Chair and CEO Scott Streiner addresses The Canadian Automobile Association on June 4, 2018

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Taking Flight: An overview of the Process for Creating Air Passenger Protection Regulations

It's a pleasure to be at the AGM of the Canadian Automobile Association, the country's largest travel and consumer advocacy organization.

Humans have always travelled. Indeed, some of our greatest tales come from the journeys we dare to take beyond familiar horizons. In the 7th century, the Chinese monk, Xuanzang undertook a 17-year pilgrimage to discover the origins of Buddhism and pioneered travel writing in the course of his odyssey. In the 13th century, the Venetian merchant, Marco Polo spent 24 years ambling around Asia before returning to his native Venice to document his travels while languishing in a jail cell. In the 14th century, the Moroccan scholar, Ibn Battuta travelled throughout and beyond the Muslim world, visiting and writing about what are today 44 countries from China to Mali. In the 18th century, British navigator and cartographer, Captain James Cook circumnavigated the globe twice, mapping Newfoundland, Hawaii, New Zealand, and much of the Pacific region along the way.

And in 1926, a 17 year-old daughter of Austrian-Jewish immigrants set out from New York City to hitchhike across the United States. Half a century later, she would be among the first Americans to enter China after the thaw in relations sparked by Richard Nixon's visit with Mao Zedong.

That woman was my grandmother, an intrepid traveller and inquisitive intellectual. Does anything connect my grandmother's trip to China in the 1970s with Xuanzang's departure from it, or Marco Polo's, Ibn Battuta's, and Captain Cook's visits to it, centuries earlier?

I believe the answer is yes. We venture beyond our cities and villages because of a drive to discover different places and cultures, the realization that we often learn more about ourselves when we're in new environments, a longing to see family and friends, and opportunities to do business. Travel makes us bigger, by filling us with experiences and insights, and also, as Gustave Flaubert observed, more modest, because we see what a tiny place we occupy in the world.

Travelling around the country and the globe has never been easier. In the mere 115 years since the Wright Brothers first got their flying machine off the ground at Kitty Hawk, human flight has compressed what would have been months-long voyages on big wooden ships into hours in a metal tube hurtling through the sky. What was once the stuff of fantasy has gone from a marvel, to a luxury, to an everyday event.

Flights are safer, more numerous, and cheaper in real dollar terms than ever before. Airlines profits globally now top $60 billion annually, with margins in North America in the 15 per cent range, thanks to record load factors, stable fuel prices, and ancillary fees. Last year, people got on and off planes in Canada 140 million times. Air travel has become as integral to modern life as cell phones and the internet.

Most of the time, our flights are uneventful and quickly fade from memory. But when something goes wrong, it can be very frustrating. In part, this is because we feel we have little control over events and little information on the reasons for disruptions. In part, it's because we're not sure what our rights are and where we can turn for explanations and recourse.

Today, I'd like to speak about steps the Canadian Transportation Agency, the CTA, is taking to help address those issues – and seek your input and assistance.

The Canadian Transportation Agency

The CTA is Canada's longest-standing independent, expert regulator and tribunal. It was created as the Board of Railway Commissioners on February 1, 1904 – just 45 days after Kitty Hawk, though it would be another 34 years before its jurisdiction was extended to air transportation.

As an independent, expert regulator and tribunal, the CTA works at arms-length from Government. It is comprised of Members – expert decision-makers appointed by the Governor in Council – supported by 250 professional public servants.

Today, the CTA has three core mandates: helping to keep the national transportation system running smoothly and efficiently; protecting the fundamental right of persons with disabilities to accessible transportation; and providing consumer protection for air travellers.

A new legislative framework

We got an important new tool to advance the third of these mandates when Bill C-49 received Royal Assent on May 23, following a year of Parliamentary deliberation and debate. For the first time, the CTA will be able to make regulations that establish a common set of airline obligations towards passengers.

Until now, airlines' terms and conditions of carriage were set out exclusively in documents called tariffs that are produced by the airlines themselves. The CTA's role has been to deal with complaints that airlines aren't respecting their own tariffs and, in some cases, to examine whether the tariffs' terms and conditions are reasonable.

The tariffs- and complaints-based approach led to some improvements to passenger rights through the CTA's adjudicative decisions, but ultimately, it proved inadequate, both for travellers and for an industry that needs predictability and a level playing field. As the 2015 report of the Canada Transportation Act Review led by David Emerson noted, the system "is producing suboptimal, piecemeal outcomes for industry, consumers, and the regulator alike…the status quo is untenable."

In bringing forward and making the recent amendments to the Canada Transportation Act, the Government and Parliament have recognized that more than tariffs is needed. Many other jurisdictions, including the EU and US, have regulations specifying airlines' responsibilities towards passengers. It's time for made-in-Canada regulations that reflect lessons learned in other countries, Canadians' values, and the nature of air travel in Canada.

The CTA's job is to make those regulations.

Guiding principles

This work will be guided by four key objectives, which we first laid out in November 2016 based on our experience as the primary administrator of the Canada Transportation Act.

• The first goal is clarity. Airlines' obligations should be described in concise, plain language, not long-winded legalise that's hard to decipher.
• The second goal is transparency. Passengers should be given relevant information about their rights, and be able to find that information easily, without needing to click their way through multiple web pages or flip through lengthy documents.
• The third goal is fairness. The minimum standards of treatment and compensation established by the regulations should reflect Canadians' sense of what's just and reasonable in different circumstances, while taking account of airlines' operating realities.
• The final goal is consistency. Travellers facing the same issues should be entitled to the same minimum treatment, regardless of the airline they're flying with. A standard set of binding regulations will go a long way towards achieving this outcome, though of course, nothing will stop an airline from going above this floor if it wants to distinguish its value proposition in a competitive market.

Even before Parliament gave the CTA the power to make regulations, we were taking action to advance these goals:

• In fall 2016, we asked the CEOs of the country's five largest airlines to post succinct, plain-language summaries of their tariffs in prominent locations on their websites and to use in-flight magazines and entertainment systems to inform passengers of their rights.
• We used our "own motion" authority with respect to international air travel to initiate inquiries into SkyGreece's services when it was teetering on the edge of bankruptcy in 2015, Air Transat's 2017 tarmac delays in Ottawa, and Sunwing's flight disruptions in Toronto and Montreal last April.
• Starting in fall 2016, we undertook modest public information efforts to raise air travellers' awareness of their rights and the availability of recourse through the CTA for issues that can't be resolved directly with an airline. These efforts contributed to a dramatic increase in the number of air travel complaints we receive, from about 800 per year in 2013 to 2015, to 6000 last year.
• We made sure our dispute resolution process is as straightforward and efficient as possible, by creating a simple online complaint form and using informal facilitation and mediation to resolve over 95 per cent of all air travel complaints.

We'll build on that experience as we develop the new air passenger protection regulations. The regulations will set out how airlines have to communicate with passengers on their rights and the recourse available to them. They'll establish minimum standards of treatment — and in some cases, compensation -- if your flight is cancelled or delayed, you're denied boarding, your bags are lost or damaged, your flight sits on the tarmac for over three hours, or you're travelling with children who need to be seated near you. And they'll require that tariffs include terms and conditions for the transportation of musical instruments.

That's a lot of ground to cover. We know that given the high level of interest in air travel issues, Canadians want to have their say about the content of these regulations – and at the same time, they want to see the new rules brought into force without unnecessary delay.

To meet these expectations, we launched a comprehensive consultation process last Monday, just a few days after the amendments to the Canada Transportation Act took effect. That process will last three months, and will give people multiple channels for sharing their views. We've created a dedicated website – airpassengerprotection.ca – that includes a discussion paper, user-friendly questionnaire, and link for sending in written submissions. We'll be conducting surveys in airports across the country and sitting down with key stakeholders, including the CAA. We'll hold public consultation sessions in Toronto on June 14; Vancouver, Calgary, and Yellowknife during the week of June 18; Winnipeg, Montreal, and Halifax the week of June 25; and Ottawa the week of July 3. And we'll organize a call-in session during the first week of July for anyone who wants to offer verbal feedback and isn't able to attend one of the in-person sessions.

Getting into the specifics

This is the first time Canadians are being asked for their input on the details of air passenger protection regulations. To date, discussion has focused on broad concepts, not specifics. Let me describe some of the scenarios the regulations will cover and the types of issues these scenarios raise.

Take flight delays and cancellations. We all know how it feels when the projected departure time shown on an airport screen for our flight keeps getting pushed back, or when we miss a connection because our first flight took off late. The law says the new regulations should prescribe minimum standards of treatment and minimum compensation when these sorts of situations are within the airline's control, set minimum standards of treatment if they're within the airline's control but required for safety-related reasons, and obligate the airline to ensure passengers complete their itinerary if they're are out of the airline's control. We're asking Canadians what they think the minimum standards of treatment and compensation should be. How often should information updates from the airline be required? What sorts of responsibilities should the airline have around food, water, and accommodation? How should the length of delay affect the required standards of treatment? Where compensation is required, is the EU's 250 to 600 euro sliding scale a good benchmark?

One situation that's a focus of special attention is bumping for reasons that are within the control of an airline. People get pretty upset if they reach check-in with a confirmed reservation, only to discover that they've been moved to a later flight without their consent because the airline – counting on a number of no-shows – has sold more reservations than there are seats on the plane. So we're considering whether the minimum compensation in such a scenario should be particularly high, cresting incentives for airlines to work hard to find volunteers willing to take a later flight. Maybe someone heading off for her gap year trip will be happy to wait a few hours in exchange for compensation that covers a significant part of her ticket price – avoiding the need to bump a senior on the way to his grandson's graduation or an athlete on her way to a major competition.

And what if that senior's luggage is lost, and he has to buy a new suit for the big event? Or the athlete's skis are damaged? What sort of compensation should they be entitled to?

What if the gap year traveller's plane is delayed on the tarmac for three or four hours? At what point should the airline be obliged to let her and the other passengers off the plane?

What if the athlete is travelling with her 8 year-old son and they want to be seated together? Should the airline be required to give them spots next to each other? In the same row? Within a few rows?

These are the sorts of questions we're posing to the public, consumer groups, airlines, and other interested parties through our consultations.

Next steps

The CAA will no doubt be an important contributor. You've long advocated for better air passenger protection, and you're uniquely placed to understand the needs of travellers. But beyond your own advice on the regulations, we'd welcome your assistance in getting the word out.

The consultation process has started strong: in the week since it was launched, over 2000 people have visited airpassengerprotection.ca and almost 1000 have filled in our questionnaire. We want to build on this momentum and hear from as many Canadians as possible between now and the end of August. The CAA's unparalleled network of clubs, stores, publications, and online resources can help make sure people know this is their opportunity to shape Canada's air passenger protection regulations.

Once the consultations are completed, we'll move as quickly as possible to draft the regulations, which will then require the approval both of the CTA and the Governor in Council (in practice, the Treasury Board Committee of Cabinet). Given that consultations are just getting under way and some of these issues are complex, it's not possible to say exactly how long regulatory drafting and approvals will take, but both the Minister of Transport and I have stated that it should be a matter of months, not years.

After the regulations come into effect, our attention will turn to making sure passengers know about them, and airlines respect them. That will mean a mix of public information efforts, efficient and effective complaint processing, and proactive compliance monitoring and enforcement, including the imposition of administrative monetary penalties if and when required. So the consultations and regulatory drafting are just the beginning. The CTA will keep its eye on the ball over the long term as we work to strengthen air passenger protection in Canada.

Conclusion

As I prepare to wrap up, I should probably stress the perhaps-obvious point that not all aspects of the air travel experience can be addressed through regulations. Al Gore has noted that "airplane travel is nature's way of making you look like your passport photo." In all fairness, I must caution you that even after the new regulations are in place, you still may not want to look in the mirror immediately after a 15-hour flight between Vancouver and New Delhi!

That said, the regulations can make a real difference. Human wanderlust will continue to take us into the skies. As Canadians fly to explore new places, see family and friends, or conduct business – and as airlines sell and operate those flights – a set of clear, transparent, fair, and consistent ground rules will be to everyone's advantage.

We look forward to hearing from the CAA during the consultation period. We look forward to hearing from Canadians from coast to coast to coast. We are listening carefully. And we are committed to ensuring concrete results.

Thank you for your attention.