Location: National
Issue/Source: WestJet Announced its Intention to Acquire Sunwing Travel Group, Including Sunwing Airlines
Date: February 13, 2023
Suggested Responses
- On May 20, 2022, the Minister of Transport announced that the proposed acquisition of Sunwing by WestJet raised public interest considerations related to national transportation. As such, a public interest assessment of the proposed acquisition has been conducted, including input from the Commissioner of Competition who was assessing impacts on competition.
- In keeping with the process set out in the Canada Transportation Act, Transport Canada officials provided the Minister of Transport with a public interest assessment of the proposed acquisition on December 5, 2022.
- Transport Canada is following the process set out in the Canada Transportation Act in proceeding with the next steps in the decision-making process.
If pressed
- There is no legislated timeline for the Minister of Transport to provide a recommendation to the Governor in Council to make a final decision concerning the proposed acquisition.
Background Information
The Minister of Transport’s role in air carrier mergers and acquisitions
- On March 2, 2022, Canada’s second largest air carrier, WestJet, announced its intention to acquire Sunwing Vacations and Sunwing Airlines. Transport Canada was officially notified April 8, 2022, triggering the review process.
- The Canada Transportation Act outlines a specific process for the assessment of mergers and acquisitions involving transportation undertakings, which allows for the consideration of the public interest, as well as competition.
- Parties to proposed mergers of transportation undertakings that are notifiable under the Competition Act must inform both the Commissioner of Competition (the Commissioner) and the Minister of Transport.
Process
- Upon receipt of the notification, the Minister has 42 days (May 20, 2022) to determine whether the proposed merger raises public interest considerations.
- If the Minister deems that the proposed arrangement raises public interest considerations, approval of the transaction must be provided by the Governor in Council (GiC) based on a recommendation from the Minister of Transport, with input from the Commissioner.
- Once the decision is taken that the proposed acquisition raises public interest concerns, an assessment of the public interest must be provided to the Minister within 150 days. The Minister does have the authority to grant extension to this deadline.
- The public interest assessment entails consultations with implicated parties, including the provinces and territories, other air carriers, airports, airline associations, consumer advocacy groups and the general public. It can also involve extensive economic and final analysis.
- As the Minister has determined that this proposed transaction does raise public interest considerations, and the Minister has accorded a 50-day extension for the analysis, the Commissioner provided an assessment of the proposed acquisition from a competition perspective on October 26, 2022. Transport Canada provided its public interest assessment on December 5, 2022.
- The Minister of Transport would then be required to make a final recommendation to the GiC, based on the input from the Commissioner and the findings of the public interest assessment. This recommendation would incorporate the findings of the Commissioner of Competition.
- Finally, depending on what markets the merged entity plans to serve, it may also require regulatory approval from other jurisdictions based on their laws and requirements.
- There is no legislated timeline for the Minister to make the recommendation for the Governor in Council to make a final decision.