Introduction: Standing Senate Committee on Transport and Communications, May 16, 2023

I would like to thank the Committee for the invitation to appear today as part of its study of Bill C-47, the Budget Implementation Act.

The Agency’s mandate is based on the Canadian Transportation Act and contributes to the National Transportation Policy, which strives for “ an accessible, competitive, economic and efficient transportation system that serves the needs of participants and communities, and in which people trust.”

• We help ensure that the national transportation system runs efficiently and smoothly in the interests of all Canadians, especially in the area of rail and marine transportation.
• We provide consumer protection for air passengers.
• We protect the fundamental right of persons with disabilities to an accessible transportation network.

The Agency has a dual role. First, we are the economic regulator for the transportation industry. We make and implement regulations. We issue determinations, for example, on Canadian ownership of airlines. We also monitor and enforce laws and regulations.

Second, we are an administrative tribunal; we provide access to justice by resolving various disputes between the regulated industry and its users, informally or through a formal decision process.

We implement through regulations, dispute resolution and other tools the legislative framework that is established by Parliament.

The Budget Implementation Act – the BIA - that was tabled by the government has many proposals which would have an impact on the Canadian Transportation Agency’s mandate and operations, as well as on the regulations for which it is responsible. I will highlight three of them.

 

First, the BIA would change the policy framework for air passenger protection.

Under the existing framework, passenger entitlements depend on how a flight disruption is categorized – within airline control, within airline control but required for safety or outside airline control. This makes it difficult for passengers and airlines to know what passengers are entitled to, and makes the regulations difficult to enforce.

The BIA would eliminate the three categories of flight disruptions. Under the new, simplified framework, air carriers would be required to compensate passengers unless there were an exceptional situation, which the Agency would define in new Air Passenger Protection Regulations.

Importantly, as soon as the relevant provisions of the BIA come into force, the burden of proof would be changed and the onus would be on the airline to prove that compensation is not due to a passenger.

Secondly, the BIA would modify the existing Agency process for resolving air passenger complaints from the current court-like approach to a more streamlined claim resolution process. This would allow the Agency to resolve complaints faster.

Currently, the dispute resolution process for air passenger complaints has three stages that culminate in a court-like adjudication, during which the Governor-in-Council appointed members of the Agency weigh the evidence and issue a decision. During the first two stages there are no fixed timelines, informal dispute resolution is attempted, but the Agency has no power to decide the case. Only Agency Members can only make a final decision in adjudication.

The new process would have simplified steps. The process would start with determining eligibility of a complaint, based on the criteria proposed in the BIA. If the complaint is not eligible, for example because it is clear that the passenger already received what they are entitled to or because their complaint is not within the scope of issues that the Agency can resolve under the legislation, then it will proceed no farther.

If a complaint is eligible, an Agency Complaints Resolution Officer would attempt to mediate a solution between the passenger and the airline. Mediation would need to start within 30 days of a complaint being filed.

Should this not succeed, the same Complaints Resolution Officer would issue a decision on the air passenger complaint within 60 days of the start of mediation.

It is worth highlighting that decision-makers in the new process would be public servants employed by the Agency, as is the case in other tribunals such as the Immigration and Refugee Board of Canada. These public servants – the Complaints Resolution Officers – will be able to deal with the entire process.

The new Agency process would come into effect as early as September 30, 2023.

 

Thirdly, the BIA would establish an 18-month pilot during which rail interswitching would be extended from 30 km to 160 km in the three Prairie provinces. The Agency would have 90 days to publish the interswitching rates that would apply to extended interswitching.

Thank you, Chair. I would be pleased to respond to questions.

Bill C-47 – BIA – Part 3 – Division 2

Bill C-47 – BIA – Part 4 – Divisions 22 and 23

Section 5 of the Act: National Transportation Policy

• Chair - Leo Housakos (Conservative Party of Canada)
• Deputy Chair - Julie Miville-Dechêne (Independent Senators Group)
• Member - Andrew Cardozo (Progressive Senate Group)
• Member - Claude Carignan (Conservative Party of Canada)
• Member - Bernadette Clement (Independent Senators Group)
• Member - René Cormier (Independent Senators Group)
• Member - Donna Dasko (Independent Senators Group)
• Member - Peter Harder (Progressive Senate Group)
• Member - Jim Quinn (Canadian Senators Group)
• Member - Raymonde Saint-Germain (Independent Senators Group)
• Member - Paula Simons (Independent Senators Group)
• Member - Pamela Wallin (Canadian Senators Group)

New funding:

As of April 1, 2023, the CTA was provided with an additional $76 million over 3 years (or an average of $25 million per year for 3 years).

1. Additional Complaints Processing

• The majority of the funding received is allocated to increasing the Agency's complaints processing capacity and reducing the backlog.
• The Dispute Resolution Program is comprised of 117 FTEs. New funding will provide for an additional 177 FTEs, of which approximately 100 have already been hired.
• The additional capacity will allow the CTA to resolve approximately 22,400 complaints per year (our base funding provides for capacity to resolve only 1000).

2. Strategic IM/IT Investments

• Funds received have allowed the CTA to increase its IMIT capacity by 15 FTEs.
• The additional capacity will allow the CTA to expand functionality on its existing case management system,  automation of its complaint intake process, the use of artificial intelligence for document classification related to cases, the creation of a portal to facilitate efficient and timely communication between the Agency, air carriers and the public (currently done via email) and leveraging the use of technology to quickly filter and resolve complaints which have common elements (i.e., common issue and flight number).

3. Increased Compliance and Enforcement

• In addition to increasing the CTA's contingent of other staff in support of enforcement and determinations, the funding will allow the CTA to increase its number of Designated Enforcement Officers from 7 to 11.

4. Cost Recovery

• The additional funding will provide 3 FTEs to implement all legislative and operational requirements of a cost recovery regime.

Dispute Resolution and Complaints Office:

What types of efficiency measures has the CTA implemented to date?

• We found ways to more quickly review cases informally and formally through batching cases, streamlining our manual review processes and developing shorter decisions where possible. For example, in adjudication, cases are getting resolved more quickly. 70% of our cases are being issued within our service standard of 85 days this year, which is a significant improvement over last year (50%).
• In fact, overall we are on track to process about 11,000 cases in 2022-23, when five years ago, we were processing 5,000. There will be variation in the volume of cases that we can process year to year, depending on complexity and resource levels. While we were able to process about 15, 000 cases in 2021-22, the cases processed this year were somewhat more complex.
• To manage our growing backlog, increased efficiency in process must be found. Through our process review and continuous improvement initiative we were able to identify a number of digital and process improvements that would be integrated into the new complaints process. These include elements, such as:
  • a user friendly and automated web based intake form to result in faster complaint intake and initial screening and
  • a web base complaints portal to support an automated and more efficient digital connection with airlines to reduce administrative work required to engage airlines in complaint resolution.

How much more productive would the new process be?

It is anticipated that the new complaints process would be at least 30% more efficient than the current resolution process.

Efficiency in the process will result from closing cases immediately (e.g. 9-10% outside CTA jurisdiction) and by simplifying the process (average cost of processing complaints reduced from $1350 to $950).  In all, on average, one FTE will be able to process 160 complaints per year compared to 113 under current process (an increase of 30%).

What would be the eligibility criteria for the new process and what would be the expected productivity at each stage of eligibility review?

There are 5 eligibility review steps of the proposed complaints process that are applied as follows:

1. The first four eligibility criteria are fully automated:
   1. complaint is within jurisdiction (it contains allegations that the carrier failed to apply fares, rates, terms / conditions of carriage, including those set out in the APPR)
   2. the passenger complaining was adversely impacted by that failure
   3. the remedy sought is compensation or a refund as set out in the carrier’s tariffs or compensation for expenses incurred as a result of that failure
   4. the passenger filed a claim with airline already and 30 days has passed without a resolution
      • 10% of complaints would not move past the eligibility review (outside jurisdiction, duplicate complaint or an incomplete application). This stage is fully automated.
2. Once eligibility review is complete and a complaint moves forward, parties may attempt unassisted resolution via a digital portal
   • 20% of complaints would be resolved here (unassisted resolution) This stage is fully automated.
3. The final eligibility criteria 5, an "initial" review as to whether "on its face" the airline met its tariff obligations
   • 30% of complaints would be resolved here and the Complaint Resolution Office "refuses to hear" these cases, as it is clear, on initial review, that carriers have respected their obligations to the passenger.
4. 40% of remaining cases would be resolved by either an Agency assisted mediation or binding decision by an Complaints Resolution officer.

What types of efficiency measures has the CTA implemented to date?

Prior to the government announced $75.9 million in additional funding for the Agency over the next three years, The Agency had been striving to make the best possible use of our resources and process as many complaints as possible.

The Agency has fully reviewed our processes to optimize our complaint handling capacity:

• We found ways to more quickly review cases informally and formally through batching cases, streamlining our manual review processes and developing shorter decisions where possible. For example, In adjudication cases are getting resolved more quickly. 70% of our cases are being issued within our service standard of 85 days this year, which is a significant improvement over last year (50%).   
• In fact, overall we are on track to process about 11,000 cases in 2022-23, when five years ago, we were processing 5,000. There will be variation in the volume of cases that we can process year to year, depending on complexity and resource levels. While we were able to process about 15, 000 cases in 2021-22, the cases processed this year were somewhat more complex. This was because of the financial support package from Government.
• The Agency understood that to manage our growing backlog, increased efficiency in process must be found. Through our process review and continuous improvement initiative we were able to identify a number of digital and process improvements that would be integrated into the new complaints process. These include elements, such as:
  • a user friendly and automated web based intake form to result in faster complaint intake and initial screening and
  • a web base complaints portal to support an automated and more efficient digital connection with airlines to reduce administrative work required to engage airlines in complaint resolution. 

How much more productive would the new process be?

It is anticipated that the new complaints process would be at least 30% more efficient than the current resolution process.

Efficiency in the process will result from

• the Agency being empowered to close immediately and on an annual basis the 9% -10 % of cases immediately that are outside of the CTA's jurisdiction.
• Legislative amendments will convert the current time-consuming and costly court-like formal adjudication process for air travel complaints (overseen by Governor in Council-appointed Members), to a simplified, decision-making process that includes a mediation step, all of which can be completed by CTA staff. By simplifying the process, the CTA's average cost of processing one complaint will be reduced by 30% (from $1,353 to $952).
• These amendments will also result in an increase to capacity. On average, one FTE will now be able to process 160 complaints per year compared to 113 under current process (an increase of 29%).

What information will be collected and what will be posted externally where an arbitration decision is made?

For all cases that result in an binding decision, the Agency will publish the

• flight number,
• occurrence date,
• cause of the disruption that was decided by the Complaints Resolution officer, and
• any order that was issued to the airline

What are the recourses from decisions of the complaint resolution officer?

• Agency decisions under the current legislation are subject to 2 special forms of challenge that are not common among tribunals.
  • - Appeal to the Federal Court of Appeal on questions of law or jurisdiction. This is a 2-step court process (permission and appeal) in which a passenger may ultimately find themselves before a panel of 3 judges at the Federal Court of Appeal, and argue questions of law and jurisdiction for what is often a claim of low monetary value.
  • - Petition to the Governor in Council. This type of challenge is usually made because a party disagrees with an Agency decision for larger policy reasons. A passenger rarely files a complaint with the Agency because they want a decision on a question of law or jurisdiction or because they have broader policy concerns.
• Under the BIA, instead of these special appeal mechanisms, the complaint resolution officer decisions will be subject to the same form of challenge that applies to all federal tribunals by default: judicial review. Judicial review is meant to be fast and efficient and to ensure that the decision-maker has exercised their power fairly, reasonably and within the bounds of the law.
• Rather than going before a panel of 3 judges or before the Governor in Council, these decisions are heard by a single judge. This default recourse is more appropriate to the context of air travel complaints.

Enforcement:

Since April 1, 2019:

• APPR: Total NOVs issued – 41, Total value of AMPs issued - $612,860
• Accessibility: Total NOVs issued – 5, Total value of AMPs issued - $160,000
• Economic: Total NOVs issued – 26, Total value of AMPs issued - $1,271,725
  • Total: $2,044,585

Since April 1, 2022:

• APPR: Total NOVs issued – 27, Total value of AMPs issued - $524,910
• Accessibility: Total NOVs issued – 5, Total value of AMPs issued - $160,000
• Economic: Total NOVs issued – 9, Total value of AMPs issued - $201,500
  • TOTAL: $886,410

What were the 'virtual' APPR inspections in relation to?

These virtual inspections (which are performed on an ongoing basis) in respect of Consumer Protection are with respect to:

1) APPR s. 5 – Information (Simple, clear and concise communication)

2) APPR s. 25-31 - Advertising