Guidelines Respecting Extra-bilateral Air Service Applications to the Canadian Transportation Agency
Table of Contents
Part 1 – Introduction
1.1 Mandate of the Canadian Transportation Agency
The Canadian Transportation Agency (Agency) is responsible for the economic regulation of air services, as set out in the Canada Transportation Act (CTA). The Agency is also named in international agreements, arrangements or conventions (agreements) as an aeronautical authority for Canada.
The Agency issues licences to operate scheduled international air services in accordance with applicable agreements. If proposed scheduled international services are not set out in an agreement, the Agency can grant authority to operate a service on a temporary basis under subsection 78(2) of the CTA. These temporary authorities are often referred to as "extra-bilateral" authorities.
Because extra-bilateral scheduled services are not rights which have been negotiated, the Agency uses discretion when granting extra-bilateral authorities. Decisions take into account any international negotiations and Canada's aviation policy objectives.
1.2 Purpose of the Guidelines
These Guidelines set out the Agency's process for dealing with extra-bilateral authorities applications.
The Guidelines clarify the Agency's legislative mandate, including circumstances in which the Agency may exercise discretion. They also describe the information the Agency needs to make a determination under subsection 78(2) of the CTA.
In the event of a conflict between these Guidelines and the CTA, its regulations or any other Act of Parliament, the legislation prevails.
1.3 Legislative Framework – Sections 76, 77 and 78 of the Canada Transportation Act
Under section 77 of the CTA, the Agency acts as aeronautical authority for Canada when specified in an agreement respecting civil aviation to which Canada is a party or when directed by the Minister of Transport. Further, the Agency is required under subsection 78(1) of the CTA to exercise the powers given to it with respect to air transportation, "in accordance with any international agreement, convention or arrangement relating to civil aviation to which Canada is a party."
Under section 76 of the CTA, the Minister of Transport may provide direction to the Agency on international air services, including:
- the implementation or administration of an agreement;
- matters affecting the public interest;
- international comity or reciprocity; and
- matters of safety and security of international civil aviation.
In some circumstances, a direction may also require the concurrence of the Minister of Foreign Affairs. Therefore, where appropriate, the Agency informs Transport Canada and the Department of Foreign Affairs and International Trade when it receives an extra-bilateral application.
Subject to Ministerial direction, the Agency may, under subsection 78(2) of the CTA, issue a temporary licence or vary the terms and conditions of a licence to permit international air services that are not permitted in agreements.
Air carriers can apply to the Agency, under subsection 78(2) of the CTA, for:
- a temporary licence to operate an international air service where no agreement exists; or
- a temporary variance of a licence held by the applicant, to operate its scheduled international service in a manner not provided for in the applicable agreement.
A temporary variance can include traffic rights and routings not specifically provided for in an existing agreement, for example:
- exercising traffic rights for the carriage of local traffic to or from intermediate or beyond points on a route;
- operating to or via points that are not provided for; and
- omitting points that are required to be served.
It should be noted that requests for temporary increases in capacity, where agreements provide for limited capacity entitlements, are not processed as extra-bilateral applications. These are dealt with in conformity with the capacity article of the applicable agreement.
In order to provide air services through code-sharing, the air carrier under whose code the service is being sold must hold an Agency licence. When there is no agreement providing for air services on a code share basis, the air carrier requires an extra-bilateral authority.
Part 2 – Extra-bilateral applications
2.1 Form and content of applications
Requests for extra-bilateral authorities must be made by filing a written application with the Agency. The applicant is responsible for setting out the grounds for the application and providing supporting documentation.
There are two types of applications:
1. Application for a temporary licence to operate an international air service on a scheduled basis, e.g. when an air carrier seeks to provide scheduled services, including services through code-sharing, to a country with which Canada does not have an agreement.
The applicant must:
- Complete the requirements set out in the relevant licence application guides for:
- Provide a complete explanation of the reasons why it would be appropriate for the Agency to grant the temporary licence, as well as information and documentation that is relevant to support the application.
Appendix B sets out considerations used by the Agency in previous decisions about extra-bilateral applications.
- Provide any other information or documentation that may be required by the Agency.
In addition, applicants should be aware that section 59 of the CTA prohibits the offering and selling of transportation for which a licence has not been granted. However, applicants can apply to Agency for an exemption from the application of section 59.
2. Application for a temporary variance of an existing scheduled international licence held by the applicant.
The applicant must provide:
- The full name, address, telephone number and other telecommunications contact information for the applicant and the applicant's representative(s);
- Clear and concise statements of the information relevant to the application, including:
- the international air services that the applicant wishes to operate, including the points to be served, the aircraft type to be operated and the frequency of service;
- the authority sought, i.e., the aspects of the proposed service that are not provided for in the relevant air transport agreement;
- the start and end dates for the authority sought; and
- a complete explanation of the reasons why the applicant believes the Agency should grant the requested variance of licence. Appendix B sets out considerations used by the Agency.
- Any other information and/or documentation that is relevant in explaining or supporting the application.
Applications must be signed by the relevant authority for the air carrier:
- Proprietorship (i.e., an individual): the proprietor.
- Partnership: each partner or an authorized partner.
- Corporation: an authorized officer or officers.
- Limited liability company: an authorized member.
A lawyer or a consultant, who prepares an application on behalf of an applicant, may only sign the application if they are the legal counsel acting, or consultant duly authorized to act, for the applicant.
2.2 Filing times
Complete applications should be filed in writing with the Agency as far in advance as possible prior to the planned start of the proposed air service, and at least 30 calendar days in advance.
Applicants are responsible for ensuring that their applications are complete and include the information set out in section 2.1. Failure to file a complete application may result in delays in the processing or the return of the application.
2.3 Information and material considered
The Agency decides on a case-by-case basis whether to authorize extra-bilateral air services.
The Agency's decision is based on the specific facts and submissions made by the applicant and, as required, information obtained from other sources. For example, the Agency may seek input from airport authorities, other air carriers, tourism officials, organizations in the federal government, and municipal and provincial governments.
The Agency will let the applicant know if further information is required and when it needs to be filed by. Failure to provide the information within this period may result in the application being denied.
If the Agency seeks information from other sources, it will provide those persons with:
- the identity of the applicant;
- a description of the authority sought; and
- the reasons invoked in support of the authority sought.
The Agency may give the applicant a copy or written summary of the information it receives and provide an opportunity to file comments within a set period.
2.4 Conditions and duration of authorities
In accordance with subsection 78(2) of the CTA, the Agency can only grant extra-bilateral authorities on a temporary basis. Therefore, the Agency will grant extra-bilateral authorities for not more than one year.
The Agency may also grant applications in whole or in part, and may make the authorities subject to conditions.
2.5 Timing for issuance of Agency decisions
The Agency is committed to making its decisions on extra-bilateral applications within 30 calendar days; however, the Agency may need more time due to the complexity of the issues involved or application processing issues. Therefore, applicants are encouraged to file their application as far in advance as possible from date they intend to start operating the new service.
2.6 Filing requirements after an extra-bilateral authority is granted
Tariff and Service Schedule filing requirements
A tariff is a schedule of fares, rates, charges and terms and conditions of carriage applicable to the provision of an air service and other incidental services. For international services it is filed with the Agency consistent with Part V, Division II of the Air Transportation Regulations (ATR).
Before commencing the operation of an international service, appropriate tariffs for that service must be filed with the Agency. As well, service schedules for scheduled international services must be filed with the Agency at least 10 days before the effective date of the schedule or amendment of a schedule. Service schedules are governed by Part VI of the ATR.
Questions about filing tariffs and service schedules may be directed to: DTR-TRD@otc-cta.gc.ca.
Statistical reporting requirements
New applicants for licences to operate air services should be aware of the type and volume of statistics that must be reported.
All carriers providing air services to or from Canada are required, under regulations pursuant to section 50 of the CTA, to report certain operational data to the Government of Canada. This is accomplished through Transport Canada's program for the Electronic Collection of Air Transportation Statistics (ECATS).To join ECATS, air carriers are required to contact the ECATS program office 30 days prior to beginning their operations to or from Canada.
Transport Canada – ECATS
Attn: Chief, Aviation Statistics
Economic Analysis (ACACE)
Place de Ville Tower C 25th Floor
Canada, K1A 0N5
Telephone: 613-990-3825 or 613-993-4541
Part 3 – General information
3.1 Procedural provisions for the processing of applications for extra-bilateral authorities
The Canadian Transportation Agency General Rules, SOR/2005-35 (General Rules) are not applicable to extra-bilateral application proceedings. Parties should refer to these current Guidelines, including Appendix A, which contain supplemental provisions applying to all proceedings of the Agency related to extra-bilateral applications.
All information filed with the Agency is normally placed on the public record. Appendix A explains how to file information under a claim for confidentiality, as well as what happens if there is a request for disclosure.
Under section 40 of the CTA, an applicant can petition the Governor in Council to vary or rescind an Agency decision. Under section 41 of the CTA, an applicant can apply to the Federal Court of Appeal within 30 days of the issuance of an Agency decision for leave to appeal the decision on a question of law or jurisdiction.
3.2 Withdrawal of an application
An applicant may withdraw an application at any time before an Agency determination is issued. If an application has been made jointly, both applicants must withdraw the application for it to be considered withdrawn.
3.3 Official languages
Written information can be submitted to the Agency in either English or French.
If information is submitted in another language, it must be accompanied by a translation in English or French and an affidavit attesting to the accuracy of the translation.
3.4 Agency decisions
Agency determinations with respect to air service applications are listed by year and by month in the "Rulings – Lists and Search" section. For ease of reference, the air decisions are numbered chronologically and are identified by the letter A (e.g. Decision No. 597-A-2007). Alternatively, an Agency Decision can be found by using the "Search" function, by entering key words related to the determination (e.g. name of carrier, and/or section of legislation).
3.5 Agency contact information
The application, including all supporting documentation, may be submitted to the Agency as follows:
Canadian Transportation Agency
Canadian Transportation Agency
15 Eddy Street
17th Floor, Mailroom
Appendix A - Supplemental provisions for the processing of extra-bilateral applications
1. Discretionary powers
- The Agency will exercise all discretion under the Guidelines and in these Supplemental provisions (Provisions) in a fair and expeditious manner.
- The Agency may, with or without notice:
- do whatever is necessary to deal with anything that is not covered by the Guidelines or these Provisions; or
- do anything prescribed in the Guidelines or in these Provisions on its own, even if the Guidelines or these Provisions state that a party must make a request to the Agency.
- In any extra-bilateral application proceeding, the Agency may dispense with or vary any of the provisions of the Guidelines or these Provisions. Failing to follow a requirement of the Guidelines or these Provisions does not, of itself, make an extra-bilateral application invalid, and the Agency may make all necessary amendments or grant other relief on any terms that it deems appropriate or dispense with compliance with any provision of the Guidelines or these Provisions at any time.
2. Filing of documents
- A document must be filed with the Agency by forwarding it in compliance with this section to the Agency's contact information as set out in the Guidelines.
- Documents must be filed or served by means of written communication or by electronic means.
- A document filed or served by electronic means must include the following information:
- the name, address, telephone number and other telecommunication contact information of the person filing or serving the document;
- the date and time of the transmission; and
- if the document is served or filed by fax, the total number of pages transmitted, including the cover page and the name and telephone number of a contact person who may be reached if problems occur in the transmission of the document.
- If a person files or serves a document by electronic means, the Agency may require the person to also file with the Agency the original document.
- The filing of any document occurs when the document is received by the Agency, except where the document is received by the Agency on a Saturday, a Sunday, a statutory holiday or on a business day after 17:00, Agency local time, in which case the document will be deemed to be received on the next business day.
- The Agency may require the whole or any part of a document filed with it to be verified by affidavit.
- If an affidavit is made on belief, the grounds on which the belief is based must be set out in the affidavit.
- Where the Agency has required that a document be verified by affidavit and the party does not comply with this section within the time established by the Agency for this, the Agency may strike out any document or part of it that has not been verified.
- A person filing a document or providing information to the Agency may make a claim for confidentiality in compliance with this section.
- No person may refuse to file a document on the basis of a claim for confidentiality alone.
- A person making a claim for confidentiality must file:
- one version of the document from which the confidential information has been deleted; and
- one version of the document that contains the confidential information marked "contains confidential information" on the top of each page and that identifies the portions that have been deleted from the version of the document referred to in paragraph (a).
- A person making a claim for confidentiality must indicate:
- the reasons for the claim, including, if any specific direct harm is asserted, the nature and extent of the harm that would likely result to the person making the claim for confidentiality if the document were disclosed; and
- whether the document from which the confidential information has been removed is not to be placed on the public record and, if so, must state the reasons for that request.
- If the Agency determines that a document in respect of which a claim for confidentiality has been made is not relevant to a proceeding, it will not form part of the record and the Agency will return the document.
- If the Agency determines that a document in respect of which a claim for confidentiality has been made is relevant to a proceeding and that the specific direct harm likely to result from its disclosure justifies a claim for confidentiality, the Agency may:
- order that the document not be placed on the public record, but that it be kept confidential;
- order that a version or a part of the document from which the confidential information has been removed be placed on the public record;
- order that the document or any part of it be provided to the applicant and that the document not be placed on the public record; and/or
- make any other order that it considers appropriate.
- The Agency has the discretion, on its own initiative, to decide whether any document filed with the Agency or any information the Agency has received or researched, or a version or part of such document, information or research in respect of any proceeding be placed on the public record.
5. Direction to produce
The Agency may:
- require that a person provides any additional information, particulars or documents that the Agency considers necessary;
- require that, subject to an Agency determination of confidentiality, any information, particulars or documents obtained under paragraph (a) be made available for inspection by, or be provided to, any other person involved in the proceeding; and
- stay the application until the information, particulars or documents are filed with the Agency and until the Agency determines that the information, particulars or documents so filed constitute a reasonable response to the Agency's direction.
6. Formulation of issues
The Agency may formulate the issues to be considered in any extra-bilateral application proceeding or require the applicant or other persons to propose the issues for its consideration if:
- the documents filed do not sufficiently raise or disclose the issues; or
- the formulation would assist the Agency in the proceeding.
7. Preliminary issue
- If the Agency determines that an issue should be decided before continuing an extra-bilateral application, or if the applicant requests it, the Agency may direct that the issue be decided in any manner that it considers appropriate.
- The Agency may, pending its decision on the issue, stay the whole or any part of the determination process.
Appendix B - Agency decisions pertaining to extra-bilateral applications
The following is a list of Agency extra-bilateral determinations issued under the CTA. These determinations can be found on the Agency's Web site under Rulings Lists and Search.
These cases set out in this summary illustrate principles and considerations taken into account when assessing international air service extra-bilateral applications. They are generally more recent and are by no means an exhaustive review of Agency Decisions relating to extra-bilateral applications. The decisions are included for information and illustration purposes only. It should be noted that the Agency is not bound by its previous decisions and makes its determinations on a case by case basis in consideration of the specific facts and evidence of each case. Accordingly, these decisions are not determinative of issues in current cases before the Agency.
Note: Agency decisions issued prior to May 2013 reflect the procedural rules set out in General Rules. The Guidelines and Appendix A set out the procedural rules that the Agency now applies to extra-bilateral licence applications. Accordingly, references to the application of prior procedural rules in the following decisions do not apply to new applications.
1. Extra-bilateral services are to be considered as exceptions
"Action by the Agency to permit an air service under subsection 78(2) of the CTA is therefore an exception that goes beyond the rights that countries have negotiated between themselves."
2. Canadian national policy and practices regarding scheduled international air services
"It is noted that section 5 of the CTA indicates that the policy objectives are best achieved under conditions ensuring that there is, inter alia, due regard to national policy. In its discretionary decisions under subsection 78(2) of the CTA, the Agency has been guided by Canada's national policy and practices regarding scheduled international air services."
3. Impact on Canada's international air relations and negotiations
"The Agency is mindful of the continued interest of Canadian carriers to expand the rights currently available under the Agreement, the concern that the achievement of such expansion has not been possible in the past and the uncertain future prospects of satisfying Canadian interests. Therefore, the Agency considers that this matter is best addressed through intergovernmental consultations. The Agency finds it inappropriate at this time to approve AeroSvit's request for extra-bilateral authority."
"With respect to Air Canada's suggestion to defer Corsair's request to the upcoming negotiations between Canada and the European Commission, the Agency finds it premature at this stage to conclude that an agreement between Canada and the European Commission would be reached in time for the next summer season. Moreover, it is unlikely that the granting of an extra-bilateral authority to Corsair for its proposed service would have a negative impact on the negotiations between Canada and the European Commission."
4. Demand for the proposed extra-bilateral service which is not otherwise met
"Although Finnair's proposed service could possibly stimulate some traffic that might not otherwise travel to Canada, there is no shortage of air services offered by Air Canada alone to and from Sweden. In its reply to the interveners, Finnair pointed out the numerous services offered by Air Canada during the same period of time as the proposed flights on the Toronto-Copenhagen-Stockholm route. The Agency is of the view that although no non-stop flights are offered between Canada and Sweden, there is a good selection of air travel options available in the market. Given this selection, it is unlikely that Swedes wishing to visit Canada would be discouraged from doing so by a lack of available air services."
5. Stakeholder interests: consideration of, and the balancing of, the interests of Canadian air carriers, the travelling public, shippers, airports and regional and community economic interests
"[...] air transport agreements are negotiated on a balance of benefits to both parties and that extra-bilateral authorities have the potential to disrupt that balance. As Air Canada pointed out, the Dutch carriers already derive significant benefits under the existing Agreement and the provision of additional opportunities may have an adverse impact on Canadian carriers' ability to utilize their rights under the Agreement."
"The Agency notes that the proposed service by Corsair is directly related to the special 400th anniversary celebrations and is, therefore, incremental traffic that otherwise would not be travelling between France and Canada. Therefore, the Agency is not convinced that the proposed service at Moncton would divert existing traffic from Air Canada's regular services in the Atlantic region."
"While the Agency recognizes that there may be benefits stemming from the exercise of fifth freedom rights on an extra flight between Vancouver and Las Vegas, the travelling public appears to have a good selection of services in the Vancouver-Las Vegas market, as not only does Philippine Airlines have the right to operate four (4) flights per week on this route, but there are also numerous other services being offered on a daily basis by Canadian and American air carriers."
"In its consideration of requests for extra-bilateral authority, the Agency must balance the interests of consumers, the travelling public, the shippers and the air carriers, in light of Canadian government policies and bilateral relations."
"The Agency cannot ignore Canada's international air relations, and has therefore taken this into account together with the interests of the Canadian travelling public, air carriers and airports."
"In reaching a decision on this type of application, the Agency must balance the economic development interests of the region and the interests of Canadian carriers."
"In its review of Corsair's application, the Agency has considered the economic interests of the communities to be served. In this respect, the Agency recognizes the potential to which the interveners refer, that the proposed service could generate additional revenues for the tourism industry in New Brunswick, the Moncton community and Moncton airport."
6. Reciprocity: The treatment by the foreign country of similar applications by Canadian air carriers
"The Agency is of the opinion that Air Transat and Air Canada have not provided evidence of a lack of reciprocity of treatment by the French aeronautical authority in their consideration of similar applications by Canadian air carriers. In fact, the Agency notes that the French aeronautical authority has, in recent years, authorized extra-bilateral applications by Canadian carriers for additional points not covered under the Canada/France agreement."
"[...] the Agency is of the opinion that approval by the French aeronautical authorities on an extra-bilateral basis of Air Transat's application in view of operating 12 regular flights to Toulouse from July 1 to September 17, 2006, would provide reciprocity in support of the approval of Corsair's application."