Transat A.T. Inc., one of the largest integrated tourism companies in the world and Canada's holiday travel leader, today announced that it will seek shareholder approval at its 2019 annual and special meeting of shareholders to implement, through amendments to its articles, recent amendments to the Canada Transportation Act (the "CTA") which will increase the permitted level of foreign ownership of Transat. The amendments to the articles, which will be undertaken by way of a statutory plan of arrangement, will increase the permitted level of foreign ownership of Transat by harmonizing the restrictions on the level of non-Canadian ownership and control within the articles with those prescribed by the definition of "Canadian" within the amended CTA.
Prior to the amendments to the CTA, no more than 25% of the voting interests of a Canadian air carrier, and consequently the holding company of a Canadian air carrier, could be owned or controlled by non-Canadians. The Government of Canada's stated purpose in implementing the amendments to the CTA was to attract more foreign investment and encourage growth in the aviation sector by increasing, from 25% to 49%, the permitted level of foreign ownership of Canadian air carriers. At the same time, the CTA amendments introduced two new limitations on voting ownership and control, which capped the respective voting rights of any single non-Canadian and of the aggregate of non-Canadian air carriers at 25% of the voting interests of a given Canadian air carrier.
Completion of the plan of arrangement is subject to shareholder approval and approval of the Superior Court of Québec. Full details regarding the plan of arrangement will be included in the management information circular which will be sent to Transat's shareholders in connection with the shareholder meeting to be held on April 30, 2019.