Canada will lift the upper limit for foreign investment in airlines to 49% to encourage more competition and lower fares.
The current limit stands at 25%.
"We will set the conditions for lower fares and increased competition by changing the rules on ownership in Canada’s passenger airline industry," transport minister Marc Garneau said.
However Garneau added that no single entity would be permitted to own more than 25% eqiuty in a Canadian airline.
The move would aid conditions for the creation of new low-cost airlines, he said.
"For any who are out there starting a new airline, it maybe gives them more opportunities. It’s a good positive step forward."
The minister said although the new rules are not yet in force, new airline startups Canada Jetlines and Enerjet would be allowed to pitch for foreign investment immediately.
Garneau said a new consumer bill of rights will also be introduced outlining minimum requirements and clearly defined compensation payable by airlines for overbooked flights or lost baggage.
