LOCATION: National
ISSUE/SOURCE: Complaints regarding the Canadian Transportation Agency
DATE: May 2025
SUGGESTED RESPONSES
- In February 2023, Finance Canada approved $75.9 million (M) in additional funding for the Canadian Transportation Agency (the Agency) over three years, starting in 2023-24.
- The Agency is funded through fiscal year 2025-26 to simplify and modernize its dispute resolution program, increase its compliance monitoring and enforcement program, and implement a cost recovery regime.
- The Agency recently consulted on revised Air Passenger Protection Regulations (Canada Gazette I) which aim to make the regime more clear and less complex for travellers and air carriers. They have also recently consulted on a cost recovery approach to offset the costs of processing complaints.
- Reducing the complaints backlog, further streamlining the complaints process, and clarifying the regulations are top priorities and I have asked my officials to work closely with the Agency to find solutions.
IF PRESSED
AGENCY BACKLOG
- The additional funding has allowed the Agency to make progress in terms of its annual complaints processing. That said, a backlog of this size is not acceptable and finding solutions is a top priority.
COST RECOVERY
- The Agency consulted on cost recovery. I look forward to receiving their official proposal.
AGENCY BUDGET
- Over the past three years, incremental funding has been allocated to the Agency to address increased responsibilities in administering the air passenger complaint regime.
AGENCY OVERSIGHT
- The Agency is an independent, quasi-judicial tribunal and economic regulator, operating at arm’s length from government and has operational autonomy.
BACKGROUND INFORMATION
- Over time, the Agency's mandate has become more relevant than ever before. The Air Passenger Protection Regulations– which were made pursuant to the Transportation Modernization Act – establish robust entitlements for passengers flying to, from, and within Canada. The Accessible Canada Act and the complementary provisions of the Accessible Transportation for Persons with Disabilities Regulations and the Accessible Transportation Planning and Reporting Regulations are significant steps towards making sure persons with disabilities are treated with dignity, and barriers are removed when using federal modes of transportation.
- The Air Passenger Protection Regulations fully came into force in December 2019, right before the onset of the COVID-19 pandemic. Its objective was to create a more predictable and balanced approach to ensure that: passengers know their rights; air carriers understand their obligations; operators do not face an undue burden or lose competitiveness that could negatively affect ticket prices for consumers; and proper complaint resolution and enforcement mechanisms are provided.
- The Agency is continuing to experience a high demand for its dispute resolution services related to the air travel experience. The pandemic, followed by a sharp increase in passenger demand, severely tested the effectiveness of Canada’s passenger rights regime. It exposed the complexity and lack of clarity around compensation, driving a huge increase in complaints to the Agency, which currently has a backlog of 84,300.
- While the Air Passenger Protection Regulations clarifies minimum standards of treatment and compensation that must be provided to passengers based on the level of control an airline has over a flight disruption, it is still challenging for them to know exactly what entitlements they are owed. This has led to many turning to the Agency to seek recourse as carriers reject compensation claims based on factors such as degree of control over a situation, and whether it was safety-related.
- As a result, the Agency continues to experience a high demand for its dispute resolution services and is challenged to stabilize its operations related to consumer protection for air passengers and the transportation of persons with disabilities. It is currently projected that it will take about one year before most air passenger complaints can be initially addressed by the Agency.
- The Agency has also implemented a new process for resolving air travel complaints, which came into force on September 30, 2023, and replaced the previous resource-intensive process with a simplified and time-bound mediation and arbitration process conducted by complaint resolution officers, primarily Canadian Transportation Agency staff.
- The Agency has already augmented its capacity to address complaints based on a combination of additional funding and internal process efficiencies. In comparison to a processing capacity of 5,000 complaints per year in 2019, in 2023-2024, the Agency resolved 16,759 air travel cases, 10,829 of which were processed in the six-month period under the new process.
- Finance Canada conveyed its decision to allocate $75.9M over three years, starting in 2023-24 ($22.5M in 2023-24 as part of Supplementary Estimates A as well as $27.0M in 2024-25 and $26.4M in 2025-26 as part of the Agency’s Annual Reference Level Update).
- Despite these improvements, the backlog continues to grow and further efficiencies must be identified. Transport Canada is committed to working with the Agency to identify process improvements and support their cost recovery efforts.