Arctic’s ‘only highway’ takes sharp turn with Canadian North sale
‘Acquisition-oriented dividend company’ might have different priorities from Inuit rights-holding organizations
A Canadian North airplane prepares to land at the Pangnirtung airport in a file photo from September 2023. A Winnipeg company says it plans to buy the airline in a $205-million deal announced Monday. (File photo by Corey Larocque)
Canadian North is, as a Nunavut cabinet minister described it, “our only highway,” but that route took a sharp turn Monday with news the airline is being sold. In the coming months, we’ll learn if the road ahead will be bumpy or a smooth ride.
Exchange Income Corp., a Winnipeg company that already owns Calm Air and Keewatin Air, announced Monday its plan to buy Canadian North from Makivvik and Inuvialuit Regional Corp., the two Inuit companies that co-own it.
It’s going to pay $205 million for the airline. Exchange Income Corp. noted the sale is subject to federal government regulatory approvals, which it expects will happen later this year.
The announcement came as a surprise. Certainly, there was no indication a sale was afoot when Canadian North president and CEO Shelly De Caria gave a speech to a couple hundred people at the Aqsarniit Trade Show and Conference gala dinner Feb. 20 in Ottawa.
Such a big change is important to people in Nunavut and Nunavik.
“Air transportation is essential to Nunavut, connecting our communities and supporting vital services, and it is our only highway,” Nunavut Economic Development and Transportation Minister David Akeeagok said Tuesday in the legislature.
Exchange Income Corp., which is publicly traded on the Toronto Stock Exchange, describes itself on its website as an “acquisition-oriented dividend company focused on opportunities in aerospace and aviation and manufacturing.”
That sounds like a company that buys up other companies, then squeezes them for a profit so it can pay dividends to its shareholders.
A similar thing played out in Canada’s newspaper industry about 20 years ago — back when income trust funds were the big thing. One conglomerate, Canwest, gobbled up smaller newspapers across the country in 2005. It used its acquisitions to generate a stream of payments for its investors.
Saddled with the debt it incurred through the acquisitions, Canwest collapsed three years later. It went into bankruptcy and sold off its assets.
The result was bad for newspapers, readers and ultimately for the company itself.
Northerners have a love-hate relationship with Canadian North. It’s an essential service in Nunavut and Nunavik. But people can’t help but gripe about its prices, flight frequency to smaller communities, baggage fees, lost luggage and delayed flights.
And that was when it was co-owned by Makivvik and Inuvialuit — two Inuit rights-holding organizations that exist to serve Inuit.
Time will tell what’s down the highway with an owner that answers to investors instead of to Inuit beneficiaries.
“Squeezes them for a profit so it can pay dividends to its shareholders.” describes any business ever. The North should wish for more capitalism, not less.
The major airlines no longer having an image issue of moving in on “Inuit” business to fly to Iqaluit will crater that cost, then CDN North will need to get much more lean and operationally well run. See affordability of YK’s flights.
Nunavut must one day decide if it wants to go forward or go back
Now we as the Inuit and the True Northerners,, we need to buy up that company from Winnipeg… you hear?
They did try. Just after ’99.
It was a disaster.
Our little sik-sik hole in Nunavut also heard, (through the grapevine,of course), the mail will be delivered daily now since Nunavut has arrived.🥳🥳🥳🎵🎵🥳🥳🎵🎵🤪🤣🤣🤣
Get ready for a bumpy ride
From arviat to rankin over 300 one way
While it was Canadian north from Iqaluit to pang one way 180 bucks with beneficiaries
Thanks for the article, Corey; we know you are trying your best to keep us informed and to bite your tongue when appropriate.
Exchange Income Corp has been around since 2004 when, with a few employees and very little revenue, it acquired Perimeter Aviation. Since then it grew to having over 3,000 employees and $800M revenue in 2015 and $1.3 sales in 2019. Today it has over 8,000 employees and revenues were nearly $3B in 2024.
It has subsidiaries Calm Air (N Manitoba and Kivalliq, NU); Carson Air (northern BC); Keewatin Air; Custom Helicopters (N. MB, BC and NU); Perimeter Aviation (N MB and N Ontario); PAL (Newfoundland, Labrador, N Quebec, NS and NB); an aircraft leasing and parts division; and a crew training subsidiary. It also owns a dozen diverse manufacturing companies across Canada.
It might just be that EIC is the ideal partner for CN. Rather than the ‘route’ taking a sharp turn it’s more likely a lot of sharp turns will be removed. Also, currently, Canadian North’s board of directors and senior management team are mostly staffed by people with no business experience or airline training or experience. It’s the opposite at Exchange Income Corp
As for the decline in newspapers over the past twenty years, I’m pretty sure air travel and air cargo businesses are on a different trajectory than community tabloids.
Too many communities, too far apart with too few people in them.
Unrealistic routes with outrageous prices. A shame for anyone who works in the North.
This is wonderful news. EIC is a well-managed company that doesn’t “squeeze for a profit” so it can pay dividends to its shareholders. Rather, it manages competently so that there will be profits – and yes, they go as dividends to the shareholders, as do the profits of all companies. Someone commented that northerners should buy the company. There is nothing to stop anyone with a bit of cash from buying shares and collecting a dividend which today is 5.17% annually. That’s a respectable dividend in these rough economic times.