Evidence of meeting #70 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was passengers.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Helena Borges  Associate Deputy Minister, Department of Transport
Melissa Fisher  Associate Deputy Commissioner, Mergers Directorate, Competition Bureau
Ryan Greer  Director, Transportation and Infrastructure Policy, Canadian Chamber of Commerce
Mark Schaan  Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
Anthony Durocher  Deputy Commissioner, Monopolistic Practices Directorate, Competition Bureau
Douglas Lavin  Vice-President, Members and External Relations, North America, International Air Transport Association
Glenn Priestley  Executive Director, Northern Air Transport Association
Allistair Elliott  International Representative, Canada, Canadian Federation of Musicians
John McKenna  President and Chief Executive Officer, Air Transport Association of Canada
Francine Schutzman  President, Local 180, Musicians Association of Ottawa-Gatineau, Canadian Federation of Musicians
Bernard Bussières  Vice President, Legal Affairs and Corporate Secretary, Transat A.T. Inc., Air Transat
Neil Parry  Vice-President, Service Delivery, Canadian Air Transport Security Authority
Jeff Walker  Chief Strategy Officer, National Office, Canadian Automobile Association
Massimo Bergamini  President and Chief Executive Officer, National Airlines Council of Canada
George Petsikas  Senior Director, Government and Industry Affairs, Transat A.T. Inc., Air Transat
Jacob Charbonneau  President and Chief Executive Officer, Flight Claim Canada Inc.
Daniel-Robert Gooch  President, Canadian Airports Council
Gábor Lukács  Founder and Coordinator, Air Passenger Rights
Meriem Amir  Legal Advisor, Flight Claim Canada

5:20 p.m.

Senior Director, Government and Industry Affairs, Transat A.T. Inc., Air Transat

George Petsikas

Not really. If I may, I would just add on to what Mr. Badawey was saying before.

In fact, I agree with you. For years—again, before Massimo's time, before he joined us—as head of the NACC I begged government for a strategic top-down integrated plan to help our strategic industry help this country succeed. That means a holistic, as Massimo said, approach. The minister said today it's a first step. Bill C-49 is not the basis for that holistic approach, and that's our problem, because there are a lot of issues that are on the table, especially infrastructure financing.

I'd just like to address the point made before when we talked about whether we are asking for a subsidy by the taxpayer to the industry to help us pay for those airports. I would argue that over the last 20 years there has been subsidization absolutely by the user towards the taxpayer. We are talking about airports that were transferred in the early nineties that had a nominal book value of about $1.5 billion. Today, we are talking about well over $7 billion paid in airport rents up until now into the federal treasury. It's not a bad return. Secondly, airports have had $18 billion in capital investments put into the ground, and that's been jobs, construction workers, downstream economic benefits, and billions and billions in terms of economic activity that's enabled by this infrastructure. It's all been paid for by the consumer, not the taxpayer, and this is an almost unique model in the industrialized world.

All we're saying is that it's time to have a look at that again, because we don't think it's helping us achieve what we can achieve or we could achieve, which is even greater things in terms of support in Canada in terms of economic growth, connectivity, trade and commerce, and competing with those global tigers out there who actually do get it when it comes to their aviation sectors. That's all we're saying, so let's go. I'm with you.

5:25 p.m.

Liberal

Vance Badawey Liberal Niagara Centre, ON

May I say something just quickly?

5:25 p.m.

Liberal

The Chair Liberal Judy Sgro

No, I have Mr. Hardie next, and that will be the end of this panel. We have worn them out, I think, with all the enthusiasm and questions on this side as well.

Mr. Hardie.

5:25 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

I do take Mr. Petsikas' point because there are more than just dollars and cents involved. There are the ripple effects—the social, environmental, and a lot of beneficial effects—in any sector of business, and that is a key one.

I have a spare question for Mr. Parry. When we talk about development at airports, they've made the investments, as Mr. Petsikas has said, in many cases. The Vancouver airport is a wonderful facility. The one area where I don't see much additional capital investment is in the capacity of CATSA to do its job. Are you're involved in planning with the airports to make sure that as they look at volume increases you will actually have the floor space to do your job?

More importantly, what about the future of your business? Where is technology leading us? Are you going to have some significant capital commitments or requirements going forward to use technology and smarter operations to meet the performance standards that people expect?

5:25 p.m.

Vice-President, Service Delivery, Canadian Air Transport Security Authority

Neil Parry

With regard to the first part of your question, in terms of capacity planning with the airports, you've hit on a really key driver behind our screening checkpoint operations. CATSA operates in the airport's space. It's not our space. It is the airport's space. It provides the space, and we operate in it.

In some cases, I would argue that we have adequate space. In other cases, due to significant growth in the industry, which you've heard about today as well, we're butting up against the wall. We do work very closely with the airports. We recognize the challenges for the airports. They have to make capital investment decisions, and that's not free. Ultimately, someone has to pay for that. It's an ongoing dialogue with airports.

In terms of effecting an improvement in what are defined as performance standards, we're talking about service levels in terms of wait times. In some cases, we're kind of maxed out within the checkpoint space, so we're having those dialogues. In other cases, there's more space to grow.

That brings me to the second part of your question. The answer is that it requires capital. In terms of the long term, right now we're engaged in dialogue and consultation with Transport Canada officials to look at a forward-looking, long-term plan for our organization in terms of capital investment.

5:25 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

While you're speaking of dialogue, I have just one last point. The minister is committed to the kind of dialogue that everyone's been talking about here. This is an iterative step. The dialogue will be going forward, even in the creation of regulations that will backstop some of the things that are positioned in Bill C-49, and also as we look forward and move to a system that works even better than one that we all have to admit is working very well.

5:25 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you all very much. I know sometimes some of the things were a little tough, but this is a forum. We all need to learn, and we're all working as parliamentarians to do the very best we can on behalf of everyone.

Thank you all very much for coming.

Everyone can get themselves something to eat, and I'll get the next panel up as soon as possible so we can continue.

5:45 p.m.

Liberal

The Chair Liberal Judy Sgro

We are resuming our study on Bill C-49.

Thank you to our witnesses who are coming late in the afternoon of our fourth day of these hearings.

From Flight Claim Canada, we have Mr. Charbonneau, president and chief executive officer.

Please introduce yourself and take your 10 minutes for your presentation.

5:45 p.m.

Jacob Charbonneau President and Chief Executive Officer, Flight Claim Canada Inc.

Thank you, Madam Chair.

My name is Jacob Charbonneau. I am the co-founder and the President and Chief Executive Officer of Flight Claim Canada Inc. I am accompanied today by my colleague Meriem Amir.

Flight Claim Canada Inc. is a multidisciplinary firm, duly registered with the Quebec Bar and made up of a number of professionals governed by Quebec's Professional Code. Through our lawyers, we provide legal services pertaining to air transportation.

The company's primary mission is to advocate for the rights of air passengers by informing consumers of their rights and by helping affected travellers to obtain compensation easily, quickly, and free of risk. We offer our clients a comprehensive service in order to provide them with compensation for delays, cancellations or denials of boarding.

We are proud and honoured to have been invited to these public consultations. So we have submitted a brief, written jointly by Jean-Denis Pelletier, a former Transport Canada commissioner, and myself. In the brief, we highlight the current situation in the airline sector.

In recent months, there have been many discussions, criticisms and complaints regarding air transportation. A number of events have made the headlines, notably cases of overbooking, flight cancellations and delays, failures in passenger care, long waits on the tarmac, and questionable business practices. There is a lack of information about passengers' rights, and pressure from airlines to withdraw advertising intended to inform passengers of their rights. All this is occurring at a time when airlines are raking in record profits.

We therefore feel that that short-term profits and share prices may count for more than client services. Passengers are treated like cargo. The lack of regulations leaves airlines with broad discretion in how they treat their clients. Air carriers suffer few to no consequences from their lack of service to passengers, which leads to general resentment and a loss of passenger confidence in the system.

For this brief, we first of all undertook a survey of our clients who had experienced problems with flights in recent years. We had more than 333 respondents. The following are the highlights from that survey. You can find them in appendix 6 of our brief.

First, we were surprised to learn that, before they heard of us, more than 35% of our clients were unaware that they might be entitled to compensation. Almost all passengers, more than 99% of them, feel that Canada should adopt regulations guaranteeing financial compensation for passengers whose flight is delayed or cancelled.

We also analyzed flight delays and cancellations in Canada, as well as trends in recent years. The following are the highlights from that study.

The number of delayed flights is increasing. The percentage of flights affected by delays of one form or another, in all time slots, went from 12% in 2014 to 15% in 2016. Canadian flight cancellations have also increased. They went from 1.2% in 2014 to 1.4% in 2016. That is a 16% increase. By comparison, with flights subject to European regulations, the rate is 0.4%, or four times less.

We clearly need a law and regulations that will set a minimum level of quality of passenger protection, thus bringing a significant citizen dimension to the liberalization of the aviation market. That means standardized Canadian protection for all users, incorporated into a charter of passenger rights.

Passengers are left to their own devices and do not know who they can turn to for help. They are grateful that there is now a company that can help them navigate their way through the system and obtain compensation. Some of our clients had already attempted the direct approach with the airline and were turned down.

While the Canadian Transportation Agency does have a mediation role, many of our clients prefer to use our services, thereby saving time and benefiting from our expertise to obtain a turnkey solution.

The new law and regulations resulting from Bill C-49 must include clear and unequivocal provisions that will reduce differences in interpretation resulting from the existence of gray areas. This new law will make it easier for passengers to assert their individual rights, and will help to restore traveller confidence.

We have therefore focused on current trends and best international practices in order to provide recommendations that will place Canada in the forefront of traveller protection.

The proposed amendments also take into account the financial impact on the airline industry and therefore anticipate measures to limit costs.

Here is a summary of the 15 proposals in our brief.

We propose: to declare Bill C-49 to be complementary to the Montreal Convention; to amend section 67.3, referred to in clause 17 of Bill C-49, by replacing “a person adversely affected” with “from or on behalf of a person,” consistent with section 156 of the current Air Transportation Regulations; to amend paragraph 18(2) of Bill C-49, regarding subparagraph 86(1)(h)(iii) of the act, to allow adversely affected persons to be represented by counsel, consistent with our constitutional rights; to enact clear rules on posting the rights and remedies of air passengers in Canadian airports, in particular, allowing companies and associations that defend passengers' rights to advertise in Canadian airports; to require airlines that deny boarding or cancel a flight to provide each affected passenger with written notice of the reason for the denial of boarding or cancellation. Carriers should also make an effort to inform passengers who reach their final destination with a delay of three hours or more of the reason for the delay; to establish more public monitoring of the management of Canadian airports; to apply or follow the European legislation regarding the minimum compensation to be paid in the event of a long delay, cancellation or denial of boarding. It would be helpful if the committee could provide Transport Canada, who will subsequently be writing the regulations, with clear guidelines on the criteria to be used, equivalent to the European guidelines; to define a long delay as being two hours for domestic flights and three hours for international flights; to establish minimum compensation equivalent to that for a cancelled flight for passengers whose flight is delayed on the tarmac for more than three hours, and require carriers to allow passengers to deplane after 90 minutes, in accordance with the carriers' tariff conditions, regardless of whether or not there are extraordinary circumstances; to apply the same right to care found in the European regulations for cases of denied boarding, cancellations or long delays. This care should apply even under extraordinary circumstances that are beyond the control of the airline; to define extraordinary circumstances as an event that is not inherent in the normal exercise of the activity of the air carrier concerned and that is beyond the actual control of that carrier on account of its nature or origin. We also propose declaring that the burden of proving the extraordinary circumstances is on the carrier; to declare that the limitation of action is equivalent to the three-year time limit applicable under common law in Canada; and finally, to make Canadian airports liable in the event of strikes, major renovations or technical failures that cause long flight delays or cancellations. This would entitle passengers to the same compensation and rights as passengers who have suffered damage caused by air carriers.

In conclusion, we firmly believe that the Canadian Transportation Agency and the government should adopt legislation that is as generous and transparent as that existing at the international level. More than anything, the law should be human and protective and should facilitate access to compensation. It should be a clear and unequivocal law that reduces gray areas as much as possible and leaves little room for interpretation.

This legislation is essential for restoring travellers' confidence in air carriers. These measures will allow us to follow best international practices and trends in consumer protection. They will enable Canada to become a leader in the protection of air passengers.

5:55 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mr. Charbonneau.

Next is Mr. Gooch, from the Canadian Airports Council.

5:55 p.m.

Daniel-Robert Gooch President, Canadian Airports Council

Thank you, Madam Chair.

Ladies and gentlemen, thank you for the invitation to appear before you as part of this committee's study of Bill C-49.

My name is Daniel-Robert Gooch, and I am the president of the Canadian Airports Council.

The CAC has 51 members, operating more than 100 airports in Canada, including all the private airports in the National Airports System (NAS). Our members handle more than 90% of commercial air traffic in Canada, and an even higher percentage of the international traffic.

The CAC's priorities involve promoting safe, strong local airports, improving the traveller experience, value for money in government services, and growing by air a globally connected Canada. Over the last few days we've been listening to the testimony on this committee's study of the Transportation Modernization Act.

Certainly, air transport is a complex industry involving interaction with several different partners on the airport grounds, including airport authorities, and airlines, of course, but also Nav Canada, service providers, and government entities such as the Canadian Air Transport Security Authority and the Canada Border Services Agency.

In terms of the role of airport authorities, they provide the infrastructure needed to facilitate air carrier movement and the processing of passengers. They enforce airport safety regulations, employ airport emergency response services in response to aircraft emergencies, and provide central command to respond to operational safety, infrastructure, and security matters.

Major airports have passenger care response plans in place to support passenger needs during irregular operations. These plans involve the deployment of certain assets as needed, such as airfield buses, water bottles, snacks, and baby supplies. Airports are empowered to activate their passenger care plans when needed, and can call in extra resources to assist in ensuring passengers have the basics they need on a short-term basis. During irregular and regular operations, the goal is always to get passengers to where they need to go in a timely, safe, and secure manner.

Airports strive to improve passenger experience on an ongoing basis. This is becoming increasingly important for airports that have seen tremendous growth in air traffic over the past decade. In the first seven months of this year so far, for example, there has been a 6.3% increase in passenger traffic. This traffic is boosting international visitor numbers, which is contributing to Canada's economy and providing extra tax revenues for government. It's a good news story. But while this is good for business and the Canadian economy, fuller airports can create logistical challenges to delivering the high level of passenger experience that the industry strives for. Canada's airports have made strategic investments in infrastructure when needed to accommodate growth and respond to the needs of passengers. In fact, they have spent $22 billion since 1992 on infrastructure, with improvements to safety, security, comfort, and the flow of passengers.

This growth has put a particular strain on government services at airports, in particular on screening provided by CATSA and on border services provided by CBSA. Travellers are faced with long lineups at security screening checkpoints and at our air borders during peak times. This has a negative impact on passenger experience. In fact, it's the complaint that we hear about most often from travellers.

You may recall that I've spoken about these issues before, at your committee earlier this year as part of your study on aviation safety. I'm pleased to say the file is progressing, but we're not where we need to be yet. Transport Minister Marc Garneau has begun important work in this area.

The launch of Transportation 2030 almost a year ago commits to look at CATSA's governance, making it more accountable to a service standard, and its funding more responsive and sustainable. Bill C-49 provides a framework for CATSA to administer new or additional screening services on a cost-recovery basis. This will provide added flexibility for airports to supplement security screening services for business reasons, such as giving a higher level of service for connecting travellers, or a separate check-in area for premium travellers. However, this should be accompanied by a full allocation of air travellers security charge revenue from passengers to funding screening by next year's budget. Otherwise, airports have a real concern that the cost-recovery mechanisms in Bill C-49 would become the mechanism used to prop up funding for screening. In other words, passengers today paying their travel security charge for service at screening...not all that money going to the airports. If airports are having to also pay up to get an acceptable level of service, then they will have to raise additional revenue that would then have to be recovered from air carriers and passengers. In other words, travellers would have to pay twice, and travellers should not have to pay twice for this service.

Canada's airports are pleased that the government has recently begun additional work on a long-term structural fix for the problem. Our shared goal should not only be to improve screening wait times, but to also deliver a professional, facilitative customer experience while continuing to provide a high degree of security.

Some airports believe the best approach would be to allow airports a greater role in the delivery of screening at airports, as is the case in Europe and many other parts of the globe, but the important message is that, when it comes to a permanent solution, one size does not fit all. It is important that a fulsome exploration of all options occur before a final decision is made by government.

Finding a long-term solution for screening is essential for passengers, who deserve predictability and value for money, but we also can't be complacent in the meantime. CATSA needs to be sufficiently funded next year to support demand. Government should also restart its stalled investments in CATSA Plus lanes, which is a new approach that is improving traveller experience in the limited sites where it has been deployed. But CATSA isn't able to proceed any further until funding is restarted.

Improving air traveller experience also means improving air service in communities through more air links and lower airfares. The proposed amendment to the Canada Transportation Act to increase foreign ownership limits on Canadian air carriers from 25% to 49% is intended to stimulate traffic and domestic competition, and these are worthy goals.

Canada's airports are delighted with the progress made by this government in all these major areas. We hope that the dynamic approach will continue, and that the work that has been started as part of the Transportation 2030 strategic plan, and through the hearings of your committee, will translate into concrete reforms.

Once again, thank you for giving me the opportunity to speak to you today.

6 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

Moving on to Air Passenger Rights, with Gábor Lukács, welcome.

6 p.m.

Gábor Lukács Founder and Coordinator, Air Passenger Rights

Madam Chair and honourable members, thank you for inviting me to this meeting. It is an exceptional privilege to have the opportunity to present the perspective of air travellers today.

Air Passenger Rights is an independent, non-profit network of volunteers devoted to empowering travellers through education, advocacy, investigation, and litigation. Our Air Passenger Rights Canada group on Facebook has more than 5,000 members.

My name is Dr. Gábor Lukács and I am the founder and coordinator of Air Passenger Rights, which grew out of my advocacy for the rights of Canadian travellers. Since 2008, I've filed 26 successful regulatory complaints against airlines, relating to issues such as liability for baggage damage, delay and loss of baggage, flight delay, flight cancellation, and compensation for involuntary denied boarding.

I'm here today to deliver a cautionary message. Bill C-49 does not address the key issue of lack of enforcement of the rights of passengers in Canada, it does not adequately protect Canadian passengers, and it falls short of the rights provided by the European Union's regime. I will be expanding on each of these issues in turn.

The lack of adequate legislation is often blamed for the woes of passengers. This is a myth. The Montreal convention is an international treaty that protects passengers travelling on international itineraries. It covers a wealth of areas: damage, delay, and loss of baggage, up to $2,000; delay of passengers, over $8,000; and even coverage in the event of injury or death. The Montreal convention is part of the Carriage by Air Act and it has the force of law in Canada.

Canada also requires airlines to set out the terms and conditions of travel in clear language in a so-called tariff. Failure of an airline to apply the terms and conditions of the tariff is punishable by a fine of up to $10,000 and is an offence punishable also on summary conviction. Thus, the existing laws, regulations, and regulatory decisions could provide substantial protection for Canadian passengers if only they were enforced by the regulator, the Canadian Transportation Agency. The trouble is that the agency has abdicated its duty to enforce the law. As you see in this diagram, which shows the statistics for the past four years, the number of complaints has soared, nearly quadrupled over the past four years, while the number of enforcement actions has dropped by an equal factor of four.

The agency has also been criticized by the Federal Court of Appeal. In a recent judgment, Justice de Montigny found that the agency erred by ignoring not only the wording of the Canada Transportation Act, but its purpose and intent. Justice de Montigny went on to remind the agency that it has a role to also ensure that the policies pursued by the legislator—you parliamentarians—are carried out. There's no doubt these laws can be improved, and it is our position that they should be. However, without enforcement, the law will remain that letter. Bill C-49, as it is reads now, does nothing to remedy this state of affairs.

Bill C-49 suffers from numerous major shortcomings. It misses important areas of passenger protection altogether and undermines existing rights in other areas. First, the bill does not create an enforcement mechanism or any financial consequences for airlines that break the rules, that disobey the rules that are laid down. Thus, breaking the rules remains the most profitable course of action for airlines. Second, the bill offers no protection for the most vulnerable passengers: children travelling alone and persons with disabilities. Third, the bill hinders advocacy groups—such as Air Passenger Rights—in protecting the rights of passengers by barring most preventive complaints that seek intervention before anyone could suffer damages.

All but one of the 26 complaints I brought and that I mentioned earlier were successful and were of this preventive nature. I was not personally adversely affected, but the practices that I challenged were clearly harmful and were recognized as such.

We recommend that the committee remove from the bill the proposed section 67.3 found in clause 17 of the bill.

Fourth, contrary to the testimony of Transport Canada officials that you heard on Monday, Bill C-49 does not provide protection that is comparable to the European Union's regime. For the all-too-common event of mechanical malfunction, the bill proposes to actually relieve airlines of the obligation to compensate passengers for inconvenience. This is cleverly hidden in proposed subparagraph 86.11(1)(b)(ii).

In sharp contrast, the European Union's regime recognizes that it is the responsibility of the airlines to adequately maintain their fleets and requires airlines to compensate passengers for inconvenience in the event that the flight is delayed or cancelled because of mechanical malfunction.

We recommend that the committee amend paragraph 86.11(1)(b) to clarify that in the event of mechanical malfunction, airlines are liable to compensate passengers for their inconvenience.

Fifth, the bill takes a step backward with respect to long tarmac delays by doubling the acceptable tarmac delay from the current Canadian standard of 90 minutes to three hours. This is a step backward. It's actually clawing back our existing rights as passengers.

We recommend that the committee amend paragraph 86.11(1)(f) by replacing three hours with 90 minutes and thereby restore the status quo.

In closing, we would also like to draw attention to some troubling facts that deepen our concerns about the impartiality and integrity of the Canadian Transportation Agency. Before this bill is passed by Parliament and before any public consultation takes place about the regulations to be developed, the agency has already sought IATA's input with respect to the regulations that the agency is to draft.

IATA is the International Air Transport Association. It represents the private interests of the airline industry. In our view, this was in disregard of the parliamentary process and of the rule of law. Evidence showing this, for the record, is found in an affidavit submitted by IATA in Supreme Court of Canada file number 37276.

We have also received reports from passengers about agency staff turning them away, unceremoniously advising them that their complaint filed with the agency would be closed. The agency did not make a decision or order dismissing these complaints, yet complainants were made to understand that their complaint had been dismissed. Complainants were either not informed about their right to ask for formal adjudication or were discouraged from exercising that right by agency staff.

In our view, the agency has lost its independence, and the integrity of its consumer protection activities has been compromised. The agency's actions and failure to act to enforce the law, as we see right in the statistics, have undermined public confidence in the agency's impartiality.

We recommend that the committee amend the bill to transfer regulation-making power from the agency to the minister and transfer other responsibilities relating to air passenger rights to a separate consumer protection body.

I would like to thank you for the opportunity to present the concerns of air travellers to the committee. A brief outlining these concerns and also providing detailed recommendations on how to salvage the bill has already been submitted.

6:10 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

We go on to our first questioner, Mr. Chong.

6:10 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

Thank you, Madam Chair.

I would like to ask a question of the first panellist, who gave us a very informative slide deck about the number of delays we could expect that would receive compensation, if the government were to implement the same guidelines as currently govern practice in the United States.

I notice that one of the slides in the slide deck says that you estimate that an average of 13,353 flights per year would be delayed beyond two hours or more for domestic flights and three hours or more for international flights, triggering compensation.

Maybe you could tell the committee what the cost of that would be for the airlines. If there are about 13,500 flights delayed, what sort of cost would the airlines be looking at by way of compensation?

6:15 p.m.

President and Chief Executive Officer, Flight Claim Canada Inc.

Jacob Charbonneau

We have to take the number into consideration. When we look at the number it represents less than 1%, so it's 0.061% of the total flight. We also have to take into consideration that when there's a regulation in place, the number of flight delays and number of flights cancelled will be less because, obviously, the industry will adapt.

6:15 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

In Europe what is the compensation for delayed flights?

6:15 p.m.

President and Chief Executive Officer, Flight Claim Canada Inc.

Jacob Charbonneau

It will depend on the number of kilometres and the number of hours of the delay, so it will go from 250 Euros to 600 Euros.

6:15 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

We're talking about some pretty big numbers here. Let's say there's an average of 100 passengers per flight. For 13,500 flights that's some 1.3 million passengers. If they are all going to be compensated, let's say at an average of $300, that's approximately over $400 million Canadian a year in compensation that the airlines would have to pay out, if that is in fact the model that would be implemented under this bill. I just make that as a point on the record.

I was interested to hear what Air Passenger Rights had to say about enforcement. Do you have any insight as to why the number of complaints that have been investigated and enforced has dropped significantly in the last three or four years?

6:15 p.m.

Founder and Coordinator, Air Passenger Rights

Gábor Lukács

My understanding is that the Canadian Transportation Agency suffers from regulatory capture. We have a manager of enforcement, who admitted under oath on cross-examination that she's on a first-name basis with executives of the industry against whom she's supposed to take enforcement actions. The vice-chairman of the Canadian Transportation Agency is a former lobbyist for the airlines. The chief complaint officer is a lawyer who was suspended for misconduct and was never reinstated. Should I go on? Is it any surprise?

It's a broken system, and that system needs to be fixed before anything else can actually be done to improve Canadians' rights.

6:15 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

How should the agency be fixed? I know you said that the passage of new legislation isn't going to address the fundamental problem, which is lack of enforcement. In your view, since you have been on this file for a number of years, what would be the solution to greater enforcement? Is it a restructuring of the agency? Is it a brand new model, maybe a non-agency model? What is it?

6:15 p.m.

Founder and Coordinator, Air Passenger Rights

Gábor Lukács

We have several recommendations.

First, we would propose transferring those responsibilities to a body that has the single mandate of consumer protection. The second point is to have mandatory compensation and fines for each violation. For one hour on the tarmac over what is allowed, there should be a fixed amount of penalty and a fixed amount of compensation. For an airline that fails to pay compensation and that fixed amount of penalty, there should be no discretion about penalties. The mere fact that they are breaking the rules should automatically trigger a penalty.

The goal is not to punish airlines for their normal business; the goal is to punish airlines that fail to abide by the rules. We also propose having mandatory cost awards in courts on a solicitor-and-client basis when passengers are successful in enforcing their rights. Currently, it is almost impossible from an economic point of view for a passenger to enforce their rights, because it would cost way too much to retain counsel, way more than what the passenger can recover.

6:15 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

I have no further questions.

Thank you.

6:15 p.m.

Liberal

The Chair Liberal Judy Sgro

Mr. Fraser.

6:15 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

Thank you very much.

It's been an interesting discussion with all three witnesses.

I hope I have time to touch on something with each of you.

Dr. Lukács, you served up the EU as a model for something that we could be striving to mimic more. Why is the EU a good model? We had testimony just in the last panel saying for God's sake not to do what the EU is doing, because it's crippling the system. The European Council is trying to roll it back.

I'm hearing two different stories here. I do want to protect consumers' rights first and foremost, but I also want to encourage an efficient system that doesn't bring transportation in Canada to its knees.