A new report from the Competition Bureau of Canada, released Thursday, is calling on the federal government to introduce stronger competition within the airline industry, with a particular focus on improving air travel in northern and remote communities.
Titled “Cleared for Take-off: Elevating Airline Competition,” the comprehensive report delivers ten key recommendations aimed at expanding market access, lowering airfare, and enhancing service quality for underserved regions such as Nunavut, Northwest Territories, Yukon, and northern Quebec.
The bureau stresses that air travel is not a luxury but a lifeline in the North—critical for the transport of food, medicine, medical equipment, and mail, as well as for passenger mobility, tourism, and regional development.
Sky-High Costs and Limited Choice in Northern Canada
The report reveals stark challenges faced by northerners. In many cases, flights are operated by a single dominant carrier, with weekly schedules and round-trip fares often exceeding $2,000 on popular routes like Ottawa to Iqaluit. For less-traveled routes, airfares can reach up to $5,000, with overnight layovers and lengthy travel times.
The study included over 120 interviews across the North with residents, businesses, tourism boards, and airlines. It found widespread frustration with the high costs, infrequent service, and lack of options, especially following the 2019 merger of First Air and Canadian North—a move that reduced competition and subsequently increased costs.
Travel Nunavut, which was consulted during the study, emphasized that northern residents need reliable, accessible, and affordable air service, arguing that air travel should be treated with the same priority as highways are in southern Canada.
A Call to Modernize Aviation Policy and Infrastructure in the North
Among its ten recommendations, the Competition Bureau’s report proposes:
- Creating a national working group dedicated to enhancing northern air transportation
- Revising federal aviation rules, such as pilot hour limits, to better reflect Arctic operational realities
- Directing federal infrastructure dollars to airport authorities, rather than to individual carriers
- Upgrading airport facilities to allow open access for multiple airlines
- Ensuring government contracts are open to more airline bidders
- Lowering barriers for new entrants to foster competition—even in single-carrier routes
The report highlighted how a 2018 federal investment in a cargo warehouse at Iqaluit Airport, built exclusively for First Air, created unfair advantages by not being shared with competitors. The bureau recommends ensuring future public investments serve the broader industry, not individual airlines.
Competition Leads to Lower Fares and Better Service
The bureau points to studies showing that introducing even one new competitor on a route can reduce average fares by 9%, while also pushing existing operators to improve service reliability.
Even on monopoly routes, regulatory flexibility and transparent infrastructure development can enhance efficiency and performance. The report also emphasizes the need to remove the federal transportation minister’s authority to override competition reviews, especially for airline mergers—a move that the bureau believes would prevent anti-competitive deals from being approved in the future.
Northern Tourism and Economic Development Also Impacted
The implications of limited air access go beyond passenger inconvenience. The tourism industry, particularly in places like Nunavut, Yukon, and the Northwest Territories, is heavily reliant on dependable flight options. Travel Nunavut notes that constrained schedules and sky-high ticket prices significantly limit inbound travel from southern Canada and abroad.
The lack of competition also affects freight movement, raising the cost of essential goods in remote communities and undermining economic development. For businesses and entrepreneurs in the North, limited air access makes scaling ventures and participating in national markets much harder.
A Need for a National Strategy
The Competition Bureau is calling for a coordinated national strategy to reimagine air service in northern and remote areas. This includes not just competitive frameworks but investment in regional airports, such as expanding runways, upgrading terminals, and building shared cargo and passenger handling facilities.
The report recommends incorporating the voices of northern communities into future policy design, ensuring the solutions are region-specific and address the unique logistical and environmental challenges of Arctic air travel.
A Pivotal Moment for Canadian Aviation
As Canada aims to strengthen its regional connectivity, the recommendations laid out in this report could serve as a blueprint for equitable access across all provinces and territories. With air travel a critical infrastructure in the North, improving competition and lowering fares isn’t just good for business—it’s essential for healthcare, food security, tourism, and community well-being.
The Bureau concludes by stating:
“Competition should be the engine powering affordable, high-quality air service across all of Canada—not just its urban centers.”
If these recommendations are implemented, they may set a new national standard for how governments invest in and regulate air travel, ensuring that no community is left behind in Canada’s vast geographic landscape.
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