Location: National / TRAN
Issue/Source: Budget 2023
Date: April 11, 2023
Suggested Responses
- Budget 2023 outlines the Government of Canada’s clear plan to support a strong middle class, an affordable economy, and a healthy future. This includes important policy and funding commitments in key areas related to Transport Canada’s mandate.
- First, Budget initiatives designed to strengthen Canada’s trade corridors as a down payment on Canada’s National Supply Chain Strategy include commitments to:
- Create a Transportation Supply Chain Office to work with private and public sector partners to improve coordination, respond to disruptions and to increase the capacity, efficiency, and reliability of Canada’s supply chains;
- Develop a collaborative and long-term transportation infrastructure plan; and
- Develop and use transportation supply chain data to reduce congestion, improve performance, and inform future planning.
- Second, the Budget outlines ways the Government of Canada is working to support travel and improve service delivery for Canadians through:
- Investments in VIA Rail to conduct maintenance and to maintain levels of service across its network;
- Funding to support the continued safe and reliable operation of ferry services in Eastern Canada;
- $1.8 billion to the Canadian Air Transport Security Authority (CATSA) to maintain and increase its level of service, improve screening wait times, and strengthen security measures at airports; and,
- $75.9 million to ensure the Canadian Transportation Agency has the resources to address passenger rights complaints, and strengthen the operation of the federal transportation network.
- Finally, Budget 2023 provides support for a clean transportation industry and to protect our environment through investments to establish a Green Shipping Corridor Program to reduce the impact of marine shipping on surrounding communities and ecosystems, as well as continued funding to protect endangered whales and their habitats.
- Budget 2023 will help us continue our work to keep Canada’s world-class transportation system safe and secure, green and innovative.
If Pressed
Railways Response to Interswitching Pilot
- The pilot approach to the extension of the interswitching limit will provide the government with time to assess the impact and effectiveness of the measure and support a decision on whether it is an appropriate long-term solution. The Government of Canada believes a temporary, geographically limited extension is the right approach.
- The rail system is highly complex, with many integrated components. The availability of additional data from this pilot will enable a robust assessment of the policy’s merits, while the Government of Canada is undertaking a more in-depth analysis of the system and existing legislative framework and remedies in the near-term before considering further changes.
- The proposed legislative change will not impact running rights, or enable rail companies to access another’s track’s at a regulated rate. They will enable shippers within a specified distance of an interchange in the prairie provinces to move with their local carrier to an interchange at a regulated rate, where they can access an alternate carrier.
Air Passenger Protection Regulations – Measures to address complaint backlog
- Canada is at the forefront of passenger protections globally and, together with other steps being taken, the Budget 2023 funding for the Canadian Transportation Agency (the Agency) will help prevent the frustrating passenger experiences of last summer and over the holiday season. Canadian passengers need a system they can rely on.
- The bulk of the new funding will make it possible for the Agency to hire more employees to deal with complaints. Funding will also allow for the expansion of certain automated processes to manage the backlog of complaints more efficiently; and will allow the Agency to increase its compliance and enforcement capacity.
Increase of the Air Travel Security Charge
- Revenues from the proposed increase to the Air Travel Security Charge (ATSC) will help support improvements to Canada’s air travel security system expenses, including the funding for the Canadian Air Transport Security Authority (CATSA) announced in Budget 2023.
- The ATSC is intended to offset expenses associated with the security screening of air passengers and their baggage and the wider air travel security system, which includes CATSA’s operations, Transport Canada’s related regulatory oversight, and the contracting of Royal Canadian Mounted Police officers on selected flights.
- ATSC rates were last increased in 2010, by 52.4 per cent.
Background Information
Budget 2023 Investments for Transport Canada (TC)
Investments that will act as a “down payment” toward the National Supply Chain Strategy:
- $27 million to establish a Transportation Supply Chain Office to work with industry and other orders of government to respond to disruptions and better coordinate action to increase the capacity, efficiency, and reliability of Canada’s transportation supply chain infrastructure;
- Collaborate with industry, provinces, territories, and Indigenous Peoples to develop a long-term roadmap for Canada’s transportation infrastructure to better plan and coordinate investments required to support future trade growth;
- $25 million for TC and Statistics Canada to work together & develop transportation supply chain data that will help reduce congestion, make our supply chains more efficient, and inform future infrastructure planning;
- Amendments to the Canada Transportation Act to provide the Minister of Transport with the authority to compel data sharing by shippers accessing federally regulated transportation services;
- A temporary extension, on a pilot basis, of the interswitching limit in the prairie provinces to strengthen rail competition. The National Supply Chain Task Force’s Final Report recommended the extension of interswitching limits to enhance rail competition. The extension of the interswitching limit is intended to support rail competition by providing shippers with access to an alternate carrier at a regulated rate; and
- The launch of a review of the Shipping Conferences Exemption Act to improve marine shipping competition.
Supporting travel and improving service delivery for Canadians:
- $210 million over five years with $117.4 million in remaining amortization, to VIA Rail to conduct maintenance on its trains on routes outside the Québec City – Windsor Corridor and to maintain levels of service across its network;
- $29.9 million over two years for the Ferry Services Contribution Program to support the continued safe and reliable operation of ferry services in Eastern Canada;
- $50.8 million over four years to expand eligibility for the Electronic Travel Authorization Program to low-risk, trusted travelers from additional visa-required countries; and
- $1.8 billion over five years to the Canadian Air Transport Security Authority (CATSA) to maintain and increase its level of service, improve screening wait times, and strengthen security measures at airports.
Clean transportation and environmental protection:
- $151.9 million for TC and partner departments to continue to protect endangered whales and their habitats; and
- $165.4 million over seven years to establish a Green Shipping Corridor Program to reduce the impact of marine shipping on surrounding communities and ecosystems.
Increase of the Air Travel Security Charge (ATSC)
Budget 2023 proposes to increase ATSC rates by 32.85 per cent, effective May 1, 2024. Revenues will support the financing of air travel security system expenses, including the $1.8 billion over five years for the Canadian Air Transport Security Authority (CATSA) announced in Budget 2023.
The increase means that the charge on one-way domestic airfare will increase by $2.46 (from $7.48 to $9.94), or $4.91 ($14.96 to $19.87) for a round-trip fare. The charge on a flight from Canada to the United States (except Hawaii) will increase by $4.18 (from $12.71 to $16.89), and the charge for a flight to other international destinations will increase by $8.51 (from $25.91 to $34.42).
Air Passenger Protection Regulations – Measures to address complaint backlog
The coming into force in late 2019 of the Air Passenger Protection Regulations (APPR), have led to a high demand for the Canadian Transportation Agency’s (the Agency) dispute resolution services, and corresponding incoming complaint volumes have increased tremendously. Between the coming into force of the APPR in December 2019 and the start of the pandemic only three months later, the Agency received about 11,200 complaints, more than doubling its previous annual average. Despite low passenger volumes during the pandemic, the Agency continued to receive about 1,000 complaints per month. The after-effects of the pandemic on the air industry and the manner, in which many air carriers managed, the recovery period led to a substantial increase of complaints. As it stands, the Agency's complaints backlog has grown to over 27,500 as of the end of October 2022.
On March 14, 2023, the Government of Canada announced $75.9 million over three years, starting in 2023-24, to ensure the Agency has the resources for enforcement and compliance, and to provide dispute resolution services to Canadians and businesses when they are unable to resolve issues directly with air, rail, or marine service providers.
Budget 2023 proposes to amend the Canada Transportation Act to strengthen airline obligations to compensate passengers for delays and cancellations. Budget 2023 also announced the Government of Canada’s intention to amend the Canada Transportation Act to make the Agency’s complaint adjudication process more efficient, and to provide the Minister of Transport with the authority to impose a regulatory charge on airlines to help cover the costs of resolving air passenger complaints.