Skip to main content

File photo of a CN Rail train.

The Canadian government is lifting ownership restrictions for Canadian National Railway Co., the country's largest railway company, and major airlines as part of efforts to bolster competition in the country's transport sector.

The changes, unveiled in a law proposed Tuesday, would lift individual share ownership limit for CN to 25 percent from the current 15 percent. Changes to airline rules also opened the door to joint ventures and codified a previously announced hike in the foreign ownership limit of foreign carriers, to 49 percent from 25 percent.

"It was a reasonable thing to increase that to 25 percent," Transport Minister Marc Garneau said a press conference in Ottawa. "We felt that this wasn't fair to CN."

Story continues below advertisement

Canada's transport sector is saddled by legacy issues stemming from the government's heavy involvement in the industry, including ownership of both Canadian National and Air Canada until recently and restrictions to competition.

Air Canada gained as much as 5.5 percent to reach its highest level since 2007 and WestJet Airlines Ltd. rose as much as 3.1 per cent. CN initially gained 1 percent on the news but quickly reversed direction, closing the day down 0.76 per cent.

Cascade Stake

Bill Gates is among those that could benefit from the changes. Gates is already the railway company's biggest single shareholder through a 13.3 percent stake held by his Cascade Investment LLC fund and a 2.3 percent stake owned by the Bill & Melinda Gates Foundation.

Patrick Waldron, a Canadian National spokesman in Montreal, said the company had no immediate comment on the legislative changes. Michael Larson, Cascade's chief investment officer in Kirkland, Washington, didn't immediately return a message left Tuesday regarding the change in the ownership cap.

Garneau made it clear the changes were aimed in part in boosting domestic railways. "I also want to make sure our railways are in a healthy state," he said.

The transport bill also includes changes to so-called inter-switching rules for railways -- where a shipper, such as a farmer, can use two railways to ship their goods -- a move that will partially open Canada to U.S. competitors. The new "long-haul inter-switching" regime essentially expands the roster of shippers who are eligible to take part, while asking them to apply instead of automatically getting approval.

Story continues below advertisement

Other changes announced Tuesday include expanding options for joint ventures between air carriers, and new airline passenger rights that spell out what ticket-holders are entitled to in event of major delays, overbooking or with lost or damaged luggage.

The changes to joint venture rules expand consideration of any effort -- cooperating on scheduling, pricing, marketing and so on -- to be reviewed under both competition laws and with "public interest considerations." Currently, joint ventures are only subject to Competition Act review.

The longest railway tunnel in the world is now complete (and it travels right under the Swiss Alps) Globe and Mail Update
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies