Decision No. 392-A-2010

September 15, 2010

File Nos. M4161/A1036
M4210/A1071

Ascent Helicopters Ltd. (applicant) applied to the Canadian Transportation Agency (Agency) for a Canadian ownership ruling, and for an amendment to Licence No. 080001 to delete all references to the Minister of Transport's Order exempting the applicant from the application of subparagraph 61(a)(i) of the Canada Transportation Act (CTA). The application was received on June 4, 2010.

The applicant, on March 8 and December 18, 2006, applied to the Agency for a licence to operate a domestic service. The Agency, on both occasions, issued a denial (Decisions No. 609-A-2006 and 245‑A‑2007), as the applicant did not satisfy the Agency that it was controlled in fact by Canadians.

On February 4, 2008, the Minister of Transport issued an Order conditionally exempting the applicant from the application of subparagraph 61(a)(i) of the CTA, namely the requirement to be Canadian.

As a result of this order, the Agency rendered Decision No. 55-A-2008 and, pursuant to section 61 of the CTA, issued domestic service Licence No. 080001, valid for small aircraft.

To obtain a licence to operate the proposed service, pursuant to subparagraph 61(a)(i) of the CTA, the applicant must establish to the satisfaction of the Agency that, among other conditions, it is Canadian. Pursuant to subsection 55(1) of the CTA, Canadian means a "Canadian citizen or a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act, a government in Canada or an agent of such a government or a corporation or other entity that is incorporated or formed under the laws of Canada or a province, that is controlled in fact by Canadians and of which at least seventy-five per cent, or such lesser percentage as the Governor in Council may by regulation specify, of the voting interests are owned and controlled by Canadians."

The Agency has carefully reviewed all of the submissions made by the applicant concerning its Canadian status, including the information contained in the current application and all documentation filed in support.

With respect to the requirement that the applicant be incorporated or formed under the laws of Canada or a province, the Agency notes that the applicant is incorporated under the Business Corporations Act of British Columbia.

With respect to the requirement that at least seventy-five per cent of the voting interests be owned and controlled by Canadians, the Agency has considered the documentation filed and is satisfied that at least seventy-five per cent of the voting interests of the applicant are owned and controlled by Canadians.

With respect to the requirement that the air carrier be controlled in fact by Canadians, control in fact is generally viewed by the Agency as the ongoing power or ability, whether exercised or not, to determine or decide the strategic decision-making activities of an air carrier. It can also be viewed as the ability to manage and run the day-to-day operations of an air carrier. When determining where "control in fact" lies, the Agency carefully examines all actual and proposed business and other relationships between the various shareholders and between the shareholders and the company whose ownership is under review. All actual and proposed operational, managerial and financial relationships are considered.

The Agency has considered the documentation filed by the applicant. The Agency notes that all of the outstanding shares in the applicant are owned by a Canadian. The applicant's directors and officers are also Canadian.

The Agency has reviewed the business relationships that the applicant has with non-Canadians and found that they are at arm's length, they reflect marketplace terms and conditions, and they do not provide the non‑Canadians with the ability to exert undue influence over the affairs of the applicant.

Finally, the Agency notes that the conditions that were previously in place, which resulted in the Agency issuing its two previous application denials, on the grounds that non-Canadians were in a position to exert a dominant or determinative influence over the applicant, are no longer in place.

For the above reasons, the Agency is satisfied that the applicant is Canadian as prescribed in section 61 and as defined in subsection 55(1) of the CTA.

Accordingly, the Agency approves the application for an amendment to delete all references to the Minister of Transport's Order dated February 4, 2008 exempting the applicant from the application of subparagraph 61(a)(i) of the CTA, and a new document of licence will be issued.

Members

• J. Mark MacKeigan
• Jean-Denis Pelletier, P. Eng.