Decision No. 609-A-2006

November 3, 2006

File Nos. M4161/A1036
M4210/A1036-1

Ascent Helicopters Ltd. (hereinafter the applicant) has applied to the Canadian Transportation Agency (hereinafter the Agency) for a licence to operate the service set out in the title. The application was received on March 8, 2006.

Pursuant to subsection 29(1) of the Canada Transportation Act (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the applicant has agreed to an extension of the deadline until March 3, 2007.

The applicant filed an affidavit attesting that within the twelve months preceding the filing of the application it did not contravene section 59 of the CTA in that it has not sold, caused to be sold or publicly offered for sale in Canada transportation in respect of the applied for air services without holding the required licences. The applicant has also undertaken in respect of the air service applied for that it will not contravene section 59 of the CTA prior to the issuance of the applied for licence.

The Agency has reviewed and considered the application and the material filed in support thereof. The Agency notes that the applicant does not hold a valid Canadian aviation document required for the operation of a domestic service, small aircraft; but it has filed proof that it has prescribed liability insurance coverage in respect of the service to be provided under the licence. Accordingly, the Agency finds that the requirement set out in subparagraph 61(a)(ii) of the CTA remains outstanding.

In order to obtain a licence to operate the proposed service and pursuant to subparagraph 61(a)(i) of the CTA, the applicant must establish to the satisfaction of the Agency that it is Canadian. Subsection 55(1) of the CTA states that "Canadian" means a Canadian citizen or a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act, R.S.C., 1985, c. I-2, as amended, 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 percent, 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 application and all documentation filed in support thereof. This also includes the information and documentation filed on July 4, September 15 and October 19, 2006.

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 percent of the voting interests are owned and controlled by Canadians, the Agency has considered the documentation filed and is satisfied that at least seventy-five percent of the voting interests of the applicant are owned and controlled by Canadians.

With respect to the requirement that the applicant be controlled in fact by Canadians, the Agency notes that the applicant has a substantial and close relationship with a non-Canadian who is also a shareholder of the applicant. The Agency is of the opinion that the relationship that exists between the applicant and the non-Canadian shareholder results in this person being able to exert great influence over the affairs of the applicant. In addition, the evidence demonstrates that the influence is dominant or determining and results in this person exerting control in fact over the affairs of the applicant. In light of the above, the Agency finds that the applicant has not satisfied the Agency that it is Canadian as defined in subsection 55(1) of the CTA in that it has not satisfied the Agency that it is controlled in fact by Canadians.

The applicant, therefore, has failed to meet a basic market entry requirement which is in place to maintain a strong Canadian aviation industry. Section 61 of the CTA states, in part, that the applicant must establish to the satisfaction of the Agency that it is Canadian, holds a valid Canadian aviation document, and has the prescribed liability insurance, before a licence to operate a domestic service can be issued. Accordingly, the Agency hereby denies the application.

Due to the confidentiality of the documents filed by the applicant, a separate letter will be sent to the applicant, in confidence, setting out the detailed reasons for the Decision.

Members

• Guy Delisle
• Baljinder Gill