Complainants dissatisfied with investigation into Nunavut airlines
“While there may be some appreciation of our northern issues, we have to live this reality. We do not have a road system”
Municipal and territorial governments remain concerned following the release of a Competition Bureau investigation that failed to find sufficient evidence for anti-competitive behaviour at Nunavut’s two biggest airlines.
That much is apparent after a pair of telephone conferences that the Competition Bureau held with the Government of Nunavut and City of Iqaluit to discuss its report, which was released online Aug. 22.
The city and GN filed formal complaints with the bureau against Nunavut’s three main airlines as early as 2015, citing decreases in passenger service, frequent cargo delays and botched medical travel arising from a series of codesharing and service deals between the companies.
“When you have two dominant players in the industry that make or appear to make motions that decrease the level of competition or animosity between them, it brings concerns,” Nunavut’s senior manager for procurement, logistics and contract support services, Mark McCulloch, told Nunatsiaq News Aug. 25.
The Competition Bureau’s three-pronged investigation dismissed allegations of anti-competitive behavior in the Kivalliq between First Air and Calm Air.
The report also said the bureau dropped its investigation into the heavily criticized codeshare between First Air and Canadian North—mainly because the airlines canceled the policy shortly after the bureau filed court requests for company records.
But while not assigning any wrong-doing, the bureau admitted that alleged predatory pricing by First Air and Canadian North likely affected the upstart flight operator, Go Sarvaq, which was pushed out of the Iqaluit-Ottawa flight market before their first flight ever left the tarmac.
Go Sarvaq said in a public statement following the report’s release that it respected the conclusions of the bureau, but added that the ruling was “frustrating” because the basement-level ticket deals offered by First Air and Canadian North that edged them out of the market—as low as $299 one-way to Ottawa in May 2016—haven’t appeared since.
“Nunavut is heading into an election, and we encourage you to make an affordable air transportation model a conversation during this election,” Go Sarvaq President Adamie Itorcheak said Aug. 23.
Iqaluit Mayor Madeleine Redfern said city councillors were equally critical of the report, after speaking with the Competition Bureau by phone about the realities of travel in the North.
“Many people are unable to leave this territory at a cost of [nearly] $3,000 per person,” Redfern said Aug. 24.
“I said that while there may be some appreciation of our northern issues, we have to live this reality. We do not have a road system, you cannot drive in and out of our territory.”
Other problems that Iqaluit councilors raised during a closed-door conference call with the bureau included the overall increase of ticket prices from historical levels, the failure of regulations to appreciate a northern or remote context, and the “chilling effect” that the bureau’s ruling will create for any new potential new competitor planning to enter the Nunavut market.
“The Competition Bureau said they were bound by their mandate, bound by their law and they could understand that it’s very difficult living in a northern, remote region,” Redfern said, of the bureau’s position during the call.
Because the bureau’s report was an assessment, its findings cannot be appealed.
But the independent watchdog agency told the GN and City of Iqaluit that it would re-evaluate any new evidence.
Redfern said one avenue left open would be to write letters to federal departments, such as Indigenous and Northern Affairs Canada or the Department of Transportation.
That position has yet to be adopted by city council, as the call with the Competition Bureau took place informally. The next city council meeting is scheduled for Sept. 5.
McCulloch added that the GN is a large player in Nunavut’s airline marketplace, and a series of lucrative contracts for duty and medical travel—set to expire in 2019—gives the government some added clout.
A recent RFP for an airline specialist to analyze Nunavut’s air industry ahead of awarding those new contracts closed with five prospective bidders, MuCulloch confirmed.
Those bids have yet to be reviewed, but part of the eventual airline analysis will explore new ways for the GN to procure its medical and duty travel.
MuCulloch added, “we’re not afraid to call the Competition Bureau, the airlines know that.”
Added space and capacity within Iqaluit’s new 9,000-square-foot, $300-millon international airport terminal could also attract new airlines to Canada’s eastern Arctic.
But at this point, MuCulloch said he has heard no news of any new airline considering routes to Nunavut.