Order No. 2019-A-95

May 23, 2019

APPLICATION by Breton Air Inc. (applicant) for an exemption from the application of section 59 of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA).

Case number: 
19-00611

The applicant has applied to the Canadian Transportation Agency (Agency) for an exemption pursuant to section 80 of the CTA to permit it to sell, cause to be sold or publicly offer for sale in Canada a domestic service, in the absence of a licence.

Section 59 of the CTA states that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, if required under Part II of the CTA, a person holds a licence issued under that Part in respect of that service and that licence is not suspended.

The applicant has applied for a licence to operate a domestic service, small aircraft. However, as the licence has not yet been issued, an exemption from the application of section 59 of the CTA has been requested.

The applicant indicates that it intends to commence commercial activities in Canada as early as Spring 2019.

The applicant states that the exemption from the application of section 59 of the CTA is sought to ensure that the resorts' clients can confirm bookings and plan their travel accordingly.

ANALYSIS

The Agency deals with applications for exemptions from the application of section 59 of the CTA on a case-by-case basis. Section 59 is a consumer protection measure intended to prevent situations in which consumers in Canada pay for a service to an entity that does not hold an Agency licence and are left out of pocket or experience any manner of inconvenience or hardship that may result if that entity does not commence operations on schedule.

Accordingly, the Agency, prior to granting an exemption from the application of section 59 of the CTA, considers whether the applicant is taking all the necessary steps to meet all licence issuance requirements and whether the applicant has demonstrated a high probability of obtaining the required licence prior to the proposed date for commencing operations.

In particular, a Canadian applicant for a domestic licence must establish that it:

  1. is Canadian;
  2. has the prescribed liability insurance coverage in respect of the service to be provided under the licence; and
  3. holds a Canadian aviation document (CAD) issued by Transport Canada.

In this case:

  1. The Agency is satisfied that the applicant is Canadian.
  2. The Agency is also satisfied that the applicant has the prescribed liability insurance coverage in respect of the proposed service.
  3. The Agency has considered the steps that the applicant has taken to obtain a CAD from Transport Canada, and is satisfied that the CAD will likely be issued before the summer of 2019.

In the present circumstances, considering the intent of section 59 of the CTA and the fact that the applicant is taking all the necessary steps to meet all licensing issuance requirements, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts the applicant from the application of section 59 of the CTA, effective from the date of this Order until such time as a decision is made to either issue or not issue a licence, permitting it to sell, cause to be sold or publicly offer for sale in Canada a domestic service, without holding the required licence, subject to the following conditions:

  1. All advertising in any media, whether written, electronic or telecommunications, shall include a statement that the air service is subject to the Agency's approval, and all prospective passengers shall be informed, before a reservation is made or a ticket is issued, that the air service is subject to the Agency's approval;
  2. Should the licence not be issued or not be issued by the time an air service sold to a passenger is to be used, the applicant shall arrange to provide alte rnative air transportation by an appropriately licensed air carrier, at no additional cost, for all passengers who have made reservations with the applicant. If such arrangements are not possible or acceptable to the passenger, the applicant shall arrange to provide a full refund of all monies paid by the passenger. The applicant will also indicate on every contract or ticket who will be operating the service.

For clarification, this exemption from the application of section 59 of the CTA does not relieve the applicant from the requirement to hold a licence in respect of the service to be provided, and, accordingly, no flights shall be operated until the appropriate licence authority has been granted. Nor does this exemption relieve the applicant from the requirement to apply its published tariffs, on file with the Agency and in effect, to sales of transportation for each point.

Member(s)

Heather Smith
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