Standing Committee on Transport, Infrastructure and Communities – November 28, 2022

• Chair, I would like to thank the Committee for the invitation to appear today.
• As you noted, I am accompanied by my colleague, Michelle Greenshields, Director General for Disputer Resolution at the Agency.
• As a regulator, the Canadian Transportation Agency develops regulations in accordance with legislation, implements regulations, issues licenses and determinations, and enforces regulations.
• As an administrative tribunal, the Agency resolves complaints using informal dispute resolution, facilitation and mediation, as well as through a formal adjudication process, in which it has all the powers of a superior court.
• The Agency has a broad mandate for the federally-regulated transportation system – air, rail, marine, and interprovincial bus - that impacts all Canadians, as well as protecting the human right of persons with disabilities to an accessible transportation network.
• A core component of our mandate is providing consumer protection for air passengers, most significantly through the Air Passenger Protection Regulations or APPR.
• In 2018, the Transportation Modernization Act amended the Canada Transportation Act and gave the Agency the authority to make regulations defining airlines' minimum obligations towards passengers.
• Before the development of the APPR, each airline set out its own terms and conditions of carriage in a legal document known as a tariff - which is in effect the contract between the passenger and the airlines - that was rarely, if ever, read by passengers. After the coming into force of the APPR, in addition to the terms and conditions set out in their tariff, each airline is required to follow the obligations as set out in the APPR. These regulations create more consistent passenger rights across airlines.
• Developed following a comprehensive public consultation exercise, the APPR addresses fundamental entitlements of passengers including receiving clear communications, and being treated fairly in the case of delays, cancellations and denied boarding.
• These minimum obligations differ, based on the extent to which the causes of a flight disruption are within an airline's control or not.
• Obviously for situations that an airline can control, airlines are held to a higher standard of treatment toward the passengers. For example, for flight disruptions that are wholly within airline control, airlines are required to provide compensation for inconvenience.
• Even when events occur that are outside of their control, airlines must still ensure that their passengers get to their destination as quickly as possible.
• Whether an event is outside of an airline's control, within their control, or within the airlines' control but required for safety can sometimes be difficult to determine.
• It can be even more difficult for a passenger, as the information that would enable the passenger to determine how the flight disruption is categorized and what their entitlements are, is within the hands of the airlines.
• The CTA has developed plain language guidance for both passengers and airlines to improve their understanding of their rights and obligations.
• The Agency has also identified key interpretation issues, such as whether crew shortages are within airline control, and is providing interpretations on such issues as decisions are made in the context of the adjudication of complaints.

Refunds

• As you are aware, in 2020, three months after the APPR came into force, the COVID-19 pandemic caused a collapse of global air.
• As the events of the pandemic unfolded, it became clear that there was a gap in Canada's air passenger protection framework relating to situations where flights were cancelled or delayed for reasons outside of an airline's control and there was no possibility of a passenger completing their itinerary within a reasonable time.
• Because the law did not require airlines to include refund provisions in their tariffs for such situations, what a passenger was entitled to depended on the particular airline's tariff.
• [Shortly afterwards, the Government, as indicated in its Fall Economic Statement 2020, provided financial support to Canadian airlines and as part of that process, asked airlines to provide refunds for flights that were cancelled during this period.]

Regulations Amending the APPR (Refund Regulations)

• Given the implications of this gap in the framework, on December 18, 2020, the Minister of Transport issued a Direction to the Agency providing the authority to develop a regulation respecting an airline’s obligations to passengers in the case of flight cancellations or lengthy delays due to situations outside their control that prevent them from ensuring that the passenger complete their itinerary within a reasonable time.
• The final regulations amending the APPR were published in Part II of the Canada Gazette on June 22, 2022 and came into force on September 8, 2022.
• The new regulations require airlines to provide a passenger affected by a cancellation or a lengthy delay due to a situation outside the airline’s control with a confirmed reservation on the next available flight that is operated by them or a partner airline, leaving within 48 hours of the departure time indicated on the passenger's original ticket.
• If the airline cannot provide a confirmed reservation within this 48-hour period, it must provide, at the passenger's choice, a refund or rebooking.
• And, a refund must be provided within 30 days.

Dispute Resolution

• Following the coming into force of the APPR we saw a significant influx of complaints –– as incoming monthly complaint volumes quadrupled (4x).
• To put this in perspective, in 2018-2019 we received 7,650 complaints. While in the year that the APPR came into force, 2019-20, we received 19,392 complaints even though the APPR were fully in force for 3 months prior to the onset of the COVID-19 pandemic.
• More recently, as air travel volumes have rebounded – and the air industry has grappled with the speed of this recovery – we have witnessed an exponential growth in complaints.
• While we had been receiving an average of about 1500 complaints per month in April, May and June of this year, complaint volumes jumped to more than 3,000 in July and almost 6,000 in August.
• Despite processing more complaints than ever before - in 2021-22, we processed over 15,000 complaints, which is more than 3x the number of complaints we were processing annually before the APPR and COVID - this significant increase has led to a backlog.
• We are working on addressing this backlog by further increasing our complaints processing capacity through identifying and implementing procedural improvements, modernizing our processes and adding capacity where possible.
• Finally, although today's study is focused on APPR, I should also mention that the Agency has a key human rights mandate for accessibility of the federally-regulated transportation system. I would note that when we receive cases regarding accessibility, they are prioritized and as a result we have no backlog in this area.

Conclusion

• Thank you, Chair. We would be happy to respond to any questions.

Are air passengers receiving refunds for cancelled and delayed flights?

• The pandemic highlighted a gap in the Air Passenger Protection regulatory framework:
  • The absence of a requirement for airlines to refund tickets when flights are cancelled, or where there is a lengthy delay, for reasons outside airline control and it is not possible for the airline to ensure that the passenger's itinerary is completed within a reasonable time.
• This gap was recently closed through an amendment to the regulations:
  • Since September 8, 2022, airlines must offer passengers a rebooking or a refund, even for flight disruptions outside airline control, if they are not able to rebook the passenger within 48 hours.

RESPONSIVE: 48-hour rebooking window

• In the case of flight disruptions outside carrier control only, airlines are provided with the opportunity to rebook a passenger within 48 hours of the original departure time, before having to offer a refund.
• The 48-hour rebooking window provides a balance between the needs of airlines and passengers. It recognizes that airlines may reasonably need more time to recover their schedules after a disruption that was outside their control. It also takes into account the unique realities and concerns of Canadian airlines, particularly those that work in the northern and remote locations where there are infrequent flights and where weather-related disruptions can be lengthier.
• In the case of events within carrier control a passenger would be entitled to a refund instead of rebooking, if the arrangements offered do not meet their travel needs, or there is no longer any purpose to the travel, because of the disruption.

RESPONSIVE: Is it not true that carriers have been required to offer refunds under Canadian law since 2004?

• Prior to 2019, the Agency had issued a number of decisions regarding refunds in specific cases adjudicated by the Agency, but there was no regulation or legislation which required airlines to provide refunds prior to the Air Passenger Protection Regulations.
• Following the amendment of the Canada Transportation Act in 2018 to allow for the making of the Air Passenger Protection Regulations, these earlier decisions helped to shape the regulatory proposals that were subsequently the subject of wide consultations, and which led ultimately to a new regulatory framework for the consumer protection of air passengers.
• This new regulatory framework provided that rebooking or refunds had to offered to passengers who experienced flight disruptions that were within airline control or within airline control, but required for safety.
• On December 21, 2020, the Minister of Transport issued a direction to the Agency, directing the CTA to amend the regulations to provide for a refund in the case of flight disruptions outside carrier control. The subsequent amendment came into force on September 8, 2022.

RESPONSIVE: Vouchers

• During the pandemic, before this regulatory amendment came into force, there was a concern that some passengers might not receive any form of repayment for the mass flight cancellations that were taking place.
• In that context, the Agency issued a statement on vouchers that was meant to ensure that this wouldn't happen.
• The statement did not affect the rights of passengers who believed that they were entitled to a refund under the tariff of a particular air carrier.
• The Agency was very clear that it would continue to respond to disputes on a case by case basis on their merits and it has done just that.

RESPONSIVE: Independence

• The Agency has recently published on our website a statement regarding our independence and impartiality.
• To perform some of its regulatory functions, the Agency does engage with government officials, with the industries it regulates, and with consumer and disability rights organizations. That engagement is required by law or government policy when the Agency develops certain regulatory instruments.
• In other situations, engagement allows the Agency to, for example, further its expertise to understand the transportation trends and issues it needs to take into account. Engagement allows the Agency to remain current and relevant, and to competently advance its mandate.

What is your backlog and how long will it take to respond to a new complaint received today?

• We continue to receive a high number of complaints, although the pace has reduced since the summer when, for example, we received 6000 complaints in the month of August. You can compare this to the period before the APPR came into force where we received 7650 complaints for the entirety of the 2018-2019 fiscal year. So far this Fiscal year we have received 28,000 complaints.
• Our current backlog is 33,000.
• We strive to make the best possible use of our resources and can now process over 10,000 complaints a year, compared to 5000 complaints per year before the pandemic.

Do you have the resources to do your job?

• There will continue to be a high number of complaints and we will continue to review our processes to optimize our complaint handling capacity:
  • We have already found ways to more quickly review cases informally and formally through batching cases, streamlining our manual review processes and developing shorter decisions where possible
  • We are meeting with airlines regularly to discuss our processes and identify processing efficiencies
  • And we have launched a review to further explore process efficiency and automation

Do you think your organization is performing well?

• We will effectively use the resources provided by Parliament to resolve as many complaints as possible.
  • This includes the $11.5 million in temporary funding that was provided until March 31, 2023 to maintain our existing staffing level.

What did the Agency do to respond to the disruptions experienced by passengers at airports last summer?

• The pandemic had a significant impact on the air transportation industry. What we were seeing during the summer was a challenging transition back to more normal operations.
• The Agency recognized that passengers needed information on their rights, in a way that was easy to access and consume, all while passengers were travelling and in the midst of experiencing disruptions.
• To this end, the Agency created a clear, simple guidance document for passengers that could be accessed and understood using a smart phone.
• The Agency also streamlined its website to take potential complainants through a step-by-step process to handle their dispute with the airline. Including what questions they should be asking and what receipts or proof they would need to keep.
• The Agency continued to respond to complaints and to issue decisions, prioritizing complaints where decisions by the Agency would have broad interpretive value to a significant number of complaints before the Agency, e.g. the Lareau and Crawford decisions on flight disruptions due to crew shortages being within airline control, and therefore subject to compensation for inconvenience.
• What I've said highlights the fact that the main way through which the Agency oversees compliance with the APPR is through the resolution of complaints made by passengers against airlines.
  • Complaint resolution is helpful individually to the complaining passenger since it can result in the passenger obtaining a remedy from the airline.
• The other way in which the Agency oversees compliance with the APPR is through compliance monitoring and enforcement activities.
• To that end, the Agency has a small number of designated enforcement officers.
• During the summer, these enforcement officers conducted blitzes at airports and launched investigations that resulted in notices of violation that have been posted on our website.
• More importantly, the engagement of enforcement staff with airlines resulted in the airlines correcting their behaviour by ensuring that the reasons for flights disruptions were properly communicated, and that passengers were provided the assistance they are entitled by the regulations.
• As a result of the investigations, instances of passengers having been incorrectly denied compensation were identified. Following these interventions, passengers were ultimately paid the compensation owed.

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

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

General

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

Mobility Aids

• Under both the ATPDR (large transportation service providers) and Part VII of the Air Transportation Regulations (ATR) (small-air carriers), airlines are required to provide assistance with respect to mobility aids, such as passenger transfers, and to quickly repair, replace or reimburse damage to mobility aids.
• The Agency receives some complaints regarding mobility aids each year. In 2021-22, we received 24 complaints related to wheelchair assisstance and none with respect to wheelchair damage. So far in 2022-23 [Sept.1, 2022], we have received 28 complaints related to wheelchair assisstance and none with respect to wheelchair damage.
• Even in the absence of a complaint, when we are made aware of an egregious incident that could be a violation of the regulations, we ask our enforcement team to look into the incident to obtain more information about what happened.
• More generally, the Agency continues to work with partners internationally to improve the handling of mobility aids. For example, with Transport Canada, we commissioned a study by the National Research Council on the safe storage and transportation of mobility aids in the cargo holds of aircraft; this study has become an important input to the work of the new IATA Action Group on Mobility Aids, which seeks to harmonize and improve industry best practices with respect to the handling of mobility aids.

Service Animals

• The ATPDR requires that trained service dogs be accepted for travel by airlines.
• It is clear that dogs can be trained as service animals and that there are many organizations that provide the appropriate training.
• We have received some complaints from travellers regarding acceptance of other animals, including emotional support animals by airlines.

We have sought an expert opinion regarding the transportation of emotional support animals, which we have posted on our website, and are conducting consultations on this subject.

Speaking Points

• The Agency has many tools to advance its regulatory mandate with respect to passenger protection, including our authority to resolve passenger complaints against airlines as a quasi-judicial tribunal and to enforce industry compliance as a Regulator. The Agency believes that these actions, combined, are the best way to ensure that industry and passengers understand their respective rights and obligations, and to achieve compliance with the regulations.
• Through the complaints process, if the Agency finds that the airline has failed to meet its APPR obligations, it can order the airline to provide passengers what they are entitled to, whether it is compensation for inconvenience, refunds, or compensation for expenses they have incurred as a result of the airline's failure to comply with the APPR. For this reason, the main way we provide consumer protection for air passengers is by resolving their complaints against airlines.
• Additional compliance tools, including compliance and monitoring activities done by our small team of 7 designated enforcement officers, are utilized strategically based on a series of factors including severity and risk. They include proactive monitoring and enforcement of the regulations, and issuing notices of violation (NoV) with administrative monetary penalties (AMP), where required. Unlike the process for the resolution of complaints, however, enforcement actions do not result in any compensation to individual passengers.
• Aspects of the APPR that are handled by compliance and enforcement include: carrier obligations related to its communication with passengers when a flight is delayed or cancelled; carrier obligations to provide passengers with food, drinks, accommodations and refunds when required and compelling carriers to provide passengers with compensation (or reason for denying compensation) within 30 days^{Note 1}.
• As per the Agency's Compliance and Enforcement Policy, Designated Enforcement Officers address non-compliance by applying a graduated approach, using both informal and formal enforcement measures. They undertake a thorough analysis to select the enforcement instrument that will be the most effective in causing the entity to return to or achieve compliance and prevent recurrence. This approach, as well as our use of AMPs to compel compliance with the APPR, is consistent with that other regulators with an enforcement mandate.
• In response to the winter 2022 disruptions in the air industry, enforcement officers have undertaken an investigation into Sunwing's provision of information to passengers related to the delays and cancellations of flights during the winter disruptions, which resulted in many passengers being delayed in southern destinations.
• Enforcement officers have also undertaken 14 compliance verifications involving 3 Canadian and 6 foreign carriers related to tarmac delays at the Vancouver Airport resulting from the winter storm on December 19, 2022. Some of those verification activities may lead to investigations.
• Additionally, the enforcement team is monitoring media and complaints data and analyzing for indicators of potential non-compliance with the APPR and/or carriers' tariffs. Enforcement officers will also monitor to ensure that compensation payments or responses are being provided to passengers within 30 days (per s.19(4)) and to ensure that refunds are being provided to eligible customers (per s.18.2).
• In response to the summer 2022 disruptions in the air industry, enforcement officers have responded by conducting onsite inspections of Canadian and foreign air carriers at the Montreal, Toronto and Vancouver airports. This led to investigations resulting in the issuance of AMPs to Air Canada, WestJet and Delta. Also, the enforcement team has been analyzing samples of cancelled flights and complaints data which has led to investigations into whether compensation may be owed to passengers. As a result of the Enforcement team's intervention, WestJet has paid $56,700 in compensation to passengers who had previously been denied compensation and Air Canada has also paid compensation to 117 passengers related to 4 flights. Finally, enforcement officers have also been investigating carriers' delayed response to passenger compensation requests, which has resulted in the issuance of AMPS to Air Canada for $13,400, WestJet for $11,000 and to Flair for $28,000. Similar investigations with other air carriers are ongoing.
• Since the coming to force of the APPR obligations in July 2019 the CTA has issued 80 Cautionary Notices and subsequently worked with carriers to bring them into compliance; and has issued $184,800 in AMPs relating to the APPR specifically, of which $96,850 are attributed to AMPs issued since April 1 of this year (52%).
• The value of an AMP issued to an entity after a regulation has come into force, reflects a lower penalty amount for a first violation, in accordance with general principles applicable to the establishment of penalty amounts, and taking into account any mitigating and aggravating factors. Penalty amounts increase for second and subsequent violations. Since the APPR is fairly new, AMPs issued thus far have been for first violation.

Early Enforcement Milestones

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

Overview

• DEOs conduct compliance verification and monitoring activities to confirm whether subject entities are meeting their regulatory obligations. When they identify non-compliance they draw on a range of available enforcement tools to ensure compliance by regulated parties. Their work is aligned with the Agency’s Compliance and Enforcement Policy.
• Their oversight activities encompass the Agency’s three mandates: consumer protection, accessibility and efficient transportation, and a broad regulatory portfolio, including the Canada Transportation Act, the APPR and ATPDR.
• The following table provides an overview of the oversight activities that have been undertaken since 2019 (not limited to APPR):

• Since 2019, DEOs have taken the following enforcement actions related to violations that have been identified during their inspections and investigations:

• The value of an Administrative Monetary Penalty issued to an entity after a regulation has come into force, reflects a lower penalty amount for a first violation, in accordance with general principles applicable to the establishment of penalty amounts, and taking into account any mitigating factors. Penalty amounts increase for second and subsequent violations.

Analysis of Compliance Statistics – By Mandate

Consumer Protection

2022 – 23

• The Agency conducted blitzes monitoring information and assistance provided to passengers in response to delayed and cancelled flights at the three Canadian airports that had the highest rates of flight disruptions this summer: Montreal, Toronto and Vancouver.
• The Enforcement team analyzed flight data provided by select Canadian air carriers and complaints received by the Agency to inform inves tigations into air carrier categorization of flight disruptions and their related compensation obligations.

2021 – 22

• The Agency conducted 19 virtual inspections of Canadian carriers' domestic tariffs to ensure compliance, resulting in 5 cautionary notices^{Note 2}.
• The APPR includes air price advertising requirements. These requirements allow consumers to determine the total price of advertised air services easily. In the Agency's work, it:
  • monitored the advertised air prices of 28 air carriers (and travel agencies),
  • issued 22 cautionary notices, and
  • issued three NoVs with penalties.

2020-21

• The CTA monitored compliance by Canadian and foreign airlines with the APPR. We issued 33 cautionary notices for potential non-compliance with APPR communication provisions. All cautionary notices were addressed by the airlines.
• We monitored the advertised air prices of 22 foreign air carriers.

2019-20

• The CTA's enforcement officers conducted compliance verifications at airports across the country and involving a tarmac delay at the Rome—Fiumicino Leonardo da Vinci International Airport. These activities led to findings of violations for failure to display notices of passenger rights at airports and failure to provide certain standards of treatment during a tarmac delay, resulting in the issuance of 9 notices of violations with administrative monetary penalties totaling $60,000.
• The Agency’s enforcement officers also issued cautionary notices for alleged non-compliance with certain communications requirements during flight delays.

Accessible transportation

2022 – 23

• The Agency has conducted investigations into five incidents involving four Canadian air carriers. One of the incidents related to damage to a mobility device. Two investigations related to the possible mishandling of passengers while they were being transferred to airplane seats. The fourth investigation involved charging for the transportation of a medical device, and the fifth involved the carrier's refusal to transport a mobility aid.

2021 – 22

• The Agency has initiated over 40 inspections to verify compliance with the ATPDR, supported by self-reporting questionnaires, and followed by virtual and on-site meetings. Where deficiencies were detected, compliance plans were developed which detailed how, and by when, the TSPs were expected to be in full compliance with the applicable requirements. The Agency is working with TSPs to ensure that they achieve compliance in 2022.
• The Agency also entered into its first compliance agreement with a transportation service provider.

2020 – 21

• The majority of the new ATPDR provisions came into force on June 25, 2020. The Agency moved quickly to:
  • verify compliance by regulated entities;
  • monitor the websites of regulated entities;
  • conduct targeted outreach to regulated entities to ensure compliance with the new communications requirements;
  • The Agency issued four notices of violations, two with penalties totaling $28,000 for non-compliances with the Personnel Training for the ATPDR.

2019-20

• No enforcement actions were issued that year but inspections were performed at various airports in the country on whether airports were complying with the Personnel Training for the Assistance of Persons with Disabilities Regulations in February 2020 which resulted in notices of violation being issued in the fiscal year 2020/21.

Efficient Transportation – Rail and Air Transportation

2021-22

• The Agency investigated Skyservice Business Aviation Inc. for operating international passenger charters without obtaining the required charter permits. This resulted in the issuance of an NoV with administrative monetary penalty.
• The Agency is actively monitoring compliance with section 136.9 of the Act. This requires railway companies to publish a list of interchange locations. The Agency conducted 20 virtual inspections of federally regulated railway companies to ensure that the interchange lists were accurate and current. Nine railway companies have since been brought into compliance.
• The Agency conducted two investigations to verify compliance by Canadian National Railway (CN) and Canadian Pacific Railway (CP) with the interswitching regulated rate under subsection 127(3) of the Act. These were for interswitching at the St-Luc interchange (Montreal) and destination facilities located on the south shore of Montreal. The Agency issued notices of violations and administrative monetary penalties to CN and CP.

2020-21

• Our enforcement officers investigated air carriers suspected of operating without a licence or necessary charter permits. These investigations resulted in the issuing of four notices of violation with penalties totalling $26,500.

2019-20

• Agency issued a Notice of Violation with an administrative monetary penalty of $5,000 to an air carrier for operating international passenger charters without obtaining the required charter permits.
• Regulations Amending Certain Regulations Made Under the Canada Transportation Act (Rail Transport): SOR/2019-254 came into force on June 25, 2019. The coming into force of the these regulations, ensured that rail provisions under the Canada Transportation Act, Railway Interswitching Regulations, and Railway Third Party Liability Insurance Coverage Regulations could be enforceable by administrative monetary penalties.

Follow up on Agency orders and decisions

2022-23

• In the first three quarters of fiscal year 2022-23, the Agency has verified compliance with 41 orders by following up with passengers and transportation service providers, including:
  • air passengers receiving compensation and refunds, as ordered by the Agency;
  • air carriers amending their tariffs to ensure transparency with passengers about their terms and conditions;
  • confirming that transportation service providers developed or amended their policies to address the removal of barriers for persons with disabilities.

2021-22

• The Agency verified compliance with 36 orders by following up with passengers and transportation service providers, including:
  • collaborating with other government agencies to ensure CN complies with the conditions of the Milton logistics hub approval;
  • air passengers receiving compensation and refunds, as ordered by the Agency;
  • air carriers amending their tariffs to ensure transparency with passengers about their terms and conditions;
  • ensuring transportation service providers communicate with their employees about existing and new transportation policies that allow persons with disabilities to better access air travel; and
  • confirming that transportation service providers developed or amended their policies to address the removal of barriers for persons with disabilities.

2020-21

• The Agency verified compliance with 44 CTA orders. These included:
  • ensuring passengers were provided compensation and reimbursements;
  • confirming air carriers amended their tariff as ordered;
  • verifying that regulated entities communicated with their employees about existing and new policies on accessibility that affect air and rail passengers;
  • confirming regulated entity policies respecting the removal of barriers for persons with disabilities were developed or amended; and,
  • receiving and analyzing reports as ordered that outline a regulated entity’s continuing compliance efforts.

2019-20

• The Agency verified compliance with 42 CTA orders. These included:
  • ensuring passengers were provided compensation and reimbursements;
  • confirming air carriers amended their tariff as ordered;
  • verifying that regulated entities communicated with their employees about existing and new policies on accessibility that affect air and rail passengers;
  • confirming regulated entity policies respecting the removal of barriers for persons with disabilities were developed or amended; and,
  • receiving and analyzing reports as ordered that outline a regulated entity’s continuing compliance efforts.

Comparative Analysis – Other Government Departments/Agencies

• From January 2020 to August 2022, the CTA (with 355 employees as of March 2021 and 7 DEOs) issued 31 NoVs with an AMP, 2 NoVs with a warning, and 112 Cautionary Notices.
• In comparing the CTA with other regulators with similar employee size:
  • Financial Transactions and Reports Analysis Centre of Canada (401 employees as of March 2021) issued 21 NoVs with an AMP.
  • Canadian Radio-television and Telecommunications Commission (541 employees as of March 2021) issued 86 citations and 37 NoVs with an AMP.
  • Canada Energy Regulator (553 employees as of March 2021) issued 2 Warning Letters and 5 AMPs.
• In comparing the CTA with other regulators with larger employee size:
  • Canadian Nuclear Safety Commission (862 employees as of March 2021) issued 3 AMPs.
  • Canadian Food Inspection Agency (6,539 employees as of March 2021) issued 230 NoVs with a warning and 224 NoVs with an AMP.
  • Health Canada (Pest Control Products) (9,204 employees as of March 2021) issued 23 NoVs with an AMP and 10 Warning Letters
  • Transport Canada (6,339 employees as of March 2021)
    • Civil Aviation issued 323 Warning Letters, 133 Verbal warnings, and 264 AMPs.
    • Aviation Security issued 830 Warning Letters, 304 Verbal Warnings, and 66 AMPs.
    • Marine Safety issued 7 Warning Letters and 100 AMPs.
    • Marine Security issued 106 Warning Letters, 614 Verbal Warnings, and 11 AMPs.
    • Rail Safety issued 1,530 Warning Letters and 19 AMPs.

Key Messages:

• On July 1, 2022 the Agency introduced its updated Compliance and Enforcement Policy reflecting our evolution to a new results-based and risk-informed approach to compliance assurance. The updated Policy is outcome focused and supports the Agency’s three core mandates.
• The Policy sets out how the Agency targets its compliance monitoring and enforcement resources to maximize proactive compliance by regulated entities with the legal obligations the Agency oversees.

Background:

• On July 1, 2022 the Agency introduced its updated Compliance and Enforcement Policy reflecting our evolution to a new results-based and risk-informed approach to compliance assurance.
• The Policy sets out how the Agency targets its compliance monitoring and enforcement resources to maximize proactive compliance by regulated entities with the legal obligations the Agency oversees.
• The Policy is outcome focused and supports the Agency’s three core mandates. of providing consumer protection for air passengers and ensuring a national transportation system that is accessible and runs efficiently and smoothly.
• The Policy speaks to four guiding principles:
  • Results-based enforcement: In securing compliance, the measures applied are intended to advance the outcomes pursued by the Agency;
  • Data-driven, risk-informed decision making: the Agency’s work is informed by data to identify potential non-compliances and optimize resource allocation;
  • Fair, objective and consistent processes: Rules and processes for inspections, investigations and enforcement are clear and applied consistently and objectively; and
  • Transparency: the Agency publishes the results of its formal enforcement actions on its website.
• Recognizing that public interest objectives are best served when regulated entities undertake and comply with applicable standards and legal obligations voluntarily, the Agency resolves non-compliance by applying a graduated approach to enforcement, using informal and formal enforcement measures.
• Guided by the Policy, the Agency employs a number of different tools and activities to foster compliance and address instances of non-compliance such as: compliance promotion, verification, enforcement (cautionary notices and Administrative Monetary Penalties) and follow-up.

Key Messages:

• The Agency has prepared three compliance promotion and verification work plans for the 2022-23 fiscal year. The plans align the Agency’s three core mandates and include activities related to passenger protection, accessibility and rail.
• The plans were developed using a risk-based approach to maximize Agency resources and provide flexibility to respond to emerging issues and concerns raised by users of the Canadian transportation system.

Background:

• The work plans (three) guide the Agency's planned compliance promotion and verification activities for the 2022-23 fiscal year. They align with the Agency’s three core mandates and cover compliance aspects related to passenger protection, accessibility and rail.
• The plans also align with the Compliance and Enforcement Policy, engaging across the full compliance continuum (promotion, verification, enforcement, follow-up).
• The plans reflect knowledge gained from compliance activities undertaken in recent years, during which new passenger protection and accessibility regulations were introduced and when rail legislative provisions were designated.
• The plans reflect the impacts of COVID-19 on industry and the travelling public and are a restart of the proactive onsite inspections that had been disrupted by the pandemic.
• The plans were developed using a risk-based approach to maximize Agency resources and provide flexibility to respond to emerging issues and concerns raised by users of the Canadian transportation system.

Key Messages:

• Enforcement officers have been performing onsite inspections of Canadian and foreign air carriers at the Montreal, Toronto and Vancouver airports which had the highest rates of flight delays and cancellations this summer. This led to investigations resulting in the issuance of Administrative Monetary Penalties (AMPs) to Air Canada, WestJet and Delta.
• The Agency is increasingly using data to inform compliance and enforcement of the APPR. The Enforcement team has analyzed flight data provided by select Canadian air carriers and complaints received by the Agency. This data informed investigations into air carrier processes for determining the categorization of flight delays and cancellations, and related compensation obligations.
• As a result of the Enforcement team's intervention, WestJet and Air Canada are reviewing whether compensation may be owed to passengers on certain flights. To date, WestJet has re-categorized flights and paid $56,700 in compensation to passengers who had previously been denied compensation and Air Canada has agreed to compensate 117 passengers who were previously denied compensation. [Redacted] [Comment redacted]
• Enforcement officers have also been examining complaints filed with the Agency related to delayed response to passenger compensation requests submitted to air carriers. To date, this has resulted in the issuance of AMPs to Air Canada for $13,400, WestJet for $11,000 and to Flair for $28,000. [Comment redacted] Similar investigations with other air carriers are ongoing.

Background:

Current and Ongoing Activities

• Since July 1, 2022 the Agency has undertaken a series of compliance verification activities to confirm that Canadian and foreign air carriers are complying with the requirements of the Air Passenger Protection Regulations related to flight delays and cancellations.

Inspections of Air Carriers at Major Airports

• Designated enforcement officers (DEOs) have been performing onsite verifications at three of the largest Canadian airports, which had the highest rates of flight delays and cancellations this summer: Montreal, Toronto and Vancouver.
• DEOs evaluated the information provided, assistance and alternate travel arrangements provided to passengers related to 43 delayed or cancelled flights, involving 11 Canadian and foreign air carriers.
• These verification activities resulted in 8 Targeted Investigations (3 NoVs have been issued, 1 each to Air Canada and WestJet and 1 to Delta. (Delta is seeking review by the [Redacted] Transportation Appeal Tribunal of Canada (TATC)). Some of these activities have led to further investigations regarding compensation eligibility for the impacted passengers and payment of compensation is being monitored related to an Flair flight.

Analysis of Flight Delay and Cancellation Data

• The Agency is increasingly analyzing complaint and flight data to inform investigations. This has led to recent interventions by Enforcement into airline practices respecting their categorization of the reason for flight disruptions.
• Since July 4, 2022 the Enforcement team has analyzed flight data provided by four Canadian air carriers related to approximately 1,100 delayed or cancelled flights occurring over a two-week period in June 2022; and corresponding complaints received by the Agency pertaining to those flights.
• Informed by this data analysis of the 1,100 flights, DEOs have conducted 7 investigations [Comment redacted]. As a result of the Enforcement team's intervention, WestJet recently re-categorized flights and paid $56,700 in compensation to passengers who had previously been denied compensation. WestJet continues to review other flights to assess the need for additional re-categorizations.
• Additionally Air Canada has agreed to compensate 117 passengers who were previously denied compensation.

Audit of Potentially Mis-categorized Flights

• Based on the results of the analysis of flight delay and cancellation data provided by the four Canadian air carriers in the context of investigations undertaken in the summer, in mid-September 2022, to identify other flights that may have been potentially mis-categorized by air carriers, for the purpose of deciding passengers entitlements, the Enforcement team began examining additional flight records at carrier headquarters, related to flight disruptions attributed to crew issues, and corresponding complaints received by the Agency. The Enforcement Officers examined air carrier processes for determining the categorization of flight delays and cancellations, and related obligations. They also considered the air carriers' operating procedures and contingency plans as part of their evaluations.
• Fifty flights were reviewed at Air Canada and four were identified by DEOs as problematic and Air Canada has agreed to compensate 117 passengers previously denied compensation.
• WestJet is currently reviewing their categorization of certain flights, following the completion of the Enforcement team’s investigation in the summer of the carrier’s flight delay and cancellation data. Verification activities will resume after that, as required.
• A review of flights another Canadian carrier is currently underway.

Carrier Obligation to Provide Responses to Passenger Claims Within 30 Days (ss. 19(4) APPR):

• In August 2022 the Enforcement team began examining passenger complaints filed with the Agency which included an allegation that the carrier delayed response to passenger compensation claims. This project reconciled passenger complaints to the Agency regarding delayed responses, with information obtained from the carriers to identify potential non-compliances.
• A Notice of Violation was issued to Air Canada related to 67 files – totaling $13,400 in penalties.
• A Notice of Violation was issued to WestJet related to 55 files – totaling $11,000 in penalties.
• A Notice of Violation [Redacted] was issued to Flair related to [Redacted]140 files – totaling $28,000 in penalties [Comment redacted].
• Similar investigations are pending for Air Transat and Swoop. [Comment redacted]

• For the first time in Canada, the Air Passenger Protection Regulations (APPR) established common requirements for air passenger consumer protection that have to be respected by all airlines.
• This includes a requirement for airlines to offer passengers a rebooking or a refund for flight disruptions within airline control or within airline control but required for safety.
• Published in CG2 on May 22, 2019, the APPR came into force in two stages:
  • On July 15, 2019, airlines were required to meet new obligations concerning communication, denied boarding, tarmac delays, baggage, and the transportation of musical instruments.
  • On December 15, 2019, the remaining obligations on flight delays and cancellations (including the payment of compensation as required), and the seating of children came into effect.
• The Regulations Amending the Air Passenger Protection Regulations came into effect on September 8, 2022:
  • These amendments include new refund obligations for flight delay or cancelations outside the airline's control where they can't rebook a passenger within a reasonable time.
• APPR created more consistent passenger rights by establishing minimum obligations related to:
  • the communication of key information,
  • flight disruptions (including flight delays and cancellations, and denied boarding),
  • tarmac delays,
  • the seating of children,
  • lost of damaged baggage, and,
  • the transportation of musical instruments.
• APPR apply to all flights to, from, and within Canada (including connecting flights).
• When communicating key information, airlines must inform passengers of their rights in a timely, clear and accessible way:
  • For all disruptions, airlines must notify passengers of a flight disruption as soon as possible and provide regular status updates.
  • They must also advise passengers:
    • Of the reason for the disruption;
    • Of the assistance (standard of treatment) they are entitled to, and provide that assistance;
    • When they may be eligible to receive compensation that may apply; and,
    • How to take recourse against the airline if they think they haven't been treated appropriately.
• For flight disruptions (including flight delays and cancellations, and denied boarding) APPR obligations depend on the level of control an airline has over the situation:
  • For situations within airline control, passengers are entitled to alternate travel arrangements, assistance, and compensation;
  • For situations within airline control but required for safety, passengers are entitled to alternate travel arrangements and assistance; and,
  • For situations outside airline control, passengers are entitled to alternate travel arrangements only (or a refund if the passenger can't be rebooked within a reasonable time).
• When providing alternate travel arrangements all airlines must complete the passenger's itinerary as soon as possible:
  • When a flight disruption is within airline control (including when required for safety):
    • The airline must rebook the passenger on their next available flight or on that of a partner airline.
    • If the alternate arrangements do not meet the passenger's travel needs, the airline must provide a refund.
  • When a flight disruption is outside airline control:
    • If the airline cannot provide the passenger with a confirmed reservation on a flight leaving within 48 hours of the departure time on the passenger's original ticket, the airline will be required to, at the passenger's choice:
      • Provide a refund; or,
      • Rebook passengers who do not wish to be refunded on the next available flight.

• Assistance must be provided to passengers when delays or cancellations within the airline’s control (including related to safety) are communicated to passengers less than 12 hours before departure, free of charge. This assistance could include, for example:
  • Food and drink;
  • Access to a means of communication; and,
  • Hotel accommodations (if delay is expected to extend overnight) and transportation to and from these accommodations.
• Airlines must provide compensation for the inconvenience of flight cancellations and flight delays within their control and not related to safety, and if the airline notified you of the disruption 14 days or less in advance.
• Compensation is paid based on the length of the passenger's delay, which is determined by your arrival time at the final destination on your ticket.
• If you are flying on a large airline and the length of the delay is:
  • from 3 to 6 hours, your compensation is $400;
  • from 6 to 9 hours, your compensation is $700; and,
  • 9 hours or more, your compensation is $1000.
  • If you are flying on a small airline and the length of the delay is:
    • from 3 to 6 hours, your compensation is $125;
    • from 6 to 9 hours, your compensation is $250; and,
    • 9 hours or more, your compensation is $500.
• For flight delays and cancellations, a passenger has one year to make a compensation claim with the airline. The airline has 30 days to respond to a claim.
• For instances of denied boarding, airlines must pay compensation no later than within 48 hours.
• During tarmac delays, airlines must:
  • Provide assistance (including, access to working lavatories, proper ventilation and heating or cooling, food and drink, and the ability to communicate with people outside the plane free of charge, if feasible); and,
  • Allow disembarkation (Canadian airport only) once the delay has reached 3 hours.
    Note: At the 3-hour mark, if take-off time is imminent^{Note 3} the airline is allowed one opportunity to remain on the tarmac, if they are able to continue to provide assistance.

• For the seating of children, airlines must take steps to seat children under 14 years of age near their parent, guardian or tutor at no extra charge –the allowable distance depends on the age of the child.
• In the case of lost or damaged baggage, airlines must apply the Montreal Convention to domestic travel (liable up to approximately $2,100):
  • Airlines area also to reimburse passengers any baggage fees paid.
• For the transportation of musical instruments, airlines must establish terms and conditions on the acceptance of musical instruments.