Ottawa has sold its stake in Air Canada: sources

Two senior federal government sources have confirmed to CTV News that the federal government has sold its stake in Air Canada.

The news was first reported by the Globe and Mail.

During the COVID-19 pandemic in 2021, the government purchased a six per cent stake in the airline for $500 million as part of a bailout package.

Ottawa’s rescue deal with Air Canada at the time included a $5.9-billion loan from the government to help support the airline after it lost billions of dollars during the pandemic.

As of Thursday afternoon, Air Canada shares closed at $25.28 on the Toronto Stock Exchange, up 23 cents.

CTV News reached out to the federal transport minister’s office and was referred instead to Deputy Prime Minister and Minister of Finance Chrystia Freeland’s office, who has not yet responded.

Last week, Transport Minister Anita Anand told CTV News she was “examining the particular legal relationship” with Air Canada in an effort to figure out how to dissuade the airline from bringing in additional carry-on fees.

Air Canada has yet to respond to CTV News’ request for comment.

Ian Lee, associate professor at Carleton University’s Sprott School of Business, says the government should have never bought shares in Air Canada in the first place.

“Its role is the referee of the hockey game, it should not own the hockey team or tell Sidney Crosby when to shoot the puck,” he told CTV News Channel.

“The government of Canada provided billions of dollars to many thousands of corporations in Canada and did not take ownership positions in all those other companies.”

When asked about whether Ottawa selling its shares in Air Canada is in any way connected to the government’s spending announcement on Monday, Lee says yes.

“There’s an awful lot of buzz that they’re going to crank up spending yet again. And so, the government needs money. They’re rattling the cupboards to see what bits and pieces can be sold off.”