Canadian Transportation Agency: Budget and Complaints
Location: National
Issue/Source: TRAN
Date: March 2024
Suggested Responses
- In February 2023, Finance Canada approved $75.9M in additional funding for the Canadian Transportation Agency (the Agency) over 3 years, starting in 2023-24.
- This funding is to allow the Agency to simplify and modernize its dispute resolution program, increase its compliance monitoring and enforcement program, and implement a cost recovery regime.
- The Agency provides an important service for Canadians, and continues to work closely with TC to ensure it has adequate mechanisms and resources to deliver on its mandate to Canadians, including consumer protection for air travellers, and ensuring barrier-free travel for persons with disabilities.
If Pressed
- The Agency’s mandate includes:
- to help ensure that the national transportation system runs efficiently and smoothly in the interests of all Canadians;
- to protect the human right of persons with disabilities to an accessible transportation network; and
- to provide consumer protection for air passengers.
- Like all government departments and agencies, the CTA is adapting to a post-pandemic environment, and continues to carry out its mandate and provide these important services to Canadians.
Agency Budget
- The Agency’s permanent funding has remained stable at around $30M per year over the past decade. In addition, over the past 3 years, incremental funding has been allocated to the Agency to address increased responsibilities in administering the air passenger complaint regime.
- Finance Canada conveyed its decision to allocate$75.9M over 3 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).
Oversight of Agency
- The Agency is an independent, quasi-judicial tribunal and economic regulator. It makes independent decisions and determinations on air transportation, under the authority of Parliament, as set out in the Canada Transportation Act and other legislation. As a federal administrative agency, the Agency operates 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 (APPR) – 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 (ATPDR), are significant steps towards making sure persons with disabilities are treated with dignity, and barriers are removed when using federal modes of transportation.
- The APPR 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, as well as an increase in passenger demand in the spring and summer 2022, 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 67,400 and rising.
- While the APPR 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 already augmented its capacity to address complaints based on a combination of additional funding and internal process efficiencies. It has increased processing capacity from 5,000 complaints per year in 2019, to currently 12,250 per year.
- The Government of Canada has taken steps to ensure that passenger complaints are getting addressed as quickly as possible and is continuing to work with the Agency to address its financial requirements to ensure it has the appropriate mechanisms and resources to carry out its mandated functions, specifically in regard to the APPR.