Opening Remarks from Tom Oommen, DG Analysis and Outreach, to the Standing Committee on Transport, Infrastructure and Communities – November 28, 2022

Chair, I would like to thank the Committee for the invitation to appear today.

As you noted, I am accompanied by my colleague, Michelle Greenshields, Director General for Disputer Resolution at the Agency.

As a regulator, the Canadian Transportation Agency develops regulations in accordance with legislation, implements regulations, issues licenses and determinations, and enforces regulations.

As an administrative tribunal, the Agency resolves complaints using informal dispute resolution, facilitation and mediation, as well as through a formal adjudication process, in which it has all the powers of a superior court.

The Agency has a broad mandate for the federally-regulated transportation system – air, rail, marine, and interprovincial bus - that impacts all Canadians, as well as protecting the human right of persons with disabilities to an accessible transportation network.

A core component of our mandate is providing consumer protection for air passengers, most significantly through the Air Passenger Protection Regulations or APPR.

In 2018, the Transportation Modernization Act amended the Canada Transportation Act and gave the Agency the authority to make regulations defining airlines' minimum obligations towards passengers.

Before the development of the APPR, each airline set out its own terms and conditions of carriage in a legal document known as a tariff - which is in effect the contract between the passenger and the airlines - that was rarely, if ever, read by passengers. After the coming into force of the APPR, in addition to the terms and conditions set out in their tariff, each airline is required to follow the obligations as set out in the APPR. These regulations create more consistent passenger rights across airlines.

Developed following a comprehensive public consultation exercise, the APPR addresses fundamental entitlements of passengers including receiving clear communications, and being treated fairly in the case of delays, cancellations and denied boarding.

These minimum obligations differ, based on the extent to which the causes of a flight disruption are within an airline's control or not.

Obviously for situations that an airline can control, airlines are held to a higher standard of treatment toward the passengers. For example, for flight disruptions that are wholly within airline control, airlines are required to provide compensation for inconvenience.

Even when events occur that are outside of their control, airlines must still ensure that their passengers get to their destination as quickly as possible.

Whether an event is outside of an airline's control, within their control, or within the airlines' control but required for safety can sometimes be difficult to determine.

It can be even more difficult for a passenger, as the information that would enable the passenger to determine how the flight disruption is categorized and what their entitlements are, is within the hands of the airlines.

The CTA has developed plain language guidance for both passengers and airlines to improve their understanding of their rights and obligations.

The Agency has also identified key interpretation issues, such as whether crew shortages are within airline control, and is providing interpretations on such issues as decisions are made in the context of the adjudication of complaints.

As you are aware, in 2020, three months after the APPR came into force, the COVID-19 pandemic caused a collapse of global air travel.

As the events of the pandemic unfolded, it became clear that there was a gap in Canada's air passenger protection framework relating to situations where flights were cancelled or delayed for reasons outside of an airline's control and there was no possibility of a passenger completing their itinerary within a reasonable time.

Because the law did not require airlines to include refund provisions in their tariffs for such situations, what a passenger was entitled to depended on the particular airline's tariff.

[Shortly afterwards, the Government, as indicated in its Fall Economic Statement 2020, provided financial support to Canadian airlines and as part of that process, asked airlines to provide refunds for flights that were cancelled during this period.]

Given the implications of this gap in the framework, on December 18, 2020, the Minister of Transport issued a Direction to the Agency providing the authority to develop a regulation respecting an airline’s obligations to passengers in the case of flight cancellations or lengthy delays due to situations outside their control that prevent them from ensuring that the passenger complete their itinerary within a reasonable time.

The final regulations amending the APPR were published in Part II of the Canada Gazette on June 22, 2022 and came into force on September 8, 2022.

The new regulations require airlines to provide a passenger affected by a cancellation or a lengthy delay due to a situation outside the airline’s control with a confirmed reservation on the next available flight that is operated by them or a partner airline, leaving within 48 hours of the departure time indicated on the passenger's original ticket.

If the airline cannot provide a confirmed reservation within this 48-hour period, it must provide, at the passenger's choice, a refund or rebooking.

And, a refund must be provided within 30 days.

Following the coming into force of the APPR we saw a significant influx of complaints –– as incoming monthly complaint volumes quadrupled (4x).

To put this in perspective, in 2018-2019 we received 7,650 complaints. While in the year that the APPR came into force, 2019-20, we received 19,392 complaints even though the APPR were fully in force for 3 months prior to the onset of the COVID-19 pandemic.

More recently, as air travel volumes have rebounded – and the air industry has grappled with the speed of this recovery – we have witnessed an exponential growth in complaints.

While we had been receiving an average of about 1500 complaints per month in April, May and June of this year, complaint volumes jumped to more than 3,000 in July and almost 6,000 in August.

Despite processing more complaints than ever before - in 2021-22, we processed over 15,000 complaints, which is more than 3x the number of complaints we were processing annually before the APPR and COVID - this significant increase has led to a backlog.

We are working on addressing this backlog by further increasing our complaints processing capacity through identifying and implementing procedural improvements, modernizing our processes and adding capacity where possible.

Finally, although today's study is focused on APPR, I should also mention that the Agency has a key human rights mandate for accessibility of the federally-regulated transportation system. I would note that when we receive cases regarding accessibility, they are prioritized and as a result we have no backlog in this area.

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