Introduction

The Air Passenger Protection Regulations (APPR), which came into force in 2019, establish a framework for the rights of air passengers under Canadian law. They include provisions on air carriers’ obligations towards their passengers for flight delays, cancellations and denied boarding, as well as for lost or damaged baggage.

Within months of its establishment, this framework was severely tested by the impacts of the COVID-19 pandemic and the collapse of global air travel. In response to this, on 8 September 2022, the Regulations Amending the Air Passenger Protection Regulations came into force to address air carriers’ obligations towards their passengers for flight disruptions in situations outside of the carriers’ control.

In order to evaluate this new framework for air passengers’ rights, the House of Commons Standing Committee on Transport, Infrastructure and Communities (the Committee) agreed to the following motion on 3 February 2022:

That, pursuant to Standing Order 108(2), the Committee undertake a study of the Air Passenger Protection Regulations, their shortcomings and what needs to be done to improve them; and that this study be carried out in four meetings or more.

The Committee dedicated two meetings to this study on 21 and 28 November 2022. It heard from nine witnesses and received two briefs.

Subsequent to the Committee passing its initial motion for this study, the chaos of the summer travel season of 2022 further highlighted some of the APPR’s shortcomings. This was addressed in the Committee’s 8th Report, entitled Enhancing the Efficient, Affordable Operation of Canada`s Airports. After beginning this study, however, still more problems became apparent over the holiday travel season in December 2022 and January 2023. As such, the Committee agreed to the following motion on 9 January 2023:

That, pursuant to Standing Order 108(2), the committee commit to undertake special meetings to study the travel disruptions that occurred during the December 2022–January 2023 holiday period with a view of understanding why the disruptions occurred, holding those responsible accountable and identifying what actions are being taken to avoid a recurrence of the problems in the future; that, as part of the study, air passenger advocates, affected travellers, Sunwing, Air Canada, and WestJet, the Toronto, Montreal and Vancouver airport authorities, Via Rail and CN rail, the Canadian Transportation Agency, Transport Canada and the Minister of Transport be invited to testify; and that, in consultation with the committee members, the Chair be empowered to coordinate the resources and scheduling necessary to hold the first special meeting on Thursday, January 12, 2023, and that the testimony recorded at the special meeting become part of the committee’s ongoing study of air passenger protection regulations.

The Committee held five meetings from 12 January to 7 February 2023, heard from 29 witnesses and received three briefs.

2022–2023 Holiday Disruptions

Witnesses representing airlines, airports, and the rail sector made clear to the Committee that preparation for an anticipated winter peak is commonplace for transportation in Canada. This includes yearly planning for resiliencies in staffing levels and equipment capacity, as well as coordination meetings to ensure the smooth and efficient transportation of passengers.^[1]

They were equally clear, however, that the holiday period of December 2022–January 2023 was exceptional. Extreme weather events across the country coincided with the busiest travel days of the year.^[2] This resulted in significant and compounding delays and cancellations, with some passengers unable to deplane while stuck on the tarmac for several hours.^[3]

According to Mr. Andrew Dawson, President of Tour Operations, Sunwing Travel Group, at Sunwing Airlines, as of 12 January 2023, Sunwing alone had received 7,000 complaints for compensation, extra expenses incurred, and refunds in relation to holiday delays and cancellations.

Witnesses representing airlines, airports, as well as VIA Rail and CN, told the Committee that they were in contact with both Transport Canada and the office of the Minister of Transport, although not with the Minister himself, throughout the holiday period^[4]. Mr. Len Corrado, President of Sunwing Airlines, for example indicated that he did not have a direct conversation with the Minister of Transport until January 5, 2023.

In his own testimony, The Honourable Omar Alghabra, Minister of Transport, stated that throughout the crisis, he was being briefed by his staff on a regular, “sometimes hourly”, basis. When questioned about his communications with the minister and his office, Mr. Philippe Rainville, President and Chief Executive Officer of Aéroports de Montréal, said “I wouldn't call the minister if I had an operational issue. That's not why the minister is there; he is there to give us regulations and look over our shoulder on our lease agreement”. Similarly, Mr. Martin R. Landry, Interim President and Chief Executive Officer of VIA Rail Canada Inc., indicated that, in his view, Transport Canada officials were the “proper contacts” to help VIA Rail address ongoing operational issues.

Some industry representatives indicated that procedural reviews are already underway,[5] with Mr. Corrado in particular apologising for Sunwing’s “failures in execution”. One common area for improvement that they have already identified is communications, particularly with regards to customer service. Minister Alghabra expressed his view that, while travel disruptions due to extreme weather are a fact of life in Canada, it is unacceptable for passengers to be “kept in the dark about what alternative plans are being provided, or being left stranded for days on end without any information.” This opinion was shared by Mr. Rainville and was also applied to passenger rail service by Mr. Landry and Mr. Tim Hayman, President of Transport Action Atlantic.

Air Passenger Rights Regulations

Over the course of its study, the Committee heard a range of opinions on the viability of the APPR as a passenger rights regime. At one end of the spectrum, Dr. Gábor Lukács, President of Air Passenger Rights, a non-profit organization, described the regulations as “essentially a sham”, “written by the airlines for the airlines” to create the appearance of air passenger protection in Canada.

At his initial appearance on 21 November 2022, Mr. John Lawford, Executive Director and General Counsel of the Public Interest Advocacy Centre, argued that the APPR represented “a counterweight to airline power”. His position changed, however, in response to the delays and cancellations over the holiday period. At his second appearance on this issue, on 26 January 2023, Mr. Lawford’s views were much more in line with those of Dr. Lukács, and he described the APPR as “structurally unsound”.

Other witnesses preferred to view the APPR as a work in progress, and, to that effect, several pointed to the fact that the regulations initially came into effect mere months before the global emergence of the COVID-19 pandemic.^[6]

Mr. Andrew Gibbons, Vice-President, External Affairs at WestJet Airlines Ltd., argued that air carriers haven’t had “a period of stability to properly assess the APPR outside of COVID chaos and operational chaos” and that the focus for the time being should be on improving the operation of the current system rather than bringing major reforms to a relatively new regulatory scheme. Mr. Ian Jack, Vice-President, Public Affairs, with the Canadian Automobile Association, had a similar view but suggested that the previous six to nine months had provided a sufficient return to near-normal operational levels to reveal “significant deficiencies that need to be addressed”.

Minister Alghabra, as well as officials from Transport Canada and the Canadian Transportation Agency (CTA), told the Committee that the regulations are in fact being continuously re-evaluated to identify potential improvements.^[7] The Minister indicated that work had already been underway prior to the events of December 2022 and that proposed changes to the APPR would likely be ready in the Spring of 2023. These changes, he said, would likely focus on three principles:

• 1)      the clarification of rules, particularly around safety;
• 2)      simplifying the CTA complaint process and reversing the burden of proof in favour of passengers; and
• 3)      strengthening existing rules with the possibility of increasing fines against air carriers.

Both Mr. Jacob Charbonneau, President and Chief Executive Officer of Late Flight Claim Canada Inc., a law firm specializing in air passenger rights, and Mr. John Gradek, Faculty Lecturer and Academic Programs Coordinator, School of Continuing Studies, McGill University (appearing as an individual), viewed the APPR as an improvement compared to the lack of framework or “wild west” that existed prior to their establishment, and in fact other witnesses suggested a similar regulatory framework for rail passengers.[8] Though both Mr. Charbonneau and Mr. Gradek identified issues to be addressed, with the former pointing to a lack of enforcement and the latter to “loop-holes” relating to compensation clauses.

Compensation

Dr. Lukács told the Committee that, in his view, refunds should be provided regardless of the reason for cancellation. Compensation, however, is specifically meant to address a passenger’s lost time, inconvenience, and productivity value. Mr. Lawford viewed compensation schemes for passengers as an acknowledgement that “the system isn't going to work”, in that air carriers will necessarily not meet all of their service obligations.

An air carrier’s responsibilities towards passengers depend upon the categorization of the issue behind the delay or cancellation. This categorization is done by the air carrier to determine whether passengers are eligible for a refund and/or compensation. Passengers who disagree with this determination can file a complaint, which can eventually result in the involvement of the CTA. This approach, according to Mr. Charbonneau relies on “the goodwill of the carriers” in their self categorization to determine their own obligations towards passengers.

According to Mr. Gibbons, CTA investigations have not revealed any instances of an airline “deliberately miscoding a flight”, though he acknowledged the possibility of human error. He also indicated that air carriers may “disagree” with the CTA’s determination of a category. However, Ms. France Pégeot, Chair and Chief Executive Officer of the Canadian Transportation Agency, reflected on the need for regulatory clarification on the categorization of flights, referring to “grey areas that are big”. She stopped short, however, of using the term “loophole”, as employed by Dr. Lukács.

A particular “grey area” that was raised by several witnesses is the category of “within an airline’s control but required for safety purposes”. Mr. Lawford told the Committee that this system was in fact “completely unworkable and will always generate lengthy disputes”.

For example, some witnesses decried airlines’ application of this category to delays and cancellations related to staffing issues, arguing that this is a conscious attempt to avoid paying compensation under the APPR^[9]. Mr. Charbonneau also raised maintenance issues, such as a delay caused by the pilot’s miscalculation of fuel requirement. Such a delay, he argued, while obviously necessary, remains an operational decision which should not indemnify the airline from providing compensation.

These accusations of deliberate avoidance were vehemently denied by some industry witnesses. Mr. Gibbons told the Committee that “safety is sacred” and should remain a key principle of the APPR as it was intended to be. Meanwhile, Mr. Jeff Morrison, President and Chief Executive Officer of the National Airlines Council of Canada, dismissed claims that airlines are using safety as an excuse to justify disruptions and avoid penalties as “false and irresponsible”. He added that cancellations in particular are a “last resort”. In fact, Mr. Rainville told the Committee that it falls to the pilot, not the air carrier, to decide whether it is safe for a plane to take off. He added that, from an airport’s perspective, a pilot’s decision regarding safety is beyond question.

On the specific issue of staffing shortages, Mr. Gradek was of the opinion that staffing levels are within an airline’s control and can be reasonably forecasted. Mr. Lawford even suggested that airlines have been responsible for their own labour shortage for not properly utilizing Canada Emergency Wage Subsidy payments to maintain staffing levels in the face of COVID lay-offs and retirements.

Both Minister Alghabra and Ms. Pégeot referred to decisions by the CTA over the summer of 2022, which found that safety issues that are due to the actions or inaction of an airline, including labour shortages, do not justify a refusal to compensate passengers.^[10]

In order to simplify the issue of compensation, some witnesses suggested harmonizing Canadian regulations with those of the European Union (EU), which place responsibility on the airline for all delays, cancellations or denials of boarding with the sole exception of “extraordinary circumstances.”^[11] Such a change would involve eliminating the category of “within an airline’s control but required for safety purposes”, by removing Section 86.11(1)(b)(ii) of the Canada Transportation Act.

Dr. Lukács and Mr. Gradek explained to the committee that an “extraordinary circumstances” exemption, in line with the EU model, would not require airlines to compensate passengers in situations such as volcanic eruptions, snowstorms, political disruption, runway incursions, or other major events for which they could not reasonably be expected to plan. In all other situations, however, the airline would be expected to compensate passengers for any delays, cancellations or denial of boarding.

Some industry representatives expressed concern with such a change with respect to weather delays, which, Mr. Morrison said, “have a safety element related to them”. Mr. Rainville gave the example of delays related to de-icing, which he told Members “takes as long as it takes” to ensure that an unsafe amount of ice has not accumulated on the aircraft by the time it takes off. Mr. David Rheault, Vice-President, Government and Community Relations at Air Canada, pointed out, in relation to extraordinary circumstances, that “(t)here is no protection regime in the world, including the (APPR), that requires air carriers to be liable for financial compensation in cases of force majeure.”

Mr. Gibbons, meanwhile, told the Committee that WestJet would be open to a simplification of categories, with the strict provision that such a change would benefit the Canadian traveller without unfairly penalizing airlines, and that it would be accompanied by specific guidance from the CTA and Transport Canada as to how the remaining categories would be interpreted.

Dr. Lukács explained that, while the European model may seem harsh with airlines in effectively establishing a presumption of compensation, this simpler system allows for very straightforward determinations of entitlement, which in the long run is less expensive for the public overall. He added that this model also allows an air carrier to recover the costs of compensation from a third party. Thus, for example, if a passenger’s luggage were damaged by security personnel, an airline would be required to compensate the passenger directly but could then attempt to recover those costs from the security entity, without the passenger`s involvement.

According to Mr. Craig Hutton, Associate Assistant Deputy Minister, Policy with the Department of Transport, there is currently no way for an airline to recoup costs resulting from airport operations or instructions from traffic control. Mr. Lawford pointed to the Canadian example of the Commission for Complaints for Telecom-Television Services (CCTS), which takes on a consumer’s complaint as its own and refers it to service providers. If no response is received within 30 days, he explained, the consumer is “given everything they asked for in the complaint they filed”.

In response to the possibility of following an international model, Mr. Gibbons and Mr. Morrison pointed out that Canada’s climate, geography and population base make for unique challenges when compared to Europe or the United States, with the latter adding that Canadian airlines face “significantly higher” fees. He also indicated that the CTA, as a “uniquely Canadian institution,” provides an avenue for the adjudication of complaints that does not exist in either of those jurisdictions.

Denied Boarding and Cancellation

In its brief, Air Passenger Rights argues that Canadian legislation and regulations should also harmonize definitions of “denied boarding” and “flight cancellation” with the “common sense” definitions adopted by the EU. In fact, it points out that “flight cancellation” is not defined in either the Canada Transportation Act, nor the APPR, while the APPR’s definition of “denied boarding” represents a step backwards by effectively limiting compensation to situations in which an aircraft has been overbooked. It proposes that a determination of denied boarding should be simple and based on facts that are within the passenger’s knowledge, with exceptions only for such reasonable grounds as health, safety or security, or inadequate travel documentation. Meanwhile, flight cancellation should be defined in such a way as to prevent “misleading” references to “schedule change”. Both Mr. Charbonneau and Mr. Lawford agreed with the need to update definitions.

During his testimony, Dr. Lukács pointed out that such definition changes could address the current situation under which passengers have no protection if an airline offers a flight departing within 48 hours of a cancellation, even if such a delay renders the trip without purpose for the passenger. Ms. Sylvie De Bellefeuille, Lawyer, Budget and Legal Advisor with Option consommateurs, told the Committee that in such circumstances an affected passenger should be able to obtain a full refund regardless of the reason for the delay or cancellation.

On the specific issue of overbooking, or the sale of more tickets than there are seats on an aircraft, Ms. De Bellefeuille said this “ is certainly a breach of contract law” and should be banned. She further added that

(t)he principle of a contract is that you pay a company to receive a service. If it is unable to provide that service, the rule normally is that the consumer is entitled to a refund. So why should it be different for an airline just because it's an airline?

Mr. Charbonneau sympathised with ticketholders who might be turned away from a flight, but offered the opposing view that overbooking is common practice in Canada as well as Europe and the United States simply because “5% to 10% of registered passengers don’t show up”. He pointed to an example from the United States and suggested the possibility of offering large incentives to encourage some passengers to voluntarily take a later flight, rather than forcing them to do so.

Burden of Proof

Several witnesses identified what they perceived as an unfair burden of proof that is currently imposed upon passengers to demonstrate their entitlement to compensation^[12]. In fact, Minister Alghabra told the Committee that his department is in the process of preparing changes to reverse this onus, with a proposal due in the Spring of 2023.

The Minister added that “airlines must continue to uphold passengers' rights, and when they violate them, they need to compensate their customers”, and that they should do so without needing the involvement of the CTA. Mr. Hutton explained that passengers are in fact required to attempt resolution of complaints directly with airlines prior to bringing their matter to the CTA. Mr. Gibbons, at his appearance on 28 November 2022, said that WestJet has indeed compensated passengers in accordance with the APPR without CTA involvement and that this is the carrier’s preferred approach. Mr. Corrado said that Sunwing has an APPR portal available through its website to process claims.

Shared Accountability in the “Aviation Ecosystem”

Several witnesses spoke of an “ecosystem” view, in which many entities share overlapping responsibilities to provide services to passengers.^[13] This is a perspective that Mr. Landry also applied to the rail sector. In aviation, this ecosystem would include airlines and airports, as well as federal entities such as NAV CANADA, the Canadian Air Transport Security Authority (CATSA), and the Canadian Border Services Agency (CBSA).

Mr. Gibbons told the Committee that despite the complexity of the aviation system, the APPR place responsibility for compensation exclusively on airlines. He sees the establishment of a shared responsibility framework as a “top priority”. This would involve the establishment of service level standards, communications protocols and a reimbursement regime for all groups that provide a service that can result in a delay or cancellation. Mr. Morrison agreed, clarifying that a shared responsibility model is not meant to be punitive, nor even necessarily include a financial penalty, but that it must acknowledge that airlines are not solely responsible for all delays.

Ms. Deborah Flint, President and Chief Executive Officer of the Greater Toronto Airports Authority, pointed out that airlines are the only entities in the aviation ecosystem that have a contract with passengers, that they can consider the facilities they use in their own risk management, and that the APPR include remedies that only air carriers can provide, such as rebooking flights to ensure the completion of a trip. Nevertheless, she supported the idea of establishing more service-level standards across the industry to improve coordinated preparation for day-to-day and extreme events.

Ms. Tamara Vrooman, President and Chief Executive Officer of the Vancouver Airport Authority, agreed, as did Dr. Lukács, who clarified that government entities should not be fined for failing to meet services standards, but rather that airlines should be able to resolve “corporate disputes” to recoup compensation costs caused by third parties, while remaining the single point of contact for passengers. Mr. Gibbons objected to airlines being made responsible for managing an APPR framework and relationships with government entities for the purposes of simplification.

Baggage

As the Committee heard, the issue of baggage can be complex. Firstly, the responsibility for transiting baggage is shared between the airline, which puts the luggage on the aircraft, and the airport, which gets it “to the exit door.”^[14]

Secondly, while the loss of baggage is regulated in accordance with the Montreal Convention, through the APPR and the Carriage by Air Act, the APPR provision that regulated compensation for delayed baggage was recently struck down by the Federal Court of Appeal.^[15]

To remedy this, Mr. Lawford, supported by Dr. Lukács, recommended that the Minister of Transport direct the CTA to make regulations to compensate passengers for delayed baggage. In addition, pending a more permanent solution through an amendment to the Canada Transportation Act to address the issue raised by the Federal Court of Appeal, he recommended that a new regulation be passed under Section 40 of the Canada Transportation Act, to recreate the provision that was struck down.

When asked about an incident in which Air Canada donated passengers’ baggage, Mr. Lukács indicated this would be a criminal, rather than civil, matter.

Infrastructure

Several witnesses noted the need for modernized transportation infrastructure, notably at airports,^[16] with some calling on the government to reinvest taxes, fees and airport rents towards increased digitization, facility upgrades, and other improvements.^[17] Mr. Rainville told the Committee that the Montreal-Trudeau International Airport’s infrastructure “will not have the capacity to undertake the next decade”, despite significant technological input, due to “tremendous growth before the pandemic and an equally strong end to 2022”.

Claims Process

When an airline and a passenger are unable to resolve a complaint themselves, the next step is to bring the matter before the CTA. Mr. Tom Oommen, Director General, Analysis and Outreach Branch at the Canadian Transportation Agency, viewed the CTA’s role in this respect as facilitating interactions between passenger and airline. He also explained the CTA’s approach to complaint resolution, with the first step being informal facilitation. At this stage, during which the “vast majority of complaints” are resolved, the facilitator asks the airline, not the passenger, to provide information on the complaint. If this is unsuccessful, the next step is adjudication, which the CTA offers free of charge. No lawyer is required, and the CTA provides “extensive guidance material to assist passengers in understanding the regulatory framework”.

Mr. Charbonneau painted a somewhat different picture of this process, claiming that air carrier tariffs prevent passengers from involving legal counsel in their initial claims, that the CTA facilitation does not allow the passenger to present their version of the facts, and that formal proceedings take over a year. The entire process, he claimed, is unfairly balanced in favour of carriers. Ms. De Bellefeuille agreed with that depiction of the claims process.

Ms. Michelle Greenshields, Director General, Dispute Resolution Branch with the Canadian Transportation Agency, confirmed that it can take up to 18 months to have a case processed, based on general average service times, although times can vary based on the individual case. She added that the CTA is making efforts to get back to its service standard and that the time to issue an adjudication decision has been reduced “from 144 days to 40 days in total”, as of 28 November 2022.^[18]

According to Mr. Charbonneau, many passengers don’t pursue claims because of the complexity of the process and because of a lack of information. Ms. De Bellefeuille pointed out that, to make a claim, passengers are dependent on information provided by the carrier, which has an interest in not recognizing when issues are within its control. Mr. Oommen shared this concern, and he told the Committee that, according to the CTA’s estimates, roughly 1 in 5,000 passengers will issue a complaint. To address these challenges, Mr. Jack advocated for a simple and clear process.

Data Sharing

One challenge to improving the claims process is a lack of publicly available data on the current system’s success rate. Ms. Greenshields told the Committee that the CTA is increasing transparency on its own case status updates. However, according to Ms. Pégeot, the CTA is not aware of how many complaints are resolved by the airlines before reaching its own claims process. She clarified that airlines are not required to provide that data.

Mr. Morrison was of the view that data sharing and transparency for all players in the ecosystem is needed to verify claims as well as the causes of disruption. Mr. Lawford told the Committee that this type of data sharing is already common practice in the telecommunications industry, while Mr. Jack claimed that airlines already have access to this data. In fact, he pointed to the example of many U.S. airlines that monthly publish their data, including on complaints, resolution, and baggage, which he claims leads to increased competition and better service.

Backlog of Complaints

At her appearance on 28 November 2022, Ms. Greenshields informed the Committee that the CTA had a backlog of 30,000 complaints, of which 80% had been received since 1 April 2022. That number increased over the holiday period, to 33,000 complaints backlogged as of 12 January 2023, according to Ms. Pégeot.

Mr. Lawford said that this level of backlog can partially be explained by bad timing, in that the APPR came into force mere months before the COVID-19 pandemic, the consequences of which in and of themselves caused an increase in complaints. According to Ms. Greenshields, the CTA’s incoming complaint volume increased significantly from a pre-APPR annual number of 7,600 in 2018–19 to 19,000 in 2019–2020. Numbers slowed somewhat but remained higher than 15,000 in 2021–22, and monthly complaint volumes for July and August 2022 were 3,000 and 5,700 respectively.

Mr. Lawford also argued for a much simpler process, calling the CTA’s current approach within a quasi-judicial formal framework a “ridiculous approach to dealing with high-volume, low-value consumer redress for such routine, and unfortunately now chronic, issues as flight delays and cancellations”. Dr. Lukács agreed, saying that “one should not be requiring 1,000 pages of documents to decide the fate of a $400 compensation claim”. Ms. De Bellefeuille, meanwhile, recommended that staffing at the CTA be evaluated.

CTA officials responded that their complaint capacity is already being increased through procedural improvements and modernization as well as increased capacity through a temporary funding increase in Budget 2022.^[19] They also clarified that complaints regarding accessibility are being prioritized and as such there is no backlog in this area^[20], as well as the fact that backlogged complaints have simply been received, not evaluated for merit.^[21] In response to the substantial change in the number of complaints, Ms. Greenshields did, however recommend a “reset” towards a more “operational organisation”, while Ms. Pégeot suggested that clearer regulations on the categorization of delays, cancellations or denials of boarding would help reduce the inflow of complaints.

In order to address the current backlog, Mr. Lawford recommended that the CTA triage and categorize complaints to issue directory decisions on similar cases, as was done with some early COVID-based complaints. Similarly, Mr. Jack believed that proactive compensation by the airlines would reduce backlog not only for the CTA but also internally within the airlines’ own complaint mechanisms. He added that national polling by the CAA shows 75% of Canadians believe carriers should be responsible for contacting passengers to compensate for flight interruption.

Specifically in relation to grouping complaints, Dr. Lukács claimed that it is “common sense” to assume that if one passenger is found to be eligible for compensation, the others on the same plane are as well. Mr. Charbonneau agreed that an automated system may work for refunds but argued that compensation needs to reflect the specific damages incurred by individual passengers. This point was echoed by other witnesses.^[22]

Dr. Lukács agreed that the amount of compensation owed to each passenger would indeed be based on the delay at their destination but maintained that eligibility to compensation can be determined on a flight basis. He added that, in fact, this type of determination is already allowed under section 67.4 of the Canada Transportation Act and section 113.1(3) of the Air Transportation Regulations, though he was not aware of this power ever being used.

Ms. Greenshields informed the Committee that the CTA has already begun batching cases that have a common flight to increase processing capacity, while Mr. Oommen advised of the agency’s intention to use the powers mentioned by Dr. Lukács to extend decisions made for an individual complaint to the other passengers on the same flight, seeming to confirm that the agency had not yet used them as of November 2022. He clarified, however, that 97% of complaints to the CTA are resolved through adjudication, and so don’t reach the stage where a decision would be issued. As such, the powers afforded to the CTA by section 67.4 of the Canada Transportation Act and section 113.1(3) of the Air Transport Regulations would not apply.

Mr. Charbonneau proposed that these powers be expanded to allow a decision to apply to different flights affected by the same issue.

The Canadian Transportation Agency

CTA officials explained that the agency serves two functions: as a regulator, and as an administrative tribunal.^[23] In response to allegations by Dr. Lukács of “encrypted emails exchanged with Transport Canada behind the scenes”, Ms. Pégeot acknowledged the importance of open contact with Transport Canada to coordinate in developing regulations. She denied, however, that these communications take the form of encrypted emails and she stated that there is a “clear wall” dividing the CTA’s administrative tribunal from Transport Canada as well as, internally, from the rest of the agency. She also clarified that tribunal members are not appointed “at pleasure” of the Governor in Council and so “cannot be fired if the government doesn’t like their decisions.”

Minister Alghabra stated that the CTA was purposefully designed as an arm's-length quasi-judicial body “to avoid the appearance of political interference in investigation, in fining and in holding the responsible parties accountable.”

Mr. Charbonneau and Ms. De Bellefeuille believed that the CTA needs power to take action and be more proactive. Mr. Lawford recommended the establishment of a dedicated administrative complaints agency with a regulatory overseer for systemic issues based on existing Canadian models like the Commission for Complaints for Telecom-television Services (CCTS) or the Ombudsman for Banking Services and Investments (OBSI), to simplify the complaints resolution process. He added that both the CCTS and OBSI are funded by industry, rather than the taxpayer.

Enforcement

Dr. Lukács told the Committee that, in addition to harmonizing regulations with the framework employed by the EU, the CTA’s enforcement capacity must be enhanced. He indicated that, in his view, the CTA currently lacks the ability to enforce regulations, to ensure that airlines “will think twice before they break the law”.

CTA officials advised that the agency currently has six compliance officers, with a seventh due to begin “soon” as of their testimony on 12 January 2023. These officers follow-up with airlines to ensure compliance with CTA decisions and “conduct targeted enforcement blitzes and issue notices of violation and administrative monetary penalties”. ^[24] According to Mr. Oommen, mere contact between compliance officers and air carriers can sometimes result in carriers recategorizing flight disruptions as “within control” and compensating passengers accordingly.

Views on the issue of fines for carriers differed significantly between industry representatives and passenger rights advocates. Mr. Rheault, for example, stated that the penalties available to the CTA under the APPR are comparatively very high. Meanwhile, Mr. Lawford pushed the need for higher fines, stating that “It has to look sort of bizarrely high, because you're assuming there will be a very small amount of enforcement with respect to those violations.” Mr. Charbonneau and Dr. Lukacs similarly argued that it is currently more financially advantageous for airlines to deny compensation and risk a fine.

Dr. Lukács recommended introducing mandatory minimum fines, as the CTA has not been issuing fines “anywhere near” the limit already available. Mr. Jack also recommended replacing the current discretionary system with upper and lower limits for administrative monetary penalties (AMPs), along with automatic increases for repeat offences.

When asked whether higher fines would result in higher airfare, Ms. De Bellefeuille replied that this hasn’t been the case in Europe, but that regardless the current impacts on passenger rights are unacceptable. Mr. Lawford thought it more likely that costs would indeed be passed on to consumers but argued it would result in better air service or at least an increased likelihood of compensation. Mr. Jack meanwhile suggested that, since the purpose of higher penalties would be to incentivize carriers “to do a better job in the first place,” fines would ideally be “quite rare” and as such there would be no additional cost to be passed down.

CTA officials told the Committee that the goals of investigations and administering AMPs are “compliance and changing behaviour.”^[25] Given the relative recency of the regulations, and a focus on informal resolution of complaints, Ms. Pégeot confirmed that the agency had not yet, as of 12 January 2023, imposed any fines for failure to provide compensation under the APPR. It had, however, issued more than $185,000 in AMPs under the APPR for issues such as an airline failing to respond within 30 days, following an incremental approach as required under administrative law.^[26],[27]

Minister Alghabra confirmed that his office is looking into the issue of fines and is open to suggestions for increasing the current amount. He clarified, however, that he does not want to interfere in the CTA’s decision-making authority with respect to issuing fines.

Conclusion

Over the course of its study, the Committee heard from many witnesses on the shortcomings of the APPR, as well as potential methods of improvement. Many of these shortcomings were highlighted during the holiday period in December 2022 and January 2023. The Committee in particular heard about the ways in which a passenger’s eligibility for compensation is determined, the aviation “ecosystem” which shares responsibility for getting travellers to their destination, as well as the CTA’s role in ensuring that passengers are compensated for delays, cancellations, or denials of boarding.