Q&A with the company buying Canadian North

The president of the company purchasing Canadian North for $205 million says it understands the North and will work to improve service for northerners.

Exchange Income Corporation, based in Winnipeg, already owns smaller northern airlines like Calm Air.

EIC has now agreed a deal with Makivvik and the Inuvialuit Development Corporation to purchase Canadian North. The transaction needs regulatory approval before it can be finalized.

Carmele Peter, EIC’s president since 2014, appeared on Afternoons at the Cabin on Tuesday to discuss why her company wants to purchase Canadian North, how it will approach running the airline, and what northern customers should expect.

This interview was broadcast on February 25, 2025. The transcript has been lightly edited for clarity.

Ollie Williams: What attracted EIC to Canadian North?

Carmele Peter: EIC has been in the aviation business since our very first acquisition back in 2004, a company called Perimeter Aviation, and they were involved in providing service into northern Manitoba. We’ve grown our portfolio of companies since then.

Through those acquisitions, we obviously got to know Canadian North and, in fact, have provided each other services over the years. One of our airlines, Calm Air, provides service in the middle of Nunavut – the middle region, Kivalliq – and then Canadian North on either side and in the Northwest Territories, where we do not provide scheduled charter and cargo services. So it became a kind-of natural adjunct for us to see if Canadian North was interested in selling and bringing it into our portfolio, to allow us to more holistically look at providing services across the North.

What we bring is our size, scale, scope and experience, adding on to what Canadian North’s been able to create and establish over the years, to hopefully provide a stronger airline that can benefit from efficiencies, that can use each other’s resources to provide an enhanced level of service. It was a natural trip for us, adjunct to what we do, and allows us to provide more seamless connectivity in the North.

This is a transaction that obviously affects people in dozens of northern communities who rely on Canadian North. In some cases, it’s their only transportation link. What is your message to northern residents about how EIC is now going to approach running the airline?

We recognize that air travel is not for leisure purposes. It is an essential service. People do rely on it. They rely on it for medical needs. They rely on it for food going up to the communities. So it is critical. And we’ve recognized that for years and years, since we’ve owned airlines, and we operate in the North so we understand the significance.

For those in the communities, we think this is a very positive thing. We think the combined entities, when that transaction gets approved, will make for hopefully an aviation operation that has a higher level of service, that has greater access to resources.

If an aircraft goes mechanical, well, you have whatever your fleet might be in that singular operation. We have a larger fleet that we can potentially draw upon to perhaps provide that better level of service, or recovery when we’ve had blizzards, We can also provide buying power. When you’re buying, let’s say, props for the aircraft, those are all things that cost a lot of money. If you can buy on a greater bulk basis, again, it’s a way of trying to keep costs as low as we can. Obviously, that helps us manage prices for the members in the communities who are relying on this essential service, so that the fees or fares can still continue to be reasonable.

I always say the best predictor of the future is the past. If you look at the airlines that we operate in the North, I think what you’ll see is a track record of investment, not just in tangible things in the communities, but also in the people. We’re true believers in trying to ensure that there are training and employment opportunities.

One of the programs we run is the Atik Mason program, a fully funded pilot school that we have created over the years in various locations. We had one in Rankin Inlet where we paid for all the travel, we paid for all the training. We make sure that there are Elders there. We make sure that the individuals coming from the communities can go back to the communities to visit their families, and we support them throughout their journey.

What happens is they come back and they’re a successful pilot, and they’re a great role model and for us, who’s better as a pilot that’s likely to remain with us than someone in the community? Someone who’s able to fly in their communities. Those are the types of things you should expect from EIC, not just because I’m saying it, but because we’ve done it and we’re going to continue to do it.

In 2023, the airline’s owners at the time said it was losing millions. Your press release yesterday spoke about making Canadian North more efficient. To northerners, the word efficient has come to mean the idea of a service being reduced over time. What does the word efficient mean to you and to EIC, and why spend $200 million on an airline losing money?

Efficient to us does not mean reduction in service because, quite frankly, you’re only as good as your communities. If you reduce service then you’re going to have disappointment in the communities. They’re not going to want to fly on you, they’re not going to be supportive of the airline. So that’s counterproductive.

What we call efficiencies – what we mean by that – is the buying power, the access to pilots. We own the largest flight school in Canada, Moncton Flight College. The sharing of maintenance so that you can overall get lower costs. All of that is what we can do from our capacity and our scope, not from a level of service, because, quite frankly, we’re looking to improve our service in these communities after we combine what Canadian North has with what EIC has through our air operators.

Efficiency is not a lower standard. Efficiency is so we can improve the standard and try to control the cost, which as we unfortunately all have experienced, has increased at a much faster pace than CPI.

What sorts of improvement, a year or two down the line, do you hope EIC might be able to introduce?

The first is access to capacity. The other is overall improvement of training. There’s lots of things you can do when you combine the flight attendants and talk about, again, how do we best train? How do we best service the community? Are there things that we should be looking at? These are all things you can tackle when you have the resources that EIC brings.

If there are investments that are needed, one of the things that EIC can bring is capital investments. If it’s aircraft that are required, well, we have the capital to be able to do that. Those are some of the things we’ll look to, to try and increase the level of service over the years under our ownership

Lots of northerners are Inuit beneficiaries of one form or another. Does Canadian North intend to maintain a fare structure that allows beneficiaries to travel for a lower cost than others?

We believe it in the airlines that we own currently, so you can imagine what our view will be and how supportive we’ll be with respect to Canadian North fares that they have in place for the regions that they service. The beneficiaries are a key component of a successful airline. We know how much they rely on these fares, and so we believe in it. Of course we’ll continue to do it.

In the past, federal regulators have taken a very keen interest in Canadian North. I’m thinking particularly of the merger with First Air in 2019: that resulted in the regulator setting out quite a strict set of conditions for the airline’s operations. Are you expecting this transaction to come with a lot of regulatory scrutiny and a fresh set of conditions that Canadian North and EIC will need to meet?

There are things that are statutorily required. The Competition Bureau will be looking at this transaction because we have to satisfy the test in which they review it. Because it’s a transportation undertaking, Transport Canada also will be looking at this transaction. That’s driven by the nature of what we’re doing. Yes, we have to go through all of those approvals.

As you probably will remember from 2019 I think it took a while, and we have a likely federal election in between, so who knows what that might do with timing.

As relates to conditions, this is a little different than the old Canadian North and First Air merger because we don’t overlap in what we do. We’re kind-of side by side is maybe the best way to describe it. From an overall perspective, you’re not changing the landscape. You’re changing ownership, but not the landscape.

Together with our history and how we’ve done things, we’re hopeful that the government sees this as a positive transaction and, because there are no true competition issues, we’re hopeful that the approval process is shorter. But when it comes to government, I learned a long time ago not to try and predict how long things take. Fingers crossed that we get through it relatively quickly. If not, we’ll listen to whatever concerns they have and attempt to address them.