Key Issue Scripts: Standing Senate Committee on Transport and Communications (May 16, 2023)

Legislative changes are the prerogative of Parliament. Should amendments to the Canada Transportation Act be made by Parliament through the BIA, the CTA would implement those parts of new legislation that are within its mandate. This may include developing or amending regulations.

The BIA that was tabled by the government this week would do the following:

• amend the Canada Transportation Act to require the CTA to modify the Air Passenger Protection Regulations (APPR).
• amend the Canada Transportation Act to convert the CTA's court-like adjudication process for complaints to a mediation-arbitration process with the intention of providing more timely resolution of air passenger complaints.
• Amend the Canada Transportation Act to require airlines to establish a process for responding to passenger claims within 30 days, including communicating their decision on the claim.
• amend the Canada Transportation Act to require airlines to cover the costs of the CTA's mediation-arbitration process for eligible passenger complaints.

Complaints Office

What is changing?

Should the proposed legislative changes be adopted by Parliament, the CTA would modify its processes for the resolution of air passenger complaints accordingly.

1. The current process has three stages that culminate in a court-like adjudicative process. The choice of pursuing a complaint all the way to adjudication rests with the passenger. During the first two stages, informal dispute resolution is attempted, but the CTA has no power to decide the case. The CTA can only make a final decision in adjudication. This means that all complaints can move through all three steps of the dispute resolution process at the passenger's discretion, including cases that for example may be out of jurisdiction.

The new process would be subject to by defined timelines and requirements, established in the Act and in CTA guidelines, where only eligible complaints are considered. Decision-makers would be public servants employed by the CTA, as is the case in other tribunals such as the Immigration and Refugee Board of Canada. This will enable the CTA to provide final decisions to applicants and airlines on their complaint much faster than the current process.

2. The current process has three steps which may include:

• a facilitation process by CTA staff
• a mediation process by CTA staff
• Adjudication by GIC appointed members

If the legislation is passed, passengers and airlines will be given one opportunity to resolve matters informally, before a binding, confidential decision is issued by an independent decision-maker, if no settlement agreement can be reached.

Once an eligible complaint is officially opened by the CTA, airlines will have an opportunity to respond to the complaint, passengers will have an opportunity to comment, and after a single opportunity for informal resolution, CTA staff will make a final decision on the case within 60 days of the start of informal dispute resolution.

3. The current process establishes interpretations of carrier obligations and passenger entitlements through individual decisions made by CTA members.

The new process will include a policy-based oversight role for GIC-appointed members, whereby they will be able to issue binding interpretations of the regulations, allowing the CTA to proactively address matters concerning the application of the APPR in timely manner. This practice is common in other regulatory agencies. Further, the new process would allow the CTA to publish on its website parts of the Complaint Resolution Officers' decision to allow other passengers on the same flights to know if a flight disruption may give rise to compensation and other entitlements. CTA GIC-appointed members will continue to have oversight over the content of airline's terms and conditions to determine whether they are reasonable, clear and not unjustly discriminatory.

4. The current legislative framework process provides two venues for recourse:

• Federal Court of Appeal
• GIC petition

The new process would provide one venue for recourse:

• Judicial review by the Federal Court

Will these changes be an improvement?

In due respect for Parliament, we cannot be definitive in our assessment of the new process, until it has been officially adopted in the legislation. Based on the proposed changes in the bill, some of the benefits could include: a much simpler, clearer, faster and more cost effective process, ensuring timely complaint resolution and access to justice for Canadians.

The new process would apply to all complaints already received by the CTA for which adjudication has not yet started, should the proposed legislative changes be adopted by Parliament and when the relevant provisions of the legislation come into force. It should therefore help to eliminate the backlog of complaints faster. Given the significant changes that could be made possible due to the BIA, we do not, at the moment, have a definitive timeline for the elimination of the complaint backlog, but the new process alongside the additional funding previously announced will allow the processing of significantly more complaints.

The CTA's current dispute resolution process was created to deal with few highly complex disputes involving mainly two commercial parties which generally have a high economic impact, for example level of service related disputes between railways and shippers. The changes would better align the nature of air travel complaints, which are high volume, generally less complex, involves an individual and a company and do not have the same system wide economic impacts, to the requirements of the process. This would reduce the burden on applicants both in terms of time and level of legal sophistication required to participate.

The new process would, from the outset, inform applicants if their complaint is not eligible so that they do not have to go through the entire process if the complaint cannot, on its face, succeed. Having clear rules for eligibility will also allow the CTA to automate this stage of the process, meaning applicants will receive this information quickly without even needing the intervention of CTA staff. By allowing the CTA not to further deal with ineligible complaints, the Act would give the CTA the authority necessary to ensure that CTA resources are properly allocated to cases that need further consideration, ultimately resulting in a better use of resources and reducing the overall processing time for those cases.

The requirements for participation and the timelines for the process will also be clear, simple, and predictable. The single step process will eliminate a significant amount of administrative back and forth and eliminate the wait times between the previous steps.

The new process would apply only to air passenger consumer complaints, and not to accessibility or rail complaints, which would continue to be subject to existing CTA processes.

What are the impacts on individuals who are currently waiting in the backlog?

The new process would apply to all complaints already received by the CTA, except those that are already being actively adjudicated, should the proposed legislative changes be adopted by Parliament and when the relevant provisions of the legislation come into force. We expect that everyone who has already submitted a complaint to the CTA will be able to benefit from a faster and more efficient process.

When and how will these changes take place?

Legislative changes are the prerogative of Parliament. Should amendments to the Canada Transportation Act be made by Parliament through the BIA, the CTA would implement those parts of new legislation that are within its mandate. This may include developing or amending regulations.

APPR 3.0

What is changing?

Under current legislation, passengers protection entitlements in the case of flight disruptions (compensation for inconvenience, rebooking, refunds, and food and accommodations) depends on the categorization of the flight disruption into one of three categories: within airline control, within airline control but required for safety, or outside carrier control.

Proposed amendments would eliminate these three categories and the need for the CTA to prescribe different entitlements depending on the category of flight disruption. Instead, passengers would be entitled to compensation, except in the case of an exceptional situations. which would be clearly defined in regulations. The onus would be on the airline to prove that compensation is not due to a passenger.

These regulations would be developed by the CTA following consultations with interested stakeholders such as consumer groups and industry, should the proposed legislative changes be adopted by Parliament.

There would be a new requirement for airlines to provide a refund if a passenger cancels a flight because of a government travel advisory.

Will these changes be an improvement?

These changes will have two main impacts for Canadians

1. It will expand passenger protections so that Canadians will be eligible for restitution in more circumstances than under the previous regulations
2. Determining whether or not passengers are entitled to something in the case of flight disruptions, will be simplified.
   1. Passengers should have better access to, and an easier time understanding whether or not they are entitled to something from the airline.
   2. Airlines should have more clarity on their requirements in the event of a flight disruption.
   3. The CTA will have a simpler decision making process and make it easier to enforce the regulations since passenger entitlements would no longer depend on how airlines categorize a flight disruption

We expect that this will lead to passengers being provided what they are entitled to faster and with less intervention by the CTA. In cases where CTA intervention is required we expect a simpler more transparent decision making process and in turn a much faster and more cost effective resolution.

When will these new regulations come into force?

The CTA would make these regulations, following consultations with consumer groups and industry.

Will the new regulations apply to individuals who have previously submitted a complaint and are currently waiting in the backlog?

The new regulation would not be retroactive and would only apply to cases received after the coming into force of the regulations. Cases currently in the backlog will be subject to the current APPR and the applicable conditions of the purchased ticket.

Regulatory Charge

The BIA would also amend the Canada Transportation Act to require airlines to cover some or all of the costs of the CTA's mediation-arbitration process for eligible passenger complaints.

The BIA, as tabled, also provides the CTA with the authority to develop rules for cost recovering other services provided by the CTA.

Cost recovery would apply should the proposed legislative changes be adopted by Parliament and when the relevant provisions of the legislation come into force, following consultations by the CTA.

Data-sharing from airlines

How would airline data be shared?

Budget 2023 proposes to amend the Canada Transportation Act to require the sharing and reporting of data by airports and airlines. This would help to reduce delays and improve coordination between airports, airlines, and the Canadian Air Transport Security Authority.

Budget 2023 also proposes to provide $5.2 million over five years, starting in 2023-24, to Transport Canada to collect and analyze air sector performance data.

Should amendments to the Canada Transportation Act be made by Parliament, the CTA would use those new levers quickly following passage of the legislation to add to its data-driven operations and improve our processing capacity and better understand the experience of passengers. This could include for example what air carriers receive as requests for compensation, and what compensation the air carriers pay out.

Rail (interswitching)

The government has proposed changes to legislation in the BIA that would enable a temporary extension, on a pilot basis, of the interswitching limit in the Prairie provinces, under rates regulated by the CTA. How will this work and when will it take effect?

Interswitching is the transfer of traffic between two railway companies. One railway takes a shipper’s freight part of the way between origin and destination. It then transfers the freight to a competing railway with which the shipper has made arrangements for the rest of the haul. The transfer takes place at an interchange – where the lines of the two railways meet.

The CTA currently regulates some interswitching to make sure shippers have fair and reasonable access to service from more than one railway, which can increase competition in the system. In particular, it sets rates each year for “30-kilometre interswitching”. This is interswitching for shippers whose siding or facility at origin or destination is:

• within 30 kilometres (in a straight line) of an interchange; or
• “reasonably close” to an interchange, as decided by the CTA.

The CTA also regulates long-haul interswitching (LHI), which is not limited to 30 kilometres. The LHI provisions enable a shipper who has a dispute with a Class 1 railway company about a rate, a route, and/or terms of service, to make an application to the Agency for an LHI order. An LHI order would require the local carrier to move the shipper’s commodity to a connecting carrier who will perform the remainder of the movement.

Should amendments to the Canada Transportation Act be made by Parliament, the CTA would implement a temporary pilot on extended interswitching in the Prairies. This pilot would involve establishing and implementing rates for interswitching in new (extended) interswitching zones. The CTA would implement the pilot within the time limits established in the legislation.

The supply chain taskforce report published in late 2022 noted that: "railways are the only source of transport for many shippers, giving rail companies pricing and service discretion that is not balanced by normal market forces. An expanded interswitch distance option would provide increased competition by offering shippers more choices."

BIA Provisions Coming into Force

BIA key dates Budget Implementation Act key dates / Provisions coming into force:

Item 2 (c) BIA Q&As

General

1. What do you think of the provisions of the BIA being proposed by the government? / Did you advise the government on the provisions of the BIA?

• During appearance before House Transportation Committee in January, I stated that clarifying the categories of flight disruption would help to improve understanding of the requirements by airlines and passengers.
• In CTA annual reports, we make recommendations about potential legislative changes that could be beneficial to the transportation system.
• CTA has proposed in annual reports a number of the items that appear in the BIA, and we have taken the opportunity to discuss many of these with the Minister and Transport Canada, including:
  • Allowing CTA staff, instead of GIC-appointed Members, to decide on air passenger complaints;
  • Increasing the maximum administrative monetary penalties for violations of air passenger protection regulations;
  • Expanding the use of compliance agreements from violations of accessibility regulations to other violations, such as those of the air passenger protection regulations.

Complaints Office

1. How will the new process be better / faster?
   • New process will provide a one-stop shop for complaint resolution.
   • It will be simpler, clearer, faster and more cost effective, ensuring timely complaint resolution and access to justice for Canadians.
   • Eligibility determined early in the new process; only eligible complaints would move forward to mediation and, if mediation is not successful, a final decision.
   • CTA able to quickly close a file if a complaint is not eligible, for example, if passenger has already received what they are entitled to, or made a complaint that is outside the scope of the regulations.
   • CTA would be able to leverage automation at eligibility stage and complaints digitally transmitted to airlines quickly, after reviewed and found to be eligible.
   • Decision-makers – Complaints Resolution Officers - would be public servants, as is the case in other tribunals such as the Immigration and Refugee Board of Canada.
   • Same Complaints Resolution Officer deals with entire process, reducing need for files to be handed over from one staff to another, and reducing processing times.
   • Simplified, digital and single step process will eliminate administrative back and forth and eliminate wait times associated with existing multistep and manual process.
   • Fixed timelines (60 days after mediation begins to issue decision).
2. Will there be any oversight over or appeals to decisions by Complaints Resolution Officers?
   • GIC-appointed members, five senior officials, could issue binding interpretations of the regulations, allowing CTA to proactively address matters concerning the application of the APPR in timely manner.
   • CTA members would continue to have oversight over the content of airline tariff terms and conditions to determine whether they are reasonable, clear and not unjustly discriminatory.
   • While the current legislative framework provides two venues for recourse – Federal Court of Appeal and GIC (Cabinet) petition - the new process would provide one venue for recourse, judicial review by the Federal Court.
   • Passengers would continue to have the possibility of pursuing their disputes in other venues, such as small claims courts, rather than through the new process at the CTA.
3. What would be the impacts on individuals who are currently waiting in the backlog?
   • New process would apply to all complaints already received by the CTA, except those that are already being actively adjudicated.
4. Why will the new process be confidential?
   • New process includes obligation of confidentiality precluding the complainant, the carrier and the CTA from disclosing information pertaining to the process with some exceptions.
   • Other complaints resolution organizations, such as the Commission for Complaints for Telecom-Television Services (CCTS), have similar confidentiality provisions.
   • This confidentiality obligation is typical in mediation to allow a frank and open discussion between the complainant and the carrier; Canada Transportation Act already contains similar confidentiality provision for the mediation services offered by the CTA (s.36.1).
   • CTA would publish for each case which requires a decision certain information, including the flight number and the date, as well as the reason for the flight disruption and whether or not compensation was awarded.
   • Other passengers would be able to use this published information to claim compensation, unlike the current regime, where passengers do not generally know the result of claims settled during facilitation.
   • Relevant information regarding the rights and obligations of passengers and carriers will be provided through the Agency's binding guidelines, via decisions on passenger claims.
5. If the new process will be confidential, how will we know if it is working well?
   • CTA would publish for each case which requires a decision information that is useful to air passengers in determining their own actions going forward.
   • Under the BIA, Transport Canada would have the ability to require data from air carriers, for example on what air carriers receive as requests for compensation, and what compensation the air carriers pay out.
6. When will the backlog be eliminated?
   • Backlog is significant.
   • Funding and BIA proposals will allow us to tackle the backlog faster:
     • We have already done a lot of work to improve the efficiency of complaint processing; with the proposed new process, we will be able to further improve the processing of complaints.
     • New APPR will reduce the grey areas for passengers and airlines, and may result in fewer complaints to the CTA.
   • However, we don't know the future volume of incoming complaints.

APPR 3.0

1. Would the changes to the APPR be an improvement?
   • Changes to APPR would have two main impacts for Canadians.
   • First, they would expand passenger protections so that passengers would be eligible for restitution in more circumstances than under the current regulations.
   • Secondly, they would remove grey areas – the categories of flight disruptions – and make it simpler for passengers, airlines, and the CTA to understand passenger entitlements in the case of flight disruptions.
   • This should lead to passengers being provided what they are entitled to faster and with less intervention by the CTA.
   • In cases where CTA intervention is required, we expect simpler, more transparent decision making process and a much faster and more cost effective resolution.
2. Would passenger entitlements such as compensation be "automatic"?
   • BIA would reduce the grey areas of what passenger entitlements should be provided during a specific flight disruption.
   • Specifically, the BIA would eliminate the three categories of flight disruption – within airline control, within airline control but required for safety, outside airline control.
   • As a result, entitlements would be due in all situations, except in exceptional situations to be established in regulation.
   • Even in exceptional situations, certain passenger entitlements, such as for food, accommodations, and rebooking, would still be required. This concept of reduced entitlements in exceptional situations is similar to the system in place in the EU.
   • As in the EU, certain passenger entitlements, such as for compensation or for refunds, would have to be requested by the passenger.
3. Will the new APPR be the toughest in the world?
   • The CTA will implement the legislative framework decided by Parliament.
   • Our experience since 2019 when we implemented for the first time comprehensive air passenger protection regulations in Canada, will guide us in the development of the regulations, as will consultations.
   • The BIA would simplify the APPR and make it easier to understand by both airlines and passengers, and easier to enforce.
   • This would be comparable to the best legislative frameworks in the world.
4. Will new APPR be easier to enforce?
   • Under current APPR:
     • Passenger entitlements depend on category of flight disruption.
     • Many factors must be considered to determine the category.
     • Making that determination is typically done through a panel / tribunal decision when deciding complaint cases.
     • Enforcement officers would have to decide category to determine whether an airline has provided the required passenger entitlements or has contravened the regulatory provisions.
     • Enforcement officer decisions are subject to appeal (to the Transportation Appeals Tribunal of Canada); there must be a high degree of confidence that violation has occurred, to the high standards of the appeal body.
   • Under future APPR:
     • Categories would be eliminated, and entitlements / compensation would be due to passengers in all cases, except exceptional situations.
     • Enforcement officers would only have to determine whether the entitlement / compensation was provided or not.
5. Would the new APPR regulations solve the problems highlighted by the Christmas 2022 flight disruptions?
   • The objective for airlines should be to ensure that passengers complete their travel on time, with all their baggage.
   • When that does not happen, the objective of air passenger regulations is to mitigate the impact on passengers.
   • By eliminating the 3 categories, airlines and passengers will have a clear understanding of what must be provided to passengers in the event of flight disruptions.
   • We will certainly keep the experience of Christmas 2022 in mind when developing the new APPR regulations.
6. When will these new APPR regulations come into force?
   • CTA would make new regulations as soon as possible following Royal Assent of the BIA, and the required regulatory process, including consultations with stakeholders and the public.
7. Would the new APPR regulations apply to individuals who have previously submitted a complaint and are currently waiting in the backlog?
   • New APPR regulations would not be retroactive and would only apply to cases involving events that occurred after they come into force.
   • Cases currently in the backlog will be subject to the current APPR and the applicable conditions of the purchased ticket.

Regulatory Charge / Cost Recovery

1. What would the CTA do with the funds collected through the regulatory charge / cost recovery given that the CTA has already been provided with $76 million over 3 years?

• As of April 1st, the CTA was provided with $76 million over 3 years to tackle the backlog of air passenger complaints. Provided financial stability, and ability to attract and retain employees. We have already begun to hire additional employees with this funding.
• Complaints will continue to be made to the CTA. Once it comes into effect, the regulatory charge would pay for the costs of each complaint that goes through the new mediation-arbitration process.
• The regulatory charge will contribute to tackling the backlog faster.

Enforcement

1. What is the purpose of the new provisions for compliance agreements?
   • Compliance agreements – like other tools – are about achieving compliance with the regulations. They are not a "get-out-of-jail-free card".
   • Compliance agreements are not novel; they are used by regulatory agencies in Canada (CFIA, Environment Canada) and in U.S. (Department of Transportation), and by CTA in the case of accessibility regulations.
   • BIA would allow carriers subject to an administrative monetary penalty (AMP) for a violation of the APPR to request a compliance agreement.
   • Compliance agreement could provide for a lesser AMP if the carrier agreed to undertake specified actions.
   • GIC-appointed members of the CTA would consider the request and determine whether or not to enter into an agreement. These decisions would be made on a case-by-case basis.
   • Compliance agreements would have a clearly defined path and associated timelines to return to compliance.
   • Even higher AMPS would be issued if an entity does not respect the terms of a compliance agreement.
2. The CTA never imposed the maximum AMP of $25,000. What will you do with a new maximum AMP of $250,000?
   • We have published our enforcement policy and our table of penalties on our website.
   • On our website, you will see that we have a graduated approach to enforcement, like other regulatory agencies. The objective of this graduated approach is compliance.
   • We will review our enforcement policy and table of penalties for a maximum of $250,000.
   • We will continue to follow a graduated approach to enforcement.

Rail (interswitching)

1. The government has proposed changes to legislation in the BIA that would enable a temporary extension, on a pilot basis, of the interswitching limit in the Prairie provinces, under rates regulated by the CTA. How will this work and when will it take effect?
   • CTA would implement an 18-month pilot on extended interswitching in the three prairie provinces.
   • Pilot would involve establishing and implementing rates for interswitching in new (extended) interswitching zones.
   • CTA would establish rates for extended interswitching within 90 days.

Canadian Transportation Agency

Cost Recovery: Requirement and Authorities Summary

Prior to the Budget Implementation Act 2023 (BIA), the Canadian Transportation Agency (Agency) had limited options to do cost recovery and did not have the ability to charge other than for applications or renewals of licences, amongst other things.

The BIA would amend the Canada Transportation Act (CTA) and require the Agency to recover costs related to the process of dealing with air travel complaints that go to mediation and decision. These charges must be established by the Agency, by September 30, 2023, or, if it is later, on the date that the BIA comes into force. The proposed amendments to the Act contained in the BIA include:

• the addition of section 85.16:
  • would require that the Agency establish charges for the purpose of recovering all or a portion of the costs related to the Air Travel Complaints program; and
  • delegate authorities that provide a significant degree of autonomy and independence to the Agency to administer those charges until the provision is repealed (authority for the Agency to fix charges, publication requirement limited to publishing charges on its Internet site, charges would not subject to the requirements of the Service Fees Act, etc.).
• section 463 of the BIA indicates that section 85.16 of the Act will be repealed, however the repeal will only come into force on order of the Governor in Council. In other words, the timing of the repeal is not yet determined. The Agency's understanding has been that the provision would be repealed upon coming in to force of rules fixed under section 34 of the Act, as described in the next paragraph.

The BIA would also amend section 34 of the Act to allow the Agency to recover its costs for the administration and enforcement of the Act, should it decide to. The authority (s.34) will not give the Agency the same independence and flexibilities than what section 85.16 will.

• Both authorities (i.e. sections 34 and 85.16) are distinct, and have a separate intent, for the purposes of administering charges.
  • Section 34: Broad authority to charge for the administration and enforcement of the Act.
  • Section 85.16: Specific requirement to establish charges for Air Travel Complaints related processes only and the authority to charge.

It can be assumed that the charges established for the air travel complaints could eventually be folded into a section 34 charge. Note that it commonly takes several years to introduce a regulatory charge like the one provided for section 34.

[Redacted]

What is your backlog?

• The current backlog is over 46,000.
  • This backlog began in the summer of 2022, where we had the highest number of cases - nearly 6000 - in the month of August and the Agency has continued to receive a high volume of cases each month.
• While it appeared as though volumes were slowing in the fall of 2022, there were additional surges over January to March 2023 where, on average, nearly 5000 cases were received per month.
• You can compare this to the period before the Air Passenger Protection Regulations (APPR) came into force where the Agency received 7650 complaints for the entirety of the 2018-2019 fiscal year.
• Work is underway to develop backlog reduction targets that are anticipated to set during the summer 2023.

How long will it take to respond to a new complaint received today?

• On March 28, 2023 a number of proposed legislative changes were tabled through the Budget Implementation Act (BIA) that would offer additional measures that could support backlog reduction, such as
  • strengthening and clarifying obligations on airlines to compensate passengers for disruptions to reduce the volume of incoming complaints to the Agency and simplifying APPR obligations to ease interpretation by passengers, airlines and the Agency and
  • An improved complaint resolution process that is more efficient, digital and user friendly
• Additional funding, legislative changes and the introduction of improve complaints processes together will support reduction of the backlog

Do you think your organization is performing well?

• The Agency has a multifaceted strategy to support the reduction of the air travel complaints backlog.
• Last year, the Agency received $11.5 M in temporary funding to process air travel complaints. Using these resources, the Agency were able to process approximately 12,000 cases.
• This was the levelSources of productivity that the Agency had targeted, given the resources that were allocated.

Do you have the resources to do your job?

• On March 14, 2023, the goverment announced $75.9 million in additional funding for the Agency over the next three years to help clear the backlog of complaints brought by air passengers who experienced travel disruptions.
  • This funding will be used to significanlty enhance the Agency's capacity to manage comapliants.
• The Agency is working currently, in anticipation of the approval of the BIA to,
  • staff front line positions to support complaint processing,
  • plan for a transformational service transition to the new complaints resolution model and
  • design the path for legislative development and adoption.
• In parallel, work is underways to develop backlog reduction targets that could be set during the summer 2023 transition period and at the time of implementation of the new complaints process in the fall 2023, once there are further detailed plans established for the new processes and legislative changes.

Do you think that the APPR works well, and is a good, effective regulation?

• For the first time in Canada, the Air Passenger Protection Regulations (APPR) established common minimal requirements for air passenger consumer protection that have to be respected by all airlines.
• Before the development of the APPR, each airline set out its own terms and conditions of carriage in a legal document known as a tariff - which is in effect the contract between the passenger and the airlines - that was rarely, if ever, read by passengers. After the coming into force of the APPR, in addition to the terms and conditions set out in their tariff, each airline is required to follow the obligations as set out in the APPR. These regulations create more consistent passenger rights across airlines.
• Passengers now have the opportunity to pursue their rights as consumers through the application of the APPR, and have done so in record numbers.
• At the core of the new regulations is a framework where passenger entitlements for flight disruptions depend on the degree of control an airline has over a disruption.
  • Passenger entitlements depend on whether flight disruptions are within airline control, within airline control but required for safety, or outside airline control.
• The regulations leave room for intepretation. As the Agency makes decisions on complaints and courts make decisions on Agency decisions which are appealed, the interpretation of the regulations will become more clear.
• The Agency has issued decisions in response to complaints that interpret the APPR and clarify passenger rights and airline obligations.
  • While complaints are generally reviewed on a First Come First Serve basis , the Agency can also prioritize those complaints that have broad, interpretive value for the efficient resolution of complaints and the enforcement of regulatory requirements.
• Overall, passengers have a more comprehensive protection regime than before the APPR. As a result, they are better protected.
• It is fair to say that the difficulty this regime presents for passengers is that it difficult for them to know the compensation they are entitiled to, since airlines have the information to determine whether the incident is within their control, within their control but required for safety, or outside their control. Therefore, if the passenger is not satisfied with the response from an air carrier, they have to lodge a complaint.
• This has contributed to the increase in the number of complaints we receive.

In brackets are the years for which this item was included in the annual report (for the fiscal year ending in that date i.e. 2021= the FY ending in March 2021)

The full details for each item and the rational can be found in the annual report:

• Annual Report 2021–2022
• Annual Report 2020–2021
• Annual Report 2019–2020
• Annual Report 2018-2019

Air passenger protection

• to allow the CTA to look into possible issues (reasonableness or clarity) with domestic tariffs on its own motion, consistent with the authority it has for international tariffs. (2022, 2021, 2020)
• so that passengers and airlines can participate in facilitation without any concern that their information and positions will be shared with others (currently does not require parties to keep confidential the discussions that took place during the facilitation, including the detail of any settlement). (2021,2020)
• to require participants be directed to mediation before a formal adjudication process can be launched. (2020)
• to be given a clear authority to set more robust standards for passenger protection—including refunds—when flights are cancelled for reasons outside of an airlines' control. (2020)
• to give the ability to proactively gather information on flight disruptions that could give rise to complaints. Currently the Agency is only able to examine passenger issues, following the receipt of a complaint. (2022)
• The Act could be amended to give the authority to public servants, instead of GIC-appointed Members, to decide on passenger complaints that an airline has not met its obligations (2022)

Accessible transportation

• to provide the CTA with remedial powers when investigating systemic issues on its own motion. (2022, 2021, 2020)
• to require transportation service providers to report on key accessibility service metrics. (2021, 2020)

National transportation network

• to prohibit contractual provisions which waive the rights of shippers to access remedies otherwise available under the legislation, and any retaliatory actions against shippers that submit applications to the CTA. (2021, 2020)

Own-motion investigations

• allow the CTA to, on its own initiative, investigate rail level of service matters and inquire into matters that concern transportation and relate to the mobility of persons with disabilities, without obtaining the Minister’s approval. (2021, 2020)

Appeals of CTA decisions

• to specifically state that the intended standard of review for CTA decisions is reasonableness rather than correctness (2022, 2021, 2020)
• to clarify the right of the CTA to appear in appeals of its decisions to the Federal Court of Appeal (FCA) and to confirm the scope of its participatory right. (2022, 2021, 2020, 2019)
• to remove the ability for a party—generally, industry—to petition government to overturn CTA decisions. It is not clear why this is in the Act, given there is a right of appeal of CTA decisions to the Federal Courts of Appeal. (2020)
• to clarify the role of the two different bodies called to interpret the same legislative and regulatory provisions – i.e. the Agency when exercising its adjudicative and regulatory powers under the Act, including the power to review Notices of violation (NoVs) containing a warning, and the Transportation Appeal Tribunal of Canada (TATC) when reviewing NoVs issued by an Agency's designated enforcement officer. (2022)

Authority to act on behalf of the Crown – Duty to consult Indigenous people

• to allow the CTA to act on behalf of the Crown in discharging the duty to consult with Indigenous persons. (2021, 2020)

Members

• Removing the requirement for Members to reside in the National Capital Region. (2022)
• to authorize the Chair to draw Temporary Members directly from the roster, rather than being required to ask the Minister of Transport to appoint them. (2021, 2020, 2019)
• to remove or raise the three-person cap on the number of Temporary Members. (2021, 2020, 2019)
• to allow Temporary Members to serve more than two consecutive one-year terms. (2021, 2020, 2019)

Ability to delegate routine matters to employees

• to allow the CTA to delegate routine matters, with minimal scope for discretion, to staff (ex. the issuance of uncontroversial air licences, charter permits, uncontested coasting trade applications etc.) (2022, 2021, 2020, 2019)

Updating the CTA’s compliance assurance toolkit

• to allow enforcement officers to rely on the CTA’s adjudicative findings when determining whether to levy an AMP. (2021, 2020, 2019)
• to increase the maximum amount for AMPs for most violations from $25,000 for corporations and $5,000 for individuals—to $250,000. (2021, 2020, 2019)
• to allow Designated Enforcement Officers to issue more than a single Notice of Violation for continuing offences (e.g., when there is a failure to have proper signage and is not remedied by a carrier after a Notice of Violation has been issued). (2021)
• to allow the Agency to enter into compliance agreements with transportation service providers. Amending the Act to add compliance agreements, as well as other powers currently found in the Accessible Canada Act, would give us modern and consistent enforcement tools across all of our mandates. (2022)
• Extending the statute of limitations to 24 months for both prosecutions and issuance of NoVs (2022)

APPR Enforcement – Speaking Points

• The Agency has many tools to advance its regulatory mandate with respect to passenger protection, including our authority to resolve passenger complaints against airlines as a quasi-judicial tribunal and to enforce industry compliance as a Regulator. The Agency believes that these actions, combined, are the best way to ensure that industry and passengers understand their respective rights and obligations, and to achieve compliance with the regulations.
• Through the complaints process, if the Agency finds that the airline has failed to meet its APPR obligations, it can order the airline to provide passengers what they are entitled to, whether it is compensation for inconvenience, refunds, or compensation for expenses they have incurred as a result of the airline's failure to comply with the APPR. For this reason, the main way we provide consumer protection for air passengers is by resolving their complaints against airlines.
• Additional compliance tools, including compliance and monitoring activities done by our small team of 7 designated enforcement officers, are utilized strategically based on a series of factors including severity and risk. They include proactive monitoring and enforcement of the regulations, and issuing notices of violation (NoV) with administrative monetary penalties (AMP), where required. Unlike the process for the resolution of complaints, however, enforcement actions do not result in any compensation to individual passengers.
• Aspects of the APPR that are handled by compliance and enforcement include carrier obligations related to: advertising transparent price information; communication with passengers when a flight is delayed or cancelled; providing passengers with food, drinks, accommodations and refunds when required; seating children with parents/guardians; and compelling carriers to provide passengers with compensation (or reason for denying compensation) within 30 days^{Footnote 1}.
• As per the Agency's Compliance and Enforcement Policy, Designated Enforcement Officers address non-compliance by applying a graduated approach, using both informal and formal enforcement measures. They undertake a thorough analysis to select the enforcement instrument that will be the most effective in causing the entity to return to or achieve compliance and prevent recurrence. This approach, as well as our use of AMPs to compel compliance with the APPR, is consistent with that other regulators with an enforcement mandate.

Recent investigation of note

• In March 2023, in response to complaints received by the Agency, Air Transat was issued two NOVs with AMPs totaling $79,750 for failing to communicate required information to passengers in the method they prefer, as required by the APPR.

Winter 2022/23 flight disruptions

• In response to the winter 2022 disruptions in the air industry, the Agency undertook an investigation regarding Sunwing's provision of information to passengers in response to the disruption of their flights, which resulted in many passengers being delayed in southern destinations. An NOV with AMP valued at $126,000 was issued following the investigation.
• The Agency undertook 14 compliance verifications involving 3 Canadian and 6 foreign carriers related to tarmac delays at the Vancouver Airport resulting from the winter storm on December 19, 2022. Investigations were performed in respect of these delays, however no violations of the regulation were identified.
• In respect of the winter disruptions, the Agency continues to monitor to ensure that compensation payments or responses are being provided to passengers within 30 days (per s.19(4)) and to ensure that refunds are being provided to eligible customers (per s.18.2). Investigations continue, and as appropriate enforcement action will be taken.

Summer 2022 flight disruptions

• In response to the summer 2022 disruptions in the air industry, the Agency responded by conducting onsite inspections of Canadian and foreign air carriers at the Montreal, Toronto and Vancouver airports. This led to investigations resulting in the issuance of AMPs to Air Canada, WestJet and Delta. Also, the Agency analyzed samples of cancelled flights and complaints data which has led to investigations into whether compensation may be owed to passengers. As a result of the Agency's interventions, hundreds of thousands of dollars in compensation has been paid to passengers who had previously been denied compensation by the carriers.
• Additionally, the Agency investigated carriers' delayed response to passenger compensation requests, which initially resulted in the issuance of AMPS to Air Canada for $13,400, WestJet for $11,000 and to Flair for $28,000. Continued monitoring identified ongoing issues with respect to compliance and more AMPs have been issued, including an additional violation by WestJet, which resulted in an AMP valued at $112,800, reflecting an increased penalty for the repeat offence. [Redacted]
• Since the coming to force of the APPR obligations in July 2019 the CTA has issued 86 Cautionary Notices and subsequently worked with carriers to bring them into compliance; and has issued $612,860 in AMPs relating to the APPR specifically, of which $524,910 are attributed to AMPs issued since April 1, 2022 (86%).
• The value of an AMP issued to an entity after a regulation has come into force, reflects a lower penalty amount for a first violation, in accordance with general principles applicable to the establishment of penalty amounts, and taking into account any mitigating and aggravating factors. Penalty amounts increase for second and subsequent violations.

APPR – Early Enforcement Milestones

• The CTA moved quickly to enforce the new APPR during the summer of 2019 in the weeks following the coming-into-force of the first set of APPR requirements, then again in December when the second phase came into effect, sending Enforcement Officers to airports to conduct compliance verification blitzes of major Canadian and foreign airlines, particularly in relation to their new communication requirements.
• Enforcement officers also conducted investigations related to instances of tarmac delays which resulted in the issuance of an AMP of $2,500 to Air Transat.
• On February 13, 2020, the CTA opened an inquiry into 567 air travel complaints from passengers alleging that air carriers did not accurately communicate the reasons for flight delays or cancellation, and appointed the CTA's Chief Compliance Officer as the Inquiry Officer to look into the matter.
• The Inquiry Officer submitted his Report on Oct. 1, 2020. He found multiple communication issues leading to passenger frustration and concluded based on the evidence that information provided to passengers was inadequate, terse and unclear. However, he found no evidence that the airlines deliberately mischaracterized the reasons for delays and cancellations.
• The report also highlighted issues related to how the airlines categorized flight disruptions. This report was part of the evidence considered by the Agency when it issued Decision No. 122-C-A-2021 on Nov. 17, 2021 in which the Agency established a number of principles regarding the interpretation of provisions of the APPR, that brought clarification regarding passengers and carriers' rights and obligations. In that decision, the Agency directed each of the six carriers involved in the 567 complaints to reconsider each the requests for compensation for inconvenience that they had received.
• With the onset of the COVID-19 pandemic; and the resulting travel restrictions and Government health measures in March 2020, the CTA pivoted to a remote compliance verification strategy to ensure continued oversight of the APPR.
• The CTA continued to focus on communication requirements, verifying carrier websites to ensure they complied with requirements to include their services and obligations to passengers respecting flight delays and cancellations among other things; ensuring that carriers' tariffs (their contracts with passengers) met, at a minimum, new APPR requirements.
• With the resumption of air travel in the fall of 2021, the CTA resumed on-site inspections in addition to ongoing virtual inspections. Enforcement efforts were targeted to issues related to communicating the reasons for a flight disruption, assistance and compensation.

General

• In general, there is a high level of adherence to the requirements of the Agency's accessibility regulations.
• We know this because we have been implementing a proactive verification strategy since the beginning of the calendar year (2022).
• In cases where travelers believe they encounter a barrier to their mobility, they file complaints with the Agency. We receive between 100 and 200 accessibility complaints a year, a small fraction of the complaints we receive each year.
• When we receive an accessibility-related complaint, we ensure that such complaints move to the front of the line and are prioritized. As a result, there is no backlog with respect to accessibility complaints.
• Even in the absence of a complaint, when we are made aware of an egregious incident where there may be a violation of the regulations, we ask our enforcement team to look into the incident to obtain more information about what happened.
• More generally, we continue to raise with industry the importance of not just following the regulations, but of ensuring that a culture of respect and ensuring the dignity of persons with disabilities is imbued in all their staff and contractors, in all aspects of their work.

Mobility Aids

• Under both the ATPDR (large transportation service providers) and Part VII of the Air Transportation Regulations (ATR) (small-air carriers), airlines are required to provide assistance to passengers who use mobility aids, such as by performing passenger transfers, and to quickly repair, replace or reimburse damage to mobility aids.
• Even in the absence of a complaint, when we are made aware of an egregious incident that could be a violation of the regulations, we ask our enforcement team to look into the incident to obtain more information about what happened.
• More generally, the Agency continues to work with partners internationally to improve the handling of mobility aids. For example, with Transport Canada, we commissioned a study by the National Research Council on the safe storage and transportation of mobility aids in the cargo holds of aircraft; this study has become an important input to the work of the new IATA Action Group on Mobility Aids, which seeks to harmonize and improve industry best practices with respect to the handling of mobility aids.

Service Animals

• The ATPDR requires that trained service dogs be accepted for travel by airlines.
• It is clear that dogs can be trained as service animals and that there are many organizations that provide the appropriate training.
• We have received some complaints from travellers regarding acceptance of other animals, including emotional support animals by airlines. We have sought an expert opinion regarding the transportation of emotional support animals, which we have posted on our website, and are conducting consultations on this subject.