Forward Regulatory Plan: 2022 to 2024 - Regulation on New Refund Requirements for Airlines
Canada Transportation Act
The Minister of Transport has given the CTA the authority, through a Ministerial Direction, to make a regulation to address a gap in the current air passenger protection framework by establishing an obligation for airlines to provide a refund when there is a flight cancellation, or a lengthy delay, for reasons outside of the airline’s control and the airline cannot complete the passenger’s itinerary within a reasonable time. This gap was highlighted by the mass flight cancellations due to the COVID-19 pandemic.
Regulatory cooperation efforts (domestic and international)
In developing this regulation, the CTA will consider the air passenger protection frameworks in the United States and the European Union.
Potential impacts on Canadians, including businesses
These proposed regulations will have positive impacts on Canadians as it will ensure clear and consistent refund entitlements for air passengers and address the risk that some passengers could be left out-of-pocket for the cost of cancelled flights.
Air carriers that already offer a voucher or refund for cancellations or lengthy delays outside of their control when it is not possible to complete the passenger's itinerary in a reasonable time would not be impacted by the proposed Regulations as they already provide a resolution equal to the value of a cash refund.
There may be small impacts on air carriers that do not offer vouchers or refunds. Under the proposed regulatory amendments, these carriers would be required to provide a refund to passengers following a cancellation or lengthy delay due to reasons outside of the carrier's control if they cannot rebook the passenger within 48 hours of the original departure time, or rebook passengers who do not wish to be refunded. These carriers would experience the cost of having to return that money to the passengers. They would also assume a cost (in the first year following the coming into force of the proposed regulations) to update their tariffs to reflect their new requirements.
Consultations on the specifics of this regulation were launched on December 21, 2020. The public and stakeholders had the opportunity to comment on the draft regulation following its publication in Canada Gazette, Part I.
Publication in Part II of the Canada Gazette is expected in 2022.
Analysis and Regulatory Affairs Directorate
Canadian Transportation Agency
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