The Blue Sky Policy: Made in Canada, for Canada

From Transport Canada

On November 27, 2006, we officially adopted the Blue Sky Policy to guide the negotiation of air transportation agreements (ATA) with countries around the world. The policy aims to encourage long-term and sustainable competition. It also encourages the development of new and expanded international air services to benefit passengers, shippers and the tourism and business sectors.

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Why these agreements are important

Canada and 190 other countries signed the Convention on International Civil Aviation, also known as the Chicago Convention. The Convention affirms that all countries, including Canada, have complete control over their airspace. So they have to give other countries permission to fly over and within their airspace. This is done by negotiating ATAs.

Bilateral ATAs are treaties that are binding under international law. Once an ATA has been ratified and signed by both countries, it doesn’t have an expiry date. ATAs typically set out operating rights such as the cities to be served, the number and frequency of flights and the number of airlines that can operate. They also specify rules around safety and security.

Types of agreements under the Blue Sky policy

Under the Blue Sky policy, we take a more pro-active approach to negotiating ATAs. The aim of these ATAs is to encourage competition, provide opportunities to grow and develop new services and generally support Canada’s trade objectives.

Each agreement is negotiated on a case-by-case basis. This allows us to assess the risks and benefits of each agreement in relation to Canada’s interests.

ATAs put in place a legal framework within which carriers make their own decisions based on commercial considerations. Expanding an ATA does not guarantee that new services will be put in place. It is up to each carrier to decide whether to use the new business opportunities provided by the ATA.

Three types of agreements are negotiated or amended under the Blue Sky policy:

  • An Open Skies-type agreement allows any number of carriers to operate both direct and indirect services between Canada and another country. Airlines choose the routes to serve, the frequency of the service and the prices of flights, without any restrictions.
  • An expanded agreement modifies an existing bilateral agreement. It generally provides more flexible provisions to carriers. An agreement can be expanded many times.
  • A first-time agreement puts in place a new formal framework to govern scheduled services between Canada and its new partner.

Expanded or first time agreements that are not Open-Skies-type agreements do not necessarily constrain the plans of carriers. In most cases, they contain sufficient rights to allow carriers to launch new services without having to renegotiate or make changes to the agreement.

Countries covered by negotiations under the Blue Sky policy

Under the Blue Sky policy, Canada has concluded new or expanded ATAs covering 106 countries. This includes a comprehensive ATA with the European Union’s 28 member countries, including Ireland and Croatia. All of the agreements concluded under the Blue Sky policy cover 96% of Canada’s overall international passenger traffic and of this, 70% is covered by an open agreement.

It can take several years for an agreement to be ratified as a treaty. So ATAs are often applied administratively once the negotiations are done. This means that carriers can use the rights negotiated in the agreement, even if the ATA has not been ratified.

Open Skies-type agreements with 21 countries

Expanded agreements with 26 countries

First-time agreements with 31 countries

A comprehensive ATA with the European Union, covering the 28 member countries (administratively applied upon signature on December 18, 2009)

Looking to the future

Canada will continue to negotiate new ATAs and expand existing agreements to promote the interests of Canadian consumers and stakeholders, as well as our trade and tourism sectors.

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