Canada Gazette, Part I, Volume 158, Number 51: Regulations Amending the Air Passenger Protection Regulations

December 21, 2024

Statutory authority
Canada Transportation Act

Sponsoring agency
Canadian Transportation Agency

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Canada’s Air Passenger Protection Regulations (APPR or the regulations) came into force in 2019 and were created to provide a clear, comprehensive and consistent set of passenger rights. The APPR define minimum air carrier requirements and obligations, including obligations toward passengers when a flight disruption (delay, cancellation, or when a passenger is bumped/denied boarding) occurs. Over the past five years, some aspects of the APPR have proven to be overly complex and/or unclear for both air carriers and passengers to understand and to implement. The degree to which challenges have arisen is evidenced by the frequency with which passengers have brought unresolved complaints against air carriers to the Canadian Transportation Agency (the Agency). In June 2023, modifications to the Canada Transportation Act (the Act) amended the APPR’s legislative framework to ensure clearer and more consistent passenger rights. Regulatory amendments are required to reflect the legislative changes and address other implementation issues.

Description: The proposed amendments to the APPR would clarify air carriers’ obligations when there is a flight disruption, namely (1) the situations in which a passenger may receive the minimum compensation for inconvenience; (2) assistance (also known as standards of treatment, which includes food, drink, access to a means of communication, and overnight accommodations if necessary) to be given to passengers; (3) rebooking (also known as alternate travel arrangements) that must be provided to ensure that passengers complete their itinerary within a reasonable time; and (4) refunds when a passenger chooses not to travel. Proposed amendments would also define air carrier obligations with respect to establishing a process to deal with passenger claims and with respect to the assignment of seats to children under the age of 14 next to their parent, guardian or tutor.

Rationale: Parliament passed the Budget Implementation Act, 2023, No.1 (BIA) in June 2023 which modified the Act to clarify, simplify and strengthen Canada’s air passenger protection regime. The regulations must be amended in order to reflect these modifications to the Act. Proposed amendments would ensure the APPR continue to balance the need to reflect operational realities of air carriers (including small carriers serving remote and northern communities) with the legislative goal of providing simple, clear and consistent passenger rights. In developing the proposed amendments, the Agency considered feedback from the public and stakeholders as well as best practices in other jurisdictions.

The proposed amendments are estimated to result in present value costs to Canadian carriers of $512.4 million, present value benefits to Canadian passengers of $527.3 million, and a net present benefit of $14.9 million, over a 10-year period following the coming into force of the proposed amendments. On an annualized basis, the costs to carriers represent around $0.99 per passenger segment.

The one-for-one rule does not apply as the proposed amendments are not expected to result in an incremental change in administrative burden on business. A total of 11 small businesses would be affected, with a total cost of $1.02 million (annualized to $13,149 per business) over the 10-year time frame, in 2022 dollars discounted to the base year of 2025 at a 7% rate.

Issues

Canada’s Air Passenger Protection Regulations (APPR or the regulations), which came into force in 2019, were created to provide a clear, comprehensive and consistent set of rights for passengers flying from, to or within Canada by defining minimum air carrier requirements and obligations to their customers with respect to communications, flight disruptions (delays, cancellations or bumping/denied boarding), tarmac delays, the seating of children under the age of 14, damaged or lost baggage, and the transportation of musical instruments. The goal of the APPR is to ensure that when a flight disruption occurs passengers (1) receive timely, clear and useful information to ensure they are aware of their rights and are kept informed during a flight disruption (2) arrive at their destination (or receive a refund); (3) receive appropriate assistance (also known as standards of treatment, which includes food, drink, access to a means of communication, and overnight accommodations if necessary); and (4) receive compensation for the inconvenience they experience (when entitled). Over the past five years, some aspects of the APPR have proven to be overly complex and/or unclear for both air carriers and passengers to understand and to implement. This led to a change to the APPR’s legislative framework, as well as the need to amend the regulations, to ensure clearer and more consistent passenger rights. The following shortcomings have been identified:

The degree to which these issues (and other matters being addressed in the amendments to the APPR) have arisen is evidenced by the frequency with which passengers have brought unresolved complaints against air carriers to the Agency. The Agency has received over 150 000 air travel complaints since 2019. If these issues with the APPR remain unaddressed, it is expected that air carriers and passengers will continue to struggle with interpreting the regulatory requirements and obligations, passenger protection will remain insufficient, passenger complaints will continue to increase, and overall consumer satisfaction with air travel in Canada will decrease.

Opportunities have also been identified to strengthen air carrier obligations to seat children beside their parent, guardian or tutor at no cost and to better align the refund requirements of the APPR with those in the United States and the European Union.

Background

In 2018, amendments to the Canada Transportation Act (the Act) required the Agency to make regulations establishing a new air passenger rights regime. The Act established a framework for the regulations which included three categories of causes of flight disruptions (outside the carrier’s control, within the carrier’s control but required for safety purposes, and within the carrier’s control) and specified the types of obligations that the regulations must set out for each category.

The APPR came into force in 2019 just months before the collapse of global air travel due to the COVID-19 pandemic, which resulted in mass cancellations of flights. These mass cancellations highlighted a gap in the passenger protection regime with respect to refund requirements. The APPR did not include an obligation for air carriers to refund tickets when flights were cancelled or delayed, for reasons outside the air carrier’s control. As a result, in 2022, the APPR were adjusted to require that, for flight disruptions outside an air carrier’s control, in cases where a disruption lasts 48 hours or more from the original departure time, a carrier provides the passenger with their choice of a refund or rebooking (also known as alternate travel arrangements).

As the air industry began (and continued) its post-pandemic recovery, air carriers experienced a variety of episodic and longer-term operational challenges providing service to their customers. Particularly through 2021 and 2022, this resulted in increased fight disruptions. Several of the more significant disruptions during this period attracted media attention and were the subject of discussion in Parliament. The broad and varied causes of disruptions during this period highlighted the significant challenges related to classifying the reason for the flight disruption within the three category system. Since air carrier obligations toward passengers with respect to providing assistance, rebookings, refunds and compensation depend of the reason for the disruption, when the reason for a disruption is not clear, it can be challenging for passengers to know what they are entitled to receive from air carriers.

Legislative amendments to the Canada Transportation Act

Parliament passed the Budget Implementation Act, 2023, No.1 in June 2023 which modified the Act to clarify, simplify and strengthen Canada’s air passenger protection regime.

Certain amendments to the Act, that are separate from the APPR legislative framework, have been made to support air carriers and passengers to resolve claims and reduce the need for passengers to bring unresolved complaints against air carriers to the Agency. These modifications to the Act include

Other amendments to the Act, again separate from the APPR legislative framework, have been made to streamline the processes for administering air travail complaints before the Agency, broaden the authority of the Agency to set fees and charges to recover its costs of dealing with such complaints, and enhance the Agency’s enforcement powers with respect to the air transportation sector. These modifications to the Act include

Proposed amendments to the APPR

The Act, as modified by the BIA, eliminates the three categories of causes of flight disruptions and instead requires that in the case of flight delay, flight cancellation and bumping the following be set out in regulations:

Modifications to the Act also require that the regulations set out an air carrier’s obligation to provide refunds when a passenger cancels a reservation due to the issuance of a Government of Canada travel advisory.

Finally, modifications to the Act increase the maximum penalty amount payable by a corporation for a contravention of designated provisions in the APPR from $25,000 to $250,000.

The APPR must be amended to reflect these modifications to the Act.

As noted above, modifications to the Act require that air carriers establish a process for dealing with claims. Proposed amendments to the APPR would set out certain minimum obligations and requirements regarding air carriers’ process for dealing with APPR passenger claims and to reflect the new burden of proof being placed on the carrier.

As part of Budget 2024, the Government of Canada indicated that amendments to the APPR would be made to ensure that air carriers seat all children under the age of 14 next to their accompanying adult at no extra cost.

Additionally, the Agency has identified, in its role as a decision-maker on air travel complaints, other provisions that could be clarified and simplified, including the criteria for the definition of bumping. The Agency has also identified that the period of time an air carrier has to provide a refund to passengers (30 days) should be better aligned with practices in the United States and the European Union.

Objective

The objectives of the proposed amendments are to

Description

Clear communications

In addition to existing communication requirements relating to assistance and compensation, the proposed amendments would require an air carrier to provide information on rebooking and refunds.

When flight disruptions occur and passengers are required to be at the gate or on board the aircraft, air carriers would continue to be required to provide audible announcements and, on request, visible announcements. However, the proposed amendments would reduce the amount of information to be provided audibly and instead require that detailed information be provided electronically to each passenger. The proposed amendments would require an air carrier, upon checking in a passenger, to confirm or request each passenger’s contact information and preferred electronic method of receiving communications.

The proposed amendments would require that the following information be communicated without delay to passengers when there is a flight disruption, using each passenger’s preferred electronic method of communication:

The proposed amendments would oblige an air carrier to inform passengers of their entitlements as soon as they have been triggered and the process to obtain their entitlement (for example how to obtain a food voucher for a meal).

The proposed amendments would also require air carriers to provide to passengers, as soon as feasible, new information, or changes to information previously provided using the passenger’s preferred electronic method of communication. Updates would be provided in the same manner every 30 minutes until (a) in the case of a delay, a new departure time for the flight is set; or (b) for all flight disruptions, until the passenger receives either a rebooking or the passenger requests a refund.

Compensation for inconvenience due to flight disruptions

The proposed amendments would specify that, for all flight delays or cancellations, an air carrier must provide compensation for inconvenience to an entitled passenger, except when the disruption was due to an exceptional circumstance. The proposed amendments would also specify that all passengers who have been bumped from a flight are entitled to receive at least the lowest amount of compensation, including in situations where they are not delayed at arrival at their destination, or they have chosen to receive a refund, except when the disruption was due to an exceptional circumstance.

These exceptional circumstances would be specified in the proposed amendments.

When seeking compensation for a delay or cancellation, the proposed amendments would permit

Identifying exceptional circumstances

Under the proposed amendments, a flight disruption would be considered to be due to an exceptional circumstance when

The proposed amendments would set out the following list of situations:

Assistance (standards of treatment)

The proposed amendments would require air carriers to provide passengers with assistance during all flight disruptions resulting in a delay of two hours or more from their original scheduled departure time. Assistance would include food and drink, overnight accommodation if necessary, and the air carrier must provide passengers with access to a means of communication. The proposed amendments would specify that passengers who have missed a connecting flight on the same itinerary due to a prior flight being delayed would also be entitled to assistance two hours after arriving at the transfer point, while they wait for their new connecting flight to depart.

The obligation to provide the passenger with assistance would apply even if the disruption is due to an exceptional circumstance. However, when a flight disruption is due to an exceptional circumstance, the amendments would limit the provision of assistance to a period of 72 hours after the flight is delayed or cancelled or the bumping from a flight occurs.

Rebooking (alternate travel arrangements)

The proposed amendments would require the air carrier to rebook a passenger on the air carrier’s (or carrier partner’s) next available flight, if the flight has been cancelled, or if a passenger has been bumped from a flight. If the air carrier cannot provide a confirmed rebooking on their own or a partner’s flight departing within 9 hours of the original scheduled departure for a large air carrier and within 48 hours for a small air carrier, the carrier would be required to offer a rebooking on the next available flight with any carrier leaving from the same airport.

The proposed amendments would require that, for a small carrier, if the passenger is not booked within 72 hours of the original scheduled departure, the carrier must provide a rebooking on the next available flight from any other airport located within a reasonable distance. The proposed amendments would clarify that, in those instances, the air carrier would have to provide transportation between the original and the new airport of departure to passengers free of charge.

Under the proposed amendments, air carriers would also have an obligation to rebook a passenger who has missed or is likely to miss a connecting flight, because of an earlier flight disruption on the same itinerary. The proposed amendments would specify that when a delay has lasted or is likely to last three hours or more after the departure time that is indicated on the passenger’s ticket, the passenger may request a rebooking.

The obligation to rebook the passenger would apply even when the disruption is due to an exceptional circumstance.

Refunds

The proposed amendments would enable passengers to choose a refund, even prior to being provided with a rebooking, when

The air carrier’s refund obligations would apply even when the disruption is due to an exceptional circumstance.

The proposed amendments would also require air carriers to provide a refund if a passenger cancels a reservation as a result of the Government of Canada issuing or upgrading a travel advisory to the level of “avoid all travel”, or “avoid all non-essential travel” to a country that is the passenger’s destination or through which they have a connecting flight.

Air carriers would be required to provide all refunds provided for under the regulations within 15 days from when the passenger becomes entitled to a refund, rather than the current 30 days.

Air carrier claims process and providing an explanation for denial of claims

The proposed amendments would set out minimum requirements for carriers when dealing with passenger claims relating to a fare, rate, charge or term or condition of carriage (which includes claims under the APPR). An air carrier would be obligated to make information about its claims process and any applicable forms available in simple, clear and concise language, in a prominent place on its website. When denying a claim, an air carrier would be obligated to provide a clear and detailed explanation of the reasons for the denial, setting out the relevant terms and conditions of carriage, fare and fare rule and, a copy of, or electronic access to, the applicable tariff.

When denying a request for compensation in the case of a flight delay or a cancellation, an air carrier denying a claim for compensation must communicate its clear and detailed explanation within 30 days after the day on which the air carrier receives the request for compensation from the passenger.

In the case of bumping, because payment of compensation to a passenger is to be made automatically within 48 hours, an air carrier denying compensation because of an exceptional circumstance would have to provide the passenger with a clear and detailed explanation for denying compensation within that same 48 hours.

Under the proposed amendments, if a carrier declines to pay compensation for inconvenience based on an exceptional circumstance, the carrier’s clear and detailed explanation would have to be accompanied by any documents, reports, or other evidence that establishes the existence of that exceptional circumstance.

Seating of children under the age of 14 years

The proposed amendments would require that all children under the age of 14 be seated, at no extra cost, next to their parent, guardian or tutor at the time of reservation. If an adjacent seat is not available at the time of reservation, the air carrier would be required to communicate to the passenger before the reservation is completed, that it is not possible to arrange such seating, and that the air carrier operating the flight will assign such a seat as soon as feasible if one becomes available. The proposed amendments would ensure that the person making the reservation is fully aware of the operating air carrier’s obligations to attempt seat assignment as well as the fact that it might not be possible.

Bumping (denial of boarding)

Under the proposed amendments, a passenger would be considered to have been bumped from a flight if the air carrier cancels a passenger’s confirmed reservation for that flight or otherwise does not permit the passenger to occupy a seat on the flight when

When asking all passengers if they are willing to give up their seat in order to avoid bumping a passenger from the flight, the proposed amendments would require the air carrier to inform a passenger who indicates a willingness to give up their seat, in exchange for the benefit offered by the carrier, of the following:

Persons with disabilities

The proposed amendments would clarify that anything an air carrier is required to provide under the regulations must be provided while having regard to the needs of persons with disabilities. This means, for example, that even though the provision in the regulations regarding an air carrier’s obligation to provide overnight accommodation does not specifically make reference to persons with disabilities, any accommodations must reflect the needs of a passenger with a disability.

Administrative Monetary Penalties (AMPs)

Proposed amendments would increase the maximum AMPs to $250,000 (from $25,000) for corporations for non-compliance of certain APPR provisions included in the Schedule of the APPR.

Regulatory development

The Agency published a consultation paper outlining the proposed amendments and seeking feedback between July 11, 2023, and August 10, 2023. The Agency received approximately 300 submissions from members of the public, air carriers and other industry representatives, consumer advocacy organizations, and academics. What follows is a summary of the main views of parties who provided comments on the Agency’s consultation paper and how these views were considered while developing the proposed amendments to the regulations.

1. Compensation for inconvenience due to flight disruptions and identifying exceptional circumstances

The Agency’s consultation paper proposed the criteria to be used to determine whether a situation (flight disruption) would be considered exceptional. The Agency put forward the following criteria for consideration and comment:

For greater clarity, the Agency proposed that the amendments also include a non-exhaustive list of exceptional circumstances, as well as a list of those circumstances that would not be considered exceptional.

Comments on the proposed criteria

Academics and consumer organizations expressed concerns about the ambiguity of having a test for exceptional circumstances, resulting in an open-ended approach to exceptional circumstances rather than an exhaustive list. Many industry stakeholders felt the wording of the criteria for the test for exceptional circumstances in the consultation paper was not clear and would lead to more confusion when interpreting events.

Consumer organizations and members of the public also expressed concern that the wording used in the proposed list of exceptional circumstances was too vague and that it could create grey areas where it was not clear whether or not airlines would be obligated to pay compensation.

The Agency considered this feedback and, in order to provide maximum clarity, the proposed amendments would include an exhaustive list of circumstances that would be considered exceptional. In addition, the circumstances would only be considered exceptional if the disruption could not have been avoided even if all reasonable measures had been taken.

Comments on the proposed list of exceptional circumstances

Air carriers raised concerns about technical / mechanical issues that threatened the safety of the flight not being included on the list of exceptional circumstances. Many members of the public, on the other hand, stated that technical / mechanical issues should not be part of the list of exceptional circumstances and should be considered within an airline’s control. In light of these differing views, the proposed amendments would include a list of specific criteria that must be met in order for an unforeseeable technical defect or other unforeseeable technical problem with the aircraft to be considered an exceptional circumstance. This balances the concern of air carriers by including technical defects/problems in the list of circumstances with the concerns of passengers, by limiting the types of defects/problems that can give rise to an exception to pay compensation to passengers following a flight disruption.

Collision with a bird/object was not on the list of proposed exceptional circumstances in the consultation paper. It has been included in the proposed amendments based on air carrier submissions suggesting that this item was important for ensuring the safety of the aircraft and acknowledging that these incidents are difficult for air carriers to prevent.

The proposed list of exceptional circumstances in the consultation paper included airport operational issues for which the airline is not responsible. Based on submissions from industry highlighting the importance of the aviation ecosystem, and on submissions from passengers indicating a need for more clarity and specificity in this area, this circumstance was clarified to specify unscheduled partial or full closure of an airport.

2. Exceptional circumstances and chain reactions (knock-on effects)

A knock-on effect occurs when an earlier flight delay or cancellation is the direct cause of a subsequent flight disruption. The Agency’s consultation paper proposed that, for the purpose of being exempt from paying compensation, only two flights in a row be able to claim the same exceptional circumstance as the reason for a delayed or cancellation.

Comments on chain reactions

Consumer organizations were supportive of the introduction of a limit on the number of flights for which the same exceptional circumstance can be claimed. Air carriers were concerned about the introduction of this limit and recommended a time-based approach of 48 hours, rather than a flight-segment limit. Northern air carriers opposed the limit to knock on effects due to the nature of their multi-leg operations.

Based on the feedback received, the proposed amendments provide more flexibility and differential treatment for large and small air carriers. The proposed amendments would adopt a time-based approach and allow large air carriers 24 hours to recover their operations following a flight disruption directly cause by an exceptional circumstance. This would cover the original impacted flight and subsequent flights using, or that were intended to use, the same aircraft and that were scheduled to depart within a 24-hour period starting at the scheduled departure time of the original flight affected by the exceptional circumstance. The delay/cancellation on subsequent flights would have to be directly attributable to the delay/cancellation on the original impacted flight and the subsequent delays/cancellations could not have been avoided even if all reasonable measures had been taken by the large carrier. Compared to current regulations, this proposal would provide passengers flying with large carriers with a clear, knowable limit on chain reactions and would allow for passengers to more easily identify the impacts of previous flight segment disruptions. This information is important for passengers to determine whether they are entitled to compensation from a large air carrier if their flight is delayed or cancelled because of a chain reaction.

The proposed amendments would not impose any limit to chain reactions for small air carriers (which includes most northern, regional and remote air carriers), to account for their unique operating environment, which can include more short-haul flights and multi-leg journeys, as well as more frequent challenging weather events.

3. Assistance (standards of treatment)

The Agency’s consultation paper proposed amendments that would require airlines to provide passengers with assistance for all flight disruptions after a certain wait time, including in exceptional circumstances. Specifically, it was proposed that

Comments on assistance

Consumer organizations and members of the public were supportive of the requirement for air carriers to provide assistance in all circumstances when there is a flight disruption. Some members of the public felt minimum amounts should be elaborated in the regulations to clarify the scope of assistance (e.g. set dollar amounts for food vouchers). The Agency decided that taking a prescriptive approach with respect to setting minimum or maximum assistance amounts would not be necessary or appropriate. Currently, the APPR allow air carriers to take into account the length of the wait, the time of day, and the location of the passenger in providing reasonable assistance measures.

Most air carriers who operate in the north and some industry groups highlighted that the requirement to provide assistance could be difficult or even impossible in the northern regions given the remoteness of the location. They stated that some of these locations have no availability or access to hotels and/or restaurants. They recommended that the proposed amendments clarify that assistance can only be offered when it is possible to do so. As noted above, currently the regulations allow air carriers to take into account the location of the passenger in providing reasonable assistance measures and, as such, no further changes are needed.

Most large air carriers identified the risk that, during large-scale disruptions, hotels may increase their prices and therefore recommended capping amounts paid for accommodations. Many air carriers also suggested that assistance requirements should be limited when the disruption is due to exceptional circumstances — some suggested a maximum of 24 hours with others recommending a maximum of three nights. In considering this feedback, the Agency is proposing to include a 72-hour limit following the start of the disruption on the requirement to provide assistance when a flight disruption is caused by exceptional circumstances. This would strike a balance between the interest of air carriers to limit the costs of providing assistance and the interest of passengers in getting reasonable protection when experiencing a flight disruption.

4. Rebooking and refunds

The Agency’s consultation paper proposed that the APPR be amended such that

Comments on rebooking and refunds

In general, the public agreed with the proposed 24-hour rebooking requirement for small air carriers. Several consumer organizations were supportive of the proposed changes to rebooking requirements, while two organizations proposed the elimination of distinctions between small and large air carriers for rebooking requirements. Several small/regional airlines and airports expressed concerns over the changes to rebooking obligations for small airlines, stating that rebooking on another airline and/or within 24 hours may not be realistic.

The Agency considered the feedback concerning the elimination of the distinction between rebooking requirements for small and large air carriers, and considered the concerns raised by small and regional air carriers. The proposed amendments would continue to differentiate between small and large air carriers rebooking requirements, reflecting the different operational realities that small air carrier face in offering diverse service to passengers. Based on the feedback received from small regional and northern carriers, the rebooking requirements for small carriers would be amended such that they would be obliged to rebook their passengers on any alternate air carrier flight leaving from the same airport if they are unable to rebook their passengers on their own or a partner airline’s flight departing within 48 hours of their passenger’s original departure time. Small air carriers would have 72 hours to rebook their passengers on a flight leaving from the same airport before being required to look for flights leaving from another airport located within a reasonable distance.

One air carrier stated that, for flight delays, three hours was too short a time window to allow passengers to request a refund. Currently the APPR require passengers to wait until a rebooking is provided (with no specified time frame attached) before they are entitled to request a refund. The proposed amendments would provide clarity around when refund options become available and enable passengers to make decisions that best meet their needs when their travel plans are disrupted. In this way, they would have the choice to wait for the air carrier to rebook them, or once the delay has reached three hours, opt for a refund and make alternate plans on their own.

The consultation paper also proposed that the period of time for an air carrier to provide a refund be reduced. Two consumer organizations proposed reducing the 30-day deadline for air carriers to provide refunds to passengers to 7 days. Air industry stakeholders noted challenges with providing refunds, particularly when they are booked through third-party agencies. The Agency considered the feedback received and, as a compromise, is proposing that the period of time for air carriers to provide refunds be shortened to 15 days. This proposed amendment would bring the APPR into closer alignment with the practice in the European Union where air carriers who fly internationally, and are subject to the APPR, are subject to a seven-day refund requirement. It would also bring the APPR in closer alignment with the United States, who require airfare purchased with credit cards to be refunded within 7 business days.

5. Communication and the provision of information

The consultation paper proposed to change the current air carrier obligations with respect to communication to ensure passengers receive timely information. The proposal included four areas for more effective delivery of timely information:

Comments on the communication and the provision of information

Consumer organizations and members of the public did not provide substantive comments on this aspect of the proposal but generally agreed that they wanted more clarity when air carriers communicate the reason for a disruption. Consumer organizations expressed concerns that air carriers would no longer be required to provide all the information prescribed by the current APPR through audible announcements at the gate and that communication should not be limited to just electronic means of communication. The Agency considered this feedback and determined that the proposed amendments would strike a balance between providing basic information audibly at the gate and more detailed information electronically. While the amendments would streamline the amount of information that must be made through audible announcements, air carrier staff would be required to make audible gate announcements that would include informing passengers that additional flight disruption information is being sent to each affected passenger via their preferred electronic method of communication, and that passengers may ask an agent of the air carrier at the gate or on board to provide those details directly to them.

Air carriers and their industry representatives expressed concern that if communication requirements during a flight disruption were too prescriptive and that infrastructure limitations could prevent air carriers from being able to comply. Northern air carriers raised the issue that there may not always be cellular service in remote areas and that, therefore, there would need to be exceptions. The Agency considered this feedback and has ensured the proposed amendments establish reasonable limitations in the event air carriers cannot communicate with their passengers due to a lack of communications infrastructure. If an air carrier is temporarily unable to communicate with passengers using their preferred method of communication, it would be required to use another method that allows information to reach the passenger (which could mean, for example, audible announcements where cell phone capability is not present).

Most large air carriers were in agreement that improving communications with passengers is important but requested that implementation time be provided in order for them to update their infrastructure and systems to be able to comply with the proposed amendments. The Agency considered the feedback together with the interest of ensuring that passengers are provided with timely information they need to make decisions when a fight disruption occurs. It is not expected that the proposed amendments would require considerable enhancements to systems and tools that air carriers currently have in place. The proposed amendments would require adjustments to the information being provided more so than changes to the systems used to communicate the information. Additionally, as the APPR have been in force for more than five years, the Agency anticipates that only relatively minor changes would be needed to air carriers’ existing communications policies and procedures in order to adapt them to comply with the proposed amendments. Therefore, the proposed amendments would include a 30-day implementation window.

The proposed amendments would include a provision clarifying that an air carrier has to provide information using the passenger’s preferred electronic methods of receiving communication chosen among the methods offered by the air carrier. In this way, air carriers can begin to meet new communication requirements using the methods and technology they already have in place.

6. Providing an explanation for denial of claims

Considering amendments to the Act that shifted the burden of proof from passengers to airlines, the consultation paper proposed that, when a passenger’s claim for compensation is denied on the basis that the flight disruption was due to an exceptional circumstance, the air carrier would be required to give the passenger a detailed explanation, including documentary evidence that the circumstances were exceptional, and reference the applicable terms and conditions of the passenger’s ticket, including fare rules. In addition, the consultation paper proposed that the APPR require air carriers to explain to their passengers how to make a claim for compensation, in a prominent area on their websites. Finally, the consultation paper proposed that, when people travel together, the amended APPR would allow for one adult to make a claim for compensation on behalf of the group. In this way, a single claim could cover everyone in a group of passengers travelling together.

Comments on explanations for denial of claims

Consumer organizations agreed that passengers should be given clear and detailed explanations should compensation be denied, but expressed concern that documentation provided to passengers may be highly technical, and/or may not be available in a passenger’s language of choice. The proposed amendments would require that air carrier provide information using simple, clear and concise language so that passengers can understand the air carrier’s reason(s) for denying compensation.

One air industry stakeholder suggested that the current 30-day window to address passenger claims for compensation for flight delays and flight cancellations combined with the shifted burden of proof, would be unrealistic, and recommended that this window be expanded. Some air industry stakeholders suggested that providing proof to passengers of an exceptional circumstance would be complicated and not always feasible within the timeframe provided for in the regulations as airlines may need access to third-party information (airport, security, customs, and navigational services). Modifications to the Act have set out the 30-day timeframe and this must be reflected in the proposed amendments. Additionally, this is important information that passengers require in order to make a decision on whether to accept the denial of their claim or to file a complaint with the Agency.

7. Refunds for Government of Canada travel advisories

Modifications to the Act require the Agency to address, in the APPR, air carrier obligations to provide refunds to a person who cancels a reservation on a flight due to the issuance of a Government of Canada travel advisory. The Agency’s consultation paper proposed that air carriers be required to provide passengers with a refund, with no charge or penalty, when they cancel their ticket because of a Government of Canada travel advisory, if

Comments on refunds for Government of Canada travel advisories

Some industry organizations noted that customers already have the ability to purchase a more flexible ticket and that requiring air carriers to provide refunds would position air carriers as the insurer of these passengers for the advisories. International air carriers noted that this change would make Canada an outlier on this matter and that this type of refund for when passengers cancel their reservation (even if they bought non-refundable tickets) could cause financial losses for the air carriers as they would still be obliged to operate the flight with empty seats. In order to minimize impacts of last-minute cancellations of reservation by passengers for Government of Canada travel advisories, some air carriers suggested adding a time restriction (e.g. it was suggested that passengers seeking a refund on this basis should have to make their request within seven days of the issuance of the travel advisory).

Keeping in mind that Government of Canada travel advisories provide information and advice that support passengers in making informed decisions about health, safety, and security when travelling abroad, the proposed amendments would include a requirement that the passenger cancel a reservation before the check-in period for the first flight of their itinerary begins. This would strike a balance between providing time to air carriers to adjust their operations and providing protection in support of passengers making decisions to cancel travel based on reasons of safety and security, due to the issuance of a Government of Canada travel advisory.

Modern treaty obligations and Indigenous engagement and consultation

The proposed amendments to the APPR do not affect modern treaty obligations or engagement. They do not have the potential to adversely impact potential or established Aboriginal or treaty rights, and therefore, do not trigger the Crown’s duty to consult.

Indigenous peoples were welcome to participate in the Agency’s consultation process for the regulatory proposal. Air North, Air Inuit and the Northern Air Transport Association (NATA), which supports air carriers owned in whole or in part by Indigenous groups such as Canadian North (wholly Inuit-owned), provided comments to the Agency. Their submissions included comments on the unique operating realities in northern and remote areas of Canada including Indigenous communities in these regions.

Instrument choice

The Act provides a framework for the APPR and requires the Agency to set out in regulations the air carrier minimum obligations in the case of a flight disruption to provide passengers with information, assistance, rebooking or a refund, and compensation. The proposed amendments are needed to reflect recent modifications to the Act and to adjust and clarify existing provisions. Therefore, no other instruments were considered.

In addition, modifications to the Act also give the Agency the authority to make regulations concerning air carrier obligations to establish a process for dealing with claims related to a fare, rate, charge or term or condition of carriage applicable to the air service it offers. The Agency is including regulatory obligations respecting this claims process as part of the proposed amendments to the APPR.

Regulatory analysis

Benefits and costs

The cost-benefit analysis (CBA) estimates the incremental net benefit to society of the proposed amendments to the APPR (regulatory scenario). The incremental benefit is determined as the difference between the net benefit of the regulatory scenario and the baseline scenario, which assumes what would happen if the proposed amendments are not made. The regulatory scenario is estimated to result in incremental present value costs to Canadian air carriers and the Agency of $512.4 million, present value benefits to Canadian passengers of $527.3 million and a net present benefit of $14.9 million, expressed in 2022 Canadian dollars, over a 10-year period following the coming into force of the proposed amendments to the APPR. On an annualized basis, the cost to air carriers represents around $0.99 per passenger segment. A passenger segment refers to an individual flight taken by a passenger. As such, a single itinerary (for example Ottawa to Vancouver via Toronto) can represent more than one passenger segment.

Costs to air carriers could be lower if flight disruption rates fall, and they make improvements in the provision of service and complaints management. The methodology for determining the flight disruption rate forecasts used for this CBA is described below, however, should the flight disruption rates throughout the analysis period be lower than forecasted, the cost to air carriers of the proposed amendments would be lower than estimated.

Baseline scenario

Air carriers are subject to the conditions of carriage in their tariffs which include the minimum passenger protections of the current APPR. Air carriers can, however, exceed the requirements of the current APPR by introducing more generous protections for passengers in their tariff. These tariffs form the contract of carriage between a passenger and an air carrier when a ticket is purchased. An air carrier’s tariff will cover its obligations in all types of events including delays, cancellations, tarmac delays, lost, delayed or damaged baggage and seating of children, among other things.

The current APPR established a minimum standard across all air carriers operating in Canada. The minimum standard set in the current APPR acts as the baseline scenario against which the costs and benefits of the proposed amendments (regulatory scenario) are measured.

Methodology, data sources and assumptions
Study period

This analysis examines costs and benefits over a 10-year period (2025–2034). A real discount rate of 7% is used to establish the net present value of the proposed regulations for non-compensation provisions. Values are expressed in 2022 constant dollars.

Scope

As per Treasury Board Secretariat (TBS) guidelines, this analysis considers the direct costs and benefits to Canadian stakeholders. Stakeholders include Canadian air carriers, passengers, and the Government of Canada. Costs and benefits to non-Canadian air carriers and passengers are not considered.

Number of passengers

The number of passengers for a given year was forecasted by applying the International Air Transport Association’s (IATA) estimated long-term annual passenger growth projection for North America to the estimated number of passengers in the previous year. IATA’s long-term growth forecast for North America is 2.2%footnote 1 per year. The number of passengers in 2024 is assumed to equal the number of passengers in 2019 as full recovery to pre-pandemic levels of passengers is expected by 2024.

Proportion of passengers considered to be Canadian

The proportion of passengers on an international flight who are Canadian is determined using data sourced from Statistics Canada for the year 2023. The data captures residency status (Canadian or non-Canadian) of passengers entering Canada by air and using a Canada Border Services Agency kiosk. Using this data, the percentage of passengers on international flights assumed to be Canadian is 66.7%. As there is no reliable data on passengers for domestic flights, the percentage of passengers assumed to be Canadian for domestic flights is the midpoint between 66.7% (the percentage of Canadians on international flights) and 100%, resulting in an assumed proportion of 83.4% for domestic flights. This mirrors the approach used to determine the percentage of passengers for the APPR 2019 cost-benefit analysis.

Flight disruptions

The number of flight disruptions (denied boarding, cancellations and delays) is an important variable in this analysis as it is the basis of several costs and benefits as described in the costs and benefits section. The following key assumptions were made:

The number of flight disruptions (cancellations and delays) is calculated by applying the 2023 flight disruption rate by the estimated number of flights over the study period. The 2023 flight disruption rate was calculated with data from third-party vendor Cirium using the following formula:

Flight Disruption rate 2023 = Number of flight disruptions 2023 Number of flights 2023

Only the number of flight disruptions and flights of air carriers that have an active Agency license were used in this calculation.

The estimated number of flights over the study period is calculated as follows:

Number of flights year = Number of Passengers year Average number of passengers per flight

The number of passengers is forecasted as described earlier, and the average number of passengers per flight is a constant representing the average passengers per flight in 2018, 2019, and 2022.

The number of flight disruptions is also broken out by the length of delay at arrival and departure, as many of the requirements under the baseline scenario and the regulatory scenario are based on length of delay.

Exceptional vs. non-exceptional flight disruptions

Under the current APPR, flight disruptions are categorized as: within the air carrier’s control, within the air carrier’s control but required for safety, or outside the air carrier’s control. Air carriers do not have to pay compensation when a disruption is considered within their control but required for safety reasons, or outside the air carrier’s control. As a result of amendments to the Act, under proposed amendments to the APPR, these three categories would be eliminated, and the amended regulations would define the exceptional circumstances when air carriers will not be required to pay compensation.

This analysis assumes that the percentage of disruptions due to exceptional circumstances under the regulatory scenario would be equal to the percentage of disruptions that are considered outside the air carrier’s control as well as the percentage of disruption that are currently within the air carrier’s control but required for safety reasons under the baseline scenario, minus 2%. The 2% being subtracted reflects the limited situations which are considered outside the air carrier’s control under the baseline scenario, but that will be considered as non-exceptional under the regulatory scenario. The distribution under the baseline scenario is based on data submitted to Transport Canada as to the reasons for flight disruptions. Using this methodology, the percent of flight delays due to exceptional circumstances is 53%, and the percent of flight cancellations due to exceptional circumstances is 69%.

APPR air carrier size

The categorization of air carriers as large or small would remain under the proposed amendments. The definition of large and small would also be the same as under the current APPR: large air carriers are those that have carried at least two million passengers in each of the previous two calendar years, small air carriers are those that fall under this threshold.

Table 1: Forecast number of affected Canadian Airlines during the period of analysis
Projected Value 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Large Canadian Carrier Count 4 5 5 5 5 5 5 5 5 5
Small Canadian Carrier Count 27 27 27 27 27 27 27 27 27 27

Approximately 140 foreign carriers would be expected to provide compensation, refunds or assistance to passenger flying to and from Canada. The costs for those carriers are not accounted in this CBA.

Assistance costs

Assistance includes overnight accommodations, transportation to and from such accommodations, as well as food and drinks, that can be (and usually is) provided in the form of meal vouchers. The cost of accommodation for one passenger is $152.15 (2022 CAN$/night), which is an average of the going rate in every province according to CBRE Canadafootnote 2 ($179) minus 15% (assumed corporate discount).

The amount of a meal voucher provided by air carriers is assumed to be $17 (2022 CAN$) and constant throughout the study period. This includes an assumed corporate discount of 15% of the original cost of $20.

Finally, the cost of a taxi for one passenger is used as a proxy for the overall cost of transportation to and from the airport when a flight disruption occurs. The cost for a taxi is $2.00/km plus a $3.75 base cost.footnote 3 The analysis assumes the average distance from airport to hotel is 2.6 km. This includes an assumed corporate discount of 15% of the original cost of $2.35/km plus a $4.41 base cost.

Claim rates

For the purposes of this CBA, the claim rates for assistance, compensation, and refunds are assumed to be the following:

Table 2: Claim rates
Compensation (flight delays and cancellations) Rates
Baseline Passengers on Domestic Flights 78%
Baseline Passengers on International Flights 76%
Regulatory Passengers on Domestic Flights 90%
Regulatory Passengers on International Flights 88%
Compensation (denied boarding) Rates
All passengers (baseline and regulatory on Domestic and International Flights) 100%
Assistance Rates
Overnight Accommodations 50%
Meal Vouchers 100%
Taxis 50%

Of the 50% of passengers accepting accommodations, 89% are assumed to need a room to themselves.

The baseline claim rates for compensation are taken from the cost-benefit analysis that was conducted for the current APPR in 2019. Claim rates for overnight accommodations and taxis are based on the assumption that 50% of passengers will be in their home city. Due to the proposed requirement for air carriers to be proactive in offering meal vouchers, it is assumed that 100% of entitled passengers would claim their meal voucher.

The claim rate for compensation is assumed to increase in the regulatory scenario as a result of the increased communication required under the proposed amendments by air carriers when disruptions occur. When there is a flight disruption, air carriers would need to inform a passenger when a specific entitlement is triggered (compensation, assistance, etc.) and the process to obtain the entitlement. It is expected that the new communication requirements would increase the rate at which passengers would claim compensation.

Rebooking

This analysis treats rebooking as a net zero cost. If being rebooked on the same air carrier, no additional cost is assumed by the air carrier. If an air carrier rebooks a passenger with another air carrier, the revenue received by the initial air carrier is passed on to the new air carrier, and thus it is considered as a transfer of funds.

Premiums for increased comfort

Flight disruptions can be stressful and uncomfortable for passengers. The proposed amendments would improve passengers’ experience during air travel by imposing minimum obligations on air carriers that would reduce stress and discomfort during flight disruptions. For instance, the new requirements to communicate the reasons for flight disruptions with passengers, and to publish the process to make a claim and the potential remedies that they may be entitled to is expected to decrease the level of stress on passengers. Additionally, the obligation to ensure a minimum level of assistance to passengers, including meals and overnight accommodations, for all types of flight disruption, even in exceptional circumstances, is expected to increased comfort during flight disruptions, and a better overall travel experience.

To estimate the value of increased comfort to passengers resulting from being provided with meals and overnight accommodations during a flight disruption, a premium associated with each is applied to the value of a passenger’s time. These premiums are

Costs

As discussed earlier in describing the flight disruption variable used for the estimation of the costs of the regulatory scenario to air carriers, the flight disruption rate in 2023 is used as a proxy for all future years of the analysis. On-time performance is defined as the percentage of flights that arrived at their destination within 15 minutes of the scheduled arrival time.

Canadian air carriers have challenges with on-time performance as compared to other carriers. Canadian air carriers had an overall on-time performance of roughly 65% compared to 75% in the rest of the world in 2023 according to the OAG.footnote 4

If Canadian air carriers improve their on-time performance over the study period, the costs described, and estimated below may overestimate the true costs of regulatory scenario.

Refunds

Under the proposed amendments, passengers would be able to request a refund, no matter the reason for the disruption, under the following conditions:

Under the regulatory scenario, this means passengers would be able to request refunds sooner. Currently, under the baseline scenario, when there is a flight disruption due to a situation within the air carrier’s control, passengers are entitled to request a refund only once they have been provided a rebooking by the air carrier. For cancellations and delays that are outside the air carrier’s control, a passenger who has not been rebooked on an alternate flight cannot request a refund until 48 hours after the original departure time.

In both the baseline scenario and the regulatory scenario, the refund owed by air carriers is calculated by first estimating the number of passengers entitled to a refund in each scenario and multiplying it by the percentage of passengers that would ask for a refund instead of waiting for their flight, or being rebooked. The rate of passengers expected to claim a refund is the same in the baseline and regulatory scenario. The number of passengers claiming a refund is then multiplied by the average ticket price (domestic or international flight) to come up with the total projected refunds to be paid. The difference in the projected refunds between the baseline and regulatory scenario is the incremental impact of the proposed regulations.

The present value of the incremental cost for refunding passengers under the regulatory scenario is $217 million, with an annualized cost of $31 million.

Compensation for inconvenience

Compensation in both the baseline and regulatory scenario is owed to passengers who are denied boarding (bumped), and to passengers who experience a flight delay or cancellation which results in a delay of over three hours of their arrival time to the destination under certain circumstances. In the baseline, compensation is owed to passengers who experience delays at their destination due to flight disruptions within the air carrier’s control, and in the regulatory scenario, it would be owed to passengers who are bumped from their flight or experience a delay of over three hours at destination as a result of a flight delay or a flight cancellation, due to non-exceptional circumstances.

The proposed amendments would define the situations that would be considered as exceptional, and as a result air carriers are not obligated to provide compensation for inconvenience to passengers. It is a more prescriptive categorization than the excluded flights under the baseline (outside carrier control, within carrier control but required for safety), and would presumably lead to fewer flight disruptions being considered exceptional circumstances for the purpose of paying compensation.

The changes between the baseline scenario and the regulatory scenario that have the largest impact on compensation include

Similar to the refund cost, the net compensation cost is calculated by estimating the number of passengers owed compensation under the baseline scenario and under the regulatory scenario given the differences explained above, and multiplying this by the percentage of passengers that will claim compensation in both scenarios. The number of passengers to claim compensation is then multiplied by the amount of compensation owed based on the length of delay at arrival. The difference in the projected compensation between the baseline scenario and the regulatory scenario is the incremental impact of the proposed regulations.

The present value of the incremental cost for compensating passengers for the inconvenience resulting from a flight disruption under the regulatory scenario is $132 million, with an annualized cost of $19 million.

Assistance (overnight accommodations, transportation to accommodations, and meals)

Assistance consists of overnight accommodations, transportation services, and meals. In the baseline scenario, accommodations are required to be provided to passengers expected to be delayed overnight, free of charge, only when the flight disruption is within the carrier’s control, including when required for safety. In the regulatory scenario, overnight accommodations would need to be provided free of charge to passengers expected to be delayed overnight, for all flight disruptions. However, when the flight disruption is due to exceptional circumstances, an air carrier’s obligation to provide accommodations would be limited to a period of 72 hours after the flight is delayed or cancelled or the bumping occurs.

In both scenarios (baseline and regulatory), it is assumed that 50% of passengers would require overnight accommodations and transportation fare to and from their accommodations, as half the passengers delayed overnight are assumed to be in their home city when the flight disruption occurs. Additionally, it is assumed that of the passengers requiring overnight accommodations, 89% would be travelling alone and would require their own room. This assumption is taken from the current APPR’s CBA conducted in 2019. The cost to air carriers for providing overnight accommodations is calculated by estimating the number of rooms they would need to provide under the baseline and regulatory scenario, and multiplying them by the average cost per room. The difference in the costs under the baseline scenario and the regulatory scenario is the net impact of the proposed amendments.

The present value of the incremental cost for providing accommodations for passengers for overnight delays, and taxi to the accommodation under the regulatory scenario is $19 million, with an annualized cost of $3 million.

Meals, or meal vouchers, would need to be provided for all flight disruptions lasting more than two hours, to account for flight disruptions at any time of the day (not only overnight). It is assumed that a passenger would receive a voucher every eight hours following two hours or more of delay. The cost for providing a meal is calculated by estimating the number of vouchers needed, based on estimates of the length of delays, and the percent of passengers who will request a voucher, and multiplied by the amount of the meal voucher, assumed to be $17 in all time periods, for all meals. The difference in the costs under the baseline scenario and the regulatory scenario is the net impact of the proposed amendments.

The present value of the incremental cost for providing meal vouchers tor passengers for flight disruptions under the regulatory scenario is expected to be $129 million, with an annualized cost of $18 million.

The total present value of the incremental cost for providing assistance (overnight accommodation, taxi, and meal vouchers) under the regulatory scenario is expected to be $148 million, with an annualized cost of $21 million.

Expedited refunds

In the baseline scenario, a refund must be paid out within 30 days of the time the passenger becomes entitled to the refund. Under the regulatory scenario, the amount of time to provide refunds would be reduced to within 15 days. It is assumed that air carriers would have to hire additional staff to meet the new refund timelines. For the baseline scenario, it is assumed that two employees are required to process refunds within 30 days of the requests. For the regulatory scenario, it is assumed that air carriers would need three employees. The net cost of the change in timelines to provide a refund is the annual income of the additional employee needed (plus 25% overhead) multiplied by the number of air carriers impacted.

The present value of the incremental cost for providing expedited refunds to passengers for flight disruptions under the regulatory scenario is expected to be $11.3 million, with an annualized cost of $1.6 million.

Publishing of claims process

The proposed amendments would require air carriers to publish their claims process in a prominent place on their website to make it easier for passengers to access the information they need to file a claim.

It is expected that this would be a one-time cost, to be completed within the first year of the proposed regulations coming into force. It is assumed to require only one page of content of approximately 250 words to be published by each air carrier’s information technology (IT) staff. The hourly IT wage to publish the claims process publicly is taken from Statistics Canada’s annual employee wages by occupation table. The cost of publishing the claims process on air carriers’ websites is calculated by multiplying the time it takes to publish the claims process online by the hourly wage rate. This is then multiplied by the total number of Canadian air carriers impacted.

The present value of the incremental cost for publishing the claims process online under the regulatory scenario is expected to be $1,939, with an annualized cost of $276.

Training costs

A one-time cost of training employees on the requirements of the regulatory scenario would be incurred by air carriers. This cost is estimated by multiplying the number of hours needed to train staff and develop material under the new requirements of the proposed regulations (one hour for training and an average of three hours for development by management) by the total number of staff across all Canadian air carriers. This is then multiplied by the average wage rate of the different employee groups.

The present value of the incremental cost for training employees under the regulatory scenario is expected to be $3.9 million, with an annualized cost of $559,042.

Tariff update cost

Air carriers would have to update their tariff to reflect the proposed amendments. This would be a one-time cost estimated by multiplying the length of time needed to update the tariff by the average wage rate of a lawyer, which is then multiplied by the total number of air carriers. It is assumed that a lawyer would spend one working day updating the air carrier’s tariff.

The present value of the incremental cost for updating the tariff to reflect the regulatory scenario is expected to be $11,093, with an annualized cost of $1,579.

Benefits

The methodology to calculate the benefits to passengers of the compensation and refund requirements of regulatory scenario is the same methodology described above for costs to air carriers of providing them, with one difference. As mentioned earlier, costs and benefits that are in scope for this analysis are those that are attributed to passengers considered to be Canadian. As a result, costs are estimated based on the total number of passengers forecasted to be provided a refund or compensation by Canadian air carriers, whereas benefits are estimated based on the total number of Canadian passengers who are projected to receive refunds or compensation from all air carriers. The description of the methodology is not repeated in the benefits section.

Refunds

The present value of the incremental benefit for passengers receiving refunds under the regulatory scenario is expected to be $177.6 million, with an annualized benefit of $25.3 million.

Compensation for inconvenience

The present value of the incremental benefit for passengers receiving compensation under the regulatory scenario is expected to be $119 million, with an annualized benefit of $16.9 million.

Increased comfort — food and drink

Currently, passengers are provided with food and drinks (or food vouchers for use in an airport) during flight disruptions either based on criteria described in the current APPR or at the discretion of an air carrier. The current APPR set a time threshold (after a delay of two hours at departure) according to which air carriers must provide passengers with food and drinks during a flight disruption. Obligations under the current APPR with respect to food and drink are in place for flight disruptions within the air carrier’s control, including those within their control required for safety reasons. The obligation does not extend to flight disruptions outside the air carrier’s control. The proposed amendments would extend the air carrier’s obligation to provide food and drinks for all flight disruptions. In situations where a flight disruption is due to an exceptional circumstance, the amendments would limit the provision of assistance to a period of 72 hours after the flight is delayed or cancelled or the bumping from a flight occurs.

In both the baseline and regulatory scenarios, the benefit to passengers of being provided with food and drinks is determined by first estimating the number of Canadian passengers who would be delayed at departure under the various flight disruptions scenarios for which air carriers provide food and drinks. Based on the number of passengers estimated to be experiencing a delay at departure, the average delay to passengers can be determined for each scenario. The benefit to passengers can then be estimated by multiplying the total number of hours of delay at departure during which passengers would have the benefit of waiting with food and drinks by the value of a traveller’s time and the premium for increased comfort (food and drink).

The present value of the incremental benefits to “Increased comfort — Food and drink” under the regulatory scenario is expected to be $204.4 million, with an annualized benefit of $29.1 million.

Increased comfort — accommodation

Currently, passengers are provided with accommodation during flight disruptions either based on criteria described in the APPR or at the discretion of an air carrier. Under the current APPR, accommodations are to be provided when a delay at departure runs overnight for flight disruptions within the air carrier’s control and within their control but required for safety reasons. The obligation does not extend to flight disruptions outside the air carrier’s control. The proposed amendments would extend the obligation to provide accommodations to all flight disruptions.

In both the baseline and regulatory scenarios, the benefit to passengers of being provided with accommodation is determined by first estimating the number of Canadian passengers who would be delayed at departure under the various flight disruption scenarios for which air carriers would be required to provide accommodation. Based on the number of passengers estimated to be experiencing delays at departure, the average delay to passengers can be determined for each scenario. The benefit to passengers can then be estimated by multiplying the total number of hours of delay during which passengers would have the benefit of waiting in an accommodation by the value of a traveller’s time and the premium for increased comfort (accommodation).

The present value of the incremental benefits to “Increased comfort — Accommodation” under the regulatory scenario is expected to be $19.2 million, with an annualized benefit of $2.7 million.

Time savings — customer service

The improved communication requirements with respect to passengers’ entitlements during flight disruptions, as well as the requirement to publish the process to submit a claim on a prominent place of the air carrier’s website will reduce the amount of time passengers will spend trying to figure out what their rights are under the APPR, including how to claim compensation.

With the increased awareness of entitlements, and how to claim them, passengers would save the time spent waiting on hold calling the air carrier, or in line at the customer service counter at the airport attempting to gather the information about what they are entitled to, and what they need to do to make a claim or request a refund. It is assumed that passengers would save an average of 15 minutes. This is a conservative estimate as studies show passengers could wait hours on the phone. Additionally, the calculations only include the estimated time savings value for claiming compensation and making refund requests but not for assistance. Therefore, the benefit for time savings — customer service is an underestimation of the true benefit. This benefit is estimated by multiplying half of the total number of passengers who are forecasted to be entitled for compensation and refunds by the amount of time saved (15 minutes) to get the total time saved, which is then multiplied by the average value of time ($21.46/hour). The benefit is only measured for half of the passengers forecasted to be entitled because not all passengers are likely to benefit from this time savings (50% of entitled passengers are assumed to benefit from the time savings).

The present value of the incremental benefit of time savings — customer service for compensation claims and refund requests under the regulatory scenario is expected to be $6.4 million, with an annualized benefit of $0.9 million.

Time value of money

The proposed amendments would require air carriers to refund passengers within 15 days from when the passenger becomes entitled to a refund, instead of the 30-day time limit under the current APPR. This change in refund timing would result in a benefit to passengers as they would have access to the value of their refund for an additional 15 days. The assumed rate of return for the purposes of this estimation is 7% annualized, applied to the appropriate time period.

The present value of the incremental benefit of the time value of money under the regulatory scenario is expected to be $0.5 million, with an annualized benefit of $0.07 million.

Qualitative impacts
Travel advisories

The proposed amendments would allow passengers to cancel their reservation on a flight and request a refund if a travel advisory is issued or updated by the Government of Canada to a country in which the passenger is travelling to or through which the passenger has a connecting flight. The proposed provision would, in particular, limit the obligation to travel advisories that recommend travellers “avoid all non-essential travel” or “avoid all travel.”

This analysis does not quantify the costs or benefits associated with this provision, as it is mainly unpredictable. Many air carriers may stop service for a period of time to countries classified by the Government of Canada as avoid all non-essential, or avoid all travel, and proactively refund passengers. For those air carriers who continue service, this provision would increase their costs based on the percentage of passengers that would cancel their reservation and request a refund. Similarly, passengers would receive a corresponding benefit. Since these events are unpredictable, it would not be possible to estimate the costs or benefits of this provision.

Reduction in costs to Agency in processing complaints

It is expected, as a result of the proposed amendments, that the number of complaints received by the Agency will decrease. The reduction is expected to occur as a result of increased clarity in the APPR, a more streamlined and efficient complaints process with the air carriers, and more information being provided to passengers.

If the Agency receives a conservative estimate of 10% fewer complaints under the regulatory scenario than under the baseline scenario, the Agency would see an incremental benefit of $12.3 million, with an annualized benefit of $1.74 million.

The Agency is dealing with a significant backlog of air travel complaints. With a reduction in complaints received, it is expected the rate at which the backlog is increasing will begin to decline.

Cost-benefit statement
Table 3: Monetized costs (in millions of dollars)
Impacted stakeholder Description of cost Base year Other relevant years (2030) Final year Total (present value) Annualized value
Canadian air carriers Refunds to passengers for denied boarding, cancellations, or delays $26.5 $29.5 $32.2 $217.2 $30.9
Compensation to passengers $16.1 $18 $19.6 $132.1 $18.8
Meal vouchers for flight disruptions $15.7 $17.5 $19.1 $128.8 $18.3
Overnight accommodations $2.2 $2.6 $2.8 $18.9 $2.7
Process expedited refunds $1.5 $1.5 $1.5 $11.3 $1.6
Training costs $3.9 $0 $0 $3.927 $0.5591
Updating tariffs and publishing of claims process $0.013 $0 $0 $0.013 $0.0019
All stakeholders Total costs $65.9 $69.1 $75.2 $512.4 $72.9
Table 4: Monetized benefits (in millions of dollars)
Impacted stakeholder Description of benefit Base year Other relevant years (2030) Final year Total (present value) Annualized value
Canadian air passengers Increased comfort — food and drink $25 $27.8 $30.3 $204.4 $29.1
Refunds to passengers for denied boarding, cancellations, or delays $21.6 $24.1 $26.3 $177.6 $25.3
Compensation to passengers $14.5 $16.2 $17.6 $119.0 $16.9
Increased comfort — accommodation $2.3 $2.6 $2.8 $19.2 $2.7
Time savings — general $0.8 $0.9 $1.0 $6.4 $0.9
Time value of money (refunds) $0.06 $0.07 $0.08 $0.5 $0.07
Total stakeholders Total Benefits $64.3 $71.6 $78.1 $527.3 $75.1
Table 5: Summary of monetized costs and benefits (in millions of dollars)
Impacts Base year Other relevant years Final year Total (present value) Annualized value
Total costs $65.9 $69.1 $75.2 $512.4 $72.9
Total benefits $64.3 $71.6 $78.1 $527.3 $75.1
Net impact $-1.6 $2.5 $2.9 $14.9 $2.2

Distributional impacts

On an annual basis, the cost to Canadian air carriers, on a per passenger segment basis, is expected to be $0.99. That is, for each enplaning of a passenger, the regulatory scenario would add an estimated $0.99 in cost to the air carriers. Depending on the air carrier’s ability to pass on costs, this may be reflected in higher tickets prices for passengers. This is further broken down by small vs. large air carriers, where the cost per passenger segment is $1.00 for large air carriers, and $0.93 for small air carriers. The estimated annualized cost to stakeholders of $73M represents 0.29% of total air industry operating expenses in 2022.

In comparison to the cost per passenger segment, which may be passed on to the passenger (in part or in whole), between 2019 and 2023, the average airport improvement fee (AIF) at 19 National Aviation System (NAS) airports increased by $5.05 per airport departure (20.4%). AIF’s are levied by governments or airport authorities with the proceeds usually intended for funding of major airport improvements, expansions, or airport services.

Air carriers offering services to rural and northern airports are primarily small air carriers. As the cost to small air carriers per passenger segment would be lower than large air carriers, and low in comparison to the costs described above, the proposed amendments should not have a significant impact on rural or northern traveller’s ability to receive flight services.

Small business lens

A total of 11 affected air carriers are considered small businesses, as per the definition in the policy on limiting the regulatory burden on business. These 11 airlines carry roughly 0.2% of domestic passengers. This analysis estimates the cost to small business by multiplying the total cost to airlines by 0.2%. The total present value cost for small business of the regulatory proposal is expected to be $1.02 million, annualized at a cost of $13,149 per small business. Provisions in the Regulations have different requirements for small carriers which are maintained by the amendments.

Small business lens summary
Table 6: Compliance costs
Activity Annualized value Present value
Providing timely refunds, assistance, compensation, complaint processes, training and tariff updates $144,638 $1,016,432
Total compliance cost $144,638 $1,016,432
Cost per impacted small business $13,149 $92,403

One-for-one rule

The one-for-one rule does not apply, as there would be no incremental change in the administrative burden on business and no regulatory titles are repealed or introduced.

Regulatory cooperation and alignment

The proposed amendments are not being introduced to comply with an international agreement or obligation, nor do they relate to a work plan or commitment under a formal regulatory cooperation forum.

As recommended by the Minister of Transport and the House of Commons Transport, Infrastructure and Communities (TRAN) Committee, the Agency examined the regimes in the European Union and United States, and considered best practices, lessons learned, and possibilities for regulatory alignment.

Some aspects of the proposed amendments would be tailored to Canadian realities that may be different from those in the EU or the United States. For example, those jurisdictions have much larger populations in a smaller territory than Canada’s, and they have a significantly more varied air sector, with many more small- and medium-sized air carriers active in their respective markets. Canada’s passenger protection regime must take into account its smaller population and wide geographical distribution of hard-to-access communities in remote areas, including the North. Hence, the proposed amendments would maintain a distinction between small and large air carriers, while the EU and US make no such distinction.

Effects on the environment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

The proposed regulatory project does not meet the threshold for conducting a Strategic Environmental Assessment as set out in section 4.2 of the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals. Specifically, the project

In addition, the project is not expected to spark any public or stakeholder concerns related to possible environmental effects.

Gender-based analysis plus

Canadians living in areas primarily served by small air carriers are expected to realize increased benefits from the proposed amendments, as the rebooking requirements for small air carriers would be more closely aligned with requirements for large air carriers. The proposed requirement for small air carriers to rebook passengers on other air carriers if they cannot rebook passengers on their own flights or partner air carrier flights would mean that passengers primarily flying with small air carriers would be less likely to be stranded if the air carrier has a limited flight schedule. Compared to areas served by large air carriers, such as cities with hub airports, regional airports offer fewer flight options, meaning rebooking after a flight disruption can lead to long wait times for passengers. Indigenous peoples would benefit in particular from improved protections for those flying with small air carriers, as many Indigenous communities are located in more rural and remote areas of the country, often served by small/regional air carriers. According to a report from Statistics Canada based on the 2016 Census, just over one quarter (26%) of Indigenous people aged 19 to 45 years lived in relatively remote areas of Canada, compared with 3% of non-Indigenous people. The proposed changes to rebooking requirements for small air carriers would benefit those living in rural and remote regions of Canada, particularly Indigenous communities, by providing greater protections and more rebooking options in the event of a flight disruption.

A concern voiced by regional air carriers and regional airports during the consultation process was that increased costs for air carriers as a result of the proposed amendments could have a negative impact on regional connectivity. To mitigate such effects, the proposed amendments would include, for small air carriers only, no flight limit on exemptions from paying compensation for flights using (or that were intended to use) the same aircraft as an initial flight disrupted due to an exceptional circumstance. The proposed amendments would also make a distinction between small and large air carriers for rebooking obligations, allowing small air carriers more time to rebook passengers on their own flights. These distinctions take into account the particular operating circumstances of smaller and regional air carriers, while providing increased protections to those flying primarily with small/regional air carriers.

No other gender-based analysis plus (GBA+) impacts have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

Implementation

It is the intention that the proposed amendments would come into force 30 days after the day on which they are published in the Canada Gazette, Part II. Many of the proposed amendments clarify and simplify regulatory requirements and, therefore, would not require substantive changes to existing processes and procedures.

Once the amendments are published in the Canada Gazette, Part II, stakeholders would be notified and the Agency would issue guidance and tools for the public and air carriers to help ensure the amendments are implemented smoothly. Updated content on the Agency’s Website would support air carriers and passengers to understand air carrier obligations under the proposed amendments. Outreach and education activities would be carried out, and there would be opportunities for stakeholders to ask questions and seek clarification. Technical briefings may also be provided.

Compliance and enforcement

The Agency monitors and enforces compliance by the entities it regulates, including air carriers, using a range of tools and activities. The Agency’s approach is guided by its Compliance Monitoring and Enforcement Policy. The Agency’s ongoing monitoring activities include compliance self-assessment questionnaires, website and routine documentation reviews, desk inspections, on-site inspections and investigations. Enforcement officers would conduct periodic inspections of air carriers to ensure that operating requirements are met, and they would do targeted administrative investigations if they suspect an air carrier is not meeting their legal/regulatory obligations.

The Agency follows a compliance continuum to encourage compliance. The first step involves the promotion of compliance through education. In amending the current APPR, the Agency would implement this step and provide regulated entities with guidelines and other information to assist them in understanding their regulatory obligations. In addition, the Agency would undertake targeted outreach activities involving individual regulated entities, or groups of entities, in relation to specific APPR provisions to help them fully understand their obligations and the consequences of non-compliance.

When required, Agency designated enforcement officers (DEOs) issue notices of violation (NOVs) with administrative monetary penalties (AMPs) for violations of designated provisions of the APPR. This approach would continue to apply in terms of promoting, verifying and enforcing compliance of the proposed amendments. The BIA modified the Act to allow air carriers to enter into compliance agreements with the Agency if they receive a NOV with an AMP under certain APPR provisions. A compliance agreement is a formal and enforceable agreement by which the regulated entity undertakes to come into compliance by meeting terms that the Agency considers appropriate. Modifications to the Act also provided DEOs with 36 months to investigate potential violations and issue NOVs.

As a result of modifications to the Act and the proposed amendments, maximum AMPs have been increased to $250,000 (up from $25,000) for corporations, in the case of a violation of certain APPR provisions. Recent changes to the Act include a new provision outlining that a violation that is committed or continued on more than one day constitutes a separate violation for each day on which it is committed or continued. Therefore, the violation of any provision that is designated in the APPR can be subject to an AMP for each day on which a violation is committed or continued.

In support of a smooth transition to the proposed amendments, the Agency would provide guidance and tools to assist air carriers and passengers.

Contact

Mary Johnson
Team Leader
Analysis and Regulatory Affairs Directorate
Canadian Transportation Agency
60 Laval Street, Unit 01
Gatineau, Quebec
K1A 0N9
Email: Consultations-aeriennes.Air-Consultations@otc-cta.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Canadian Transportation Agency, subject to the approval of the Governor in Council, proposes to make the annexed Regulations Amending the Air Passenger Protection Regulations under subsection 86(1)footnote a, section 86.1footnote b and subsections 86.11(1)footnote c and 177(1)footnote d of the Canada Transportation Act footnote e.

Interested persons may make representations concerning the proposed Regulations within 75 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Mary Johnson, Team Leader and Senior Policy Advisor, Regulatory Affairs, Canadian Transportation Agency, 60 Laval Street, Unit 01, Gatineau, Quebec J8X 3G9 (email: Consultation-aeriennes.Air-Consultations@otc-cta.gc.ca).

Ottawa, December 13, 2024

Wendy Nixon
Assistant Clerk of the Privy Council

Regulations Amending the Air Passenger Protection Regulations

Amendments

1 (1) Subsection 1(1) of the Air Passenger Protection Regulations footnote 5 is repealed.

(2) Subsection 1(3) of the Regulations is replaced by the following:

Denial of boarding

(3) For the purpose of these Regulations, there is a denial of boarding when, no earlier than 24 hours before the scheduled departure time of a flight, a carrier cancels a passenger’s confirmed reservation for the flight, or otherwise does not permit a passenger who holds a confirmed reservation to occupy a seat on the flight, because the number of confirmed reservations for the flight exceeds the number of seats that may be occupied.

2 Section 2 of the Regulations is replaced by the following:

Carrier liability

2 (1) If a carrier’s obligations in respect of a given matter as set out in the applicable tariff are more favourable to a passenger than its obligations in respect of the same matter as set out in these Regulations, the carrier is liable with respect to the obligations set out in the tariff.

Joint liability

(2) If one carrier carries passengers on behalf of another carrier under a commercial agreement, the carriers are jointly and severally, or solidarily, liable to those passengers with respect to the obligations set out in sections 7, 22 and 24 or, if they are more favourable to those passengers, the obligations in respect of the same matter that are set out in the applicable tariff.

Denial of claim

2.1 A carrier that denies — in whole or in part — a claim referred to in section 85.01 of the Act must, when communicating that denial to the claimant, provide

Refunds

2.2 (1) All refunds provided under these Regulations must be paid to the person who purchased the ticket or service that is being refunded and must be paid using the method used for the original payment, unless

Refund deadline

(2) The refund must be provided by a carrier within 15 days after the day on which the passenger becomes entitled to it.

3 Subsection 3(1) of the Regulations is replaced by the following:

Persons with disabilities

3 (1) These Regulations do not limit a carrier’s legal obligations with respect to persons with disabilities and anything that a carrier is required to provide under these Regulations must be provided having regard to the needs of persons with disabilities.

4 Paragraph 4(1)(b) of the French version of the Regulations is replaced by the following:

5 Section 5 of the Regulations is replaced by the following:

Provision of Information

Website

4.1 A carrier must publish, in a prominent place on its website, in simple, clear and concise language and in a format that is compatible with adaptive technologies intended to assist persons with disabilities, a description of the process for dealing with claims that is established by the carrier under section 85.01 of the Act and any information and forms that a person might need to make a claim.

Digital platform and itineraries

5 (1) A carrier must make the following information available in simple, clear and concise language on all digital platforms that the carrier uses to sell tickets and on all documents issued by the carrier on which a passenger’s itinerary appears:

Precision — passengers’ entitlements

(2) The information referred to in paragraph (1)(a) must include

Flight operated by other carrier

(3) If a carrier issues a document on which a passenger’s itinerary appears and that itinerary includes a flight operated by another carrier, the carrier that issues the document must also make available on the document, in simple, clear and concise language, information on the recourse that is available to the passenger through the process for dealing with claims that is established by that other carrier under section 85.01 of the Act.

Hyperlink

(4) For the purpose of subsections (1) to (3), information that is contained on a web page is considered to have been made available on a digital platform or a document that contains a hyperlink to that web page.

Notice

(5) The carrier must also include the following notice on all digital platforms that the carrier uses to sell tickets and on all documents issued by the carrier on which a passenger’s itinerary appears:
“If you are denied boarding, your flight is cancelled or delayed for at least two hours, or your baggage is delayed, lost or damaged, you may be entitled to certain standards of treatment and compensation under the Air Passenger Protection Regulations. For more information about your passenger rights, please contact your air carrier or visit the Canadian Transportation Agency’s website.
Si l’embarquement vous est refusé, ou si votre vol est annulé ou retardé d’au moins deux heures ou si vos bagages sont retardés, perdus ou endommagés, vous pourriez bénéficier de certaines normes de traitement et d’une indemnité au titre du Règlement sur la protection des passagers aériens. Pour de plus amples renseignements sur vos droits, veuillez communiquer avec votre transporteur aérien ou visiter le site Web de l’Office des transports du Canada.”

Persons with disabilities

(6) Any information or notice that is provided under this section in a digital format must be provided in a format that is compatible with adaptive technologies intended to assist persons with disabilities and any information or notice that is provided in a paper format must be provided, on request, in large print, Braille or a digital format.

6 Sections 10 to 21 of the Regulations are replaced by the following:

Denial of boarding

10 (1) A carrier must not deny boarding to a passenger unless it has asked all passengers if they are willing to give up their seat.

Voluntary giving up of seat

(2) The carrier must inform any passenger who indicates a willingness to give up their seat of

Confirmation of benefit

(3) If a passenger accepts a benefit from the carrier in exchange for willingly giving up their seat, the carrier must provide the passenger with a written confirmation of that benefit before the flight on which they have given up their seat departs.

Passenger on aircraft

(4) The carrier must not deny boarding to a passenger who is already on board the aircraft, unless the denial is required for reasons of safety.

Priority for boarding

(5) When selecting passengers who will be denied boarding, the carrier must give priority for boarding to passengers in the following order:

Information — delay, cancellation or denial of boarding

11 (1) In the case of a flight delay, flight cancellation or denial of boarding, the carrier that operates the flight must, without delay, provide the following information to each affected passenger using the passenger’s preferred electronic method of communication referred to in subsection (4):

New information

(2) The carrier must also, using each affected passenger’s preferred electronic method of communication,

Update every 30 minutes

(3) The carrier must provide an update to each affected passenger using their preferred electronic method of communication every 30 minutes until

Preferred electronic method of communication

(4) For the purposes of subsections (1) to (3), the carrier that checks in a passenger for a flight must, at the time of check-in, request the following information or, if the information has already been provided, must request that it be confirmed and update it if necessary and, in the case of a flight that is operated by a different carrier, must provide the information or confirmation to that other carrier:

Method temporarily unavailable to carrier

(5) If the carrier is temporarily unable to send information that is required to be provided under this section using a passenger’s preferred electronic method of communication, it must make reasonable efforts to provide the information to the passenger using any other available means of communication.

At gate and on board

(6) From the time that passengers are required to be present at the boarding gate, whenever information is provided under subsections (1) to (3), the carrier must also provide the following information by means of audible announcements — and, if requested, visible announcements — at the boarding gate and, if passengers have already boarded, on board the aircraft:

Information on request

(7) The carrier must ensure that the information provided under paragraphs (1)(b) to (e) and subsections (2) and (3) is provided directly and without delay to a passenger who requests it.

Simplicity, clarity and concision

(8) All information provided under this section must be provided in simple, clear and concise language.

Standard of treatment

12 (1) A carrier must provide the following, free of charge, to a passenger referred to in subsection (2) during any period referred to in subsection (3):

Eligible passengers

(2) Subsection (1) applies in respect of

Period of entitlement

(3) Subsection (1) applies during the following periods:

Limitation — exceptional circumstances

(4) Despite subsection (3), if the delay, cancellation or denial of boarding that gives rise to the carrier’s obligations under subsection (1) is the result of a circumstance referred to in section 18, those obligations cease to apply 72 hours after the flight is delayed or cancelled or the denial of boarding occurs.

Exception

(5) A carrier need not provide the treatment referred to in subsection (1) to the extent that doing so would further delay the passenger.

Alternate travel arrangements

13 (1) A carrier must, unless the passenger has requested a refund to which they are entitled under section 14, provide the applicable alternate travel arrangements referred to in subsection (2) or (3), as the case may be, free of charge and without delay, to any passenger of a flight operated by the carrier if

Large carrier

(2) In the case of a large carrier, the alternate travel arrangements consist of a confirmed reservation for

Small carrier

(3) In the case of a small carrier, the alternate travel arrangements consist of a confirmed reservation for

Other alternate travel arrangements

(4) The carrier may, in agreement with the passenger, provide in place of the alternate travel arrangements provided under subsection (1) other alternate travel arrangements that will allow the passenger to reach the next destination airport indicated on their original ticket.

Transportation to other airport

(5) If a carrier provides alternate travel arrangements that include a flight that does not depart from the airport from which the passenger was scheduled to depart or, in the case of a connection, that does not depart from the airport at which the passenger arrives on their preceding flight, the carrier must also provide transportation free of charge from the airport in question to the new departure airport.

No supplementary payment

(6) The carrier must not request supplementary payment for any alternate travel arrangements, including those that provide for a higher class of service than the original ticket.

Refund for lower class

(7) If the alternate travel arrangements provide for a lower class of service than the original ticket, the carrier must refund the difference in the price of the applicable portion of the ticket.

Refund for services not received

(8) If a passenger who is provided with alternate travel arrangements does not receive an additional service that was purchased from the carrier in connection with their original ticket or pays for that service a second time, the carrier must refund the cost of that service.

Option to decline

(9) A passenger may decline any alternate travel arrangements that have been provided to them if they do not allow the passenger to complete their itinerary within a reasonable time or otherwise do not meet their travel needs, in which case the carrier may cancel the reservation.

Refund of ticket

14 (1) If a passenger referred to in subsection (2) requests a refund before alternate travel arrangements are provided to them under section 13 or declines the arrangements that have been provided to them under that section, the carrier that operates the flight referred to in subsection (2) must

Eligibility

(2) Subsection (1) applies in respect of a passenger

Additional services included

(3) The refund must include the cost of any additional services purchased from the carrier in connection with the ticket or in connection with the unused portion of the ticket, as the case may be.

Compensation for delay or cancellation

15 (1) Subject to section 18, a carrier must provide compensation of no less than the applicable amount referred to in subsection (2) to any passenger of a flight operated by the carrier that is delayed or cancelled if

Minimum amount

(2) The minimum amount of compensation is

Payment

(3) The compensation must be provided within 30 days after the day on which the carrier receives the request to deal with the claim for compensation.

Explanation — exceptional circumstances

(4) If the carrier determines that compensation is not payable due to the existence of a circumstance referred to in section 18, the explanation referred to in section 2.1 must be accompanied by any documents, reports or other evidence that establish the existence of that circumstance.

Compensation for denial of boarding

16 (1) Subject to section 18, a carrier must provide compensation of no less than the applicable amount referred to in subsection (2) — or any greater amount determined under subsection (4) or confirmed to the passenger under subsection (5) — to any passenger who is denied boarding of a flight operated by the carrier.

Minimum amount

(2) The minimum amount of compensation is

Payment

(3) The carrier must provide the compensation to the passenger as soon as it is operationally feasible, but not later than 48 hours after the time of the denial of boarding.

Estimated arrival time

(4) Any compensation that is paid before the passenger arrives at the destination airport is to be determined based on the passenger’s expected arrival time.

Written confirmation

(5) If a carrier does not provide the compensation before the boarding time of the first flight under any alternate travel arrangements that are provided to the passenger, the carrier must provide the passenger with a written confirmation of the minimum amount of compensation that they are owed, based on their expected arrival time.

Explanation — exceptional circumstances

(6) If the carrier determines that compensation is not payable because of the existence of a circumstance referred to in section 18, the carrier must provide to the passenger, within 48 hours after the denial of boarding, a clear and detailed explanation as to why compensation is not payable that is accompanied by any documents, reports or other evidence that establish the existence of that circumstance.

Form of compensation

17 Compensation under sections 15 and 16 must be provided in the form of money, unless

Exceptional circumstances

18 A carrier is not required to provide compensation under section 15 or 16 if

Travel Advisory

Refund on request

19 (1) If, after a reservation is made, the Government of Canada issues or upgrades a travel advisory to recommend avoiding all travel, or all non-essential travel, to a country that is a passenger’s destination or through which they have a connecting flight, the carrier that issued the ticket must, on request of the passenger, refund the ticket, without charge or penalty, if the passenger cancels the reservation before the check-in period for the first flight of their itinerary begins.

Additional services included

(2) The refund must include the cost of any additional services purchased from the carrier in connection with the ticket.

7 Section 22 of the Regulations is replaced by the following:

Proximity to parent or guardian or tutor

22 (1) At the time that a reservation is made for a child under the age of 14 years who is travelling with a parent or a guardian or tutor, the carrier that issues the ticket must assign to the child at no additional charge a seat adjacent to the seat of at least one parent or guardian or tutor, unless there are no seats available to permit such an assignment.

No adjacent seats available

(2) If there are no seats available at the time of reservation to permit the assignment to the child of a seat adjacent to that of a parent or a guardian or tutor,

Exception

(3) Subsections (1) and (2) do not apply if

No supplementary payment

(4) A carrier must not request supplementary payment from any passenger to whom the carrier assigns a different seat for the purpose of complying with paragraph (2)(b), including a passenger who volunteers to change seats.

Refund for lower class

(5) If, for the purpose of complying with paragraph (2)(b), a carrier assigns to a passenger, including a passenger who volunteers to change seats, a seat that is in a lower class of service than their ticket provides, the carrier must refund the price difference between the classes of service.

8 (1) The portion of subsection 23(1) of the Regulations before paragraph (a) is replaced by the following:

Delayed, lost or damaged baggage

23 (1) If baggage is delayed, lost or damaged, the carrier must provide compensation equal to or greater than the sum of

(2) Subsection 23(2) of the Regulations is repealed.

9 Subsection 24(2) of the Regulations is replaced by the following:

Obligation to carry

(2) A carrier must accept a musical instrument as checked or carry-on baggage, unless accepting it is contrary to general terms and conditions in the applicable tariff with respect to the weight or dimension of baggage or to safety.

10 The definitions frais du transport aérien and somme perçue pour un tiers in section 25 of the French version of the Regulations are replaced by the following:

frais du transport aérien
S’entend, à l’égard d’un service aérien, de tous les frais ou droits qui doivent être payés lors de l’achat du service, y compris les coûts supportés par le transporteur pour la fourniture du service, mais à l’exclusion des sommes perçues pour un tiers. (air transportation charge)
somme perçue pour un tiers
S’entend, à l’égard d’un service aérien ou d’un service optionnel connexe, d’une taxe, de frais ou de droits établis par un gouvernement, une autorité publique, une administration aéroportuaire ou un mandataire de ceux-ci qui sont, lors de l’achat du service, perçus par le transporteur ou un autre vendeur pour le compte de ce gouvernement, de cette autorité, de cette administration ou de ce mandataire afin de lui être remis. (third party charge)

11 Section 32 of the Regulations is replaced by the following:

Designation

32 The provisions of these Regulations set out in column 1 of the schedule are designated for the purposes of subsection 177(1) of the Act.

12 The portion of section 33 of the Regulations before paragraph (a) is replaced by the following:

Maximum amount payable

33 The maximum amount payable in respect of a contravention of a provision set out in column 1 of the schedule is the amount

13 Section 34 of the Regulations and the heading before it are repealed.

14 The schedule to the Regulations is replaced by the schedule set out in the schedule to these Regulations.

Coming into Force

15 These Regulations come into force on the later of the first day on which subsections 464(2) and 465(1), (2) and (4) of the Budget Implementation Act, 2023, no. 1, chapter 26 of the Statutes of Canada, 2023, are all in force and the 30th day after the day on which these Regulations are published in the Canada Gazette, Part II.

SCHEDULE

(Section 14)

SCHEDULE

(Sections 32 and 33)

Administrative Monetary Penalties
Item

Column 1

Provision

Column 2

Maximum Amount Payable — Corporation ($)

Column 3

Maximum Amount Payable — Individual
($)
1 Section 2.1 25,000 5,000
2 Subsection 2.2(1) 250,000 5,000
3 Subsection 2.2(2) 250,000 5,000
4 Subsection 4(2) 25,000 5,000
5 Section 4.1 250,000 5,000
6 Subparagraph 5(1)(a)(i) 250,000 5,000
7 Subparagraph 5(1)(a)(ii) 250,000 5,000
8 Subparagraph 5(1)(a)(iii) 250,000 5,000
9 Subparagraph 5(1)(a)(iv) 250,000 5,000
10 Paragraph 5(1)(b) 250,000 5,000
11 Paragraph 5(1)(c) 250,000 5,000
12 Subparagraph 5(2)(a)(i) 250,000 5,000
13 Subparagraph 5(2)(a)(ii) 250,000 5,000
14 Subparagraph 5(2)(a)(iii) 250,000 5,000
15 Subparagraph 5(2)(a)(iv) 250,000 5,000
16 Paragraph 5(2)(b) 250,000 5,000
17 Paragraph 5(2)(c) 250,000 5,000
18 Subsection 5(3) 250,000 5,000
19 Subsection 5(5) 250,000 5,000
20 Subsection 5(6) 250,000 5,000
21 Section 6 250,000 5,000
22 Subsection 7(1) 250,000 5,000
23 Subsection 7(2) 250,000 5,000
24 Paragraph 8(1)(a) 250,000 5,000
25 Paragraph 8(1)(b) 250,000 5,000
26 Paragraph 8(1)(c) 250,000 5,000
27 Paragraph 8(1)(d) 250,000 5,000
28 Subsection 8(2) 250,000 5,000
29 Paragraph 9(1)(a) 250,000 5,000
30 Paragraph 9(1)(b) 250,000 5,000
31 Subsection 9(3) 250,000 5,000
32 Subsection 10(1) 250,000 5,000
33 Paragraph 10(2)(a) 250,000 5,000
34 Paragraph 10(2)(b) 250,000 5,000
35 Subsection 10(3) 250,000 5,000
36 Subsection 10(4) 250,000 5,000
37 Subsection 10(5) 250,000 5,000
38 Paragraph 11(1)(a) 250,000 5,000
39 Paragraph 11(1)(b) 250,000 5,000
40 Paragraph 11(1)(c) 250,000 5,000
41 Paragraph 11(1)(d) 250,000 5,000
42 Paragraph 11(1)(e) 250,000 5,000
43 Paragraph 11(2)(a) 250,000 5,000
44 Paragraph 11(2)(b) 250,000 5,000
45 Subsection 11(3) 250,000 5,000
46 Subsection 11(4) 250,000 5,000
47 Subsection 11(5) 250,000 5,000
48 Paragraph 11(6)(a) 250,000 5,000
49 Paragraph 11(6)(b) 250,000 5,000
50 Paragraph 11(6)(c) 250,000 5,000
51 Subsection 11(7) 250,000 5,000
52 Subsection 11(8) 250,000 5,000
53 Paragraph 12(1)(a) 250,000 5,000
54 Paragraph 12(1)(b) 250,000 5,000
55 Paragraph 12(1)(c) 250,000 5,000
56 Subsection 13(1) 250,000 5,000
57 Subsection 13(5) 250,000 5,000
58 Subsection 13(6) 250,000 5,000
59 Subsection 13(7) 250,000 5,000
60 Subsection 13(8) 250,000 5,000
61 Paragraph 14(1)(a) 250,000 5,000
62 Paragraph 14(1)(b) 250,000 5,000
63 Subsection 14(3) 250,000 5,000
64 Subsection 15(1) 250,000 5,000
65 Subsection 15(3) 250,000 5,000
66 Subsection 15(4) 250,000 5,000
67 Subsection 16(1) 250,000 5,000
68 Subsection 16(3) 250,000 5,000
69 Subsection 16(5) 250,000 5,000
70 Subsection 16(6) 250,000 5,000
71 Section 17 250,000 5,000
72 Subsection 19(1) 250,000 5,000
73 Subsection 19(2) 250,000 5,000
74 Subsection 22(1) 250,000 5,000
75 Paragraph 22(2)(a) 250,000 5,000
76 Paragraph 22(2)(b) 250,000 5,000
77 Paragraph 22(2)(c) 250,000 5,000
78 Subsection 22(4) 250,000 5,000
79 Subsection 22(5) 250,000 5,000
80 Subsection 23(1) 250,000 5,000
81 Paragraph 24(1)(a) 250,000 5,000
82 Paragraph 24(1)(b) 250,000 5,000
83 Paragraph 24(1)(c) 250,000 5,000
84 Subsection 24(2) 250,000 5,000
85 Paragraph 28(1)(a) 25,000 5,000
86 Paragraph 28(1)(b) 25,000 5,000
87 Paragraph 28(1)(c) 25,000 5,000
88 Paragraph 28(1)(d) 5,000 1,000
89 Paragraph 28(1)(e) 5,000 1,000
90 Paragraph 28(1)(f) 5,000 1,000
91 Subsection 28(2) 5,000 1,000
92 Subsection 28(3) 5,000 1,000
93 Section 29 5,000 1,000
94 Section 30 5,000 1,000
95 Section 31 5,000 1,000

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Privacy notice

The information you provide is collected under the authority of the Financial Administration Act, the Department of Public Works and Government Services Act, the Canada–United States–Mexico Agreement Implementation Act,and applicable regulators’ enabling statutes for the purpose of collecting comments related to the proposed regulatory changes. Your comments and documents are collected for the purpose of increasing transparency in the regulatory process and making Government more accessible to Canadians.

Personal information submitted is collected, used, disclosed, retained, and protected from unauthorized persons and/or agencies pursuant to the provisions of the Privacy Act and the Privacy Regulations. Individual names that are submitted will not be posted online but will be kept for contact if needed. The names of organizations that submit comments will be posted online.

Submitted information, including personal information, will be accessible to Public Services and Procurement Canada, who is responsible for the Canada Gazette webpage, and the federal institution managing the proposed regulatory change.

You have the right of access to and correction of your personal information. To seek access or correction of your personal information, contact the Access to Information and Privacy (ATIP) Office of the federal institution managing the proposed regulatory change.

You have the right to file a complaint to the Privacy Commission of Canada regarding any federal institution’s handling of your personal information.

The personal information provided is included in Personal Information Bank PSU 938 Outreach Activities. Individuals requesting access to their personal information under the Privacy Act should submit their request to the appropriate regulator with sufficient information for that federal institution to retrieve their personal information. For individuals who choose to submit comments anonymously, requests for their information may not be reasonably retrievable by the government institution.