Canadian Bill to Relax Foreign Ownership Laws on Airlines and Railways Hits a Snag
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Frederic Tomesco and Josh Wingrove, Bloomberg - April 13, 2018
A proposed law that would increase ownership limits in Canadian railways and airlines has run into a delay as politicians wrangle over what new powers companies should have.
Canada's Senate has changed Bill C-49, a law originally proposed by Transport Minister Marc Garneau as a sweeping overhaul of the country's transportation industry. The chairman of the Senate committee behind the changes said Garneau's original version too heavily favored Canadian National Railway Co. and Canadian Pacific Railway Ltd. and airlines including Air Canada. The altered bill strengthens powers for farmers, shippers and airline passengers.
"There was nobody who was extolling the virtues of this bill except basically CN, CP and the government of Canada," said David Tkachuk, a senator from Saskatchewan, a Prairie province where farmers have fought railways over a backlog of grain. As for airline changes, "people were very concerned that this was not about consumers, this was about airlines."
Many parts of the original bill introduced 11 months ago are unchanged, including a proposal to raise the ownership limit for CN to 25 percent from 15 percent. The railway's biggest shareholder is Cascade Investment LLC, Bill Gates's investment company, which owns 13.6 percent, double anyone else's stake. The bill would also raise airline foreign ownership limits to 49 percent from 25 percent and establish new airline-passenger rights.
Air Canada, in a submission to lawmakers, said it was "generally supportive" of the bill but requested certain changes. It warned new categories of foreign ownership could be too complex, potentially making the airlines less attractive to investors. It declined to comment on the Senate changes.