Transport Committee on Nov. 21st, 2022

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. De Bellefeuille.

Mr. Barsalou‑Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you very much, Mr. Chair.

In light of what we are hearing from the various witnesses appearing today, there seems to be a consensus that the current complaints process is not working. According to the witnesses, the system is downright broken. As a result, consumers end up discouraged, and airlines feel emboldened to not treat them well and not respect their rights.

However, with regard to the proposed solutions, there would seem to be nuances, differences, about which I would like the witnesses' comments.

According to Ms. De Bellefeuille, an approach that would reverse the burden of proof should be preferred. It would then be up to the airlines to show that they did not have to compensate the air passengers. As I understand her perspective, whenever a flight was cancelled, passengers would be reimbursed by default and it would be up to the airline to take steps to ensure otherwise.

Could such an approach hold water?

Mr. Charbonneau, let's start with you.

[Jacob Charbonneau]

Certainly the burden of proof must rest with the air carriers.

On the other hand, they can come out with all sorts of evidence, as I have already said. Now, the consumer is not an expert and does not know the rights and obligations of the carriers, so he or she will not know what to do with them if left to their own devices. So someone has to be able to decide and say whether the evidence provided is reliable, whether the facts are true and whether the arguments are valid.

This is the role of the Canadian Transportation Agency or any other agency, which must be able to decide at the first stage, very easily and very quickly, in order to avoid overly long processing times and too much complexity. Above all, travellers must not be left to their own devices when they take the steps, which is what the carriers are demanding at present. Travellers are not equipped to do this. As Ms. De Bellefeuille said, they find themselves fighting like David against Goliath. They don't have the means to deal with multinationals that have almost unlimited resources.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Do you have anything to add, Mr. Lukács?

[Dr. Gábor Lukács]

We need to fix more than just the burden of proof. We should start with clear definitions that mirror the European Union's definitions of “denied boarding” and “cancellation”. Then we need to move on to a presumption of liability for denied boarding, delay and cancellation on the carrier's part, as in the Montreal Convention. This is where the carrier has to rebut and show the extraordinary circumstances and why it should not be paying compensation.

We also recommend the removal of the “safety reasons” loophole, which does not exist in the European Union's regime and creates a lot of room for abuse. We agree with each one of the solutions, but we believe that we need all of them together to fix the system. Ultimately, one should not be requiring 1,000 pages of documents to decide the fate of a $400 compensation claim.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Lawford, do you have any comments on this?

[John Lawford]

I would just like to point out that the Commission for Complaints for Telecom-Television Services is experiencing the same problems with companies having powers and means to act to the detriment of consumers.

At this commission, experts are looking into these issues and asking companies to respond in a month or less to consumer complaints. The experts offer a form of mediation, which helps a lot. Normally, 80% to 90% of complaints are resolved within a month, if not within six weeks. So it's much more effective.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

Ms. De Bellefeuille, in your statement and in response to questions you were asked, you pointed out that it is usually only a minority of consumers who take action, file complaints and go all the way to get compensation. In the end, the bad practices of the airlines allow them to get away with it.

Shouldn't a rule be established to require that if a passenger gets compensation or a case is proven, that information is automatically provided to all other passengers on the same flight so that they too can get justice?

[Sylvie De Bellefeuille]

This would certainly be a very interesting potential solution. Indeed, the Canadian Transportation Agency can only deal with the file of the person who submitted the complaint, even though it is likely that all other passengers on the same flight suffered the same inconvenience.

Finding a way to make an individual's battle collective would be a good thing. The case of some travellers needs to be dealt with separately, of course, but what you are putting forward is certainly an interesting possible solution.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Charbonneau, I'll pass the floor to you again.

[Jacob Charbonneau]

It can also happen that the same situation applies to several flights. I'm thinking here of a lack of crew or a crew working too many hours, both of which have caused delays or cancellations that carriers have categorized as necessary for safety reasons.

Two judgments were issued, the first against Air Canada, the second against WestJet. Such judgments should automatically also apply to all people who were given bad information by carriers at the outset. Indeed, tens of thousands of passengers have been turned away.

These judgments overturn the position of the carriers, but they are not communicated to all the people who suffered misinformation and therefore feel a little aggrieved in this situation.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Barsalou-Duval and Mr. Charbonneau.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have six minutes.

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

Thank you, Mr. Chair.

Thank you to all of our witnesses for being here today.

What we've heard so far at this meeting is a pretty stunning indictment of the air passenger protection regulations and how they've been enforced during a time when air passengers across the country have gone through some pretty extreme circumstances and have been put in some extremely inconvenient situations. Of course, the study that our committee has undertaken is coming at a time when there are over 20,000 complaints before the CTA, and it is right before the Christmas travel season, when we risk seeing that number jump even higher.

I have a whole bunch of questions, but I want to start with Mr. Lukács.

Welcome back to the committee, Mr. Lukács. I want to start by asking you if you can elaborate on the specific regulatory and legislative changes that you believe this committee should recommend as a way of strengthening Canada's air passenger rights system.

[Dr. Gábor Lukács]

The first change is incorporating in the Canada Transportation Act a clear definition of “denial of boarding” and “cancellation” that mirrors the European Union's definition. We often hear, for example, that a flight was not cancelled; it was just a schedule change. The airline refuses to pay compensation on that basis.

The next change is the removal of the “safety reasons” loophole. It would involve removing subparagraph 86.11(1)(b)(ii) and adding language to clarify that the delay, cancellation or denial of boarding for safety purposes is deemed to be within the carrier's control.

The third change that should be in the Canada Transportation Act is a clear presumption of liability for denied boarding, delay and cancellation that is presumed to have been in the carrier's control, as in the Montreal Convention. The burden of proof would be on the carrier to rebut, with evidence, that presumption.

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

Mr. Lukács, we heard earlier from Mr. Charbonneau that the DOT in the United States has already issued seven million dollars' worth of fines to air carriers who slow-walked—I believe that was the translation—the refunds they were supposed to provide to passengers. The APPR in Canada also has a provision that allows the CTA to levy fines against the carriers for contravention of the regulations. Has the CTA used this tool, and if so, how effectively?

[Dr. Gábor Lukács]

The Canada Transportation Act allows the CTA to issue fines of up to $25,000 per passenger per incident for violations of the APPR.

With respect to the main provisions of the APPR relating to compensation of passengers, I'm aware of only one fine very recently issued against WestJet for $11,000 for 55 violations. That was $200 per violation. Those were violations or provisions where the amount at stake—the compensation owed to passengers—was between $400 and $1,000, so it was actually cheaper for the airline to pay the fine than to compensate the passengers.

With respect to those issues, our recommendation would be to have mandatory minimum penalties for airlines that break the regulations and mandatory enforcement provisions, as well as to increase the limitation period from 12 months to 36 months or longer for the CTA to issue a notice to airlines.

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

If I may, I will turn to Mr. Charbonneau.

The APPR requires that airlines communicate to passengers about the existence of the APPR so they can pursue claims. Like many people in this room, I fly a lot and had a lot of flights cancelled and delayed over the past year. I think I can count on one finger the number of times I was handed any information about air passenger protection rights. At one point, much to the embarrassment of my teenage daughters, I asked a boarding room full of people whose flight had been cancelled if anyone was aware of these regulations in Canada. Not a single person put up their hand.

You mentioned that only 2% of passengers actually pursue claims. I'm wondering if that is because the process is not well publicized or because the process is so complex that most average air passengers aren't going to find their receipts and go through a 30-day process of appealing to the carrier and then appealing to the CTA. Which of those two, or how much of each, is the problem here?

[Jacob Charbonneau]

Actually, it's a combination of both situations. For the most part, people don't go further because of their lack of knowledge of their rights and the carrier's obligations. Also, from the outset, either a lot of misinformation occurs or no information is provided.

I am telling you about an experience I had a few weeks ago. I had gone to Halifax for the weekend. On the morning of my return, I arrived at the airport to catch my flight, but the flight was not displayed on the screen. When I got to the counter to follow up, I saw a small sign that said the counter would open at 3:30. Yet my flight was at 8:30, all the passengers were there, but no one knew if the flight was delayed or cancelled and if there would be another flight.

I was the one who talked to the 90 people to tell them what they were entitled to and what the carrier's obligations were. All these people were left to their own devices.

In fact, often when releases are issued, it is to say that these are exceptional circumstances and there is no right to compensation. In this case, I dug around to find out why this was the case. I was told that it was a safety reason, but I was never able to find out the details.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Charbonneau.

Thank you very much, Mr. Bachrach.

Mr. Muys, the floor is now yours. You have five minutes.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you, Mr. Chair.

Thank you, witnesses. I know that some of you are repeat witnesses at the transport committee, so thank you for your investment of time here.

Mr. Lawford, you painted a picture of “chronic issues”, as you said, and flight delays. You also talked about maybe looking back a lot further in the time continuum, from 2003 to now. Maybe you can elaborate a bit on this. In your view, what factors are causing the spikes in delays we're seeing and these frustrations consumers are facing that are remedied by the APPR? What factors are outside of that? Where is the division, and how has that progressed over time?

[John Lawford]

I don't think the APPRs themselves have any large effect on cancellations or delays. I think when we went into this, after Mr. Emerson did his report, and we were setting up the regulations, we thought that if airlines had a lot of fines to pay for these cancellations and delays, they would change their habits.

Well, it doesn't work that way. It actually looks like when they get a number of claims, they continue to cancel flights because the economics are so much larger for choosing a different aircraft, changing the schedule or not having staff. Those costs really pale compared to the consumers' compensation.

Really the scheme, I've come to think, is more about compensating consumers for their inconvenience because the system isn't going to work. We have other problems, as I think you heard in previous committee meetings, around the way airports work, the way security works and all of these international flight and competition issues.

You can still fly. What really gets under my skin about this entire thing is that airlines can still fly. They can fly late. They can cancel flights. They just have to pay.

What we're missing here is the sort of automatic.... If a 100 people on a 200-passenger plane make a claim, well, too bad: Pay for 100 cancellations or 100 delays. That's the cost of stranding people if you're going to operate like this. That might give them an incentive to change in future, but at least those people will get something for having been crushed under the wheels, so to speak.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Is that always the fault of the airline?

You referenced the number of issues we had this year in particular, and the headline we were all horrified by this past summer was that Toronto Pearson was the worst airport in the world. What are the other issues, and how are they being addressed?

[John Lawford]

I'm not downplaying the complexity or difficulty of running an airline, especially in the present circumstances. What I'm saying is that if you're going to be in the airline business, it's an essential service to get people from A to B, so if you strand them, you have to pay for it. That's what we've come up with because it's so important to people and so essential. It's going to have to be factored into costs, yet I see Air Canada, WestJet and IATA going to the mat in trying to take out these regulations. It's very disturbing.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

In my previous life, prior to politics, I did a lot of business travel in the United States, and I know the EU was referenced as a model that we could look to. I'm wondering if any of the witnesses would like to comment about the U.S. In all my time, I found very few delays and very few issues. In fact, often, if I booked too tight a connection, I was running between gates. Is there something we can learn or something instructive from the U.S. model, not just the EU's? Are they better off or worse off than Canada in this regard?

Maybe Mr. Gradek, given your years of experience in the industry, you could start off.

[John Gradek]

One of the things we see happening in the Canadian aviation marketplace is what I would say is a gradual reduction in the integrity of airline managers when looking towards making passengers enjoy their trip. What we see happening is that more and more decisions are being made by the airlines to look at minimizing the impact on profitability. That's where we have the traditional fight going on between customer service and dealing with profitability. The pendulum has swung, at this point in time, towards profitability because of the fact that the airlines have been short of profits over the last 24 months and are trying to catch up.

Will we come back to a pendulum point where customer service will in fact take precedence? Probably. I'm not sure how long it's going to take to get there, but it will happen. It will be a question of carriers all of a sudden deciding that customer service is worth more and trying to get some competitive advantage by providing a good level of service.

As to the EU model, I think they've had a lot of experience. They've had regulations in place for close to 20 years. It's interesting. They have kind of privatized the process of having people identify themselves as being subject to compensation. If you go on a U.K. or EU website—