Transport Minister Omar Alghabra says airlines’ use of loopholes around traveller compensation “left government with no choice” but to beef up passenger rights rules.
Alghabra says the COVID-19 pandemic exposed gaps in the Liberals’ passenger rights charter, as carriers frequently cited safety as the reason for last-minute cancellations and delays, relieving them of their obligation to pay compensation to customers.
On Monday, the federal minister laid out reforms that put the onus on airlines to show a flight disruption was caused by safety concerns or reasons outside their control.
Tabled in the House of Commons on Thursday, the amendments also ratchet up the maximum penalty for carrier violations to $250,000 and put the regulatory cost of complaints on carriers.
The National Airlines Council of Canada, an industry group representing four of the country’s biggest carriers, says the cost of tougher passenger protections could trickle down to travellers by way of pricier fares.
The proposed $250,000 maximum fine for airline violations – a tenfold increase from the existing regulations – encourages compliance, said Sylvie De Bellefeuille, a lawyer with the advocacy group Option consommateurs.
So does an amendment placing the regulatory cost of complaints on carriers’ shoulders, she said. In theory, the measure incentivizes carriers to brush up on their service and thus reduce the number of grievances against them.
“If these measures are adopted as they are proposed, these are all good things for consumers. It should fix some loopholes that we’ve been talking about for the past two, three years,” De Bellefeuille said.
Undergoing first reading late last week, the new legislation further demands that airlines institute a process to deal with claims and respond to complaints with a decision within 30 days. The establishment of “complaint resolution officers” at the Canadian Transportation Agency (CTA) should expedite the process, De Bellefeuille said.
She also applauded the closure of a loophole that has allowed airlines to avoid compensating passengers for delayed luggage, though not for lost luggage.
“This was obviously something that was forgotten in the first law,” she said.
The bane of many passengers over the past few years, a second loophole has allowed airlines to deny customers compensation for flight cancellations or three-hour-plus delays if they were “required for safety purposes” – as stipulated in the Canada Transportation Act.
The revised section of that law makes no mention of the safety out, paving the way for the regulator to align its rules with those of the European Union, De Bellefeuille said. The EU distinguishes only between flight disruptions that are within the airline’s control – caused by mechanical issues, for example – and those outside its control, such as weather-related delays. In general, only the latter reason relieves a carrier of compensation obligations.
Some observers, however, suggested that the legislation fails to ensure transparency for the complaints process and leaves too much discretion in the hands of the regulator, particularly when it comes to compensation for flight disruptions, thanks to an amendment that states the complaints process “shall be kept confidential, unless the complainant and the carrier otherwise agree.”
The government first pledged in January to strengthen the four-year-old passenger rights charter with legislation.
Alghabra also pledged an additional $75.9 million over three years to reduce a complaint backlog that has ballooned to nearly 45,000, more than triple the tally from a year ago.
The new amendments overlapped with some of the measures in a private member’s bill put forward last month by NDP transport critic Taylor Bachrach. But the legislation did not go so far as to adopt automatic compensation for travellers whose flights are delayed or cancelled.
Bachrach had called for higher penalties and more rigorous enforcement.
Fast facts
According to the government, the new proposed amendments to the Canada Transportation Act would, among other things, allow the Canada Transportation Agency to modify its regulations to:
• Make compensation mandatory for all disruptions, unless the disruption was caused by very limited circumstances that would be specifically defined by regulations
• Remove exemptions to air carriers’ compensation obligations based on broad categories of disruptions (e.g., disruptions outside/within the control of airlines or required for safety)
• Make standards of treatment, such as the provision of food and water, mandatory for all flight disruptions
• Establish requirements for delayed baggage and prescribe parameters around refund requirements as a result of a travel advisory issued by the Government
The amendments would also:
• Replace the current process for resolving air travel complaints, which includes an adjudication process by Governor in Council-appointed members, with a more simplified process conducted primarily by Agency staff to ensure travellers get quicker decisions
• 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
• require air carriers to establish an internal process for dealing with air travel claims
• Broaden the authority of the Agency to set fees and charges to recover its costs
• Enhance the Agency’s enforcement powers with respect to the air transportation sector by allowing the Agency to increase the maximum amount of Administrative Monetary Penalties applicable to the APPR for corporations and by providing the Agency with the authority to enter into compliance agreements with air carriers.