Earlier this month, a Supreme Court of Canada ruling delivered a clear message to airlines: Ottawa’s air passenger protection rules are here to stay.
The top court was unanimous in dismissing an appeal by domestic and global carriers that sought to strike down aspects of the Air Passenger Protection Regulations (APPR), which set out travellers’ rights in case of flight disruptions.
The decision was a big win for consumers, but Canadians are still stuck with a flawed set of rules for claiming refunds or compensation from carriers.
It’s exceedingly complex for inconvenienced passengers to get money from airlines. And nearly five years after the APPR took effect in 2019, there are still big loopholes that airlines can use to delay or avoid paying out compensation.
Last year, the federal government finally acknowledged the rules need an overhaul. But regulators are dragging their feet in drafting the changes and displaying a concerning tendency to repeat past mistakes.
When Ottawa first set out to design an enhanced system to protect the rights of consumers, it had an obvious blueprint to follow. The European Union came up with its own rules in 2004, which are now widely considered the gold standard among consumer advocates.
Instead, the federal government decided to design its own incredibly intricate wheel. The result was a byzantine set of rules that made it too complex and lengthy to assess passenger complaints, and far too easy for airlines to avoid providing compensation.
The rules currently in force distinguish among delays, cancellations and denials of boarding. There are also three categories for what caused the disruption: situations within a carrier’s control, within its control but required for safety, and outside its control. Large and small airlines have different obligations.
That works out to 18 different scenarios that determine what a passenger is entitled to, as pointed out in a joint submission to regulators by consumer groups Air Passenger Rights and the Public Interest Advocacy Centre, and by University of Ottawa professor Marina Pavlovic.
But the main headache is determining what actually caused a disruption. Carriers have a clear incentive to invoke safety concerns or circumstances beyond their control. Consumers are ill-equipped to fact-check those claims.
To its credit, Ottawa has already introduced some needed fixes, including streamlining complaints-processing at the Canadian Transportation Agency (CTA), the industry regulator that deals with air passenger disputes. It also raised penalties for rule-breaking and put the burden of proof for what caused a disruption on the shoulders of airlines.
Another promising idea is to make airlines pay a percentage of the cost of processing eligible complaints through the CTA. The regulator recently proposed $790 per claim, or 60 per cent. That should be an incentive for airlines to stop dismissing legitimate claims before passengers escalate their complaints to the CTA.
Lawmakers also, finally, took a page from the EU rulebook, with changes that will eliminate the three flight disruption categories and mandate compensation for inconvenience except in extraordinary circumstances.
The CTA has outlined broad concepts for a revamp but has yet to turn those into detailed regulations. But its proposals are still too complicated and too lenient. An example of lingering complexity: there are still 12 possible scenarios to assess passengers’ rights.
As for leniency, there is a proposed list of exceptional situations that would let carriers off the hook, including strikes and an overly broad definition of mechanical defects that contrasts with narrower carve-outs in the EU. And in a country where harsh winters are the norm, regulators must clarify what truly constitutes unmanageable bad weather.
Perhaps Ottawa is worried that EU-style rules will prove too costly for domestic airlines, which serve a vast, sparsely populated country. If so, the government should focus on working with airports to lower Canada’s stratospheric airport fees, which drive up costs for both carriers and passengers.
Regardless, more than year after a first round of consultations with airlines, experts and the public, the CTA has yet to produce a first draft of the new regulations. Canadians have waited long enough for a working air passenger rights system – a delay for which they won’t get any compensation.