In a statement, Ottawa says the review will be done with input from the Commissioner of Competition, who will assess impacts on competition.
The assessment will include consultations with industry and other stakeholders, other government departments, other levels of government, as well as the public.
Transport Canada has been given until Dec. 5 to complete the review and provide it to the transport minister, who would then provide a recommendation to cabinet concerning the deal, which requires regulatory approval.
WestJet announced in March its plan to buy Sunwing, a move that would bolster its holiday tour business. Financial terms of the agreement, which would see Sunwing’s shareholders become equity holders in the WestJet Group, were not disclosed.
Under the deal, WestJet has said it plans to create a new tour operator unit based in Toronto that would include Sunwing Vacations and WestJet Vacations as separate brands. The airline has said it would also expand to include Sunwing Airlines, adding capacity as it turns seasonally operated aircraft into year-round jets.