Up in the Air: Federal Government Approves First Air and Canadian North Merger Despite Report From the Competition Bureau

On July 10, 2019, two northern Canadian airlines, First Air and Canadian North, announced that their respective owners, the Makivik Corporation and the Inuvialuit Regional Corporation, had closed the merger of their two operations into a “strong, confident and unified airline that will serve northern customers and charter clients under the name Canadian North.”[1] Both the Makivik Corporation and the Inuvialuit Regional Corporation are owned and operated by First Nations communities.

When the transaction was announced, First Air operated a route network that included 32 northern communities in the Northwest Territories (“NWT”) and Nunavut, while Canadian North’s route network included 16 communities in the NWT and Nunavut.

The regulatory clearance of the deal under the review provisions of the Canada Transportation Act (“CTA”), despite a negative competitive effects report from the Commissioner of Competition (the “Commissioner”), makes for an interesting case study into how the government weighs public interest issues against competition concerns in certain instances.