Transport Committee on Dec. 8th, 2020

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Lukács, you mentioned before that you feel that the current legislation and the current regulations are actually strong enough to require these refunds. You also mentioned that you believe changes could be made to increase their clarity and protect consumer rights. Could you identify specifically what changes you think need to be made to the APPR in order to ensure that passengers are never left exposed like this again?

[Dr. Gábor Lukács]

First of all, I believe passenger rights should be incorporated in the primary legislation, not in regulations. Regulations they can suspend, and do suspend, on a whim. Second, even before the APPR, passengers had a right to a refund when the airline cancelled a flight for any reason. That hasn't changed. It could be incorporated and should be incorporated in the APPR simply to have a single document that lists all those rights.

The other major issue of concern relates to who has the burden of proof, when a flight is cancelled or delayed, of whether or not it was in the airline's control. There's this whole idea that if a flight was cancelled or delayed for maintenance reasons, then the airline is off the hook. That is inconsistent with international standards. Canada should generally adopt the European Union's gold standard. In the European Union, there are no such issues with refunds. The European Union made it clear to all states that they have to enforce the right of passengers to a refund, which is clearly enshrined in the European regulations.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay.

Maybe my last question, just....

[The Chair, Liberal, Vance Badawey]

Actually, Mr. Bachrach, the time is up. I'm sorry.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

[The Chair, Liberal, Vance Badawey]

I'm bang on time here, so I'm trying to keep it disciplined. My apologies.

Thank you for the questions as well, Mr. Lukács.

I'm now going to go to the Conservatives.

Ms. Kusie, you have five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thanks very much, Mr. Chair.

Mr. Sparling, I was hoping that you might be able to provide some insight as to what a lack of rapid testing has meant for regional service in the north specifically—if and how that has affected air travel in the north.

[Joseph Sparling]

Well, to the extent that rapid testing would eliminate the need for mandatory self-isolation, then it's had a major impact. As you may or may not know, anybody now coming into Yukon from outside the territory must self-isolate for two weeks. We had a travel bubble with B.C., starting in July. When the travel bubble opened in July, we saw a pretty significant uptick in traffic. I thought we were clearly on the mend in terms of the COVID impact.

However, in late November, due to the rising infections in B.C., the government reimposed the travel bubble, and traffic dropped like a rock. Rapid testing, if we were able to then let people travel more freely, would make a significant difference. We're certainly in discussions with the Yukon government about that possibility.

To date, the border is closed. It's having a major impact. We're looking for something to get things going again.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I'm going to move now to air cargo. I'm wondering what it means in terms of the significance of being able to move cargo freely to and from the Yukon at this time and if there have been difficulties or changes in cargo patterns as a result of the pandemic.

[Joseph Sparling]

Our cargo volumes are the one thing that has been stable as a result of the pandemic. Passenger volumes were down 95% in April. We've recovered to being down 60% or so. Cargo volumes have remained relatively stable throughout the pandemic. We're very thankful for that.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay. It's significant, and there's been no difficulty.

I'll go back to Dr. Lukács then.

Dr. Lukács, could you please expand on the changes that you would like to see within the current legislation, which I believed was proposed by my predecessor, MP Doherty? Could you explain clearly for the committee what this legislation would incur exactly?

[Dr. Gábor Lukács]

Currently there's a private member's bill by Mr. Barsalou-Duval, Bill C-249, which was tabled earlier. I understand that your predecessor may also be working on something similar.

The effect of this bill is that it would declare that the law has always been that passengers are entitled to a refund when an airline cancels a flight for any reason, whether it's within or outside the airline's control.

The one change that I would like to see in the bill is this: Instead of having this within the summary of the bill, it be moved it into the actual text of the statute to avoid any doubt. What we have seen now is that airlines will try to use every excuse not to repay passengers. Making clear that this bill is declaratory will settle once and for all this debate. It will ensure that it is clear to everyone that the law has always meant that when an airline cancels a flight for any reason and doesn't provide passengers with a service that passengers have paid for, passengers have to get that money back.

[The Chair, Liberal, Vance Badawey]

You have 40 seconds, Ms. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much.

I'll finish, then, with the question that I had earlier for our colleague Mr. Lawford.

Dr. Lukács, what affect do you think this will have on consumer confidence in the future?

We heard some testimony today that there was some increased confidence in consumers based upon the passenger rights legislation. Do you think that this has been eroded as a result of this situation of the pandemic?

[Dr. Gábor Lukács]

The air passenger protection regulations created a false sense of confidence. They never were meant to work; they were designed to fail. Certainly what we see now undermines further passenger and customer confidence.

Bill C-249 is going to fix just the basics. The most important principle in every commercial transaction, that if you don't receive what you paid for, you get your money back, is a vital step for the entire sector's recovery.

[The Chair, Liberal, Vance Badawey]

I will now go to our last speaker, for five minutes. For the Liberals, it is Mr. Bittle.

Mr. Bittle, the floor is yours.

[Chris Bittle, Liberal, St. Catharines, ON]

Thank you very much, Mr. Chair.

Mr. Lawford, my understanding is that the CTA's voucher statement in March was not a binding decision. It did not change the law, but provided guidance as to a reasonable approach, given the extraordinary circumstances. I was wondering if you could comment on that.

[John Lawford]

Yes, I suppose that the CTA thought it was a reasonable response in the panic moment. However, that was a policy statement they should have known was going to affect consumers' will and understanding of the situation.

My concern with it is that it implied, at least at a consumer understanding level, that refunds would not be forthcoming and that consumers should just sit tight and be happy with their two-year vouchers. I think the CTA did not take into account consumers' perception of what they were trying to do, which was just to give a temporary circuit break until they could get to these complaints.

I would have been much happier had they described it that way, but they left it out, making it sound, with no context, as if that were all that consumers were ever going to get and that it were all they were entitled to. I think that's the concern Dr. Lukács also mentioned.

[Chris Bittle, Liberal, St. Catharines, ON]

Perhaps this is venturing into hypotheticals, but I am wondering if you could comment. I know there's some dispute as to the situation the airlines find themselves in. What would the status of a consumer be if an airline or airlines were to enter into bankruptcy or creditor protection? As an unsecured creditor, what would their rights be under the law?

[John Lawford]

As I think Maître De Bellefeuille said, they would likely be unsecured creditors at the very bottom of the heap. If the company were to come to an arrangement to hand out, let's say, 17¢ on the dollar, they would get their portion after secured creditors took that 17¢, and I'm sure their complaint would be larger than that. So they would probably get nothing. I understand the concern might be that if there are refunds offered, some airlines may become financially unstable, and then that would happen and there would be a knock-on effect.

However, my understanding is a bailout package is being negotiated—without consumers in the room, I might add. If that's the case, then I think it's eminently reasonable to ask for refunds, especially if taxpayers are already going to be making sure that no one goes bankrupt.

[Chris Bittle, Liberal, St. Catharines, ON]

Thank you, Mr. Lawford.

I'll throw this question to you, as well, but I'll open it up to whomever wants to answer.

How concerned do you think the government should be about Canada's losing connectivity for a long time, both domestically and internationally, as a result of this crisis?

[John Lawford]

That's the million-dollar question.

Certainly I believe that Air Canada is large enough and strong enough, and probably WestJet as well, to weather at least another year of this. Other smaller airlines, such as Air Transat, may be in a different position. I think it's the minister's job to monitor that situation closely and to come up with new policy, if needed.

That's all I can say.

Thank you.

[Chris Bittle, Liberal, St. Catharines, ON]

Would any other witness like to answer that question?

[Dr. Gábor Lukács]

I'm happy to comment on that.

For the short term, people should be staying at home because that is the safest thing to do in the pandemic. Once the pandemic is over, demand is going to be back. If consumer confidence is restored, demand is going to be back and connectivity will be back. These things are tied together: One cannot deal with one and not the other.

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Jack, would you like to comment on that question?