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An Emirates Air jet sits at the terminal at Toronto's Pearson airport on Nov. 19, 2010. (J.P. MOCZULSKI/J.P. Moczulski for The Globe and Mail)
An Emirates Air jet sits at the terminal at Toronto's Pearson airport on Nov. 19, 2010. (J.P. MOCZULSKI/J.P. Moczulski for The Globe and Mail)

Air Canada proposed Emirates deal in 2006: documents Add to ...

There's interesting new information about Air Canada's relations with Emirates Airlines before a landing-rights dispute erupted between Canada and the UAE.

Documents obtained by The Canadian Press show Air Canada proposed a joint venture with Emirates four years ago in which the two airlines would share equally in profits from increased flights between the two countries.

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The information emerges as relations between Canada and the UAE continue to deteriorate after the Harper government refused to increase landing rights for the Persian Gulf country's two major airlines.

The Gulf News newspaper said Wednesday that relations between Canada and the Persian Gulf federation were at an "all-time low" after comments Prime Minister Stephen Harper made in a published interview last week questioning the reliability of the UAE as an ally.

Emirates and its fellow UAE carrier, Etihad Airways, have been pushing to increase flights to Toronto beyond the current three per week, and want to expand service to Montreal, Vancouver and Calgary as well.

The Harper government - despite a major cabinet split on the issue - rejected the UAE's request for extra landing rights to protect Air Canada from losing business.

But more than four years ago, Air Canada proposed daily flights and made a major pitch for a profit sharing with Emirates, while raising the possibility of giving the UAE what it has failed to get - landing rights in other major Canadian cities.

The airline outlined its proposal in an Oct. 17, 2006 presentation titled, "Proposed Framework for Commercial Cooperation," a copy of which has been obtained by The Canadian Press.

It proposed a "50/50 Profit sharing formula for routes between Canada-UAE" and suggested a daily flight between Dubai and Toronto's Pearson Airport, with the possibility of expanding service to other cities.

The deal never materialized, and it appears it was likely rejected by Emirates because of the profit-sharing proposal.

Meanwhile the relationship between the UAE and Canada has worsened in recent months after Ottawa refused to grant the two Emirati airlines extra landing rights.

The Gulf News article published earlier this week quoted an unnamed U.A.E. government official as saying that the "UAE deserves an apology from the Canadian Prime Minister" for what it said was a "vitriolic attack" on the country. It also listed a litany of grievances that the U.A.E. government has with Canada, saying it is "furious with Harper's attack."

The UAE embassy in Ottawa declined all comment Thursday, saying it did not want to exacerbate relations further.

The Harper government remained silent Thursday. Spokespeople for Harper and for two top cabinet ministers currently touring in the Middle East - Foreign Affairs Minister Lawrence Cannon and Defence Minister Peter MacKay - declined to speak to reporters.

Cannon's office cancelled a conference call, citing a packed schedule. MacKay's office declined an interview request, saying the UAE spat was Cannon's bailiwick.

Since Ottawa's landing-rights refusal, the UAE asked Canada to leave Camp Mirage, which had been an important staging ground for the military mission in Kandahar.

The UAE has also imposed visa requirements on Canadian travellers and business people ranging from $250 to $1,000.

Meanwhile, Liberal Leader Michael Ignatieff renewed his call to Harper to repair relations with the UAE.

"We need to get relations with this strategic ally in the Middle East back on track," Ignatieff said in a statement Thursday.

Ignatieff noted that 200 Canadian companies operate in the UAE, while Alberta, Nova Scotia and Ontario have led trade missions to the country.

The UAE is Canada's 12th largest investor at $4.4 billion.



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