Canadian Transportation Agency: Budget and Complaints
LOCATION: National
ISSUE/SOURCE: Canadian Transportation Agency
DATE: April 17, 2023
Suggested Responses
- The Government of Canada recognizes that the Canadian Transportation Agency continues to experience a surge in passenger complaints. The unique weather events and ensuing flight cancellations over the 2022 holiday season placed an additional strain on the transportation system, inevitably resulting in the Agency having to address a substantial increase in the number of complaints. While these events are exceptional, passenger rights must remain protected.
- In March 2023, the Government announced an additional $75.9M in funding over three years, starting in 2023-24, to enable the Agency to increase its complaint processing capacity, increase its compliance and enforcement capacity, and develop a cost recovery regime.
- The Agency provides an important service for Canadians, and continues to works closely with TC to ensure it has adequate mechanisms and resources to deliver on its mandate to Canadians, including consumer protection for air travellers.
If pressed
- 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.
- 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 federal 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 Protection Regulations (APPR).
- As part of an off-cycle budget decision in 2023, the Agency was allocated $75.9M of additional funding over three years, starting in 2023-24 ($22.5M in 2023-24, $27M in 2024-25, and $26.4M in 2025-26).
- Budget 2022 allocated $11.5M of incremental funding to the Agency in addition to the $18.5M in new funding that was allocated in 2020-21 and 2021-22 ($8.3M in 2020-21 and $10.2M in 2021-22).
Air Passenger Protection Regulations
- The creation of Canada’s air passenger rights regime provided an important framework for travellers’ rights when air travel does not go as planned.
- The extraordinary impact of the pandemic, which began shortly after the implementation of the regulations, tested the regime beyond anything imaginable and provided valuable insight into how to further refine.
- While the government did strengthen the regime during the pandemic by including refunds for cancellations and long delays, further enhancements have been introduced through the Budget Implementation Act.
- The proposed amendments would strengthen Canada’s passenger rights regime, streamline the processes for administering air travel complaints before the Agency, and increase air carriers’ accountability.
- Along with the $75.9 million previously announced for the Agency to help clear the backlog of complaints, these measures would help ensure that when events similar to those of last summer and over the holiday season occur, passengers are treated fairly, and the carriers meet their obligations swiftly.
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. The regulations’ 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 37,500 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 taken 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.