Questions and Answers on Air Services Price Advertising: Proposed Amendments to the Air Transportation Regulations and the Designated Provisions Regulations

On December 16, 2011, the Government of Canada announced that the Canadian Transportation Agency would proceed with developing regulations requiring air carriers to include all taxes, fees and charges in their advertised prices.

To inform the development of the proposed amendments, which are of interest to both consumers and industry, the Agency undertook a broad consultation process in January and February 2012. The aim of the consultation was to obtain input from stakeholders, including air carriers, travel and advertising industry experts, public interest advocacy groups, representatives of provincial and foreign governments, as well as Canadian citizens before drafting the amendments.

What We Heard During the Consultation

The following four points represent the most common topics noted during the consultation process.

Total, all-inclusive price

Participants in the consultation process, including individual consumers and consumer advocacy groups, indicated that the price shown in the advertisement should include all costs necessary to complete the travel. Participants wanted the advertised price to present the entire cost of travelling from point A to point B.

The air travel industry, including representation from both air carriers and travel agents, was also in agreement with the concept of the total price, being the all-in total price, inclusive of all taxes, fees and charges.

Consistent representation of advertised price

Participants indicated that the proposed regulation should apply to all forms of advertising and to any person or entity that advertises air fares, including travel agents and their agencies, loyalty programs and vacation package providers.

The air travel industry was also in agreement with the concept that regulation of air services price advertising should apply to all who advertise the price of air services in order to provide for a level playing field.

Consistent regulatory regime

Participants indicated that the Government of Canada should base regulation of air services price advertising on the approaches currently in place in the United States and the European Union.  They were of the opinion that by using a comparable regulatory approach, the consumer would know what to expect on nearly every airline and flight in the world. Compatibility with other international practices would also minimize confusion with respect to ticket pricing and fare rules when comparing fares.

The air travel industry was also in agreement with the concept of harmonizing regulation of air services price advertising with those of our major markets and competitors in order to reduce the need to develop and maintain different compliance mechanisms in an integrated world marketplace.

Details of included costs and optional services

Participants expressed a strong interest in an itemization of the charges which make up the total price, provided either in the advertisement or easily accessible at a specified location, i.e. posted online. Most agreed that listing of the basic price along with other costs (fuel, airport improvement, taxes, security, etc.) and the total price would be optimal. Respondents also indicated they would welcome such an approach since showing a breakdown would alleviate confusion associated with hidden costs and make it easier to calculate the total cost of the air service.

The air carriers felt that there were business or marketing reasons to show the detail of costs collected on behalf of others with respect to the provision of the air service.  Other members of the air travel industry, perhaps due to the nature of their business models, were less concerned with the need to detail or break out the costs—except for optional services or upgrades. However, there was general acceptance of the proposal to provide access to a breakdown of the taxes, fees and charges collected on behalf of a third party.  

Input received through the consultation process informed the drafting of the proposed amendments, which have now been pre-published in Canada Gazette Part I.

About the Regulatory Amendment Process

Q. Why is the Canadian Transportation Agency drafting these regulations?

In December 2011, the Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities, requested that the Canadian Transportation Agency develop regulations for air services price advertising.  

The Canada Transportation Act, section 86.1 directs the Agency to create regulations respecting the advertising of the price of air services. Based on the January 2012 enactment of section 86.1, the Agency drafted amendments to the Air Transportation Regulations and the Designated Provisions Regulations pertaining to the advertisement of the price of air services. 

The Canadian Transportation Agency (the Agency) is an independent quasi-judicial tribunal, which administers and enforces transportation-related legislation in Canada. The Agency also acts as an economic regulator to carriers under federal jurisdiction. It works collaboratively with many partners in order to help sustain a transportation system that works for all Canadians. In its role as an economic regulator and aeronautical authority, the Agency administers regulations which govern the Canadian air transportation marketplace.

Q. With whom did the Agency consult?  Who is participating in these consultations?

Prior to drafting the proposed amendments, the Agency consulted with industry stakeholders, consumer groups and all interested individuals through a number of channels. The Agency hosted a Web 2-0 based platform, invited written submissions, met with key stakeholders from the air industry and consumer groups, and held discussions with other governments, both within Canada and abroad. All feedback was reviewed and has informed the development of the proposed amendments pertaining to air services price advertising.

Pre-publication of the proposed amendments in Part I of the Canada Gazette, the official newspaper of the Government of Canada published since 1841, gives interested groups and individuals, as well as Canadians in general, a final opportunity to review and comment on the proposed amendments at the last stages of the regulation-making process, before they are enacted and published in Part II of the Canada Gazette.

Q. What happens next in this process?

Canadians and other interested parties have 75 days from the pre-publishing date to review the proposed amendments and to provide their comments and feedback.  

After comments from interested parties are received and evaluated (which may result in changes to the proposed amendments), it is anticipated that the amendments will be published in the Canada Gazette, Part II this winter, at which time they will enter into force.

About the Proposed Amendments

Q. What are the objectives of the proposed amendments?

The proposed amendments will support two key objectives:

  1. Enable consumers to readily determine the total price of an advertised air service.

    The display of the total price in air service price advertising would reduce confusion and frustration as to the total price and increase transparency.  It would also allow consumers to more readily conduct price comparisons and make informed choices.

  2. Promote fair competition between all advertisers in the air travel industry

    Regulation of all-inclusive air price advertising would promote competition by achieving a level playing field for all persons who advertise the price of air services within, or originating in Canada.

Q. As a result of the proposed amendments, will air travellers be able to see the full price clearly indicated in pricing advertisements?

The proposed amendments would require the price represented in any advertisement:

  • To be the total price, inclusive of all taxes, fees and charges which a customer must pay in order to obtain and complete the air service. 
  • To include a minimum level of description of the air service offered, including:
    • origin, destination;
    • whether the service is one way or round trip; and
    • limitations with respect to booking or travel availability periods.
  • To provide the customer with access to a breakdown of the taxes, fees and charges which are paid to a third party (i.e. GST/HST, departure taxes, airport fees, security fees). 


The proposed amendments will also require that a consumer have access to a listing of any optional services (i.e. checked baggage, preferred seat selection and meals) offered by the service provider for a fee or charge, and that the price of each service be displayed using an all-inclusive price format that includes third party charges.

Q. What is considered to be an advertisement?

As per the Canada Transportation Act, advertising covers prices for air services in all forms of media, including on the Internet.

In acknowledgement of the technical differences of the various media, some flexibility would be provided in the proposed regulatory text to accommodate the limitations of certain media by allowing the required breakdown of information in the advertisement to be provided at another location. For example, in the case of announcement of the total all-inclusive price of an air service via a brief radio advertisement, the advertiser would be in compliance with the proposed regulatory text if the advertisement included the mention of a location where a breakdown of necessary information (i.e. taxes, fees and charges) could be obtained (e.g. website or toll free telephone number).

Q. What must appear in an advertisement for air services?

The proposed amendments would require the price represented in any advertisement:

  • To be the total price, inclusive of all taxes, fees and charges which a customer must pay in order to obtain and complete the air service. 
  • To include a minimum level of description of the air service offered, including:
    • origin, destination;
    • whether the service is one way or round trip; and
    • limitations with respect to booking or travel availability periods.
  • To provide the customer with access to a breakdown of the taxes, fees and charges which are paid to a third party (i.e. GST/HST, departure taxes, airport fees, security fees). 


The proposed amendments will also require that a consumer have access to a listing of any optional services (i.e. checked baggage, preferred seat selection and meals) offered by the service provider for a fee or charge, and that the price of each service be displayed using an all-inclusive price format.

Q. Will the amendments apply to foreign airlines operating flights to and from Canada?

Yes. The amendments will apply to any person advertising prices for air services from and within Canada.

Q. Do the proposed amendments cover tour operators and travel agents?

The proposed amendments will apply to any person who advertises the price of air services within, or originating in Canada, regardless of media. Given the wide breadth of advertising of air fares in the air industry, the proposed amendments would not specify categories of stakeholders subject to the regulation (i.e. air carrier or travel agent), but rather focus more broadly on any person who engages in the activity of advertising the price of an air service. Any mandatory fees that tour operators or travel agents charge for air travel must be included in the advertised price.

Q. Do the proposed amendments exclude air cargo services, business to business services, package travel services, or travel reward programs?

The proposed amendments would not apply to air cargo services nor to services which are only offered "business to business" and not to the general public. In addition, the proposed amendments would not apply to package travel services, which in addition to an air service include other features such as accommodation, cruise, tours or car rental, nor other activities outside the regulatory scope pertaining to business practices such as travel reward programs.

In keeping with the scope of the Canada Transportation Act (Act), air services which are excluded from the application of the Act would also be excluded from the proposed amendments. Examples of such excluded activities are aerial surveying, aerial inspection and aerial fire-fighting.  A complete list of excluded air services is provided in section 56 of the Act and section 3 of the Air Transportation Regulations.

In order to retain the regulatory focus on the air industry, the proposed amendments would not apply to any person whose sole involvement in the advertising of an air service is the provision of the advertising medium, for example, newspaper publishers or radio stations. 

Q. How is itemization of pricing addressed in the proposed amendments?

The proposed amendments will require the price represented in any advertisement:

  • To be the total price, inclusive of all taxes, fees and charges which a customer must pay in order to obtain and complete the air service. 
  • To include a minimum level of description of the air service offered, including:
    • origin, destination;
    • whether the service is one way or round trip; and
    • limitations with respect to booking or travel availability periods.
  • To provide the customer with access to a breakdown of the taxes, fees and charges which are paid to a third party (i.e. GST/HST, departure taxes, airport fees, security fees). 


The proposed amendments will also require that a consumer have access to a listing of any optional services (i.e. checked baggage, preferred seat selection and meals) offered by the service provider for a fee or charge, and that the price of each service be displayed using an all-inclusive price format.

Q. How are baggage fees addressed in the proposed amendments?

The decision to charge baggage fees is considered a business practice and as such is outside the regulatory scope of these amendments. Furthermore, passengers have some discretion on the extent to which they will use these services. Should the carrier decide to charge any optional fees for services such as checked baggage, preferred seat selection and meals, a full disclosure of such services and a total price are required to be made available to the customer before the customer makes the decision to purchase the service.

Q. Are there any similar regulations in place in Europe or in the United States?

Other jurisdictions have already implemented similar legislative requirements. The European Parliament has had legislation in place since 2008. In the past, the United States imposed some requirements, and as of January 26, 2012, it has further strengthened regulations requiring all-in airfare advertising.

Q. Are the proposed amendments in harmony with similar rules in the United States?

While the Agency is aware of the regulations currently in place in the United States, in line with Open Government, the Agency consulted with industry, consumer groups and individual Canadians, and held discussions with other governments both within Canada and abroad before drafting the proposed regulations. The proposed regulations would ensure an appropriate level of harmonization with air price advertising formats found in the American and European markets.

Q. Why has only air services been selected to be regulated and not other types of service price advertising?

In December 2011, the Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities, requested that the Canadian Transportation Agency develop regulations for air services price advertising.  

The Canada Transportation Act, section 86.1 directs the Agency to create regulations respecting the advertising of the price of air services. Based on the January 2012 enactment of section 86.1, the Agency drafted amendments to the Air Transportation Regulations and the Designated Provisions Regulations pertaining to the advertisement of the price of air services. 

Q. When will these amendments come into effect and how will the Agency enforce them?

It is anticipated that the amendments will be published in the Canada Gazette, Part II this winter, at which time they will enter into force. 

The Agency will begin monitoring compliance with the proposed amendments as soon as they are registered and will enforce the regulations using its authority under the Canada Transportation Act (the Act) through monitoring and enforcement mechanisms. 

The Agency will work with advertisers of the price of air services to provide educational and other guidance materials to assist in the transition to the new regime.

In order to support enforcement, the Canadian Transportation Agency Designated Provisions Regulations will also be amended to set out the provisions of the Act and the Air Transportation Regulations which, if contravened, administrative monetary penalties may apply. The Agency may impose fines of up to $5,000 for an individual and $25,000 for a corporation where either has been found guilty of an offense as a result of contravening these regulations. As with all Agency enforcement actions, the determination of what corrective measures and/or penalties are required in the case of contravention, are based on a number of different factors including the frequency and nature of the offence.

Q. How long will it take for the regulations to be implemented? 

Proposed regulations amending the Air Transportation Regulations and the Canadian Transportation Agency Designated Provisions Regulations are being published in the Canada Gazette, Part I, on June 30, 2012, with a 75-day review period provided for final public comments and feedback. During this consultation process, the Agency will collect feedback from industry stakeholders and the public to ensure the Agency considers Canadians' and interested parties' comments and recommendations.

After comments are received and evaluated, the Agency may amend the proposed regulations and anticipates publishing them in the Canada Gazette, Part II this winter, at which time they will enter into force. 

Q. Will there be any cost for the air travel industry to implement the regulations?

In light of the progress to date and continued evolution of the air industry towards some form of a total all-inclusive price format, the Agency has determined that any costs of compliance with the proposed amendments would be minor, non-recurring and would not have a disproportionate effect on small businesses in Canada.

Given the frequency with which the air travel industry makes pricing changes in advertisements and produces new advertisements, any costs associated with changes required by the proposed amendments would be minor and could be absorbed as part of the regular business cycle. It is anticipated that some advertisers that offer online booking of air services may need to make minor changes to back-office systems to align with the proposed amendments.

The new regulatory requirements would not impose any additional administrative burden on businesses in relation to the reporting of information or the completion of forms or schedules by industry for submission to the Agency.

How to Provide Comments

Q. How do I participate?

Proposed amendments to the Air Transportation Regulations and the Canadian Transportation Agency Designated Provisions Regulations are pre-published in the Canada Gazette, Part I. Canadians and interested parties now have until September 13, 2012, to review and comment on the proposed amendments.

During this consultation process, the Agency will collect feedback from industry stakeholders and the public and consider comments of Canadians and interested parties.

After comments are received and evaluated, the Agency may amend the proposed regulations and anticipates publishing them in the Canada Gazette, Part II this winter, at which time they will enter into force.

Q. Where can I get more information?

To review the proposed amendments and to find out how to comment, visit Part I of the Canada Gazette.

For more information please refer to the Agency's consultation page on the proposed amendments for air services price advertising

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