Agency Rulings

Order No. 1999-A-306

July 2, 1999

IN THE MATTER OF an application by Air Georgian Limited also carrying on business as Ontario Regional Airlines for an exemption from the application of subsections 64(1) and 64(2) of the Canada Transportation Act, S.C., 1996, c. 10.

File No. M4210/O89-1

The application was received by the Canadian Transportation Agency (hereinafter the Agency) on June 28, 1999 and was complete and ready for processing on June 29, 1999.

Under Licence No. 980105, Air Georgian Limited also carrying on business as Ontario Regional Airlines (hereinafter the Licensee) is authorized to operate a domestic service, small aircraft.

Pursuant to subsection 64(1) of the Canada Transportation Act (hereinafter the CTA), where a licensee proposes to discontinue a domestic service or to reduce the frequency of such a service to a point to less than one flight per week and, as a result of the proposed discontinuance or reduction, there will be only one licensee or no licensee offering at least one flight per week to that point, the licensee shall give notice of the proposal in the prescribed form and manner.

Pursuant to subsection 64(2) of the CTA, a licensee shall not implement a proposal to discontinue a domestic service until the expiration of sixty (60) days after the notice is given or until the expiration of such shorter period as the Agency may, on application by the licensee, specify by order.

Subsection 14(1) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR) states that:

For the purposes of section 64 of the CTA, a licensee proposing to discontinue or to reduce the frequency of a domestic service shall give notice of the proposal

(a) to the Agency, to the Minister and to the minister responsible for transportation in the province where the area to be affected by the proposal is located or in the Yukon Territory or the Northwest Territories, if that area is located therein, by sending them a notice in the form set out in Schedule III; and

(b) to holders of domestic licences operating in the area to be affected by the proposal and to persons resident therein, by publishing notice in the form set out in Schedule III in newspapers with the largest circulation in that area in each official language, the names of which newspapers shall be obtainable from the Agency on request by the licensee.

Pursuant to subsection 80(1) of the CTA, the Agency, may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of Part II of the CTA or of a regulation or order made under Part II of the CTA where the Agency is of the opinion that

(a) the person has substantially complied with the provision;

(b) an action taken by the person is as effective as actual compliance with the provision; or

(c) compliance with the provision by the person is unnecessary, undesirable or impractical.

In this case, the Licensee indicates that it had been approached by local officials to add Hornepayne to its Sault Ste. Marie - Wawa - Marathon- Manitouwadge route. Consultations with officials in Marathon and Manitouwadge were held to ensure that the best possible services could be provided to the communities affected. Following these discussions, the Licensee decided, because of the low population density and the low passenger frequency utilizing the service, to realign its service by consolidating traffic from Marathon at Manitouwadge and to include a stop at Hornepayne.

In this regard, by letter dated June 3, 1999, the Licensee advised the Airport Manager of Marathon and the Reeve of Marathon that it would no longer operate scheduled services to Marathon and indicated that passengers who have reservations to fly with the Licensee will be provided with two options: a) Marathon passengers who have made reservations before June 2, 1999 are entitled to a discounted ticket to fly to or from the Manitouwadge Airport on the date of their reservation; b) if passengers out of Marathon do not wish to take advantage of discounts, the Licensee will still recognize the reservation and provide the service on the date of their reservation. The Licensee had indicated that service to Marathon will continue through until July 8, 1999, the date of the last confirmed booking at Marathon.

The Agency notes that on June 10, 1999, an article appeared in the Thunder Bay Chronicle-Journal which has a circulation of 550 - 600 to Marathon which discussed the proposed discontinuance of the Licensee's service at Marathon.

The Agency further notes that although there are no other scheduled carriers at Marathon, the Licensee is continuing its scheduled operations at Manitouwadge which is located a distance of 100 km away with two lane blacktop road access. In addition, bus service is provided twice daily to Thunder Bay and to Sault Ste. Marie.

The Agency has considered the request and in light of the actions taken by the Licensee and the article which appeared in the Thunder Bay newspaper, the Agency is of the opinion that the action taken by the Licensee is as effective as actual compliance with the provisions of subsections 64(1) and (2) of the CTA. Accordingly, the Agency, pursuant to paragraph 80(1)(b), hereby exempts the Licensee from the application of subsections 64(1) and (2) of the CTA. This exemption is subject to the condition that the Licensee gives immediate notice of the proposal to the Minister and to the Minister responsible for transportation in the province of Ontario by sending them a notice in the form set out in Schedule III of the ATR with a copy of the notice to the Agency.