Garneau Directs CTA To Develop New Refund Rules for Large-Scale Flight Cancellations

Mark Stachiew, Open Jaw

In a letter to the Canadian Transportation Agency (CTA) on DEC18, Federal Minister of Transport Marc Garneau directed to develop a new regulation on the issue of refunds to passengers that would apply to future flights that are cancelled for reasons outside of an air carrier’s control, such as a pandemic.

"Air travel is essential to Canada's economic growth and prosperity, and when Canadians buy an airline ticket, they expect airlines to meet their obligations,” said Garneau in a press release.

He added that the ongoing COVID-19 pandemic has highlighted a gap in the air passenger protection framework, which did not foresee the potential for large-scale and lengthy flight cancellations and groundings of air carrier fleets not only in Canada but globally. In the event of a future situation that causes similar large-scale flight cancellations, Garndeau said that this gap needs to be closed so that travellers are treated fairly.

"Today I issued a Ministerial Direction to provide the Canadian Transportation Agency with the authority to develop a new regulation on the issue of refunds to passengers,” said Garneau. The new rules would apply to cancelled flights where it would not be possible for the carrier to complete the passenger's itinerary within a reasonable timeframe.

Garneau asked that the updated regulation be made in a manner that is fair and reasonable to passengers, and to the extent possible, not impose an undue financial burden on air carriers that could lead to their insolvency. 

“As I announced on November 8, 2020, the Government of Canada is developing a package of assistance to Canadian airlines, airports and the aerospace sector that will include strict conditions to protect Canadians and the public interest, including issuing refunds for flights cancelled as a result of the COVID-19 pandemic. The new regulation will ensure that a similar situation doesn't occur again in the future," said Garneau.

In response to the directive, the CTA launched Monday a consultation seeking input from members of the public, consumer organizations, airlines and experts on a proposed regulation establishing additional refund obligations for airlines.

The CTA can only develop regulations if given the appropriate authority by Parliament in legislation or by the Minister of Transport through a formal direction.

After reviewing all feedback from the public, consumer organizations, airlines and experts, the CTA will develop the regulation, with the goal of having them in place by summer 2021.

"The CTA will move quickly to consult Canadians, consumer groups, and industry on the specifics of the new regulatory provisions, and work to bring them into force by the summer. Until these requirements are in effect, airlines are encouraged to adopt policies that ensure no passenger is left out of pocket for the value of a cancelled flight, irrespective of the fare purchased or the reason for the cancellation," said Scott Streiner, Chair and CEO of the CTA.

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