Opening Statement to the Standing Committee on Transport, Infrastructure and Communities: State of Airline Competition in Canada

Remarks from Melissa Fisher, Deputy Commissioner, Mergers Directorate

Standing Committee on Transport, Infrastructure and Communities

Ottawa, Ontario

May 9, 2024

(As prepared for delivery)

Good morning Mr. Chair and members of the committee. Thank you for the invitation to appear before you today.

My name is Melissa Fisher and I am the Deputy Commissioner of the Competition Bureau’s Mergers Directorate. Joining me today is my colleague Brad Callaghan, Associate Deputy Commissioner of the Policy, Planning and Advocacy Directorate.

The Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. We administer and enforce Canada's Competition Act, a law of general application that applies to every sector of the economy. We investigate and address abuses of market power, anti-competitive mergers, price-fixing and deceptive marketing practices. The Bureau also advocates for pro-competitive government rules and regulations.

It’s important to recognize that we are enforcers, not adjudicators. The Competition Act requires us to meet several thresholds and standards, such as proving that there has been a significant harm to competition.

I will also note that, in the case of airline mergers, there is a public interest review process that can be triggered by the Minister of Transport. When that happens, our statutory role becomes one of advisor rather than enforcer. Our role is to identify any competition concerns relating to the merger to the Minister of Transport by way of a public report and the Minister makes the final decision on whether to recommend approval of the proposed transaction. We have done this in three airline mergers in recent years:

1. First Air/Canadian North;
2. The proposed merger between Air Canada/Air Transat; and 
3. West Jet/Sunwing.

We believe that it’s important to correct the record in light of prior testimony that you have heard. The Bureau did not approve these mergers - in fact, our public reports outlined the serious competition concerns that each of them raised.

We also participated in the last major review of the Canada Transportation Act carried out in 2015. Our submission made a number of recommendations to Government that we believe would result in lower prices, higher quality services, and greater innovation in the transportation industry.

In light of recent events that have raised questions about the state of competition in the airline sector, the Bureau has been considering the value of a more fulsome study, separate from enforcement matters that review specific transactions or behaviour. With that in mind, we have initiated the process to begin a market study of the industry. This will be our first market study under our new powers, which were granted in December 2023 through Bill C-56. It follows our most recent study into the retail grocery industry.

We intend to study the state of competition in the airline industry and how governments across Canada can improve competition for the benefit of domestic air passengers as well as the workers and entrepreneurs who enable these services.

We will be providing more details on this market study of the airline industry in the coming days when we launch a consultation on its terms of reference.

Before fielding your questions, I would note that the law requires the Bureau to conduct investigations in private and keep the information we have confidential. This obligation may prevent us from discussing some past or current investigations.

I would like to thank the Committee for the opportunity to appear today. We look forward to your questions.