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British Columbia Western Canada: Kenney, Nenshi praise WestJet-Onex deal

Good morning! It’s James Keller in Calgary.

A private-equity firm’s $3.5-billion offer to buy WestJet is being heralded by politicians and greeted with apprehension by workers. The friendly takeover by Toronto-based Onex Corp. could reshape the country’s airline industry and transform a company that has long been held up as a Western Canadian success story.

The deal was announced on Monday, though it still requires the approval of regulators. If it goes ahead, the sale would be the biggest private-equity takeover of an airline in history.

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Having a new private owner outside the pressures of stock-market investors will give the airline needed breathing room to continue expanding and take on rival Air Canada.

Calgary Mayor Naheed Nenshi praised the sale, as did Alberta Premier Jason Kenney (who even suggested his government’s planned corporate tax cuts helped seal the deal). Mr. Kenney said he was assured by WestJet and Onex that the company’s headquarters would remain in Calgary.

But workers at WestJet, where share purchases and profit sharing are baked into the company’s ethos of “Owner’s Care," are concerned about what it means for them. Onex says it plans to keep all of WestJet’s employees and continue on the company’s current business direction. Onex also says it will keep profit sharing in place and find a way to replace the share-purchase program with an option suitable for a private company.

Chris Rauenbusch, president of the Canadian Union of Public Employees Local 4070, said the share-purchase program is the only option WestJet has offered for their workers’ retirement.

“It’s huge. We don’t have a pension plan at WestJet. In order to have any retirement with dignity, that’s the plan we rely upon. Without it, you have your day-to-day wages and that’s about it.”

It’s not the first time Onex founder and CEO Gerry Schwartz have attempted to enter the airline industry. He unsuccessfully attempted to buy and merge Air Canada and Canadian Airlines in the late 1990s. That attempt failed in part because of a lawyer brought in by Air Canada named Calin Rovinescu crafted a legal strategy to block the takeover attempt. Mr. Rovinescu is now the CEO of Air Canada.

This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.

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Around the West:

Gas prices:

Vancouver drivers should brace themselves for another spike in gas prices ahead of the May long weekend as the conditions that have forced them to pay the highest prices for fuel in the country exacerbate. A new report from the National Energy Board shows gasoline prices in Vancouver have eclipsed all other markets in Canada in large measure because it has the tightest supply – and demand is just about to increase.

The NEB’s latest market snapshot lays out what shapes prices at the pumps. There is the tax bite, crude oil prices, the markup by refiners for turning that crude oil into gasoline, and the cost of getting that refined product to the consumer. Metro Vancouver drivers pay the highest gas taxes in the country, in part to pay for public-transit levies, with the total paid to all levels of government adding up to 53.9 cents a litre.

They also paid the largest markups for refining in April.

Carbon tax: The federal government plans to move quickly to impose a carbon tax on Alberta once Premier Jason Kenney removes his province’s own policy. Mr. Kenney plans to eliminate the provincial tax – a key campaign commitment – by May 30, setting up a clash with Ottawa.

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Paid leave for domestic violence victims: The Saskatchewan government has passed legislation that will allow victims of domestic and sexual violence to take paid leave from work. Employees were previously entitled to take 10 unpaid days of leave. But the new rules allow them to take five paid days and five unpaid days off. They can use the leave to move, obtain support services, get medical help and attend court appearances.

The Supremes head to Winnipeg: The Supreme Court of Canada plans to visit Winnipeg in September to hear two appeals and meet with Manitobans – the first time the court will sit outside of Ottawa. The high court says going on the road is part of an effort to make the venerable institution more accessible to the public. The justices, hosted by the Manitoba Court of Appeal, will hear a criminal-law case from Manitoba on Sept. 25 and a language-rights appeal from British Columbia the following day.

Chinatown through a wide lens: Vancouver’s Chinatown and its immigrant communities during the first half of the 20th century were chronicled by Chinese photographer Yucho Chow. He was the go-to photographer for Chinese families and for individuals or families who may not have been welcomed at other photography studios at the time, including Sikh Canadians. He photographed newly arrived Europeans, black Canadians, mixed-raced couples and families, and Indigenous people. Mr. Chow’s lens chronicled thousands of faces of all skin colours, religious and cultural backgrounds through the tumultuous time that included Canada’s imposition of the Chinese head tax and the First and Second World Wars. An exhibit of his work is on display until the end of the month.

Opinion:

Gary Mason on money-laundering estimates: “For me, an alarm went off when the report on money laundering in B.C.’s real estate sector suggested that the problem is even worse in the Prairies. Really? I find that hard to believe. Perhaps sensing the skepticism that tidbit might elicit, the report’s authors added: “If money laundering in Alberta and the Prairies have been overestimated by the model, that implies that money laundering in B.C., Ontario and Quebec have likely been underestimated. What is someone to make of that?”

Campbell Clark on the environmental stance of Jagmeet Singh: “The Green Party has wind in its sails, most recently from winning a second seat in the British Columbia riding of Nanaimo-Ladysmith, and some New Democrats see that as a sign their party isn’t woke enough on the crisis of climate change.”

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Kelly Coulter on the need for the cannabis industry to address its smell issue: “The issue around smell feels like a small, local issue, but it is an important microcosm of the potential turning point the industry now faces. It’s a fracas that could whittle away goodwill around a nascent, stigma-soaked sector that needs to put a good foot forward before public perception catalyzes around it. The problem offers an early crossroads between the old way of doing things and a new, conciliatory way led by best practices in land use, corporate responsibility, environmental leadership and community relations.”

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