New refund regulations
June 22, 2022 – Gatineau, Quebec – The Canadian Transportation Agency
The Canadian Transportation Agency (CTA) today announced that the Regulations Amending the Air Passenger Protection Regulations, which provide additional refund requirements, are published in Part II of the Canada Gazette. They will come into force on September 8, 2022.
Until now, the Air Passenger Protection Regulations required refunds to be provided for flight disruptions within the control of airlines. The new requirements will require airlines to provide passengers with either a refund or rebooking, at the passenger's choice, when there is a flight cancellation, or a lengthy delay, due to a situation outside the airline’s control that prevents it from ensuring that passengers complete their itinerary within a reasonable time. They will apply to all flights to, from and within Canada, including connecting flights, taking place after the coming into force of the regulations.
The new regulatory requirements:
- Require airlines to provide a passenger affected by a cancellation or a lengthy delay due to a situation outside the airline’s control with a confirmed reservation on the next available flight that is operated by them or a partner airline, leaving within 48 hours of the departure time indicated on the passenger's original ticket. If the airline cannot provide a confirmed reservation within this 48-hour period, it will be required to provide, at the passenger's choice, a refund or rebooking;
- Identify what costs must be refunded (unused portion of the ticket, which includes any unused add-on services paid for);
- Identify the method to be used for refunds (same as the original payment, e.g., a return on the person's credit card);
- Require airlines to provide a refund within 30 days.
The COVID-19 pandemic revealed a gap in Canada's air passenger protection framework: the absence of a requirement for airlines to refund tickets when flights are cancelled, or where there is a lengthy delay, for reasons outside airline control and it is not possible for the airline to ensure that the passenger's itinerary is completed within a reasonable time.
On December 21, 2020, the Minister of Transport issued a direction giving the CTA the authority to develop new regulations to close this gap for future travel. In a letter accompanying the direction, the Minister asked that the CTA design the regulations in a manner that is fair and reasonable to passengers and, to the extent possible, not impose an undue financial burden on carriers that could lead to their insolvency.
Consultation process On December 21, 2020, the CTA launched a consultation process seeking feedback on certain questions to help shape the new requirements. A summary of this input can be found in the resulting What We Heard report.
On July 3, 2021, the CTA published its proposed Regulations Amending the Air Passenger Protection Regulations in Part I of the Canada Gazette for public review and comment. A second round of consultations invited stakeholders and the public to comment on the proposed regulations, which ended on October 1, 2021. The results of both consultations have informed the final amendments to the regulations.
“These regulations will close the gap in the Canadian air passenger protection regime highlighted by the COVID-19 pandemic and ensure that even when cancellations and lengthy delays occur that are outside the airline’s control, passengers will be protected if the airline cannot complete their itinerary within a reasonable period of time. Starting September 8, 2022, if an airline cannot rebook passengers within 48 hours of their original departure time, it will be required to provide at the passenger’s choice, a refund or rebooking, regardless of the type of ticket they purchased.”
France Pégeot, Chair and CEO of the Canadian Transportation Agency
About the CTA
The Canadian Transportation Agency is an independent, quasi-judicial tribunal and regulator that has, with respect to all matters necessary for the exercise of its jurisdiction, all the powers of a superior court. The CTA has three core mandates: helping to keep the national transportation system running efficiently and smoothly, protecting the fundamental right of persons with disabilities to accessible transportation services, and providing consumer protection for air passengers. To help advance these mandates, the CTA makes and enforces ground rules that establish the rights and responsibilities of transportation service providers and users and level the playing field among competitors, resolves disputes using a range of tools from facilitation and mediation to arbitration and adjudication, and ensures that transportation service providers and users are aware of their rights and responsibilities and how the CTA can help them.