Decision No. 615-C-A-2002

November 13, 2002

File No. M4370/C519/01-109

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COMPLAINT

On March 27, 2001, Rick Hesp filed with the Air Travel Complaints Commissioner the complaint set out in the title. However, due to the regulatory nature of the complaint, it was referred to the Canadian Transportation Agency (hereinafter the Agency).

On June 18, 2002, Agency staff requested that Air Canada address the complaint within the context of sections 67 and 67.1 of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA).

Air Canada filed its answer on July 18, 2002. Mr. Hesp did not file a reply.

Pursuant to subsection 29(1) of the CTA, the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties have agreed to an indefinite extension of the deadline.

ISSUE

The issue to be addressed is whether Air Canada properly applied its domestic tariff with respect to this matter.

FACTS

On March 10, 2001, prior to departing the Kamloops airport for the return portion of their travel between Toronto, Ontario, and Kamloops, British Columbia, Mr. Hesp and his companions, Kevin Brown, Vikki Brown and Joan Ostrander were each required to pay a $13 airport usage surcharge.

POSITIONS OF THE PARTIES

Mr. Hesp submits that he and his companions were informed of the airport usage surcharge only upon checking in their baggage at the Canadian Regional Airlines (1998) Ltd. carrying on business as Canadian Regional (hereinafter Canadian Regional) counter at the Kamloops airport. Mr. Hesp advises that there is no information notifying passengers of this surcharge either on Air Canada's website or tickets, no signs are posted in the Kamloops airport, and no information was provided by Air Canada to Mr. Hesp's travel agent. Mr. Hesp submits that it was only after walking around the terminal and inspecting the baggage kiosk that he discovered a Passenger Notice underneath and mixed in with some other papers. Mr. Hesp advises that he was informed, upon checking his luggage, that he would not be permitted to board the aircraft unless he paid the $13 surcharge. Mr. Hesp indicates that given this ultimatum, he and his companions each paid the surcharge.

According to Mr. Hesp, the manner in which this surcharge was collected is inappropriate and illegal. Mr. Hesp submits that he did not find any reference in the Aeronautics Act, R.S.C., 1985, c. A-2 and its applicable regulations stating that Air Canada is permitted to collect such a surcharge or that the air carrier may deny passage, if it is not paid. Mr. Hesp requested a refund from Air Canada for himself and his companions. Mr. Hesp further submits that Air Canada should either discontinue collecting the airport usage surcharge, or inform passengers of this surcharge at the point of sale and include it in the price of the ticket.

In a letter to Mr. Hesp dated November 9, 2001, Air Canada advises that Air Canada Regional Inc.'s expenses increased substantially over the past few years at certain airports and its ability to recover these costs and expenses had been limited. The carrier further advises that Air Canada Regional Inc.'s predecessor, Canadian Regional, imposed the Kamloops airport usage surcharge as part of the fare, to offset expenses incurred to operate to this airport. Air Canada also advises that it was reviewing its policy, "to determine if there was a more feasible way to offset its costs and minimize the impact on Kamloops customers".

Mr. Hesp advises in his submission of June 10, 2002 that he is not satisfied with Air Canada's reply. He submits that Air Canada charged him and his companions $13 each for the airport usage surcharge, when the tariff applicable at that time allowed Air Canada to charge $10.28 + GST or $11 per passenger. According to Mr. Hesp, the carrier contravened the CTA and the regulations by charging an amount in excess of the one stipulated in Air Canada's tariff.

Mr. Hesp further submits that the airport usage surcharge, notwithstanding the tariff, is unfair and unreasonable. Mr. Hesp adds that the carrier did not inform him and his companions of this additional charge before leaving Toronto, but only just prior to departing the Kamloops airport on the return portion of their trip. Mr. Hesp advises that, as he and his companions had prepaid their air fares in full, it is unreasonable for the carrier to impose an additional charge at Kamloops.

As a remedy, Mr. Hesp is asking the Agency: to find that Air Canada contravened the CTA and the regulations by charging him and his companions $13 for the airport usage surcharge; to order Air Canada to reimburse all passengers that departed from Kamloops on Air Canada or its affiliated carriers the full amount of the airport usage surcharge, from the date the carrier started collecting this fee; to find that the airport usage surcharge is unfair and unreasonable; and to order Air Canada to discontinue charging passengers for the Kamloops airport usage surcharge, unless this surcharge is disclosed prior to and at the time of ticket purchase.

In its answer of July 18, 2002, Air Canada advises that an airport usage surcharge was introduced on July 20, 1999 at Kamloops airport, in order to recover certain airport charges paid to Kamloops Airport Ltd. since June 1, 1999. The carrier further advises that since May 1, 2002, this surcharge is no longer collected, but has been replaced with an equivalent increase in fares.

Air Canada submits that following the amalgamation of Air Canada and Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International, Canadi*n Airlines or Canadi*n in January 2001, certain matters were not fully completed by March 2001. The carrier adds that on March 10, 2001, its tariff did not fully reflect the airport usage surcharge collected at Kamloops airport, but rather, the applicable tariff allowed Air Canada to charge $11, whereas Mr. Hesp was charged $13. According to Air Canada, the airport usage surcharge was clearly set out in its tariff, however, the actual amount had not been properly updated. Air Canada submits that, since then, it has corrected this oversight, which was due solely to the complexity and extent of the amalgamation process. The carrier adds that, as it has taken appropriate corrective measures, the Agency should not exercise its jurisdiction in this matter. Air Canada further submits that the remedies requested by Mr. Hesp are outside the jurisdiction of the Agency.

ANALYSIS AND FINDINGS

In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings.

Legislation

The relevant legislation in this case is sections 67, and 67.1 of the CTA, which provide that:

67. (1) The holder of a domestic licence shall

(a) publish or display and make available for public inspection at the business offices of the licensee all the tariffs for the domestic service offered by the licensee;

(b) in its tariffs, specifically identify the basic fare between all points for which a domestic service is offered by the licensee; and

(c) retain a record of its tariffs for a period of not less than three years after the tariffs have ceased to have effect.

(2) A tariff referred to in subsection (1) shall include such information as may be prescribed.

(3) The holder of a domestic licence shall not apply any fare, rate, charge or term or condition of carriage applicable to the domestic service it offers unless the fare, rate, charge, term or condition is set out in a tariff that has been published or displayed under subsection (1) and is in effect.

(4) The holder of a domestic licence shall provide a copy or excerpt of its tariffs to any person on request and on payment of a fee not exceeding the cost of making the copy or excerpt.

67.1 If, on complaint in writing to the Agency by any person or on its own motion, the Agency finds that, contrary to subsection 67(3), the holder of a domestic licence has applied a fare, rate, charge or term or condition of carriage applicable to the domestic service it offers that is not set out in its tariffs, the Agency may order the licensee to

(a) apply a fare, rate, charge or term or condition of carriage that is set out in its tariffs;

(b) compensate any person adversely affected for any expenses they incurred as a result of the licensee's failure to apply a fare, rate, charge or term or condition of carriage that was set out in its tariffs; and

(c) take any other appropriate corrective measures.

Legal issues

As indicated above, Air Canada, in its answer of July 18, 2002, presented several arguments relating to the jurisdiction of the Agency in this case under section 67.1 of the CTA. In this Decision, the Agency will consider these arguments as a preliminary matter before making its determination concerning the case at hand.

In general, Air Canada submits that the Agency does not have the jurisdiction under section 67.1 of the CTA to order Air Canada to reimburse the airport usage surcharge to all passengers who departed from Kamloops, British Columbia during the period in which Air Canada's tariff was incorrect, as requested by Mr. Hesp. Instead, Air Canada submitted that the jurisdiction of the Agency under this section is limited to ordering Air Canada to compensate each of the four complainants for the two dollars that was overcharged.

In support of its submissions, Air Canada first argued that in the context of an individual complaint, paragraph 67.1(b) of the CTA only allows the Agency to order the licensee to compensate the complainant. Air Canada's argument is that the preamble to section 67.1 of the CTA refers to the complaint being made by "any person" and paragraph 67.1(b) of the CTA refers to the Agency ordering the licensee to compensate "any person" who was adversely affected, and therefore these two phrases must refer to the same person. This argument is based on the principle of statutory interpretation that within a statute the same words have the same meaning.

When interpreting a legislative word or phrase, such as "any person" in the context of section 67.1 of the CTA, one must first look to its ordinary or usual meaning. Then, using the principle cited by Air Canada above, this ordinary meaning is applied to each instance that it appears in the provision. The resulting interpretation is then analyzed to ensure that it accords with the purpose of the provision and the overall legislative scheme of the CTA. The Agency is of the opinion that, in ordinary usage the term "any person" refers to anyone at all, and not to any specific person. Thus in section 67.1 of the CTA, on a complaint brought by anyone at all, the Agency may order the licensee to compensate anyone at all who was adversely affected. Thus, the Agency finds that it is not limited to ordering compensation only for the complainant under paragraph 67.1(b) of the CTA, but in fact the Agency can order compensation for anyone at all who was adversely affected.

The Agency is of the opinion that, this interpretation is more in line with the scheme of the provision than the interpretation offered by Air Canada. In particular, the Agency notes that under section 67.1 of the CTA, the Agency may investigate any matter mentioned in that provision on its own motion. The Agency also notes that in the case where an individual does make a complaint under section 67.1 of the CTA, there is no requirement that the complainant be a person who was adversely affected by any misapplication of the carrier's tariff. In these two cases, interpreting the phrase "any person" in paragraph 67.1(b) of the CTA as referring to the person who made the complaint would not make any sense.

Furthermore, an analysis of the interpretation of section 67.1 of the CTA offered by Air Canada reveals that the meaning of the phrase "any person" would change between its two uses under that interpretation. Air Canada is in fact arguing that the first use of "any person" in the preamble to section 67.1 of the CTA refers to anyone at all, but the use of that phrase in paragraph 67.1(b) of the CTA refers to a specific person, the person who made the complaint. Clearly this change in meaning would violate the principle of statutory interpretation that Air Canada refers to above.

Any lingering doubt concerning this interpretation is quickly dissipated when one reads the corresponding French version of paragraph 67.1(b) of the CTA:

67.1 S'il conclut, sur dépôt d'une plainte ou de sa propre initiative [...] l'Office peut, par ordonnance, lui enjoindre:

[...]

b) d'indemniser toute personne lésée des dépenses [...].

Here the use of the words "toute personne" in paragraph 67.1(b) of the CTA, and the fact that a person is not referred to in the preamble to the section, clearly indicate that the Agency has the power to order compensation for any person who was adversely affected, and not just the complainant.

Air Canada's second argument in support of its submissions is that paragraph 67.1(b) of the CTA only allows the Agency to order the licensee to refund the difference between the amount that was set out in the tariff and the amount that was actually charged, plus any incidental expenses that were incurred as a result of the misapplication of the tariff. Thus, in this case, the Agency would be limited to ordering a refund of the two dollar difference between the $13 that was charged and the $11 amount ($10.28 plus GST) that appeared in the tariff. This argument is based on the fact that paragraph 67.1(b) of the CTA uses the word "compensate", and the ordinary meaning of this term is to restitute that which has been lost as a result of the misapplication (see, for example, the definition in the Dictionary of Canadian Law). Air Canada also pointed out that the word "refund" is used in other places in the CTA, and therefore "compensate" must mean something other than a refund.

With respect to this argument, the Agency agrees that the use of the word "compensate" in paragraph 67.1(b) of the CTA implies that the Agency is limited to ordering the licensee to refund the difference between the amount that was actually charged and the amount that appears in the tariff, plus any additional expenses that were incurred as a result of the misapplication of the tariff. The Agency finds that this paragraph, read as a whole, clearly indicates that its purpose is to restore any person who was adversely affected by the misapplication of the tariff to the same position that person would have been in had the misapplication never occurred. The use of the word "indemniser" in the French version of this paragraph further reinforces this interpretation. Thus, the provision is compensatory in nature and is not intended to be used to punish the licensee or to provide a windfall for an adversely affected person.

With respect to the powers of the Agency, Air Canada also argued that the general power that the Agency has in paragraph 67.1(c) of the CTA to order the licensee to "take any other appropriate corrective measures" must be interpreted in the context of the preceding list of powers in the section. Thus, this provision cannot give the Agency the power to order Air Canada to give a refund of the $13 to everyone who was charged the incorrect amount. The Agency agrees that this paragraph must be interpreted in light of the powers contained in the previous paragraphs and the overall purpose of the provision. An analysis of paragraphs 67.1(a) and (b) of the CTA reveals that the orders that the Agency may make under section 67.1 of the CTA relate to compensating persons who were adversely affected by a misapplication of a tariff, as discussed above, and to ensuring that a misapplication does not recur in the future. Any order made under paragraph 67.1(c) of the CTA would also have to be for one of these two purposes, and therefore Air Canada is correct that this provision cannot be used to order a full refund, as that would clearly be outside of the scope of section 67.1 of the CTA.

Air Canada's final argument in support of its submissions is that the purpose of section 67.1 of the CTA is to address major systemic problems and should only apply to egregious actions and not to an inadvertent error, as is the case here. In support of this, Air Canada quoted a speech made by the Minister of Transport in the House of Commons concerning the bill that enacted section 67.1 of the CTA to the effect that a goal of the bill is to "effectively protect consumers from any abuse by the dominant carrier" (Hansard, No. 76, March 13, 2000 at 1015). On this point, the Agency notes that section 67.1 of the CTA does not require the Agency to enquire into the bona fides of the licensee nor does it state that it only applies in large or important cases. The Agency is of the opinion that the fact that the provision applies any time that a licensee misapplies its tariff is in keeping with its compensatory and preventative purposes as described above. With respect to the quote from Hansard, the Agency recognizes that referring to such sources is often a helpful indicator of the purpose or context of the legislation and is useful when attempting to resolve an ambiguity that appears in the legislation. In the present case, however, the legislative text is perfectly clear on this point. Furthermore, such sources cannot be used to add words or concepts to the legislation, as Air Canada is attempting to do in its arguments.

The present case

The Agency has also examined Air Canada's tariff provisions in effect on March 10, 2001, on the Carrier Collected Airport Usage Fee, as set out in Rule 0396 of the Canadian Domestic General Rules Tariff published by the Airline Tariff Publishing Company, which states, in part, that:

An airport usage fee is collected by the carrier at the following airports for all departing passengers for the purpose of recovering charges from the airport to the carrier.

...

YKA (Kamloops) ... for travel on/after 20 July 1999 $10.28 *

* Subject to GST where applicable

The Agency notes that Air Canada's tariff at the time of Mr. Hesp's travel provided for the collection of a $10.28 surcharge, plus GST, where applicable, but that Mr. Hesp and his companions were charged $13. The Agency is therefore of the opinion that Air Canada contravened subsection 67(3) of the CTA, as it applied a charge at an amount that was not set out in its tariff that is applicable to domestic services. Accordingly, the Agency has determined that Air Canada should reimburse Mr. Hesp and his companions the amount of $2 each, which represents the difference between the charge actually assessed and that which appeared in Air Canada's tariff.

On the issue of other passengers that departed from Kamloops since the date the carrier started collecting this fee, the Agency does not contemplate taking any action in this regard, given the magnitude of such a task, and the minimal amount of money involved per passenger.

With respect to Mr. Hesp's request that the Kamloops airport usage surcharge be found to be unreasonable, and that Air Canada be ordered to discontinue such fee, unless it is disclosed prior to and at the time of ticket purchase, the Agency notes that this surcharge is no longer collected, but has been replaced by an increase in fares. In this regard, the matter of these remedies sought by Mr. Hesp is moot.

CONCLUSION

Based on the above findings, the Agency concludes that Air Canada contravened subsection 67(3) of the CTA by applying a charge at an amount not set out in its domestic tariff.

The Agency hereby orders Air Canada, pursuant to paragraph 67.1(b) of the CTA, to reimburse, within thirty (30) days from the date of this Decision, Rick Hesp, Kevin Brown, Vikki Brown and Joan Ostrander the amount of $2 each.