The Parliament of Canada recently passed Bill
C-26 which received Royal Assent on June 29, 2000.  Bill C-26 amends the
Canada Transportation Act, the Competition Act, the Competition Tribunal Act
and the Air Canada Public Participation Act. The amendments to the Air Canada
Public Participation Act provide inter alia for an increase to the maximum
individual ownership limit from 10% to 15%.

Air Canada`s articles in their present form currently provide for a
maximum individual ownership limit of 10%. For purposes of reflecting the
amendment to the Air Canada Public Participation Act, Air Canada intends to
submit to its shareholders an amendment to its articles at the next annual
meeting of shareholders at the latest. In the meantime and so as to comply
with its articles, Air Canada will continue to administer the maximum
individual ownership constraint in accordance with the current terms of its
articles - more specifically limited at 10% - until the amendment relative to
increasing the maximum ownership threshold to 15% is confirmed and ratified by
its shareholders.

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