Corporate Responsibility

Introduction

This Tax Strategy statement is provided in compliance with Schedule 19 of the UK Finance Act 2016 for the year ended December 31, 2017.

Incorporated under the laws of Canada, Air Canada is the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. transborder market and the international market to and from Canada.

Approach to Taxation Risk Management and Governance Arrangements

It is the policy of the Company to comply with all applicable laws and regulations, including tax laws. No employee of the Company has authority to violate any law or to direct another employee or any other person to violate any law on behalf of the Company, in accordance with the Company’s Code of Conduct.

The overall responsibility for the governance and management of taxation lies with Air Canada’s Chief Financial Officer. Operational responsibility for tax compliance, risk management and day-to-day tax matters sits with the Managing Director, Taxation, who in turn manages a group of skilled and experienced tax professionals.

Attitude Towards Tax Planning

Air Canada adopts a conservative approach towards tax planning and does not engage in aggressive tax planning. All tax planning is aligned with a genuine commercial purpose.

When facing uncertainty on the interpretation of tax laws, the Company consults with external independent advisors.

Acceptable Level of Risk in Relation to UK Taxation

The tax strategy is in line with the overall Air Canada risk framework.

Air Canada pays the proper amount of tax and incurs significant expenditures to ensure it complies with its tax obligations not only in the UK, but around the world where Air Canada flies. Guidance is obtained from qualified external advisors to keep up to date with UK legislation and HMRC policy.

Dealings with HM Revenue and Customs (HMRC)

Air Canada aims to maintain a good relationship with HMRC by complying with its tax filing, tax reporting and tax payment obligations in the UK. The Company is committed to cooperate with HMRC and to respond to communications in a clear and timely manner.