Decision No. 482-A-2012

INTRODUCTION

Air Canada’s Proposed Tariff Revisions

[1] On November 22, 2011, Air Canada filed with the Canadian Transportation Agency (Agency) certain revisions to Rule 109(C)(5) of its Canadian Cargo International Rules and Rates NTA(A) No. 246 Tariff and Rule 19(A)(3)(e) of its Air Freight Rules Tariff NTA(A) No. 268 (International Cargo Tariff), with an effective date of January 10, 2012.

[2] Subsequent to Air Canada’s filing of its International Cargo Tariff revisions with the Agency, the Agency received complaints from Steven N. Liss, Ph. D., Vice-Principal (Research), Queen’s University, and from the Public Health Agency of Canada (PHAC), alleging that Air Canada’s proposed tariff revisions related to its Domestic Tariff and its International Cargo Tariff are “unreasonable or unduly discriminatory” pursuant to subsection 67.2(1) of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA), and “unjust, unreasonable and unjustly discriminatory” pursuant to section 111 of the Air Transportation Regulations, SOR/88-58, as amended (ATR).

[3] In Decision No. LET-A-4-2012 dated January 9, 2012, the Agency, pursuant to paragraph 113(a) of the ATR, suspended Air Canada’s International Cargo Tariff revisions pending completion of the Agency’s investigation into this matter. That Decision further required Air Canada to re-file the International Cargo Tariff provisions which were in effect prior to the filing date of November 22, 2011. Regarding Air Canada’s Domestic Tariff, the Agency noted that pending its determination of the matter, the Agency did not have the jurisdiction to suspend terms and conditions of carriage applicable to domestic service.

[4] The Agency also received numerous submissions from other parties who were interested in the matter, and subsequently were granted intervener status. The interveners are the British Union for the Abolition of Vivisection (BUAV), the Humane Society International/Canada (HSIC) and the Primate Research Center and Wildlife Reserve of Barbados Inc. (PRCB). As interveners, these organizations are parties of record in this matter and, as such, have the opportunity to intervene or support arguments presented. The Agency also granted interested person status to 24 other individuals and organizations that indicated an interest in this matter. While the interested persons are not afforded intervener rights, their comments were placed on the record and were provided to the parties of record (Queen’s University, PHAC, Air Canada, BUAV, HSIC and PRCB).

Legislative context

[5] Subsection 67.2(1) of the CTA, which applies to domestic carriage, states that:

If, on complaint in writing to the Agency by any person, the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory, the Agency may suspend or disallow those terms or conditions and substitute other terms or conditions in their place.

[6] Section 111 of the ATR, which applies to international carriage, states that:

(1) All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.

(2) No air carrier shall, in respect of tolls or the terms and conditions of carriage,

(a) make any unjust discrimination against any person or other air carrier;

(b) give any undue or unreasonable preference or advantage to or in favour of any person or other air carrier in any respect whatever; or

(c) subject any person or other air carrier or any description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatever.

[7] As stated in Decision No. LET-A-97-2012 dated July 3, 2012, the complainants allege that Air Canada’s Proposed Tariff Revisions are “unreasonable or unduly discriminatory” pursuant to subsection 67.2(1) of the CTA, and “unjust, unreasonable and unjustly discriminatory” pursuant to section 111 of the ATR. The Agency notes that while the terminology used in subsection 67.2(1) of the CTA and section 111 of the ATR are not identical, this terminology broadly refers to the issue of unreasonable or unjust discrimination. Therefore, the Agency is of the opinion that the words “unreasonable” and “unjust discrimination” used in section 111 of the ATR encompass and capture the meaning of the terms used in subsection 67.2(1) of the CTA.

[8] To address this matter in an efficient manner, the Agency will consider this matter pursuant to section 111 of the ATR; however, the Agency’s findings will be equally applicable to Air Canada’s International Cargo Tariff and Domestic Tariff.

PRELIMINARY MATTERS

National transportation policy

[9] In their submissions, some parties provided comments on the relevancy of the national transportation policy to the Agency’s consideration of this matter.

[10] PHAC argues that based on the jurisprudence and the importance that the Agency has given to the national transportation policy in previous decisions, the national transportation policy should be used in this matter as a tool to “guide and structure” the Agency’s exercise of discretion. PHAC and Queen’s University submit that the Agency should consider the impact that the Proposed Tariff Revisions could have on the well being of Canadians, competitiveness and economic growth when determining whether the Proposed Tariff Revisions are unreasonable and/or unduly discriminatory.

[11] Both HSIC and BUAV agree with the statements made by the Agency in respect of the national transportation policy in Decision No. LET-A-97-2012. BUAV submits that with respect to tariffs, the primary decision maker is the carrier and the tariffs belong to carriers. BUAV adds that carriers do not need the permission of the Agency to adopt a particular tariff, they file a tariff with the Agency and the Agency then, on complaint, must consider whether the tariff is unreasonable or unjustly or unduly discriminatory. BUAV states that absent a complaint, the tariff comes into effect automatically. Finally, BUAV submits that as the Agency has no discretion in relation to tariffs, there can be no question of the national transportation policy “guiding and structuring” the Agency’s exercise.

[12] The Agency is required to consider Air Canada’s Proposed Tariff Revisions according to subsection 67.2(1) of the CTA and section 111 of the ATR. In exercising the discretion provided by these provisions, the Agency considers the principles of the national transportation policy. As a statement of policy, the national transportation policy does not constitute a source of legal obligations in and of itself, but delineates the object and purpose of the legislation to be considered in interpreting the provisions of that legislation.

[13] As stated in Decision No. LET-A-97-2012, the Agency is of the opinion that the national transportation policy does not provide broad authority to assess how the general health and well‑being of Canadians are impacted by Air Canada’s Proposed Tariff Revisions. The Agency notes that the national transportation policy states that “[...]a competitive, economic and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians [...]” Further, the national transportation policy states that public intervention is necessary only when competition and market forces do not achieve satisfactory economic, safety, security, environmental or social outcomes.

[14] The Agency’s consideration of whether a tariff that impacts passengers and their baggage has been quite broad, as what is in question is an individual’s ability to travel. As stated in Decision Nos. 666-C-A-2001, 320-C-A-2005 (Stutz v. Air Canada) and 746-C-A-2005 (Black v. Air Canada), among others, an objective of the Agency’s assessment of whether a carrier’s tariff is unreasonable is to protect the travelling public against the unilateral imposition by air carriers of unreasonable terms and conditions. This broader purpose is reflected in the CTA, including Part V relating to accessible transportation. Furthermore, the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention) and Convention for the Unification of Certain Rules Relating to International Carriage by Air signed in Warsaw on 12 October 1929 include numerous provisions dealing with the carriage of passengers and their baggage.

[15] However, when considering the rights of shippers and the transport of cargo, the Agency is of the opinion that the relationship between shippers and carriers is primarily commercial in nature and, accordingly, is more properly determined by competition and market forces.

Federal Court of Appeal’s ruling in Air Canada v. Canadian Transportation Agency

[16] PHAC submits that in Air Canada v. Canadian Transportation Agency, 2009 FCA 95, the Federal Court of Appeal addressed the Agency’s interpretation of “unreasonable”, and found that “[i]n particular, it was incumbent upon the Agency to take into account and weigh the reasons for the Air Canada tariff revisions against the inconveniences of the respondent.” PHAC adds that there is nothing in that Decision to suggest that a consideration of the resulting inconveniences would only apply to passengers and not their cargo.

[17] PHAC is therefore of the view that, in determining whether Air Canada’s Proposed Tariff Revisions are unreasonable, a consideration of the “rights of a shipper” should include the inconveniences that the Proposed Tariff Revisions would cause to shippers of non-human primates for laboratory research and/or experimental purposes.

[18] However, the Agency notes that the context was inconvenience faced by passengers. The Agency is of the opinion that the Federal Court of Appeal’s use of the word “inconvenience” was not meant to expand the issues addressed in the balancing test, nor did the Court state that the balancing test applied by the Agency in that case applies to an assessment of whether a tariff impacting shippers and cargo is unreasonable. Furthermore, the decision does not determine the nature of the balancing test that must be applied in assessing whether an air carrier’s tariff affecting air cargo is unreasonable. While a balancing test must also be applied in the context of cargo, as stated in Decision No. LET-A-97-2012, the elements to be balanced are different from those involved in a passenger/baggage complaint.

DECISION NO. LET-A-97-2012

Reasonableness and unjust discrimination

[19] In Decision No. LET-A-97-2012, the Agency considered submissions from the parties with respect to the issue of whether air carriers have a legal obligation to transport cargo. The Agency concluded the following:

[...] the Agency is of the opinion that an air carrier’s obligation to carry cargo may be subject to limitations, including a refusal of carriage of cargo, according to terms and conditions that are clearly stated in its tariff. However, an air carrier’s tariff must comply with the requirements of the regulations, including that it be reasonable and not unjustly discriminatory.

[20] With respect to its consideration of the reasonableness of an air tariff, the Agency has, in past decisions, recognized the need to balance competing interests of the passengers and the carrier and the need to protect the travelling public against a unilateral decision by a carrier imposing unreasonable terms and conditions in its tariff. However, the Agency found that this complaint relates to the transport of cargo and, as such, does not affect passengers or baggage.

[21] In Decision No. LET-A-97-2012, the Agency stated that its assessment of the “reasonableness” of an air cargo tariff, or whether it is “unjustly discriminatory”, must include a consideration of the reason for the tariff, and the extent to which it results from a business decision by Air Canada. The Agency must also consider Air Canada’s competitive environment, industry practices and the additional service options available to Air Canada’s customers. While the Agency recognized that there were operational and legislative reasons as to why an air carrier may impose terms and conditions, as well as restrictions on the carriage of air cargo, the Agency also acknowledged that there were provisions of international agreements that pertain to air cargo that need to considered. The Agency also recognized the fact that shippers are entitled to protection against unreasonable decisions, that is, decisions that are made without a rational basis.

Unreasonableness

[22] The Agency also stated in Decision No. LET-A-97-2012 that in considering whether an air carrier’s proposed cargo tariff is reasonable, it will balance the rights of a shipper with the statutory, commercial and operational obligations of an air carrier. This consideration will include the rationale behind the Proposed Tariff Revisions, industry practices in regard to the shipment of the same cargo in similar circumstances, the applicable provisions of international instruments to which Canada is a party, an air carrier’s operational requirements and applicable legislative or regulatory provisions relating to safety or security. Such an assessment must include consideration of the reason for the Proposed Tariff Revisions, and the extent to which they result from a business decision.

Unjust discrimination

[23] In Decision No. LET-A-97-2012, the Agency stated the following:

The Agency is therefore of the opinion that in determining whether a term or condition of carriage applied by a carrier is “unduly discriminatory” within the meaning of subsection 67.2(1) of the CTA or “unjustly discriminatory” within the meaning of section 111 of the ATR, it must adopt a contextual approach which balances the rights of the travelling public not to be subject to terms and conditions of carriage that are discriminatory, with the statutory, operational and commercial obligations of air carriers operating in Canada. This position is also in harmony with the national transportation policy found in section 5 of the CTA.

The Agency must first determine whether the term or condition of carriage applied is “discriminatory”. If the Agency finds that the term or condition of carriage applied by the domestic carrier is “discriminatory”, the Agency must then determine whether such discrimination is “unjust” in consideration of the statutory, commercial and operational reasons that led to the tariff.

In assessing whether Air Canada’s tariff is “unduly discriminatory” the Agency must also consider the commercial context of the transportation of air cargo and the fact that a refusal to carry certain cargo may result from a legitimate business decision.

When balancing the shippers’ rights against the carrier’s obligations, the Agency must consider the whole of the evidence and the submissions presented by both parties and make a determination on the reasonableness or unreasonableness of the term or condition of carriage, or whether the tariff is “unjustly discriminatory” based on which party has presented the more compelling and persuasive case.

Undue/unreasonable prejudice

[24] In their response to Decision No. LET-A-97-2012, PHAC, PRCB and Queen’s submit that the Agency should also address the issue of whether Air Canada’s Proposed Tariff Revisions are unduly or unreasonably prejudicial or disadvantageous in relation to cargo contrary to paragraph 111(2)(c) of the ATR. Although this issue was not raised in their original complaints, PHAC and Queen’s University have subsequently raised this issue in the current proceeding and are of the view that it needs to be addressed by the Agency. As such, the Agency will address this issue in the context of cargo in addition to the issue of unreasonableness and unjust discrimination.

ISSUES

[25] The issues to be addressed are:

1. Are Air Canada’s Proposed Tariff Revisions unreasonable, within the meaning of subsection 111(1) of the ATR?
2. Are Air Canada’s Proposed Tariff Revisions unjustly discriminatory, within the meaning of paragraph 111(2)(a) of the ATR?
3. Do Air Canada’s Proposed Tariff Revisions subject any person or other air carrier or any description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever, contrary to paragraph 111(2)(c) of the ATR?

ISSUE 1 - ARE AIR CANADA’S PROPOSED TARIFF REVISIONS UNREASONABLE, WITHIN THE MEANING OF SUBSECTION 111(1) OF THE ATR?

Positions of the parties: General comments regarding the reasonableness of the Proposed Tariff Revisions

Air Canada

[26] Air Canada submits that its commercial interests, compared to the stated but unsubstantiated interests of laboratories receiving occasional shipments of non-human primates for research purposes, should be balanced, and Air Canada’s right to refuse to transport non-human primates for research or experiments should be confirmed.

PHAC

[27] PHAC points out that there is nothing in either section 67.2 of the CTA or section 111 of the ATR to indicate that the protections offered through that legislation would be limited to passengers and, furthermore, that there is no indication from previous Agency decisions that such a limited interpretation would apply. PHAC points out that paragraph 5(c) of the CTA speaks to conditions that “do not constitute an undue obstacle to the movement of traffic […]” PHAC submits that the term “traffic” has a meaning that is broader than the travelling public, and that the entire CTA and ATR should be interpreted in this broader context.

[28] PHAC argues that the Agency’s setting out of specific considerations does not appear to be reflected in Agency case law. PHAC submits that these considerations provide Air Canada with considerable guidance with respect to its defence of the proposed tariff language and no guidance to the complainants on what is meant by the rights of shippers.

[29] PHAC further holds that the Agency’s statement in Decision No. LET-A-97-2012 that “shippers are entitled to protection against unreasonable, that is, decisions that are made without a rational basis” seems to imply that, provided Air Canada can establish that the proposed ban has a rational basis, the Agency will not consider it to be unreasonable. PHAC adds that this appears to set a threshold which is lower than the test set out in previous Agency case law, and is inconsistent with its long held position that the competing interests of the parties must be balanced.

Queen’s University

[30] Queen’s University states that under Air Canada’s Proposed Tariff Revisions, animals, including non-human primates, will continue to be transported by Air Canada; only non-human primates for research purposes will be prohibited. Queen’s University asserts that this arbitrary restriction, which singles out for negative treatment a very small sector of the animal population, runs counter to the requirements of just, equal, non-prejudicial, non-disadvantageous treatment of traffic found in section 111 of the ATR, and is, accordingly, unreasonable.

BUAV

[31] BUAV states that it is the primary right of the air carrier, not the Agency, to strike the balance with regard to tariffs. BUAV is of the view that the carrier is the primary decision maker and that the Agency’s role with respect to tariffs is that of the reviewer, as it showed it appreciated in Decision No. 666-C-A-2001 by drawing an analogy with judicial review.

[32] BUAV makes reference to the Ferroequus Railway Co. v. Canadian National Railway Co. case where the Federal Court of Appeal indicated that as a reviewer it should confer a considerable degree of deference to the Agency (the primary decision-maker in the context of that case).

[33] BUAV submits that, by parity of reasoning, the Agency, the reviewer in the present context, should accord considerable deference to carriers, the primary decision-makers with regard to tariffs, and leave it to them to weigh various relevant factors.

[34] BUAV points out that Air Canada has made a reasoned judgment that it is better for it, in business terms, to refuse to transport non-human primates for research purposes than to transport them, despite the fact that this inevitably means losing the income that it would receive from such transport. BUAV submits that, in this case, the air carrier has provided clear rationale, backed up by overwhelming evidence, for its decision. BUAV adds that the carrier is not expressing a mere preference but, rather, is making a calculated judgment about its business interests and the interests of its shareholders.

Commercial justification of the Proposed Tariff Revisions

HSIC

[35] HSIC submits that Air Canada’s business and reputation would likely be harmed if it were to continue transporting non-human primates for research purposes. HSIC asserts that Air Canada imposed the Proposed Tariff Revisions in response to widespread public concern over the transport of non-human primates for research and testing purposes that threatened its business reputation and consumer base. HSIC adds that the opposition to this practice stems from the fact that many people find non-human primate research and testing to be ethically unacceptable.

[36] HSIC explains that many people and groups are concerned about Air Canada’s policy to transport non-human primates for research purposes and have been calling for a boycott of Air Canada’s services until it ceased the transport of non-human primates for research purposes. HSIC therefore concludes that Air Canada’s position on this controversial issue was threatening to harm its business and damage its domestic and international reputation.

Air Canada

[37] Air Canada submits that its main activity is the transport of passengers, comprising of 32 million passengers to more than 170 destinations worldwide each year. Air Canada points out that although it has an extensive cargo network, it does not operate all-cargo aircraft and, as such, cargo is always carried on passenger aircraft. Air Canada notes that its transport of non‑human primates destined for research is minimal both in absolute terms of the value of these shipments and in comparison with its total cargo weight.[1]

[38] Air Canada submits that since December 5, 2011, it has received over 47,000 letters from the public protesting its practice of transporting non-human primates for research purposes. Air Canada adds that because of the considerable volume of letters, the likelihood that the writers are passengers or potential passengers is high, and that some writers clearly state that they have travelled with Air Canada before and would not do so anymore by reason of Air Canada’s decision to accept to transport non‑human primates destined for research. Air Canada advises that in other letters, writers indicated that they will not travel with Air Canada for that reason. Air Canada submits that it cannot ignore the overwhelming volume of letters in opposition to the transport of non-human primates destined for research, nor can the letters be discounted as not coming from its passenger base.

PRCB

[39] PRCB submits that from an air transportation perspective, the setting up of different transportation rules based on whether non-human primates are or are not intended for research has no rational basis.

[40] PRCB maintains that no evidence exists in this matter to establish that the transport of non‑human primates for research purposes causes any operational hindrance for Air Canada. Considering this, PRCB argues that the only justification behind the Proposed Tariff Revisions would appear to be to stop Air Canada from being pressured by animal rights activists.

[41] PRCB refers to Air Canada’s position that its transport of non-human primates for research purposes represents only a small portion of its overall cargo traffic, and submits that this fact does not justify Air Canada’s Proposed Tariff Revisions. PRCB submits that such a minimal proportion shows the unreasonableness of Air Canada’s Proposed Tariff Revisions, in that it puts in force a draconian measure that may have an immense impact on medical research in Canada.

[42] PRCB further points out that if Air Canada intends to rely on the 47,000 letters of protest, they should be made available to other parties.

PHAC

[43] PHAC maintains that BUAV and HSIC failed to provide evidence to demonstrate widespread public opinion against medical testing with non-human primates. Furthermore, PHAC asserts that no evidence has been provided to the effect that this is a position held by Air Canada customers, nor that it affects Air Canada’s business interests.

[44] PHAC argues that the public opinion regarding the use of non-human primates for research purposes is, in general, quite favorable, and cannot be used as the basis for Air Canada’s Proposed Tariff Revisions. PHAC therefore concludes that Air Canada’s commercial interests would not outweigh the negative impact that a ban on the transport of non-human primates for research purposes would have on medical research in Canada.

Queen’s University

[45] Queen’s University maintains that if Air Canada is allowed to discontinue transporting non‑human primates for research purposes, there will be a direct impact on Queen’s University research programs. Queen’s University points out that an increased purchase cost for each animal of between 10 and 15 percent would certainly be anticipated due to the rerouting of animals either in China or North America. Furthermore, Queen’s University submits that with declining research funding available in Canada, this increase in costs will hinder important ongoing research that could benefit the Queen’s University research community and Canadians in general. Queen’s University also points out that animals may need to be transported up to several thousand kilometres by truck through the United States of America and Canada, which may cause unnecessary stress for the animals.

[46] Queen’s University refers to Air Canada’s submission that it has received 47,000 letters of protest regarding the transport of non-human primates for research purposes and that these letters are the basis for its claim that the Proposed Tariff Revisions are necessary because the continued transport of non-human primates for research purposes will negatively impact its business. Queen’s University submits that without analyzing the letters of protest, there is no way to tell if these letters were written by one or 47,000 people, whether these letters were from Canadians or whether they were from actual or potential Air Canada passengers. Queen’s University argues that Air Canada is asking the Agency to accept an assumption that is not supported by objective evidence.

[47] Queen’s University submits that even if all 47,000 letters were written by different people who were all past or are potential customers of Air Canada, they represent only 0.001 percent of Air Canada’s client base. (Queen’s University calculates this number based on Air Canada’s submission that it transports 32 million people per year - this equals 24 million people in 9 months. Air Canada has been collecting protest letters for nine months - 47,000 is 0.001 percent of 24 million). Queen’s University maintains that this small percentage should be contrasted against the number of people who support animal research.

[48] Queen’s University is of the opinion that it is unreasonable for Air Canada to change its terms and conditions of carriage in response to complaints from such individuals.

BUAV

[49] BUAV notes that Air Canada has clearly set out its reasons for the Proposed Tariff Revisions which are to align its policies with those of many other major international carriers and in response to widespread public concerns, which are exclusively business reasons. BUAV states that Air Canada judged that it was in the best interests of its business to decline to transport non‑human primates for research purposes, despite the loss of immediate income it would suffer.

[50] BUAV states that it is perfectly understandable, from a business point of view, that Air Canada, a private company, should wish to take account of the views of its customers or potential customers.

[51] BUAV maintains that if Air Canada’s Proposed Tariff Revisions are within the bounds of reasonableness and just or “due discrimination” (assuming there is any discrimination), it is not for the Agency to substitute its own view of what Air Canada’s tariffs should contain.

Current industry practice

HSIC

[52] HSIC submits that given how many of Air Canada’s competitors already have a policy to refuse to transport non-human primates for research purposes and given the public opposition that Air Canada faced before it changed its policies, it would have been unreasonable for Air Canada not to consider changing its policies in light of this competitive industry environment. HSIC refers to evidence from BUAV’s Web site which discloses that a large number of carriers have stopped the practice of transporting non-human primates for research purposes.

Air Canada

[53] Air Canada states that many air carriers around the world do not accept to transport non-human primates for research purposes. To illustrate this point, Air Canada provided a list of carriers which included Emirates, Delta Air Lines, Inc. and American Airlines, Inc.

PRCB

[54] PRCB submits that Air Canada’s assertion that it is just following other air carriers that do not accept to transport non-human primates for research purposes is in no way a sufficient justification for the Proposed Tariff Revisions. PRCB is of the view that the practices followed by other air carriers are irrelevant with respect to the case at hand, as those air carriers may be subject to a different regulatory framework, which has not been evidenced by Air Canada. Nevertheless, PRCB submits that it would seem that Air China has recently stopped transporting non-human primates for research purposes. PRCB also points out that the air carriers referred to by Air Canada do not serve routes or destinations used by non-human primates shippers, both internationally and domestically, to Barbados.

PHAC

[55] PHAC acknowledges that most major air carriers do not transport non-human primates for medical research purposes. However, PHAC notes that most of the international carriers that have refused to transport non-human primates for research and laboratory purposes are not subject to legislation that prohibits unreasonable or unduly discriminatory terms and conditions of carriage.

BUAV

[56] BUAV points out that Air Canada made it clear that it was filing the Proposed Tariff Revisions to align its practices with many other major international carriers. BUAV adds that Air Canada’s decision to deprive itself of a revenue stream, no doubt in the hope of gaining business elsewhere through enhancement to its brand, is perfectly rational. BUAV submits that it is a rational decision based on what is currently happening in a highly competitive industry and that by taking this step, Air Canada no doubt believes that it is better equipping itself to compete in the harsh environment for air carriers. BUAV states that it is well known that air carriers compete on various levels, with a concern to improve their brand and that they seek to enhance their brand and try to change those practices that are detrimental to it.

[57] According to BUAV, as a result of protests by the public, 73 air carriers have decided to discontinue transporting non-human primates for research purposes.

[58] BUAV submits that with the high number of air carriers amending their tariffs to align themselves with their competitors, it is clear that the refusal to transport non-human primates for research purposes is a common industry practice. BUAV adds that while there are a number of air carriers that continue to transport non-human primates for research purposes, including to Canada, Air Canada is perfectly entitled to align itself with the majority of international carriers that now refuse to do so.

Air cargo transportation environment

HSIC

[59] HSIC submits that given how many of Air Canada’s competitors already have a policy to refuse cargo of non-human primates for research purposes, and the public opposition that Air Canada faced before it changed its policy, it would have been unreasonable for Air Canada not to consider changing its policy in light of this competitive industry environment.

BUAV

[60] BUAV states that it is well known that the modern air industry is extremely competitive. BUAV points out that air carriers have to deal with tough economic crises as any other industry does and, with a large proportion of the public travelling by air for work and pleasure, focusing on price is not enough. BUAV adds that air carriers constantly revamp their approach to keep existing customers and attract new ones and to distinguish themselves from their competitors.

[61] BUAV submits that with many air carriers deciding not to transport non-human primates for research purposes, Air Canada is entitled to conclude that its brand, and therefore its profitability, would suffer should it continue to do so. BUAV is of the view that Air Canada is entitled to conclude that many national and international passengers will not want to share a flight with non-human primates destined for laboratories, or even to travel with an air carrier that carries such non-human primates on other flights.

[62] BUAV adds that, conversely, Air Canada is entitled to conclude that it could gain consumers who wish to travel with carriers they regard as ethical, and therefore offset the loss of revenue caused by declining to transport non-human primates for research purposes.

International instruments to which Canada is a party

PHAC

[63] PHAC points out that Canada is a member country of the World Organization for Animal Health (OIE), which, as noted in a submission made by an interested person, the Canadian Food Inspection Agency, means that Canada “subscribes to the principle that the use of animals carries with it an ethical responsibility to ensure the welfare of such animals to the greatest extent practicable, and that the amount of time that animals spend on a journey should be kept to a minimum”. PHAC surmises that these principles are set out in the OIE Terrestrial Animal Health Code, and that in order to meet these obligations, PHAC “should be able to continue transporting non-human primates to Winnipeg by air, rather than by road”.

[64] PHAC also refers to the International Air Transport Association (IATA) Live Animals Regulations (LAR), which is the worldwide standard for transporting live animals by commercial air carriers. PHAC submits that while Canada is not a “party” to the IATA, Air Canada is subject to the LAR. PHAC adds that there is nothing in the LAR that would prevent Air Canada from transporting non-human primates intended for laboratory research and/or experimental purposes.

Queen’s University

[65] Queen’s University submits that a federal body, the Canadian Council on Animal Care, exists to regulate the use of animals for research purposes and that at the national level, procedures and standards governing the importation of animals is governed by the Health of Animals Act, S.C, 1990, c. 21 and the Health of Animals Regulations, C.R.C., c. 296. Queen’s University further points out that at the international level, the transport of animals is governed by the IATA LAR, which are followed by all carriers.

BUAV

[66] BUAV submits that there are no international agreements to which Canada is a party requiring Air Canada to transport non-human primates for research purposes.

[67] With respect to PHAC’s submission concerning Canada’s responsibility to ensure that the amount of time that animals spend on a journey be kept to a minimum, BUAV submits that the OIE guidance simply means that those trading in animals should keep journey times to a minimum in the context of the options that are available. BUAV states that it cannot possibly be construed as requiring any particular carrier to transport particular species on particular routes for particular purposes. BUAV adds that the OIE has no jurisdiction over carriers or transport regulators.

[68] BUAV states that most non-human primates destined for research arrive in Canada by road and that this is not disputed by the complainants. BUAV submits that the logic of PHAC’s argument is that Canada is in breach of its obligations as an OIE member by allowing non-human primates for research purposes to arrive in Canada by road.

Air Canada’s operational requirements

PHAC

[69] PHAC submits that as non-human primates for research purposes shipped to support necessary medical research are handled in accordance with the same regulations and shipped in the same manner as those destined for zoological display, Air Canada cannot argue that the Proposed Tariff Revisions are due to Air Canada’s operational requirements.

Queen’s University

[70] Queen’s University submits that operational obligations relate to the qualitative and quantitative parameters of a system, and that, in its view, Air Canada has no operational basis for distinguishing between animals based on the reason for the transport.

BUAV

[71] BUAV contends that the operational requirements are not a relevant factor (if “operational requirements” are viewed in their normal sense). BUAV states that operationally, Air Canada no doubt could continue to transport non-human primates for research purposes, but equally there is no operational reason compelling it to do so.

Alternative service options

HSIC

[72] HSIC submits that the Proposed Tariff Revisions do not affect the availability of ground transportation for the domestic and regional transportation of non-human primates for research purposes, and that other air carriers remain available to transport non-human primates for research purposes and testing directly to Canada from overseas.

[73] HSIC points out that China Eastern Airlines Corporation Limited carrying on business as China Eastern Airlines and China Eastern and China Southern Airlines Company Limited carrying on business as China Southern Airlines and China Southern provide direct flights to a variety of Canadian destinations, including the Pearson International Airport, and provide for the transport of non-human primates for research purposes and testing. HSIC further points out that the policies of Société Air France carrying on business as Air France (Air France), Philippine Airlines Inc. and Vietnam Airlines allow for the transport of these animals. As such, HSIC is of the opinion that Air Canada’s Proposed Tariff Revisions will not have the effect of preventing the transport of non-human primates for research purposes to or within Canada and will ultimately not prevent biomedical research from taking place in Canada.

Air Canada

[74] Air Canada submits that PHAC does not indicate why it must source non-human primates for research purposes from other countries as opposed to breeding them in Canada and, furthermore, that PHAC fails to indicate how another air carrier that accepts to transport non-human primates for research purposes, such as Air France or Air China, could not transport the animals to the destined laboratories, or how another mode of transport would not be possible. Air Canada indicates that while PHAC asserts that the alternative transport mechanisms would “require considerable more travel time and increase the discomfort of primates while in transit”, PHAC does not adduce any evidence in support of this assertion.

[75] Air Canada submits that there are no data to support Queen’s University’s assertion that the Proposed Tariff Revisions would impose unnecessary rerouting of purpose-bred primates for research purposes, resulting in unnecessary stress, distress and discomfort to the animals in transit which may potentially cause life-threatening conditions.

[76] With respect to PRCB’s claim that Air Canada’s refusal to transport non-human primates for research purposes will unduly limit PRCB’s access to the Canadian market, Air Canada points out that PRCB does not claim that it uses Air Canada’s services to transport non-human primates for research purposes. Air Canada submits that a review of its records does not reveal any transport of live non-human primates for research purposes from Barbados since at least 2009. Moreover, Air Canada points out that all shipments from PCRB appear to consist of “monkey tissue” or “monkey samples”.

PRCB

[77] PRCB submits that the fact that it has not shipped live non-human primates for research purposes recently does not mean that it will not do so in the future. PRCB adds that Air Canada offers the only direct air cargo routing to Canada from Barbados and that when shipping its non-human primates for research purposes, fast, efficient transport should be available.

PHAC

[78] PHAC submits that Health Canada does not currently maintain a non-human primate colony in Ottawa as a breeding colony in order to meet domestic supply. PHAC points out that the colony was closed on March 31, 2011, and that it is not aware of any non-human primate breeding facilities currently located anywhere in Canada.

[79] PHAC further points out that if the proposed ban on the transport of non-human primates for research is permitted, PHAC’s only option to transport non-human primates for research purposes from a Canadian supplier is by road. PHAC submits that this would involve a driving time of approximately 25 hours, not including time for rest stops. PHAC adds that road access from Montréal to the National Microbiology Laboratory in Winnipeg can be problematic, particularly during the winter months. PHAC argues that the extended periods of time involved in road transport may cause more stress and be more detrimental to the well being of non-human primates for research purposes than transport by air. PHAC points out that no air carriers that transport non-human primates for research purposes travel to Winnipeg and, therefore, even if those non‑human primates were brought into Toronto or Vancouver, they would still have a long journey by road. PHAC submits that flight options from suppliers in the United States of America would also be more limited without the services of Air Canada.

Queen’s University

[80] Queen’s University submits that if non-human primates for research purposes are not permitted to travel directly into Canada by air, there will be unnecessary rerouting of non-human primates for research purposes within China, where conditions can be less favorable for their well being. Furthermore, Queen’s University points out that animals may need to be transported up to several thousand kilometres by truck through the United States of America and Canada, which may cause unnecessary stress leading to life-threatening conditions for these animals.

BUAV

[81] BUAV is of the opinion that due to the existence of other options, neither complainant has demonstrated any meaningful inconvenience suffered as a result of the Proposed Tariff Revisions. BUAV states that businesses must be allowed to evolve to reflect changing circumstances, which includes the evolution of public opinion regarding the acceptability of particular services.

[82] BUAV points out that Air Canada is not the sole carrier of non-human primates for research purposes to Canada from abroad; there are other international air carriers that operate scheduled flights to Canada that continue to transport non-human primates for research purposes. BUAV also submits that there are companies that transport non-human primates for research purposes by truck from the United States of America to Canada. BUAV adds that according to the 2010 Convention on International Trade in Endangered Species data, Canadian research institutions already import nearly 60 percent of imported research non-human primates via the United States of America.

[83] According to BUAV, Air Canada has stopped transporting beagles for research, but this has not stopped the Canadian trade in beagles for research.

[84] BUAV notes PHAC’s submission that there is a holding centre in Montréal from which PHAC takes non-human primates for research purposes, and points out that when PHAC and other institutions require non‑human primates for research purposes, they do not have to wait for a new shipment from China, Mauritius or other source countries. BUAV indicates that this makes it much easier for supply and demand to be managed.

[85] BUAV submits that it is clear, therefore, that the complainants will be able to continue to access non-human primates for research purposes should Air Canada’s Proposed Tariff Revisions be approved. BUAV states that even if the absence of other options was otherwise relevant, that is not the factual situation.

[86] BUAV refers to Queen’s University’s claim that “an increased purchase cost for each animal of between 10 and 15 percent would certainly be anticipated due to the rerouting of animals either in China or North America”, and asserts that there is no reason to suppose that the proportion of research non‑human primates currently transported by air directly into Canada would reduce, thus increasing the cost. As such, BUAV submits that Queen’s University anticipated increase in costs is not founded and the alleged need for rerouting is unexplained.

Analysis and findings

Commercial justification of the Proposed Tariff Revisions

[87] In its September 4, 2012 submission on this matter, Air Canada states that since it began preserving letters of protest on December 5, 2011, it has received 47,000 such letters regarding its transport of non-human primates for research purposes. Air Canada is of the opinion that, as the letters contain personal information, they cannot be sent to the complainants or interveners. Air Canada provided, as an example, a redacted version of one of the letters of protest.

[88] Queen’s University responds that without analyzing the letters of protest, there is no way to tell if they were written by one or 47,000 people, whether these letters were from Canadians or whether they were from actual or potential Air Canada passengers. Queen’s University asserts that Air Canada is asking the Agency to accept an assumption that is not yet supported by objective evidence. PRCB submits that Air Canada cannot rely on the 47,000 letters of protest if they are not communicated to the other parties, and that if Air Canada wants to rely on those letters, it should delete the nominal information and render them available to the other parties.

[89] The Agency is of the opinion that it is plausible that there is a significant group of potential Air Canada passengers who are opposed to the transport of non-human primates for research purposes and that they would consider not travelling with Air Canada if it were to continue this practice. Air Canada has provided in its submission one of the pieces of correspondence in question, which clearly expresses this view. Similar expressions from a notable number of interveners and interested parties who are in favour of Air Canada’s Proposed Tariff Revisions confirm to the Agency that there is a real and significant population that opposes Air Canada’s transport of non‑human primates for research purposes.

[90] In fact, no party has suggested a reason why Air Canada has adopted these Proposed Tariff Revisions other than that stated by Air Canada itself, which is to avoid offending its passenger base and the general public, which may include potential passengers. The Agency accepts that Air Canada has filed the Proposed Tariff Revisions after considering the negative impact that continuing this practice would have on its business and reputation as compared to the loss of what has constituted a very small part of its air cargo business.

[91] The Agency accepts that Air Canada has established the Proposed Tariff Revisions as a commercial decision that results from a perceived negative impact that continuing to transport non-human primates for research purposes has and will have on its reputation and passenger sales. The Agency notes that, generally, air carriers sell a commodity product at largely similar prices on the same route. As such, branding, reputation and consumer perception may be important factors in distinguishing one carrier over another, thus providing a competitive advantage for a carrier.

[92] The Agency is of the opinion that, generally, carriers should have the flexibility to employ strategies as they see fit to meet their commercial requirements, subject to legislative or regulatory constraints. The Agency accepts Air Canada’s submission that it cannot ignore the potential negative impact on traffic levels based on its own knowledge of its customers if it continued the transport of non-human primates destined for research, and that the transport of cargo represents a small percentage of its business. The Agency is also of the opinion that Air Canada’s Proposed Tariff Revisions which reflect its intention to stop transporting non-human primates for research purposes constitute a rational commercial decision, due to the potentially negative impact that continuing this practice would have on its passenger business.

Current industry practice

[93] The Agency notes that the complainants do not challenge the submissions by Air Canada, BUAV and HSIC that many carriers around the world, among them some of the world’s largest carriers as set out in the list of 73 carriers provided by BUAV, do not accept for transport non-human primates destined for research. The Agency therefore accepts that these carriers, including many of Air Canada’s major international competitors, have chosen to no longer transport non-human primates for medical research purposes. Furthermore, the Agency accepts Air Canada’s submission that one of the purposes behind the Proposed Tariff Revisions is to align Air Canada’s commercial practices with those of many other major international carriers.

Alternative service options

[94] The Agency notes that while the majority of air carriers have stopped transporting non-human primates for research purposes, there continue to be other carriers that are willing to transport non-human primates destined for research into Canada. In addition, the Agency accepts that the research non-human primates could be transported by air into the United States of America and trucked into Canada. As noted by BUAV, in 2010, 60 percent of the non-human primates imported into Canada for research arrived by road, via the United States of America.[2] In light of this, the Agency accepts the arguments of Air Canada, BUAV and HSIC in this regard. The Agency is of the opinion that there are service options available for shipping research non-human primates.

[95] The Agency accepts Air Canada’s and BUAV’s arguments that Queen’s University does not provide any evidence to support its position that the Proposed Tariff Revisions would lead to an increase in costs or that costs would increase to levels that would make the transport of non‑human primates for research purposes economically unviable.

International instruments to which Canada is a party

[96] In response to the parties’ submissions, the Agency accepts that air carriers endeavour to provide a safe environment for research non-human primates in accordance with applicable regulatory requirements. However, the Agency also notes that there are no international agreements to which Canada is a party that require Air Canada to transport non-human primates for research purposes. The Agency further notes that the fact that the Montreal Convention contains comparatively few provisions dealing with air cargo supports the Agency’s position that the air transport of cargo is not subject to the same regulatory oversight as is passenger travel.

Operational requirements

[97] The Agency accepts that Air Canada has no operational requirements that would result in it being unable to transport non-human primates for research purposes.

Conclusion

[98] The Agency has examined the evidence and arguments of all parties and finds that there are significant statutory, commercial and operational reasons supporting Air Canada’s Proposed Tariff Revisions.

[99] In terms of commercial requirements and industry practices, the Agency finds that the arguments presented by Air Canada demonstrate that its Proposed Tariff Revisions reflect a rational business decision. The Agency finds that Air Canada’s decision to stop transporting non-human primates for research purposes is representative of an ongoing business decision elements of which are balanced against conflicting market forces impacting its financial position. The Agency is satisfied that Air Canada, in making its decision, has balanced the trade off between lost cargo revenue from the transport of non-human primates for research purposes and the potential revenue impact of lost passenger business. The Agency also finds that Air Canada’s decision to stop transporting non-human primates for research purposes follows general international industry practice. The Agency accepts that one of the purposes for the Proposed Tariff Revisions is to align Air Canada’s commercial practices with those of many other major international carriers.

[100] The Agency has considered the shipper’s arguments challenging the Proposed Tariff Revisions. As stated above, the Agency is of the opinion that there are service options available for shipping non-human primates for research purposes and that there was no evidence provided to support the argument that transportation costs would increase or would increase to levels that would make the transport of non-human primates for research purposes economically unviable.

[101] The Agency does not suggest that Air Canada’s Proposed Tariff Revisions will not cause inconvenience to the complainants. In balancing the impact that the Proposed Tariff Revisions will have on the complainants with the reasons supporting the Proposed Tariff Revisions, the Agency concludes that the Proposed Tariff Revisions are not unreasonable.

ISSUE 2 - ARE AIR CANADA’S PROPOSED TARIFF REVISIONS UNJUSTLY DISCRIMINATORY, WITHIN THE MEANING OF PARAGRAPH 111(2)(a) OF THE ATR?

Positions of the parties

HSIC

[102] HSIC recognizes that the Agency must first determine whether the Proposed Tariff Revisions are discriminatory, before looking at whether they are unjust. HSIC also recognizes that the Agency has looked at this issue in prior cases and that the Agency has indicated that “discrimination” occurs where a distinction is made based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing a burden, obligation or disadvantage on such an individual or group not imposed on others. HSIC submits that in this case, the relevant group would be shippers, rather than passengers, and that no distinction is made based on grounds relating to the personal characteristics of the shippers. HSIC argues that all non-human primates destined for research and testing are treated equally under the Proposed Tariff Revisions, i.e., they are all prohibited from being transported by Air Canada regardless of the shipper.

[103] HSIC indicates that research institutions that own the research non-human primates and conduct the experiments also carry out experiments on a wide range of other animals that are not affected by the Proposed Tariff Revisions. HSIC submits that, consequently, all such research institutions are treated equally under the Proposed Tariff Revisions and no institution suffers a burden, obligation or disadvantage not imposed on others. HSIC submits that because a tariff is narrowly tailored does not make it discriminatory.

[104] HSIC is of the view that even if it should be decided that discrimination exists, such discrimination does not meet the “unjustly/unduly” test established by the Agency.

[105] HSIC submits that Air Canada’s Proposed Tariff Revisions are the result of a legitimate business decision to protect its reputation and keep its customers, and that the Proposed Tariff Revisions were established to keep in line with industry practices and to protect Air Canada’s reputation among customers.

[106] HSIC submits that, in practical terms, the burden imposed by the Proposed Tariff Revisions is likely minimal or non-existent, as other air carriers will continue to transport non-human primates for research purposes and alternatives to air transportation continue to exist. HSIC states that the primary means of transport for non-human primates destined for research and testing in Canada is ground transportation originating from either Ottawa or the United States of America.

[107] HSIC’s position is that the Proposed Tariff Revisions are not discriminatory. However, in its view, even if the Agency finds otherwise, this does not amount to unjust or undue discrimination because the Proposed Tariff Revisions: stem from a legitimate business decision and well-established ethical concerns; do not prevent shippers from switching to other carriers that would accept such cargo; and, are narrowly tailored to impact only the specific practice causing harm to Air Canada’s business.

Air Canada

[108] Air Canada argues that it also does other business with the shippers that have shipped non‑human primates destined for research. Consequently, it submits that it does not discriminate against shippers.

[109] Air Canada submits that transporting non-human primates for research purposes using alternative means may entail longer travel or connections but this cannot make Air Canada’s Proposed Tariff Revisions unreasonable or unduly discriminatory. Air Canada adds that since 2010, an overwhelming majority of research non-human primates shipments, even using Air Canada services, involve a connection between itself and another carrier. Air Canada states that, likewise, passengers from Canada travelling the world and passengers from abroad seeking to visit Canada regularly take myriad connections.

PRCB

[110] PRCB submits that “any external condition to exclude transportation of non-human primates destined for laboratory research and/or experimental purposes, which is not based on an objective and operational inconvenience for an air carrier, and moreover is unrelated to issues of air transport, such as ideological consideration or whims of some minority groups and activists, is unjust and discriminatory and can only lead to discrimination and injustice, undue advantage to activist groups over the Canadian public, which could only suffer undue or unreasonable prejudice or disadvantage.”

PHAC

[111] PHAC submits that Air Canada’s Proposed Tariff Revisions impose a burden or disadvantage on one group – persons shipping non-human primates for laboratory research and/or experimental purposes – that is not imposed on others. PHAC states that those shipping non-human primates with Air Canada for other reasons, such as for movies or zoological display, would still be permitted to do so. PHAC maintains that this is clearly discriminatory. PHAC adds that the proposed ban does not apply to shippers of other animals used for laboratory and/or research purposes.

[112] PHAC states that the Canadian Charter of Rights and Freedoms case law might be a useful starting point to define discrimination; however, PHAC argues that it cannot be strictly relied on in this matter as the CTA and ATR are not human rights legislation. In general, Canadian human rights legislation is intended to protect vulnerable persons and groups from discrimination, and these groups are often defined by their personal characteristics. PHAC argues that the purpose of section 67.2 of the CTA and section 111 of the ATR is wider than the protection of vulnerable persons and groups, and that the discrimination analysis in this matter should not be limited to differential treatment based on “personal characteristics”.

[113] PHAC submits that the term “discrimination” can be interpreted outside of the human rights context, and can apply to a failure to treat all persons equally, regardless of whether that treatment is as a result of personal characteristics. Therefore, PHAC submits that the differential treatment of shippers of non-human primates intended for laboratory research and/or experimental purposes where there is no reasonable distinction between them and other shippers of non-human primates is discriminatory.

[114] PHAC asserts that should the Agency make a determination that the Proposed Tariff Revisions are discriminatory, in order to determine whether that discrimination is “undue”, it should assess the consequences or effects of the ban and balance the interests of the various parties.

[115] While acknowledging that the Agency is of the opinion that it does not have the mandate to decide between the benefits and the negative impacts of animal testing, PHAC submits that, to assess whether the Proposed Tariff Revisions are unreasonable or unduly discriminatory, the Agency should follow its previous case law and balance the interests of the parties. PHAC indicates that to do so, the Agency will need to consider the impact that the Proposed Tariff Revisions would have on PHAC’s medical research program.

Queen’s University

[116] Queen’s University notes that the definition of “discrimination” found in Decision No. 666‑C‑A‑2001 has been developed in the human rights and labour relations context and may have limited applicability to the transport of cargo. Queen’s University submits that discrimination in the context of the transport of cargo, where there are no personal characteristics involved, should have a more general definition. Queen’s University is of the view that this definition must be one that goes beyond the enumerated personal grounds of the “Code” and include any differential treatment of cargo.

[117] Queen’s University submits that the definition of discrimination in the context of the transport of cargo could be patterned on the definition found in Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143 without the word “personal”. That is, discrimination may be defined as “a distinction, based on grounds relating to characteristics of the individual or group, which has the effect of imposing a burden, obligation, or disadvantages on such individual or group not imposed on others, or which withholds or limits access to opportunities, benefits, and advantages, available to other members of society.”

[118] Queen’s University maintains that Air Canada’s Proposed Tariff Revisions discriminate because they will treat shippers of non-human primates for research purposes differently from all other shippers, imposing disadvantages on them that other shippers do not face.

[119] According to Queen’s University, the burden is on Air Canada to justify any terms of carriage that are discriminatory.

BUAV

[120] BUAV submits that there can be no unlawful discrimination within section 67.2 of the CTA or section 111 of the ATR unless (i) the complainant would in practice suffer a material disadvantage as a result of a tariff; (ii) there is differential treatment between relevant groups or individuals; (iii) that differential treatment constitutes discrimination as a matter of law; and, (iv) in all the circumstances, the discrimination is unjust and/or undue.

[121] BUAV states that there would be no disadvantage to the complainants from the Proposed Tariff Revisions because there are a number of air and road carriers that continue to transport non‑human primates for research purposes into Canada (and there is a domestic supplier of non‑human primates). BUAV submits that around 60 percent of non-human primates for research purposes arrive in Canada by road and there are a number of other air carriers travelling directly into Canada that continue to transport non-human primates for research purposes. BUAV also states that it makes no difference to the research wishes of the complainants how research non‑human primates arrive at their laboratories, provided they arrive in the same general condition.

[122] BUAV submits that the complainants claim discrimination in two respects: (a) research institutions using other species for research are not affected by the Proposed Tariff Revisions; and (b) importers of non-human primates for non-research purposes are similarly not affected by the Proposed Tariff Revisions. With respect to (a), BUAV contends that there is no differential treatment because the complainants also use other species for research. (A discriminated complainant cannot be a member of both the advantaged and disadvantaged group.) BUAV maintains that with respect to (b), only differential treatment can have any conceivable relevance.

[123] BUAV makes reference to the definition of “discrimination” found in Decision No. 666‑C‑A‑2001, and submits that there are no personal characteristics in play here as institutions such as the complainants do not have personal characteristics in the context of the alleged discrimination. BUAV states that Queen’s University argues that personal characteristics should not govern discrimination in this situation. However, BUAV points out that the Agency’s case law is clear and the fact that cargo is at issue in this case makes no difference. BUAV adds that potential unlawful discrimination is against a shipper of cargo, not the cargo itself, and there is no reason why, in principle, a shipper should not possess personal characteristics. BUAV adds that, for example, if a carrier refused to transport the cargo of a particular shipper simply because of their race or gender, it would be discrimination based on a personal characteristic. According to BUAV, the complainants are unable to show any discrimination of this sort.

[124] BUAV submits that ultimately, it does not matter whether it is necessary to show a relevant personal characteristic because, even supposing the Proposed Tariff Revisions are discriminatory in fact and in law, they are not unduly or unjustly discriminatory. BUAV disagrees with PHAC’s contention that the personal characteristics test laid down by the Agency in previous cases do not apply in the context of cargo.

[125] BUAV accepts that, in principle, shippers can complain about unjust discrimination. BUAV adds that there is no reason, however, why they should not have to demonstrate a relevant personal characteristic, as passengers do.

Analysis and findings

[126] As stated earlier, the assessment of whether a tariff is “unjustly discriminatory” is a two‑step process. The Agency must first determine whether the term or condition of carriage is “discriminatory”. If the Agency finds the term or condition of carriage applied by the carrier to be “discriminatory”, the Agency must then determine whether such discrimination is “unjust” in consideration of the statutory, commercial and operational reasons that led to the Proposed Tariff Revisions. The Agency must also consider the commercial context of the transport of air cargo and the fact that a refusal to transport certain cargo may result from a rational business decision.

[127] The Agency notes that both HSIC and BUAV submit that in this case the relevant group would be the shippers, rather than the passengers, and that the Proposed Tariff Revisions make no distinction based on grounds relating to the personal characteristics of the shippers. Furthermore, HSIC and BUAV argue that all non-human primates destined for research and testing are treated equally under the Proposed Tariff Revisions, in that they are all prohibited from being transported by Air Canada regardless of the shipper.

[128] The Agency agrees with HSIC and BUAV. Paragraph 111(2)(a) of the ATR states that no carrier shall, in respect of the tolls or the terms and conditions of carriage, make any unjust discrimination against any person or other air carrier. To demonstrate discrimination, the complainants (PHAC and Queen’s University) must provide evidence that a burden, obligation or disadvantage has been imposed on a particular group of shippers. The Agency is of the opinion that Air Canada’s Proposed Tariff Revisions treat all shippers equally. No specific shipper has been singled out for different treatment based on a specific characteristic. In this respect, the key element to consider is whether any specific shipper is treated differently, not the cargo itself. In this case, the Agency finds that the Proposed Tariff Revisions apply equally to all shippers and are therefore not discriminatory.

[129] It is recognized that discrimination against a shipper could be achieved indirectly by imposing a tariff in respect of a specific type of cargo that affects only one shipper or a group of shippers based on their characteristics. However, the Agency has found that there is a rational basis for the Proposed Tariff Revisions; they are not indirectly aimed at discriminating between shippers, but represent a business decision to discontinue transporting non-human primates for research purposes given the effect that continuing to do so could have on Air Canada’s reputation and commercial interests. The Agency is of the opinion that air carriers should have the business flexibility to decide which type of cargo they want to transport. By itself, an air carrier’s decision to stop transporting a specific type of cargo for reasons that are rationally related to a business decision does not constitute discrimination.

[130] The Agency’s finding that the Proposed Tariff Revisions do not constitute discrimination is sufficient to dispose of this ground of complaint. However, even if the Agency had found the Proposed Tariff Revisions to be discriminatory, balancing the shipper’s arguments against the Proposed Tariff Revisions with the statutory, operational and commercial obligations of Air Canada, the Agency is of the opinion that the Proposed Tariff Revisions cannot be considered to be “unjust”.

Conclusion

[131] The Agency has considered the complainants’ positions respecting this matter, and finds that Air Canada’s Proposed Tariff Revisions are not discriminatory. They do not differentiate between shippers on a specific characteristic of any shipper or otherwise and therefore, the Proposed Tariff Revisions are not discriminatory.

ISSUE 3 - DO AIR CANADA’S PROPOSED TARIFF REVISIONS SUBJECT ANY PERSON OR OTHER AIR CARRIER OR ANY DESCRIPTION OF TRAFFIC TO ANY UNDUE OR UNREASONABLE PREJUDICE OR DISADVANTAGE IN ANY RESPECT WHATSOEVER, CONTRARY TO PARAGRAPH 111(2)(c) OF THE ATR?

Positions of the parties

Air Canada

[132] Air Canada submits that its Proposed Tariff Revisions do not convey any undue or unreasonable prejudice or disadvantage to the shipper or the consignee. Air Canada indicates that the text of section 111 of the ATR does allow carriers to impose tariffs that cause a prejudice or a disadvantage, the prohibition relates to an “undue or unreasonable prejudice” or to an “undue or unreasonable disadvantage”. Air Canada points out that neither “prejudice” nor “disadvantage” has been defined in the CTA.

PRCB

[133] PRCB states that the Agency must decide if Air Canada’s Proposed Tariff Revisions give undue or unreasonable advantage to or in favor of any person in any respect whatever or if they subject a person to undue or unreasonable prejudice or disadvantage pursuant to paragraphs 111(2)(b) and (c) of the ATR.

[134] PRCB submits that Air Canada must establish that, in the context of the transport of air cargo, the conditions of its Proposed Tariff Revisions are not only reasonable, but also, that they do not give undue or unreasonable preference to a person, nor do they subject a person to undue or unreasonable prejudice or disadvantage.

PHAC

[135] PHAC contends that the Agency needs to consider whether Air Canada’s Proposed Tariff Revisions subject PHAC or any description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatever, pursuant to paragraph 111(2)(c) of the ATR.

Queen’s University

[136] Queen’s University is of the view that the Proposed Tariff Revisions will subject the cargo consisting of non-human primates destined for research to prejudicial or disadvantageous treatment. Queen’s University submits that because this type of cargo will be denied service, the Proposed Tariff Revisions will impose burdens and disadvantages on the cargo (and correspondingly, on shippers of the cargo) which are not imposed on other cargo or shippers.

[137] Queen’s University recognizes that there are circumstances that may justify prejudicial or disadvantageous treatment and that leads to the next step of the test which is to determine if the term or condition is unduly or unreasonably prejudicial or disadvantageous. Queen’s University argues that the thrust of section 111 or the ATR is fair treatment; undue and unreasonable must be interpreted in light of that context. Queen’s University further argues that what is particularly relevant in this contextual analysis is that paragraph 111(2)(c) of the ATR states that there can be no undue or unreasonable prejudice or disadvantage “in any respect whatsoever”. Queen’s University submits that such an unequivocal direction must be taken into account when considering the “undueness” of the Proposed Tariff Revisions and, in its opinion, this strong language imposes an additional burden on Air Canada to justify the Proposed Tariff Revisions.

[138] Queen’s University states that in the absence of compelling operational or commercial obligations justifying the Proposed Tariff Revisions, the Agency must find that they are unduly and unreasonably prejudicial and disadvantageous.

BUAV

[139] BUAV is of the view that paragraph 111(2)(c) of the ATR adds little to paragraphs (a) or (b). BUAV argues that the terms “prejudice or disadvantage” set out in paragraph 111(2)(c) are simply the flip side of the terms “preference or advantage” set out in paragraph 111(2)(b). BUAV contends that both paragraphs elucidate what is meant by “discrimination” in paragraph 111(2)(a). BUAV argues that discrimination, by definition, means that one group is advantaged or preferred and another is disadvantaged or prejudiced. BUAV also contends that the words “in any respect whatsoever” in paragraph 111(2)(c) of the ATR simply means that all kinds of prejudice and disadvantage are to be avoided where they are undue or unreasonable. According to BUAV, these words say nothing about whether any prejudice or disadvantage is undue or unreasonable, which it also contends is the issue that the Agency is addressing.

Analysis and findings

[140] PHAC, PRCB and Queen’s University made submissions that Air Canada’s Proposed Tariff Revisions are also unduly or unreasonably prejudicial and disadvantageous, contrary to paragraph 111(2)(c) of the ATR. Paragraph 111(2)(c) states:

(2) No air carrier shall, in respect of tolls or the terms and conditions of carriage,

(c) subject any person or other air carrier or any description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.

[141] Queen’s University argues that this paragraph obliges air carriers to treat all cargo of the same description equally and that in stating that an air carrier may not subject any description of traffic to any undue or unreasonable prejudice or disadvantage whatsoever, paragraph 111(2)(c) of the ATR imposes additional restrictions on an air carrier’s right to refuse cargo.

[142] The Agency has not specifically dealt with the requirements of paragraph 111(2)(c) before in the context of a complaint respecting an air tariff.

[143] The word “traffic” is defined in the ATR as “any persons or goods that are transported by air”. The Agency accepts that in prohibiting a carrier from subjecting “any person or other air carrier or any description of traffic” to any undue or unreasonable prejudice or disadvantage, the Agency is required to consider the effects of the tariff on persons, air carriers and cargo.

[144] As noted by BUAV, the concepts of “prejudice or disadvantage” set out in paragraph 111(2)(c) are similar and very closely related to the concepts of “preference or advantage” identified in paragraph 111(2)(b) which, in turn, are related to the concept of discrimination.

[145] In a general sense, Air Canada’s Proposed Tariff Revisions may be seen as causing at least some disadvantage to the complainants and to the shipment of non-human primates for research purposes. However, the Agency has already found that there are service options available for shipping non-human primates for research purposes. The Agency also found that there is no evidence to support the argument that transportation costs would increase or would increase to levels that would make the transport of non‑human primates for research purposes economically unviable.

[146] The Agency has found that Air Canada’s decision to stop transporting non-human primates for research purposes is representative of a business decision. Decisions that are achieved as a result of commercial interests may not be to the advantage of everyone concerned as they often involve compromise. In fact, all commercial terms including prices, conditions of shipment and a carrier’s decision to refuse to transport cargo could be characterized by either the shipper or the air carrier as constituting a disadvantage or prejudice to them to some degree. The Agency is of the opinion that this does not, in and of itself, make the Proposed Tariff Revisions inconsistent with paragraph 111(2)(c) of the ATR. The Agency must balance the impact that the Proposed Tariff Revisions will have on shippers with the reasons supporting the Proposed Tariff Revisions. On this basis, the Agency is of the opinion that the Proposed Tariff Revisions are not unduly or unreasonably prejudicial or disadvantageous for the purposes of paragraph 111(2)(c) of the ATR.

Conclusion

[147] The Agency has considered the complainants’ position respecting this matter, and finds that Air Canada’s Proposed Tariff Revisions related to discontinuing to transport non-human primates for research purposes do not subject any description of traffic to any “undue or unreasonable” prejudice or disadvantage within the meaning of paragraph 111(2)(c) of the ATR.

OVERALL CONCLUSION

[148] In light of the foregoing, the Agency dismisses the complaints and rescinds the suspension of the Proposed Tariff Revisions related to Air Canada discontinuing to transport non-human primates for research purposes, as set out in Decision No. LET-A-4-2012. Air Canada may re‑file, restoring the suspended Proposed Tariff Revisions on not less than one day’s notice. Until such time as the Proposed Tariff Revisions are in effect, Air Canada is required to apply the tariffs on file, which in this case, provide for the transport of non-human primates for research purposes.

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[1] For example, Air Canada submits that in 2010, it carried 182 shipments of non-human primates from China to Canada, totalling 1,828 non-human primates, which represents 0.01% of its total cargo weight worldwide. Air Canada further submits that in 2011, only 33 shipments were traced, comprising of 258 non-human primates, which represents 0.001% of Air Canada’s total cargo weight worldwide. Air Canada further submits that in 2012, to date, it has carried 6 shipments comprising a total of 354 non‑human primates. Air Canada points out that to the best of its knowledge, since the beginning of 2010, it has carried only 4 shipments of non-human primates as cargo for purposes other than research or experimentation, comprising a total of 7 non‑human primates.

[2]Statement of Michelle Thew, paragraph No. 53.