IMPROVING AIR PASSENGER RIGHTS
Context
In December 2019, the creation of the Air Passenger Protection Regulations (APPR) provided an important framework of rights for Canadians when air travel does not go as planned, clarifying 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. Our air sector was incredibly hard-hit by the COVID-19 pandemic. Last summer, as the air sector entered recovery from the pandemic and passenger volumes surged, there were challenges that submitted this new passenger rights regime to a previously unimaginable stress test.
These events exposed complexity and a lack of clarity in the regime around eligibility for compensation, leading to a surge in complaints at the Canadian Transportation Agency (Agency). The current regime allows for a broad interpretation of the categories of disruption. A trend is being observed that carriers are increasingly classifying flight disruptions as being within their control but required for safety purposes or outside of their control, to avoid providing compensation, which is resulting in a large backlog of complaints at the Agency and the perception that the onus is on the passenger to prove the merit of their request for compensation even though they are typically unaware of the cause of the disruption. The Agency now has a backlog of over 43,000 air travel complaints, up from 12,934 at the end of March 2022. These events have also exposed other concerns with the system, such as the costs and processes associated with administering the regime being borne by taxpayers.
The proposed amendments to the Canada Transportation Act (Act) would strengthen Canada’s passenger rights regime, streamline the processes for administering air travel complaints made to the Agency, and shift some of the financial burden from government to industry to enable the Agency to carry out its mandate more efficiently and allow it to and offset financial pressures, while providing better service to travellers. These amendments would be a continuation of this Government’s commitments to strengthen air passenger rights and align with Transport Canada’s core responsibility and commitments to foster an efficient and essential transportation system, implementing rules and policies that promote sufficient choice and improved service to Canadian travellers.
Summary of the measures
As a result of the aforementioned, the proposed legislative changes to the Act would:
- Modify the regulation making authorities of the Agency to enable it to remove the broad categories of disruptions (within the carrier’s control, outside the carrier’s control and within the carrier’s control but required for safety) and, instead, make compensation and standards of treatment mandatory for all disruptions, unless the disruption was caused by circumstances that would be specifically defined in regulation made by the Agency (in consultation with the Minister of Transport), in which case the air carriers would be exempted from the compensation requirement.
- Impose a greater burden of proof on air carriers by requiring compensation unless the air carriers can demonstrate that a disruption falls under a specifically predefined situation where compensation is not owed.
- Create a new regulation-making authority for the Agency to regulate, in consultation with the Minister of Transport, for requirements when baggage is delayed, and to prescribe refunds when there is a Government Travel Advisory.
- Overhaul of the current dispute resolution process of air travel complaints, which includes an adjudication process by Governor in Council (GiC)-appointed members, to replace it with a simplified complaint resolution process conducted primarily by Agency staff. This new process for air travel complaints includes additional consequential amendments to the Act to:
- Require air carriers to have an internal process in place to deal with claims for compensation within 30 days.
- Give the authority to the Chairperson of the Agency or a person designated by the Chairperson the authority to appoint complaint resolution officers, to deal with eligible complaints and to consider whether the complexity of a complaint requires it to be referred to a panel of at least two GiC-appointed members of the Agency, which would act as complaint officers for the purpose of issuing a decision on the complaint.
- Provide the Agency with the authority to issue binding guidelines to assist complaint resolution officers in carrying out the complaint process including the procedures for the complaint processes and to provide guidance on how the APPR should be applied.
- Allow the Agency to establish fees or charges, and require that air carriers pay for the costs for of the complaint resolution process of eligible complaints.
- Require the Agency to publish a summary of an order or the entire order once a decision has been issued on a complaint.
- Broaden the fee-setting authority of the Agency to allow it to make rules in consultation with the Minister of Transport to implement regulatory charges to cost recover for its various responsibilities attributable under the Act.
- Allow the Agency to increase the maximum amount of Administrative Monetary Penalties applicable to the APPR to $250,000 for corporations.
- Provide the Agency with the authority to enter into compliance agreements with air carriers.
Regulation-making authority of the Agency with respect to air carriers’ obligations towards passengers
As a result of these amendments to the Act, the Agency would be able to amend and strengthen, in consultation with the Minister of Transport, the APPR to make them clearer and less complex for both travellers and air carriers and ensure that travellers are fairly compensated in all cases where disruptions occur except where there are specifically defined exceptions in the regulations.
Moreover, the Agency would be able to regulate, in consultation with the Minister of Transport, for the standard of treatment applicable when disruptions listed on the list of exceptions apply; for requirements when baggage is delayed, and to prescribe refunds when there is a Government Travel Advisory.
Greater burden of proof on air carriers
The amendments would impose a greater burden of proof on air carriers where it is presumed that compensation is payable to a complainant unless the air carrier proves the contrary and require them to have an internal process in place to deal with claims for compensation within 30 days.
Process for resolving air travel complaints
The changes would replace the current process for resolving air travel complaints with a more streamlined process designed to result in more timely decisions which would increase the Agency’s ability to provide timely dispute resolution services to Canadians for both new complaints and for complaints that have been received.
Enforcement Authorities
The changes would allow the Agency to increase the maximum amount of Administrative Monetary Penalties applicable to the APPR to $250,000 for corporations and provide the Agency with the authority to enter into compliance agreements with air carriers.
Broaden the fee-setting authority
This change would ensure that the Agency has the necessary authorities to cost recover for its various responsibilities attributable under the Act, including the APPR, which would also allow it to shift some of the financial burden from government to industry and enable the Agency to carry out its mandate more efficiently and allow it to and offset financial pressures, while providing better service to travellers.
Coming-into-force
To ensure a transition with the new regime, careful consideration has been given to the coming into force of each provision.
The new process for resolving air travel complaints would come into force on September 30, 2023, or if it is later, on the day on which the Budget Implementation Act receives royal assent and all the complaints, other than the ones in the course of being heard by the Agency, would be transferred to the new process for resolving the air travel complaints.
The updated regulation-making authority of the Agency with respect to air carriers’ obligations towards passengers would come into force on a day to be fixed by order of the Governor in Council, which would be synchronized with the publication in Canada Gazette, Part II of the final regulations amending the APPR.