the counting or prorating of votes cast at any meeting of shareholders of the Corporation and attached to voting shares of the Corporation that are held, beneficially owned or controlled, directly or indirectly, by non-residents so as to limit the counting of those votes to not more than twenty-five per cent of the total number of votes cast by shareholders at that meeting;

(2) New.

Clause 18: New.

Clause 19: New.

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