SUPPLEMENTARY INFORMATION
BRIEFING TO MP DANIEL BLAIKIE ON APRIL 12, 2023 ON BUDGET IMPLEMENTATION ACT, 2023, No. 1
FOLLOW-UP QUESTIONS
Q: What is the rationale for the extended interswitching pilot?
- Regulated 30 km interswitching provides shippers, within a 30km radius of an interchange, with guaranteed access to another carrier at that interchange, at a regulated rate set by the Canadian Transportation Agency (the Agency), without an application. This means it is easy to use, provides cost certainty and, therefore, provides meaningful leverage to shippers in their negotiations with railways.
- While Long-Haul Interswitching (LHI) was introduced in 2018 to provide additional competitive options for shippers outside the 30 km interswitching radius, that measure has not been used by shippers, who have raised concerns with the effectiveness of the measure given the barriers to utilize the measure (including the need to apply to the Agency), and uncertainty with respect to costs. As a result, the measure also does not provide the same kind of leverage that regulated interswitching provides.
- The National Supply Chain Task Force was established last winter, following a number of challenging years for Canada’s supply chains, and was mandated to consider a wide range of issues and develop solutions. One of its recommendations was to expand the interswitching distance, Canada-wide.
- While the Task Force recommended that extended interswitching be rolled out Canada-wide, we have taken a more targeted approach with the extension limited to the Prairies to limit potential impacts in critical areas like Vancouver and the Quebec-Windsor corridor.
- The approach will mimic the 2014-2017 policy for the transportation of grain, with a 160km limit in the prairie provinces, rates set by the Agency, and the collection of additional data to support the analysis of the measure.
- This partially addresses the Task Force’s recommendation, provides a functional alternative to LHI, and responds to long-standing shipper concerns about level of competition in the rail sector and incentivizes railways to provide better rates and service, while providing the Government of Canada with additional time and evidence to support decision-making on a longer-term approach, supported by additional data that was not available in 2014-2017.
Q: How was the 160 km limit for the pilot selected?
- The 160 km limit for this pilot was chosen to be consistent with the previous approach to extended interswitching from 2014-2017 for the transportation of grain. At that time, extended interswitching was introduced on a temporary basis to addresses challenges with grain movement following a record grain crop and harsh winter in 2013-2014.
- The 160km limit for the recently announced pilot will give a significant proportion of shippers located on CN or CP lines in the prairie provinces access to the measure at CN and CP interchanges. Those shippers will benefit from easier access to an alternate carrier, as well as added leverage in their negotiations with railways, to improve their service and rates.
- At the same time, it is a distance that guards against the risk of unintended consequences, including by limiting the distance at which cost-based regulated rates will apply.
- In 2014-2017, only a very small amount of traffic in the prairies made use of the measure, and there was no evidence of significant unintended consequences for the network overall. 160 km is therefore a distance that enables us to trial the extended interswitching approach with confidence that there is a low likelihood of unintended consequences.
BRIEFING TO SENATORS ON APRIL 27, 2023 ON BUDGET IMPLEMENTATION ACT, 2023, No. 1
FOLLOW-UP QUESTIONS
AIR PASSENGER PROTECTION REGULATIONS CONFIDENTIALITY
Questions:
- What is the policy intent behind the confidentiality clause on page 294 of C‑47?
- Is the entire complaint investigation confidential? Or are there specific aspects of the complaint / investigation that will remain confidential?
- Is confidentiality imposed on the claimant through this clause and is the purpose of this clause to act as a non-disclosure agreement?
Responses
- The new complaint resolution process strikes a reasonable balance between the timely and efficient resolution of air passenger complaints, on the one hand, and public accountability and openness, on the other. It is intended to be even more transparent than the current process and has been designed to ensure that more passengers have access to information they may need to claim compensation. The new process contains an obligation of confidentiality precluding the complainant, the carrier and the Canadian Transportation Agency from disclosing information pertaining to the process, with some exceptions. This confidentiality obligation is typical in meditation processes to allow a frank and open discussion between the complainant and the carrier. In addition, under the current existing process, the Act provides for confidential mediation of air passenger complaints.
- For each decision made by a complaints officer, the Canadian Transportation Agency will be obligated to publish certain information, including the flight number and the date, as well as the reason of the flight disruption and whether or not a compensation was awarded. Using this transparency, other passengers would be able to rely on this published information to claim compensation. This is not the case under the current regime, where passengers do not generally know the result of claims settled during facilitation or mediation steps. In addition, under the new process, the Agency would still be required to make public the orders made by a panel of two or more Agency members acting as complaint resolution officers.
- This confidentiality obligation in the meditation process is intended to allow a frank and open discussion between the complainant and the carrier and already exists for mediations under the current three step process.
TRANSPORT CANADA APPEARANCE AT THE STANDING COMMITTEE ON FINANCE ON MAY 2, 2023
FOLLOW-UP QUESTIONS
#1 Request from Committee:
Question from MP Daniel Blaikie (Elmwood – Transcona, MB) on extended interswitching and consultation with industry associations and companies
Response
The following industry associations have expressed support for and/or requested an increase to the interswitching distance, either directly or as members of broader coalitions or campaigns.
Agricultural Producers Association of Saskatchewan
Alberta Barley
Alberta Forest Products Association
Alberta’s Industrial Heartland Association
Alberta Pulse Growers
Alberta Wheat Commission
Animal Nutrition Association of Canada
Canadian Association of Recycling Industries
Canadian Canola Growers Association
Canadian Federation of Agriculture
Canadian Meat Council
Canadian Oilseed Processors Association
Canadian Pulse and Special Crops Trade Association
Canola Council of Canada
Cereals Canada
Chemistry Industry Association of Canada
Essential Minerals Association
Fertilizer Canada
Forest Products Association of Canada
Freight Management Association of Canada
Global Automakers of Canada
Grain Growers of Canada
Inland Terminal Association of Canada
Keystone Agricultural Producers of Manitoba
Mining Association of Canada
Pulse Canada
Responsible Distribution Canada
Saskatchewan Pulse Growers
Saskatchewan Wheat Development Commission
Soy Canada
Western Canadian Shippers’ Coalition
Western Canadian Wheat Growers Association
Western Grain Elevator Association
BRIEFING TO BLOC QUÉBÉCOIS TRANSPORT CRITIC XAVIER BARSALOU-DUVAL ON THE BUDGET IMPLEMENTATION ACT, 2023, No. 1 - MAY 8, 2023
FOLLOW-UP QUESTIONS
PASSENGER RIGHTS
EUROPEAN UNION’S LIST OF EXTRAORDINARY CIRCUMSTANCES
- The European Union (EU) has never clarified the term ''extraordinary circumstances'' in their Regulation No. EC 261/2004. However, the regulation has been subject to a series of challenges in the court over various interpretations of the rules, which has also resulted in more clarity in terms of what could constitute ''extraordinary circumstances'', including:
- War or Political instability
- Adverse weather conditions
- Natural disasters
- Security risks
- Air traffic control restrictions
- Hidden manufacturing defect on the aircraft
- Union, airport staff, and air traffic control strikes
- Bird strikes
- Medical emergencies
- Coronavirus (COVID-19) and other global pandemics
- In 2013, the EU developed a set of proposals to advance the regime, including clarifying the term ''extraordinary circumstances''. That said, nothing has yet been voted by the European Parliament, but the proposal included the following circumstances to be considered extraordinary:
- Natural disasters rendering impossible the safe operation of the flight;
- Technical problems which are not inherent in the normal operation of the aircraft, such as the identification of a defect during the flight operation concerned and which prevents the normal continuation of the operation; or a hidden manufacturing defect revealed by the manufacturer or a competent authority and which impinges on flight safety;
- Security risks, acts of sabotage or terrorism rendering impossible the safe operation of the flight;
- Life-threatening health risks or medical emergencies necessitating the interruption or deviation of the flight concerned;
- Air traffic management restrictions or closure of airspace or an airport;
- Meteorological conditions incompatible with flight safety; and
- Labour disputes at the operating air carrier or at essential service providers such as airports and Air Navigation Service Providers.
RESPONSE PREPARED BY THE DEPARTMENT TO QUESTIONS FROM MINISTER’S OFFICE ON DISPUTE RESOLUTION PROCESSES
Question:
Is there mediation offered by either the Commission for Complaints for Telecom-television Services or the Ombudsman for Banking Services and Investments in their respective dispute resolution processes? If so, is this mediation confidential?
Answer:
The Commission for Complaints for Telecom-television Services (CCTS) and the Ombudsman for Banking Services and Investments (OBSI) serve the function of resolving complaints between consumers and service providers in their respective sectors.
At the CCTS, an informal mediation process is part of complaint resolution. Information shared during the mediation process is kept confidential and parties are invited to sign a non-disclosure agreement. If there is no settlement, the CCTS is required to publish, following their investigation, its decisions which names the service provider, but all information that may identify the consumer is removed.
The OBSI does not use a mediation process to resolve complaints. Rather, it hears both sides of the story from the consumer and service provider, and conducts its own analysis/investigation, then makes a recommendation. Their complaint resolution process is confidential. If the recommendation was for the firm to compensate the consumer, but the firm does not apply the recommendation, the OBSI may publish a report with their analysis naming which firm is refusing the compensation despite the OBSI's recommendation.
RESPONSE PREPARED BY THE DEPARTMENT TO QUESTIONS FROM MINISTER’S OFFICE ON AIR PASSENGER PROTECTION REGULATIONS
1. What happens if an airline chooses to contest a case at the CTA which clearly does not fall into one of the exceptional circumstances that will be defined by regulation? Can the CTA simply issue a summary judgment against the airline? Or do the parties still have to go through the mediation process, etc.?
Response:
First and foremost, the proposed measures would impose a greater burden of proof on air carriers by requiring them to pay compensation to travellers unless they can demonstrate that a disruption was caused by specific extraordinary circumstances set out in the regulations, once they are in force. If a flight disruption does not fall under one of the circumstances listed on the list of exceptions, air carriers would be required to pay compensation.
Should a claim make its way to the Agency and is deemed eligible, the complaint resolution officer would then launch the mediation process between the passenger and the air carrier, during which both parties would try to reach a settlement. However, the complaint resolution officer could issue a decision at any point within the 60-day legislated timeline to resolve the complaint if the officer sees that there is no foreseeable compromise/outcome that the parties could reach without a decision being issued. The air carrier would then be responsible for the cost of that process.
2. What consequences will there be - if any- if the CTA fails to respect the timelines in the dispute resolution process?
Response:
The Canadian Transportation Agency is required to comply with the legislative timelines governing its mandated functions. However, in cases where air travel complaints are not resolved on time, the complaint resolution officer would still complete the review and make a decision if necessary. In the event that legislative timelines are not met on a regular basis, senior officials from the Agency could be held accountable through their performance management mechanisms.
That said, the Government has taken actions and will continue to work with the Agency to address its financial requirements to ensure it is resourced appropriately to carry out its mandated functions, specifically regarding the Air Passenger Protection Regulations. While additional resources have been provided to the Agency to clear the existing backlog of air travel complaints, the proposed legislative amendments to overhaul the Agency’s current complaint resolution process are designed to provide timely dispute resolution services to Canadians and help reduce the complaints backlog and allow the Agency to recover the cost of air travel complaints. All of which would incentivize airlines to address complaints directly and reduce the number of incidents referred to the Agency.
3. The EU already has a list of exceptional circumstances. Why not just incorporate these into the legislation (while retaining the possibility to consult and add to this list through regulatory process)?
Response:
To prevent an undue burden that could increase the cost of air travel, some limits should be placed on the range of circumstances in which compensation must be provided, especially recognizing the unique challenges of operating as an air carrier in Canada.
The European approach has provisions that limit compensation in the face of extraordinary circumstances, a term that was not defined in the regulation, and which has been subject to a series of challenges in the courts over various interpretations of the rules.
The Government of Canada has determined that the best course of action would be to develop a list of exceptions tailored to the Canadian airspace, while consulting the European Union list of exceptional circumstances as a reference. If the proposed amendments to the Act receive royal assent, the Agency would have the authority to develop the proposed list of exceptions, in consultation with industry stakeholders as well as Canadians.
4. Does anything prevent the airlines from going to the regular court system and bypassing the CTA? What about travellers?
Response:
Under the new process, air carriers would be required to have a process in place to communicate their decisions on claims to passengers within the 30-day legislated timeline. Should a passenger remain unsatisfied with a carrier’s response, the recommended course of action would be to file a complaint with the Agency, which has a mandate to resolve consumer complaints directed at air carriers. If the passenger files a complaint with the Agency and they are unhappy with the complaint resolution officer’s decision, they would still have a court-based method of appealing the decision through requesting a judicial review.
However, the new proposed system would not prevent passengers from seeking recourse from small claims court in the first place, which would involve the typical court procedure and associated fees and expenses.
5. What if the airlines refuse to enter CTA mediation process? Does the CTA simply rule in favour of complainant?
Response:
Should a claim make its way to the Agency and is deemed eligible, the complaint resolution officer would then launch the mediation process between the passenger and the air carrier, during which both parties would try to reach a settlement. However, the complaint resolution officer could issue a decision at any point within the 60-day legislated timeline to resolve the complaint if the officer sees that there is no foreseeable compromise/outcome that the parties could reach without a decision being issued, including when an airline refuses to participate in mediation.
Since there would be a greater burden of proof on air carriers to demonstrate that a disruption was caused by a circumstance listed on the list of exception, this would incentivize air carriers to participate in the mediation process.
RESPONSE PREPARED BY THE DEPARTMENT TO REQUEST FROM MINISTER’S OFFICE FOR A COMPARATIVE ANALYSIS BETWEEN THE NEW PROPOSED U.S MEASURES VERSUS THE NEW APPR MEASURES IN CANADA.
COMPARISON OF REGIMES – APPR 2.0 VS U.S. PROPOSED CHANGES
Key Highlights
- Unlike the European Union (EU) or Canada, the United States (U.S.) does not have federal regulations requiring air carriers to pay compensation (e.g., additional amount of money or voucher) or standard of treatment (e.g., food/accommodation) for flight disruptions such as delays and cancellations.
- Currently, a passenger is entitled to refund when there has been a ‘’significant delay’’ and the passenger chooses not to travel and a compensation in case of denied boarding as a result of overbooking. Media reports indicate that airlines often try to persuade consumers to accept a travel voucher instead of a refund. Air carriers based in the U.S. are ultimately permitted to establish their own standards of treatment and/or compensation, beyond a passengers entitled ticket refund.
- On May 8, 2023, the U.S. Department of Transportation (DoT) announced plans to introduce a new rulemaking process aimed at addressing:
- Compensation for passengers when there is a controllable airline cancellation or significant delay;
- A meal or meal voucher, overnight accommodations, ground transportation to and from the hotel, and rebooking for controllable delays or cancellations;
- Timely customer service during and after periods of widespread flight irregularities;
- Definition of a controllable cancellation or delay; and,
- Fee-free family seating, guaranteeing a parent or caregiver could sit next to a child aged 13 or under without paying junk fees.
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