Order No. 2020-A-36

BACKGROUND

On March 11, 2020, the World Health Organization assessed the outbreak of COVID-19 as a pandemic. Since the outbreak of the virus, a number of countries, including Canada, have issued travel bans, restrictions, or advisories.

On March 18, Air Canada applied to the Canadian Transportation Agency (Agency) for a temporary exemption from the provisions of section 64 of the CTA to permit it to suspend the operation of air services between points in Canada, as it considers necessary, without having to provide the normal 120 days of notice and engage in the consultations required by the CTA and the Air Transportation Regulations, SOR/88-58, as amended (ATR).

LEGISLATIVE FRAMEWORK

Section 64 of the CTA requires, in part, that a licensee not implement a proposal to discontinue a domestic service referred to in subsection 64(1) of the CTA until the expiry of 120 days, or any shorter notice period that the Agency may specify by order, and that the licensee provide elected officials of the relevant municipal or local government with an opportunity to meet with the licensee to discuss the impacts of the proposed reduction or discontinuation of service.

Subsection 14(1) of the ATR provides that, for the purposes of subsection 64(1) of the CTA, a licensee proposing to discontinue or to reduce the frequency of a domestic service shall give notice of the proposal to the Agency, the Minister of Transport and the minister responsible for transportation in the province or territory where the area to be affected is located. Additionally, the licensee is required to advise holders of domestic licences operating in the area to be affected by the proposal and the persons resident therein, by publishing a notice in newspapers with the largest circulation in that area in each official language.

SUBMISSIONS BY AIR CANADA

Air Canada states that as a result of the magnitude of the COVID-19 crisis, it must manage the financial viability of its network, and that doing so may require suspension or cancellation of routes between two points in Canada.

Air Canada further states that, because of the fluidity of the COVID-19 crisis, it seeks a blanket exemption from the provisions of section 64 of the CTA because there is simply no time to publish the prescribed public notices and undertake the associated consultations.

Air Canada submits that in the current circumstances, it is impossible and impractical to comply with the notice and consultation provisions.

Air Canada requests that the authorization remain in effect until the end of the COVID-19 crisis or until such time as the Agency sees fit.

In light of the urgent nature of the situation, Air Canada requests expedited treatment of the present application.

ANALYSIS AND DETERMINATION

The exemption request, if granted, would temporarily permit Air Canada to reduce or discontinue domestic air services immediately on routes where it would normally be required to provide a 120‑day advance notice and engage with local officials.

The notice provisions required by the CTA are intended to ensure that communities with limited air service, including remote communities, are made aware enough in advance of any proposed reductions in or discontinuances of air services to their community, in order to permit them to plan for the event, including potentially seeking alternative air carriers to provide air services. Carriers operating in the area are also made aware and can consider whether to provide replacement air services.

The impact of the COVID-19 pandemic is significant and continues to evolve as air carriers try to adjust to travel restrictions and rapidly dropping passenger volumes and revenues.

The Agency finds that in light of the extraordinary circumstances related to the COVID‑19 pandemic and the urgency of the situation, compliance by Air Canada and other air carriers with section 64 is impractical at the present time. That said, the Agency also finds that it would not be desirable to permit the permanent, as opposed to temporary, discontinuation of domestic air services without advance notice and consultation.

CONCLUSION

Pursuant to section 28 and paragraph 80(1)(c) of the CTA, the Agency exempts all air carriers who hold a domestic licence from the provisions of section 64 of the CTA until June 30, 2020, on the condition that once the exemption ends, air carriers who have taken advantage of the exemption to temporarily reduce or suspend services on certain routes will immediately resume those services and follow all of the requirements of section 64 of the CTA if they wish to reduce or eliminate any services on a permanent basis.

In addition, the exemption may be lifted by the Agency in respect of a particular route or community, should the Agency find that as a result of the exemption, the cessation of service on a certain route has caused or is likely to cause a community to become so isolated that it does not have access to critical services and goods. In such an instance, service would have to resume and the carrier providing the service would be required to comply with section 64 before discontinuing it.

On or before June 30, 2020, the Agency will determine if the exemption should end on that date or be extended to a later date.