Chair and CEO Scott Streiner addresses ATAC National Aviation Conference and Tradeshow on November 16, 2016
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It's a pleasure to have this opportunity to speak with some of Canada's most innovative air carriers, and the partners and suppliers who work with them.
Aviation and the Canadian Transportation Agency were born at almost the same time.
On March 20, 1903, the Honourable AG Blair, Minister of Railways and Canals, explained to the House of Commons that the Government intended to establish a board "composed of members independent of the government, independent of parliament …and capable ... by experience and ability, of making thoroughly effective the legislation." Three days later and hundreds of kilometers away, Orville and Wilbur Wright applied for a patent for the flying machine they were working on.
The board promised by Blair came into being, with Blair himself as its first Chair, on February 1, 1904 – just 45 days after the Wright Brothers got their flying machine off the ground for the first time at Kitty Hawk.
Few understood at the time what a revolution the Wright Brothers' ingenuity and ambition would unleash. At first, the new board's responsibilities focused only on rail. But over time, its mandate expanded to cover the air and marine sectors, its name changed, and its approaches evolved.
The Canadian Transportation Agency has changed as Canada has developed and the transportation system has undergone extraordinary transformations.
Today, I'd like to talk about how the Agency is working to stay – and help you stay – ahead of the curve.
As you may know, that familiar expression refers to the power curve that pilots think about on landing. If something goes wrong during the approach and they’re ahead of the curve, they have enough power to pull up safely. But if they’re behind the curve, the room for manoeuver is minimal and the risk of stalling – or worse – is serious.
The Agency aims to help the aviation industry and its customers keep flying smoothly. And that means understanding and dealing with the headwinds, tailwinds, and crosswinds caused by forces like globalization, technological advances, and shifting social norms.
As the country's longest-standing arms-length tribunal and regulator, the Agency has lots of experience to draw on as it confronts these challenges. But in the face of accelerating change, we need to combine the expertise and professionalism that come from 112 years in the business with the agility and dynamism that 2016 demands.
How do we stay ahead of the curve? By engaging with stakeholders. By modernizing the rules. By ensuring that our services are nimble and efficient.
These are all themes I'll touch on as I discuss three of the Agency's responsibilities that are of particular interest to the people in this room and, indeed, many Canadians: licencing airlines; protecting air passenger rights; and ensuring that transportation services are accessible to travellers with disabilities.
Let's start with licencing.
Who gets to fly has major implications for industry, which wants reasonable conditions for market entry and a level playing field, and for travellers, who benefit from competition but don't want to find themselves stranded if a new entrant lacks the financial resources to keep operating.
The criteria for licencing are laid out in legislation and regulations. The legislation, of course, is passed by Parliament, normally on the basis of proposals from the Government. The regulations are double-approved by the Agency and Cabinet.
On November 3, the Minister of Transport announced that the Government would introduce legislative amendments to allow non-Canadian investors to hold up to 49 per cent of the voting interest in a Canadian airline, rather than the current 25 per cent, while capping the interest of any single foreign investor at 25 per cent.
As an independent tribunal and regulator, the Agency works at arms-length from Government – just as AG Blair described it over a century ago – and administers the legislation as passed by Parliament. If there is useful information or analysis we can offer Ministers or Parliamentarians as they weigh legislative options, we are happy to do so. But the legislative choices are theirs to make.
The Agency's job, when it comes to foreign investment, is to ensure that whatever the legislated limits, Canadian airlines are controlled in fact – and not just on paper – by Canadians. We have to make sure that foreign players who are interested in earning a profit by providing equity to Canadian airlines don't take effective control of them.
The Agency has laid out some principles for these determinations:
- First, they're done on a case-by-case basis. We understand that business arrangements need to be flexible to encourage investment and innovation, so we look at the particular voting arrangements and controls proposed in each situation rather than applying a cookie-cutter approach.
- Second, control doesn't have to be exercised to be real and of concern. The ability to control is sufficient to trigger a finding of control in fact.
- Third, control can exist with varying clusters of individuals or groups, even without voting interests.
- Fourth, control shared between Canadians and foreigners won't satisfy the test. Canadians - without aide or hindrance from foreign interests - must themselves have control.
- And finally, ownership chains – when companies are owned by other companies – are examined to determine who controls the company up to the top.
Making a proper determination can be complex and take time. To deal with the uncertainty this can create, we have put in place a process for parties to obtain advance determinations.
With the planned increase in thresholds announced by Minister Garneau, a logical, predictable set of criteria and steps for control-in-fact determinations becomes even more important. To get there, the Agency will look at approaches used in other jurisdictions, increase the transparency of determinations, and launch consultations with industry, experts, and other interested Canadians.
These consultations will be combined with those already planned on air transportation regulations. As some of you know, the Agency announced last May that it would be reviewing every one of the regulations it administers, to address concerns that some provisions had become outdated after two decades or more years on the books. Three goals underpin the Regulatory Modernization Initiative, or RMI:
- Ensuring that industry’s obligations are clear, predictable, and relevant to a range of existing and emerging business practices.
- Ensuring that the demands associated with compliance are only as high as necessary to achieve the regulations’ purposes.
- Facilitating the efficient and effective identification and correction of instances of non-compliance.
The RMI is proceeding through a number of phases. The next will deal with air transportation, including control-in-fact determinations, and will be launched before the end of the year.
Looking forward, we plan to complete consultations on all elements of the RMI by next summer; review comments, release a summary document, and draft updated regulations by the end of 2017; and complete all necessary approvals and begin implementing the regulations in 2018. This is an ambitious schedule but, with focus and hard work, achievable.
I'd like to turn now to consumer protection for air travellers.
In the same speech in which he addressed foreign investment in Canadian airlines, Minister Garneau announced the Government's plan to introduce an Air Travellers Passenger Rights Regime.
Any legislation to create that regime will, again, be a matter for the Government and Parliament to decide.
The Agency's experience administering the current system suggests that there is often confusion on the part of passengers about what, if anything, they can expect from an airline if there are disruptions to their travel. This confusion can contribute to frustration. And frustration can mean customer relations issues for airlines.
We need to do better. 133 million people got on and off planes in Canada in 2015, and that number grows every year. Air travel is integral to modern life. Just as the internet connects us virtually across the country and around the world, aviation connects us physically. It's a big part of how we do business, see family and friends, and experience new places.
Usually, air travel goes fine and is memorable for little more than the thrill as the plane lifts from the ground, the spectacular views from the window, and the quality of the food.
But sometimes, there are problems. The traveller who's bumped from a flight, arrives days later than planned, or doesn't get her bags needs to know what steps the airline will take to make things right.
There are four important principles that everyone should be able to agree on when it comes to consumer protection: transparency, clarity, fairness, and consistency.
- Transparency means that passengers should not have to search all over the sub-pages of a website or dig through lengthy documents to figure out what they're entitled to if something goes wrong with their trip. That information should be easy to find.
- Clarity means that when they locate that information, it is easy to understand. Passenger rights documents loaded with jargon and legalese are of limited use to most travellers.
- Fairness means that the measures or compensation that an airline provides are reasonable and proportionate to the problems experienced by the traveller – and that when a disruption happens for reasons that are beyond an airline's control, its obligations change accordingly.
- Consistency means that there shouldn't be dramatic differences in the measures and compensation offered by different airlines for identical events.
The Agency has taken steps in support of these principles:
- We've published a Fly Smart guide for air travellers.
- We've produced short, factual videos informing air travellers about their rights and responsibilities, and those of the airlines. These videos are running on our website, Facebook page, YouTube channel, and screens in airports across the country, including right here in YVR.
- We've made binding decisions and determinations that require subject carriers to increase the amount of compensation offered when travellers are bumped from domestic flights, make every reasonable effort to ensure that children are seated with their parents, and apply one set of baggage rules if an itinerary involves multiple carriers and is purchased on a single ticket.
- We've completely eliminated a backlog of 200 air travel complaints in the last few months.
- We're going to phase in firm timelines for facilitation and mediation, the informal processes used to try to achieve a quick resolution of air travel complaints. Once the phase-in is complete, we'll expect a case to be resolved to the satisfaction of the parties within 30 calendar days, or to be moved into adjudication. The only exception will be where discussions are making progress and the parties jointly request an extension.
- We're going to implement an expedited process for adjudicating relatively straightforward air travel disputes, to minimize the time and cost of these court-like proceedings.
Airlines also have to do their part.
Earlier this fall, I reached out to the CEOs of the country's largest airlines and asked them to post plain language summaries of the terms and conditions of carriage in a prominent place on their websites. I also asked them to put information in in-flight magazines and entertainment systems on passengers' rights and responsibilities, as well as the recourse mechanisms available to them. I'm pleased to report that each of the airlines has responded positively.
Today, I'm calling on every airline, regardless of size, to also take action. Whatever Air Passenger Regime is put in place, providing clear information for consumers is the right thing to do. And this isn't only in the interests of travellers. Airlines benefit when consumers understand their rights and responsibilities and have confidence that any issues will be resolved efficiently and fairly.
Finally, let's talk about accessibility, a topic that goes beyond consumer protection and touches on the fundamental rights of Canadians with disabilities.
Here, too, the Government has signalled some legislative plans: the Minister of Sport and Persons with Disabilities is currently consulting Canadians on options for federal accessibility legislation.
Meanwhile, the first phase of the Agency's Regulatory Modernization Initiative, which I mentioned a few minutes ago, has examined accessibility rules across all modes of transportation.
The Agency has had a mix of regulations and voluntary codes in place for 20 years to advance the goal of removing obstacles to travellers with disabilities. It has also set up an Accessibility Advisory Committee, which I chair, bringing together representatives of disability rights organizations and the transportation industry. And it has undertaken proactive audits of aircraft and airport accessibility.
The result of these efforts has been significant progress in a number of areas. But it's debatable whether voluntary codes are the right tool in 2016. The RMI is looking at turning those codes into mandatory regulations and updating their provisions to reflect the experience of the last two decades and best practices across Canada and around the world.
If we move in this direction, we have to do so without imposing undue hardships on airlines and other transportations service providers. We need to achieve maximum accessibility for Canadians with disabilities, while taking into account the differences between large and small carriers, large and small planes, large and small airports.
Accessibility is a core Canadian value. The neighbour who is blind, the grandparent who requires a wheelchair, and the former soldier who has PTSD have a right to equal participation in society. Like Canadians without disabilities, they should be able to travel for work and pleasure, to visit with loved ones, to have enriching experiences.
As the United Nations' Convention on the Rights of Persons with Disabilities says, accessible transportation allows persons with disabilities "to live independently and participate fully in all aspects of life."
And let's remember: the number of Canadians who have disabilities is only going to increase as the population ages. This is an issue that touches all of us. We need to work together to ensure that, to the greatest extent possible, accessible air transportation is available to every Canadian.
I'd like to conclude my remarks with some commitments and invitations.
- You have my commitment that the Agency's engagement with you – and with all stakeholders and interested Canadians – will be meaningful, your input will be carefully considered, and we will be transparent about the thinking that leads to any adjustments to our approach.
- You have my commitment that we'll continue to look for innovative ways to deliver our services in as efficient and responsive a fashion as possible.
- And you have my commitment that our decisions and determinations will always be impartial, rigorous, and guided by the letter and purpose of the law and the evidence before us.
And now, the invitations:
- I invite you to provide us with your insights and advice as we consult on regulatory reform and other matters.
- I invite you to reach out to us for information and assistance, whether you're looking for an advance control-in-fact determination, hoping to achieve a quick and fair resolution of a dispute with a customer, or seeking feedback on how to improve the accessibility of your aircraft. The Agency is open for business and here to help.
- And I invite you to raise any issue you wish during the question-and-answer session today. The most interesting discussions come from the hardest questions, and those of us charged with regulatory and adjudicative roles can deliver them best when we have a solid understanding of what's happening in the sector.
With that, I'd like to thank ATAC for the opportunity to appear today.