Notice to Industry: Applications for Exemptions from Subsections 115(1) and 138(3) of the Air Transportation Regulations (ATR)

1. Purpose

This notice to industry outlines the Agency’s approach to considering applications for exemptions from the filing notice periods that apply to international air services, as set out in subsections 115(1) and 138(3) of the ATR.

2. Legislative references to the Canada Transportation Act (CTA) and the ATR

Subsection 80(1) of the CTA states:

The Agency may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of this Part or of a regulation or order made under this Part where the Agency is of the opinion that:

  1. the person has substantially complied with the provision;
  2. an action taken by the person is as effective as actual compliance with the provision; or,
  3. compliance with the provision by the person is unnecessary, undesirable or impractical.

Subsection 115(1) of the ATR states:

Every tariff or amendment to a tariff shall be filed with the Agency at least 45 days before the tariff or amendment comes into force, except

  1. where a different period is specified in an international agreement, convention or arrangement respecting civil aviation to which Canada is a party; or
  2. if the tariff or amendment is filed at least one working day before it comes into force to publish tolls for an additional aircraft to be used in, or to cancel tolls respecting an aircraft to be withdrawn from, a non-scheduled international service, other than a service that is operated at a toll per unit of traffic; or,
  3. by order of the Agency.

Subsection 138(3) of the ATR states:

Every service schedule or amendment thereto shall be filed with the Agency at least 10 days, commencing on its receipt by the Agency and not on mailing, prior to the effective date of the schedule or amendment.

3. Overview

A tariff is a schedule of fares, rates, charges and terms and conditions of carriage applicable to the provision of an air service and other incidental services. Air carriers must have a tariff in accordance with the requirements of the ATR and are prohibited from applying a fare, rate, charge or a term and condition of carriage unless it is in their tariff. Subsection 115(1) of the ATR, which applies solely to international air services, requires a tariff be filed 45 days in advance of when it takes effect.

A service schedule details the points served, the frequency of service, the times of departure and arrival at each point, the flight number(s), and the aircraft to be operated. Subsection 138(3) of the ATR, which applies solely to scheduled international services, requires a service schedule be filed 10 days in advance of when it takes effect.

Since the introduction of the ATR in 1987, the aviation industry has experienced significant evolution and change. The Internet is now the primary source for the dissemination of information regarding fares, rates and charges and the posting of tariff terms and conditions and service schedules. Air carriers continually review and modify their product offerings and update their fares, rates and charges, terms and conditions and schedules to respond to operational, competitive and governmental factors, among other things, and require the ability to implement changes quickly.

Canada is party to many open skies type air transport agreements that either do not require air carriers designated under those agreements to file their fares, rates and charges for scheduled services and, in some cases, non-scheduled services, or that set out shorter timeframes for such filings. General terms and conditions, however, continue to be subject to the filing requirement in subsection 115(1) of the ATR despite a more liberal approach with respect to pricing. Furthermore, the Agency has also granted a number of exemptions from subsection 110(1) of the ATR, for the filing of rates, on the basis of reciprocity and equal treatment between air carriers, for non-scheduled services not governed by an air transport agreement or arrangement. Many air carriers therefore no longer file their fares, rates, or charges with the Agency, while other air carriers remain required to do so in accordance with the filing notice periods set out in subsections 115(1) and 138(3) of the ATR.

The volume of tariff and service schedule filings remains significant. Given the rapid evolution of technology, business practices, and the market, today’s air carriers seek to update these documents frequently and quickly. As a result, the filing notice requirements established in the ATR over three decades ago may be unnecessary, undesirable or impractical.

4. Exemptions from subsections 115(1) and 138(3) of the ATR

For this reason, the Agency will consider exercising its power to exempt air carriers, pursuant to subsection 80(1) of the CTA and paragraph 115(1)(c) of the ATR, from the filing notice requirements set out in subsections 115(1) and 138(3) of the ATR. These exemptions, which may be subject to certain conditions, could provide air carriers with filing timelines that better align with air industry operations and allow air carriers to remain agile in a competitive marketplace, while ensuring the Agency continues to have the means to monitor compliance with ATR requirements.

5. Conditions attached to exemptions

The Agency has the power under subsection 80(1) of the CTA to attach conditions to exemption orders.

The Agency may consider it appropriate that an exemption from subsection 115(1) of the ATR be subject to conditions such as the following:

  1. For any new or amended toll (fare, rate and charge), subject to any applicable air transportation agreement, the toll has been filed with the Agency at least one day before its coming into force date.
  2. For any new or amended term or condition of carriage:
    1. The carrier has submitted its proposed new or amended term or condition of carriage to the Agency for review by Agency staff, indicating the carrier’s proposed coming into force date;
    2. The carrier has received a notice from Agency staff indicating that Agency staff is satisfied, after summary review, that the proposed new or amended term or condition of carriage does not appear, on its face, to be inconsistent with the requirements of the ATR, the Air Passenger Protection Regulations (APPR) or the Accessible Transportation for Persons with Disabilities Regulations (ATPDR), and that the carrier may file the proposed new or amended term or condition on shortened notice; and,
    3. The carrier, upon receipt of the notice from Agency staff, has filed its tariff or amendment to its tariff containing the new or amended term or condition of carriage, with the Agency, at least one day before its proposed coming into force date.

The Agency may consider it appropriate that an exemption from subsection 138(3) of the ATR be subject to conditions such as the following:

  1. The new or amended service schedule has been filed with the Agency at least one day before its proposed coming into force date, on receipt of a notification by Agency staff that Agency staff is satisfied, after summary review, that the service schedule does not appear on its face to be inconsistent with the requirements of the ATR.

The exemption order, and the staff notice, would not affect the Agency’s authority to enforce the requirements of the ATR, the APPR or the ATPDR, including by suspending or disallowing any tariff or service schedule at any time before or after the tariff or service schedule comes into force.

The Agency may rescind an exemption if a carrier does not comply with the conditions of the exemption, or when the Agency deems it otherwise necessary.

Air carriers that apply for and receive an exemption may, nonetheless, continue to file new or amended tariffs and service schedules in accordance with the filing notice requirements set out in subsections 115(1) and 138(3) of the ATR. These filings would not be subject to conditions that may be established in an Agency order that is issued as a part of this process.

6. Applications

Air carriers may apply, pursuant to paragraph 80(1)(c) of the CTA, for an exemption from subsections 115(1) and 138(3) of the ATR, specifying why they believe compliance with these provisions is unnecessary, undesirable or impractical. Applications should be submitted to secretariat@otc-cta.gc.ca, to the attention of the Manager, Tariffs and Research Division.

Applications received by September 15, 2020, are expected to be considered through a single process.

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