Notice to industry – Enforcement of the all-inclusive air price advertising regulations (ASPAR)

Released on February 14, 2014

Purpose

The Canadian Transportation Agency (Agency) wishes to inform industry how it applies administrative monetary penalties (AMPs) to enforce the all-inclusive air price advertising regulations.

Alleged offenders may request that a formal warning be reviewed or that they be exempt from following the regulations. The time taken by the Agency to review their request will continue to count towards calculating any monetary penalty they may be issued.

Background

In December 2012, the Government of Canada announced amendments to the Air Transportation Regulations requiring all-inclusive air price advertising. These regulations help consumers easily determine the total price of advertised air services and the components of the total price, and encourage fair competition among advertisers of air services.

During the first several months from the coming into force of the new regulations, the Agency worked with advertisers to assist them in understanding what they needed to do to become compliant.  Since then, the Agency has issued a number of formal warnings and notices of violations (NOV) with associated penalties that dealt with issues of non-compliance.

Current practice

When a contravention is identified, as a first step in the escalation of penalties, the Designated Enforcement Officer (DEO) issues a formal warning outlining the findings and the deadline by which the alleged offender is required to comply.  If, after receiving a formal warning, an alleged offender disagrees with the findings, it may apply to the Agency to request a review of the case. This process may take up to 120 days.

If the Agency makes a determination that the warning issued by the DEO is not justified, the warning will be withdrawn and will not be used as a basis for further enforcement actions.

In contrast, if the Agency determines that the warning is justified, the warning then constitutes a first violation of the designated provision. If the provision is violated again within four years, the DEO may proceed with the imposition of a penalty.

In cases where the alleged offender believes that the compliance with the regulations is not possible, they may apply for an exemption under section 80 of the Canada Transportation Act. Reviewing an exemption request may take up to 120 days.

Should the Agency grant an exemption, no further enforcement action will be taken after the exemption.

In cases where the exemption is not granted, the alleged offender will have to comply and may be subject to further enforcement actions. 

At the time of issuing this notice, the Agency has ruled on two requests for review, and received two exemption requests. Both reviews of a warning letter have confirmed the violations determined by the DEO (Decisions 320-A-2013 and 8-A-2014). As for the exemption requests, the first one followed an Agency decision on the review of a formal warning (Decision 320-A-2013) and was later withdrawn. The offender, British Airways, was subsequently issued a monetary penalty. The second exemption request, submitted by Aeroflot Russian Airlines, was denied by the Agency (Order 2014-A-31).

Future practice for all applications

Alleged offenders that request a review of a warning letter or an exemption from the application of the regulations should not presume the outcome or assume that there will be no consequences from not being in compliance while the Agency is considering these requests.

The Agency considers each day that an advertisement remains in non-compliance to constitute a contravention of the regulations.  Consequently, an advertiser is subject to monetary penalties each and every day of its non-compliance.

Therefore, from now on, should the Agency uphold a warning, the DEO may apply a penalty for each day starting with the original date of compliance as stated in the original warning letter up to the date when the Notice of Violation is issued.  Penalties may be applied during this period, notwithstanding the request for a review of the warning and the time taken for the Agency to make its decision regarding the warning review.

Similarly, in cases where the alleged offender chooses to request an exemption from the application of the regulations, the monetary penalty may be applied for each day of non-compliance starting with the compliance date stated on the original warning letter up to and including the date of the Agency's decision in regard to the exemption.  This includes the period during which the request for exemption is being considered by the Agency. Additionally, given the nature of an exemption, a penalty may be applied during this period even if the Agency grants the exemption.

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