Canada's Air Passenger Rights Regime: Phase One Now in Effect

On July 15, 2019, the first phase of Canada’s Air Passenger Protection Regulations, made under the Canada Transportation Act (the “Act”) came into effect (the “First Phase Regulations”). The second phase is scheduled to come into force on December 15, 2019 (the “Schedule Phase Regulations”). This regime was introduced in connection with Bill C-49, which is discussed further in our article on Bill C-49’s airline joint venture immunization regime, as well as in our article on Bill C-49 more generally. This article will provide a general overview of the changes associated with both the First Phase Regulations and Second Phase Regulations (collectively, the “Regulations”) before summarizing the key distinctions between the two phases.

As will be seen, the Regulations, which apply to airlines of any size that operate flights to, from, or within Canada, now set out minimum standards for airlines with respect to communication, delayed or cancelled flights, tarmac delays, the seating of children under the age of 14, lost or damaged baggage, and the transportation of musical instruments. Notably, airlines will be required to provide compensation of up to $1,000 following flight delays, cancellations and the over-booking of flights[1] (each a “Flight Disruption”), as discussed further below, which will significantly increase the costs that airlines incur in such instances.

In light of this regulatory change, all airlines operating in Canada should carefully review any policies in place that relate to Flight Disruptions, ensuring that revised policies carefully outline the airline’s obligations depending on the degree of control the airline has over the situation at hand. Importantly, non-compliance can be costly – non-compliant airlines could face penalties of up to $25,000 per violation.

Overview

The regulation of air passenger rights brings Canada in line with other key jurisdictions

The Regulations have significantly modernized Canada’s air passenger rights regime, bringing it more in line with those of the United States and the European Union. Historically, Canada has not regulated air passenger rights (nor has Australia, for example) – rather, these rights were derived primarily from airline-set policies, as reflected in “tariffs”,[2] which the Canadian Transportation Agency (the “Agency”) is charged with enforcing. Since 1999, passengers flying internationally have also benefitted from a limited set of rights granted under the Montreal Convention, including rights to compensation in certain circumstances – but these rights have not been available for passengers flying within Canada.[3]

The Regulations apply to all flights to, from, and within Canada and to airlines of all size

The Regulations are broad in scope, applying to all flights to, from, and within Canada, including connecting flights.[4] The Regulations also apsply to both “large carriers” and “small carriers”, with the former defined to include those that have transported a worldwide total of two million passengers or more during each of the two preceding calendar years, and the latter defined as any airlines that are not “large carriers”.

While many obligations set out in the Regulations apply to airlines across the board, there are some distinctions based on airline size. For example, in the event of delay or flight cancellation, the amounts of compensation payable differ, as shown in the chart below. Obligations for making alternate travel arrangements also differ by airline size.

Key Obligations under the Regulations

An airline’s obligations are dictated by the degree of control it has over the situation

The Regulations distinguish between the level of control that the airline has over the situation. The three levels of control are as follows:

  • Situations outside the carrier’s control: these situations include weather conditions, instructions from air traffic control, medical emergencies, airport operation issues, labour disruptions, orders or instructions from law enforcement, war, political instability, and illegal acts or sabotage.
  • Situations within the carrier’s control but required for safety purposes: these situations are unforeseen events legally required to reduce safety risks to passengers, such as unscheduled maintenance or mechanical problems.
  • Situations within the carrier’s control: these situations include any not captured within the two categories above.

The changes to obligations for airlines according to their level of control over a given situation are illustrated in the chart following this article.

Airlines are obligated to inform passengers of their rights and to provide timely status updates in the event of Flight Disruption

Airlines must generally use clear, simple, and concise language to inform passengers, both electronically and on all travel documents, of any terms and conditions of carriage for Flight Disruptions, lost or damaged baggage, and the seating of children under 14 years of age. In addition, airlines must also regularly keep passengers updated in the event of a Flight Disruption, including by providing status updates every 30 minutes until a new departure time is confirmed.

Airlines now have extensive obligations to passengers in the event of Flight Disruption

Generally speaking, depending on the type of Flight Disruption and the level of control the airline has over the situation, airline obligations now include informing passengers of the reason for the Flight Disruption and the compensation to which the passenger may be entitled, providing alternate travel arrangements or a refund, and providing the minimum compensation, as applicable.

In addition, for passengers delayed at the airport, airlines are required to provide reasonable food and drink after a two-hour delay, as well as access to a means of communication. If a delay is extended overnight, the airline must offer accommodation and transportation free of charge. Further, for tarmac delays, airlines must provide access to working lavatories, proper ventilation, food and drink, and means to communicate with people outside the aircraft. After a three-hour tarmac delay at a Canadian airport, passengers must be permitted to disembark, unless the aircraft is likely to take off within 45 minutes after the three-hour period.

Airlines must now provide compensation for lost or damage baggage

Previously, only airlines operating internationally were required to pay compensation for lost or damaged baggage, pursuant to the Montreal Convention. The Regulations have extended this obligation, which requires compensation of up to $2,100, to airlines operating domestic flights within Canada.[5] Beyond providing this compensation, airlines are also required to reimburse passengers for baggage fees paid.

Airlines are required to ensure children under 14 are seated in close proximity to a parent, guardian or tutor

Airlines now have an obligation to ensure children under the age of 14 are seated in “close proximity” to their parent, guardian or tutor, regardless of whether the airline formally assigns seats. The Regulations define a proximate seat as an adjacent seat for a child four years of age or under, a seat in the same row for a child between five and 11, and a seat separated by no more than one row for a child between 12 and 13. If seat assignment is not possible in advance, the airline must ask other passengers to voluntarily change seats to accommodate.

Passengers with service animals and untrained “emotional support animals” granted right to disembark with priority in the event of a tarmac delay

The Regulations do not alter the rules set out by the Air Transportation Regulations (“ATR”) and the  Aircraft Accessibility for Persons with Disabilities (known as the “Air Code”) in respect of service and emotional support animals. The rule remains that on an aircraft with 30 or more passenger seats, airlines must provide carriage free of charge to service animals who are required by a person for assistance and “certified, in writing, as having been trained to assist a person by a professional service animal institution”.

The Regulations do require that where an airline disembarks passengers in the case of tarmac delay, priority must be given to passengers with service animals, but also to passengers with “emotional support animals” if there are any. With this addition of untrained emotional support animals, the Agency appears to be contemplating (in advance) the coming second round of accessibility regulations following the Accessible Transportation for Persons with Disabilities Regulations. It remains to be seen which animals may qualify as “emotional support animals”, and the advantage of priority deplaning in the event of tarmac delay may not alleviate airlines’ concerns over the bona fide nature of certain requests for travel with support animals.

Airlines may face up to $25,000 in administrative monetary penalties for non-compliance

The Act empowers the Agency to set administrative monetary penalties (“AMPs”) in respect of the violation of “designated provisions” of the Act or any regulations adopted thereunder. The Agency has provided for AMPs in the Regulations in the maximum amounts permitted by the Act: up to $5,000 for individuals or $25,000 for corporations. Although violations of the Regulations that lead to AMPs are not “offences” under the Act (such that a conviction will not result in a criminal record for the individual or corporation), violations and AMPs are public, as are contestations of such violations.

Final Thoughts

The Regulations bring to air passenger transportation in Canada an entirely new regulatory scheme, under which the obligations of Canadian airlines are now in step with those of airlines in several other jurisdictions. Though it is already clear that airlines must re-evaluate and adjust their policies and practices to adapt to the Regulations, it remains to be seen to what extent the costs associated with airlines’ duties under the Regulations will affect passengers in ways not necessarily intended by the Agency, including possible increases in fares.

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McCarthy Tétrault’s Transportation and Logistics Group regularly advises airlines, airport operators and other actors involved in air transportation in Canada. For more information, contact David F. Blair or Brian Lipson.

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Appendix: Phase One vs. Phase Two

The following chart sets out the obligations of airlines under the Regulations, including key distinctions according to the level of control an airline has over a situation, as well as differences between the First Phase Regulations and the Second Phase Regulations:

 

First Phase Regulations

(In force as of July 15, 2019)

Second Phase Regulations

(Comes into force as of December 15, 2019)

Communication

  • Information regarding passengers’ rights in regard to Flight Disruption, lost or damaged baggage and the seating of children under 14 years of age, must be provided electronically and on all travel documents the airline provides to its passengers
  • In the case of official ticket resellers, airlines must make reasonable efforts to ensure the information is provided to travelers
  • If there is a Flight Disruption, airlines must communicate to travelers why the flight has been disrupted, as soon as feasible, through specific modes of communication
  • Airlines are required to provide updates to passengers as soon as feasible, but at minimum every 30 minutes until a new departure time is confirmed
  • Communication is required to be accessible for persons with disabilities
  • Airlines must provide information on passenger’s rights with regard to the compensation rights and standards of treatment
  • Airlines must inform passengers about their recourse options, including regarding making complaints to the Canada Transportation Agency

Flight Disruption

Denied Boarding:

  • Airline must look for volunteers to give up seats prior to denying boarding to a passenger for reasons within its control or required for safety, and once a volunteer is found, the airline must put in writing the agreed-upon benefits prior to the flight’s departure
  • Airlines must compensate passengers who are denied boarding, if the reason for denial is within the airline’s control and is not required for safety, with compensation based on length of delay at arrival at their final destination:

 

Amount (CAD)

0-6 hours

$900

6-9 hours

$1,800

9+ hours

$2,400

Delay/Cancellation

General

  • Generally, for all types of flight delays or cancellations, the airline operating the flight will have to ensure passengers complete their itinerary
  • Once a delay reaches three hours, an airline is required to rebook the passenger on the next available flight; rerouting must be reasonable

Cancellation/delay within the airline’s control, or within their control and required for safety

  • In addition to the above, passengers must be rebooked in the same class/service; and
  • ·         If the airline’s next flight leave nine or more hours after the original departure time, a large airline will have to book the passenger on another airline

Cancellation/delays within the airline’s control and unrelated to safety

  • In addition to the above, the airline must compensate passengers an amount based on the length of the delay and the size of the airline:

 

Large Carrier

Small Carrier

3-6 hours

$400

$125

6-9 hours

$700

$250

9+ hours

$1,000

$500

  • Passengers have one year to make a claim, and the airline has 30 days to respond to the claim
  • Monetary or alternative forms of compensation; however, the passenger has the right to choose the form
  • If rebooking does not meet the passenger’s travel needs, the passenger is entitled to a refund of their ticket and compensation for the inconvenience ($400 for large airlines and $125 for small airlines)

Cancellation/delay outside of the airline’s control

  • If a large airline’s own flight does not depart within 48 hours, the large airline is required to rebook using services of another airline

 

Standard of Treatment

  • In the case of denied boarding, airlines must provide the same standards of treatment required for flight delays and cancellations
  • In the case of a tarmac delay, airlines must provide access to working lavatories, proper ventilation, food and drink, and ability to communicate with people outside the aircraft free of charge.
  • After a three-hour tarmac delay at a Canadian airport, an aircraft is required to return to the gate so passengers can disembark. However, if an aircraft is likely to take off within 45 minutes after the three-hour period, it is permitted to remain on the tarmac
  • In the case of a delay at departure of two hours that is within the airline’s control or within their control and required for safety purposes, the airline operating the flight must provide passengers with (a) food and drink; and (b) electronic means of communication
  • If a delay is extended overnight, an airline must offer accommodation free of charge, as well as free transportation to the accommodation

Minors under the age of 14

N/A

  • Airlines are required to seat children under the age of 14 near a parent, guardian, or tutor.
  • Airlines are required to establish a policy for unaccompanied minors, and prohibit minors under the age of five from travelling without a person who is at least 16

Baggage

  • Airlines are held liable for up to $2,100 for baggage that is lost or damaged during domestic flights
  • Airlines must include terms and conditions of carriage for transportation of musical instruments as checked or carry-on baggage, in their tariffs; airlines cannot meet this requirement by adopting a “no musical instrument” policy

N/A

 

[1] The Regulations refer to overbooking flights as “denial of boarding”, which is defined as when “a passenger is not permitted to occupy a seat on board a flight because the number of seats that may be occupied on the flight is less than the number of passengers who have checked in by the required time, hold a confirmed reservation and valid travel documentation and are present at the boarding gate at the required boarding time”: Regulations, s. 1(3).

[2] According to the Canada Transportation Agency, “A tariff is the contract between an air carrier and its passengers. It covers the passengers’ rights and obligations, as well as the air carrier’s rights and its responsibilities towards the passenger”: see https://otc-cta.gc.ca/eng/air-carrier-tariffs-posted-websites.

[3] Jed Chong, “Air Passenger Rights and Other Jurisdictions” (Ottawa: 28 February 2018, Library of Parliament), online: https://lop.parl.ca/staticfiles/PublicWebsite/Home/ResearchPublications/BackgroundPapers/PDF/2018-09-e.pdf [Chong].

[4] Canada Transportation Act, s. 86.11(1).

[5] Chong, supra note 3.

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