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. International Air Transport Association v. Canadian Transportation Agency

In International Air Transport Association v. Canadian Transportation Agency (Fed CA, 2022) the Federal Court of Appeal summarized some recent amendments to the Canada Transportation Act dealing with air travel delays, which were mostly upheld on a complex ultra vires regulation appeal:
[2] In May 2018, Parliament adopted the Transportation Modernization Act, S.C. 2018, c. 10 (the TMA), which amended the Canada Transportation Act, S.C. 1996, c. 10 (the CTA) by creating the new section 86.11. This new provision requires the Agency [SS: the 'Canadian Transportation Agency'], after consulting with the Minister of Transport (the Minister), to make regulations imposing certain obligations on air carriers, notably in relation to flight delays, flight cancellations, denial of boarding, and loss of or damage to baggage. In April 2019, pursuant to subsection 86.11(2) of the CTA, the Minister issued the Direction Respecting Tarmac Delays of Three Hours or Less, S.O.R./2019-110 (the Direction) requiring the Agency to adopt regulations imposing obligations on air carriers to provide timely information and assistance to passengers in cases of tarmac delays of three hours or less.

[3] Around the same time, the Agency adopted the Air Passenger Protection Regulations, S.O.R./2019-150 (the Regulations), imposing obligations – including liability – on air carriers with respect to tarmac delays, flight cancellations, flight delays, denial of boarding and damage or loss of baggage in the context of domestic and international air travel. For ease of reference, the text of the Regulations can be found in the Annex to these reasons.


[9] In 2014, the Minister launched a review of the CTA to examine current issues in transportation, and to identify priorities and potential courses of action in the sector to support Canada’s long-term economic well-being. Informed by extensive consultations with Canadian transportation and trade stakeholders and individual Canadians, the review revealed the latter’s dissatisfaction with their air travel experiences, including with respect to the existing consumer protection regimes in place. The Report was tabled in Parliament by the Minister of Transport on February 25, 2016 (Canada Transportation Act Review, Pathways: Connecting Canada’s Transportation System to the World, Vol. 1 (Ottawa: Department of Transport, 2015)). It described the system in place as producing "“suboptimal, piecemeal outcomes for industry, consumers, and the regulator alike”" (at p. 203) and recommended that the government enhance air passengers’ rights.

[10] In response, the Minister tabled Bill C-49 in May 2017, which mandated the Agency to develop new regulations enhancing air passenger rights in Canada. On May 23, 2018, the legislature enacted the TMA, which amended the CTA to add the new section 86.11. This new provision required the Agency, after consulting with the Minister, to make regulations in relation "“to flights to, from and within Canada, including connecting flights”", notably in respect of carriers’ obligations in case of flight delay, flight cancellation or denial of boarding, including minimum standards of treatment and minimum compensation, in certain circumstances, and for lost and damaged baggage.

[11] The Agency then launched a consultation process, to inform the development of the new air passenger protection regulations (Canadian Transportation Agency, Air Passenger Protection Regulations Consultations: What We Heard (Ottawa: Canadian Transportation Agency, 2018 (Air Passenger Protection Regulations Consultations)). Travellers and consumer advocates generally favoured the creation of a fair compensation regime that would reflect the inconvenience and losses suffered by passengers, including of their time. This suggestion was met with resistance by certain airlines, who warned that imposing minimum compensation for delays in international travel might contravene the Montreal Convention (see Appeal Book, Vol. 22, Tab 14, at p. 369-370). The Agency also considered best practices and lessons learned from air passenger protection regimes in other jurisdictions, including the European Union and the United States, as well as the regime provided by the Montreal Convention (Air Passenger Protection Regulations Consultations at p. 2).

[12] The proposed Regulations were published in Part I of the Canada Gazette in December 2018, and approved by the Governor in Council on May 21, 2019. The Regulations modified the rights and obligations of passengers and air carriers, defining carriers’ minimum obligations to passengers with respect to:
. Communication of passengers’ rights and recourse options (ss. 5-7);

. Flight delays, cancellations and denied boarding (ss. 10-21);

. Tarmac delays of three hours or more (ss. 8-9);

. The seating of children under the age of 14 (s. 22); and

. The terms and conditions on the transportation of musical instruments (s. 24).
[13] Shortly before the adoption of the Regulations (on or about April 26, 2019), the Minister also issued the Direction, purportedly in reliance of subsection 86.11(2) of the CTA. As we shall see later, the appellants contend that this Direction seeks to expand the Agency’s regulation-making authority, to the extent that paragraph 86.11(1)(f) only authorizes the imposition of obligations in respect to tarmac delays in excess of three (3) hours.

[14] With respect to flight delays, cancellations and denied boarding, the Regulations establish informational (s. 13) and assistance (ss. 14, 16) obligations, require carriers to provide alternate travel arrangements and, in certain circumstances, refund a ticket or an unused portion of it. Additionally, the Regulations imposed a standardized minimum compensation amount for passengers who experienced flight delays, cancellations or denial of boarding that was "“within the carrier’s control”" but is not required for safety purposes. The amount of compensation ranges from $125 to $2400, depending on the size of the carrier (large or small) and the length of time between the scheduled and actual arrival (ss. 12, 19-20).

[15] Under subsection 86.11(4) of the CTA, the new obligations flowing from the Regulations are "“deemed to form part of the terms and conditions set out in the carrier’s tariff”" insofar as they are more advantageous than the terms and conditions of carriage already provided for in the carrier’s tariffs. Where a carrier fails to comply with these obligations, passengers may file a complaint with the Agency, which would in turn determine whether the carrier had failed to apply its tariffs. If found not to have applied the tariffs, carriers could be subjected to the Agency’s "“corrective measures”", including an order to pay the required compensation under the Regulations, and administrative financial penalties under section 32.

[16] The Regulations came into force on July 15, 2019, with the exception of sections 14, 19, 22, 35 and 36, which came into effect on December 15, 2019.
. International Air Transport Association v. Canadian Transportation Agency

In International Air Transport Association v. Canadian Transportation Agency (Fed CA, 2022) the Federal Court of Appeal set out basics of the Canadian Transportation Agency:
[7] The Agency is a regulator and quasi-judicial tribunal. It is empowered by the CTA, its enabling statute, to develop and apply rules that establish the rights and responsibilities of transportation service providers and users. As part of its regulatory function, the Agency makes determinations relating to matters such as the issuance of licenses, permits, and exemptions where appropriate, within the authority granted to it by Parliament. The Agency is also empowered to assign administrative monetary penalties to any breaches of the CTA or its regulations and to take enforcement action through designated enforcement officers. As a quasi-judicial tribunal, the Agency is tasked with resolving commercial and consumer transportation-related disputes, as well as adjudicating accessibility issues for persons with disabilities.
. Air Passengers Rights v. Canada (Transportation Agency)

In Air Passengers Rights v. Canada (Transportation Agency) (Fed CA, 2020) the Federal Court of Appeal addressed an aggressive consumer rights group's application for interlocutory injunctions (some mandatory in nature) against the Canadian Transportation Agency (CTA). During the COVID-19 crisis the CTA issued on it's website comments that may be construed as offering airlines an exemption from duties of refund they may face in the rash of cancellations so caused:
3. The Test for Injunctive Relief

[13] The parties agree that in determining whether APR is entitled to interlocutory injunctive relief, the test to be applied is that established by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385.

[14] That is, the Court must consider three questions:
1) Whether APR has established that there is a serious issue to be tried in the underlying application for judicial review;

2) Whether irreparable harm will result if the injunction is not granted; and

3) Whether the balance of convenience favours the granting of the injunction.
[15] The RJR-MacDonald test is conjunctive, with the result that an applicant must satisfy all three elements of the test in order to be entitled to relief: Janssen Inc. v. Abbvie Corp., 2014 FCA 112, 120 C.P.R. (4th) 385 at para. 14.

4. Has APR Raised a Serious Issue?

[16] The threshold for establishing the existence of a serious issue to be tried is usually a low one, and applicants need only establish that the underlying application is neither frivolous nor vexatious. A prolonged examination of the merits of the application is generally neither necessary nor desirable: RJR-MacDonald, above at 335, 337-338.

[17] With this low threshold in mind, I will assume that APR has satisfied the serious issue component of the injunctive test to the extent that it seeks to enjoin members of the CTA from dealing with passenger complaints on the basis that a reasonable apprehension of bias exists on their part. However, as will be explained further on in these reasons, I am not persuaded that APR has satisfied the irreparable harm component of the injunctive test in this regard.

[18] However, APR also seeks mandatory orders compelling the CTA to remove the two statements from its website and directing it to "“clarify any misconceptions for passengers who previously contacted the Agency regarding refunds arising from COVID-19, and key stakeholders of the travel industry”". It further seeks a mandatory order requiring that the CTA bring this Court’s order and the removal or clarification of the CTA’s previous statements to the attention of airlines and a travel association.

[19] A higher threshold must be met to establish a serious issue where a mandatory interlocutory injunction is sought compelling a respondent to take action prior to the determination of the underlying application on its merits. In such cases, the appropriate inquiry is whether the party seeking the injunction has established a strong prima facie case: R. v. Canadian Broadcasting Corp., 2018 SCC 5, [2018] 1 S.C.R. 196 at para. 15. That is, I must be satisfied upon a preliminary review of the case that there is a strong likelihood that APR will be ultimately successful in its application: C.B.C., above at para. 17.

[20] As will be explained below, I am not persuaded that APR has established a strong prima facie case here as the administrative action being challenged in its application for judicial review is not amenable to judicial review.

[21] APR concedes that the statements on the CTA website do not reflect decisions, determinations, orders or legally-binding rulings on the part of the Agency. It notes, however, that subsection 18.1(1) of the Federal Courts Act does not limit the availability of judicial review to formal decisions or orders, stating rather that applications may be brought "“by anyone directly affected by the matter in respect of which relief is sought”" [my emphasis].

[22] Not every administrative action gives rise to a right to judicial review. No right of review arises where the conduct in issue does not affect rights, impose legal obligations, or cause prejudicial effects: Democracy Watch v. Canada (Attorney General), 2020 FCA 69, [2020] F.C.J. No. 498 at para. 19. See also Tsleil-Waututh Nation v. Canada (Attorney General), 2018 FCA 153, [2019] 2 F.C.R. No. 3, leave to appeal to SCC refused 38379 (2 May 2019); Democracy Watch v. Canada (Conflict of Interest and Ethics Commissioner), 2009 FCA 15, 86 Admin. L.R. (4th) 149.

[23] For example, information bulletins and non-binding opinions contained in advance tax rulings have been found not to affect rights, impose legal obligations, or cause prejudicial effects: see, for example, Air Canada v. Toronto Port Authority at al., 2011 FCA 347, 426 N.R. 131; Rothmans, Benson & Hedges Inc. v. Minister of National Revenue, [1998] 2 C.T.C. 176, 148 F.T.R. 3. It is noteworthy that in its Notice of Application, APR itself states the CTA’s statements "“purport[t] to provide an unsolicited advance ruling”" as to how the CTA will deal with passenger complaints about refunds for pandemic-related flight cancellations.

[24] I will return to the issue of the impact of the CTA’s statements on APR in the context of my discussion of irreparable harm, but suffice it to say at this juncture that there is no suggestion that APR is itself directly affected by the statements in issue. The statements on the CTA website also do not determine the right of airline passengers to refunds where their flights have been cancelled by airlines for pandemic-related reasons.

[25] Noting the current extraordinary circumstances, the statements simply suggest that having airlines provide affected passengers with vouchers or credits for future travel "“could be”" an appropriate approach in the present context, as long as these vouchers or credits do not expire in an unreasonably short period of time. This should be contrasted with the situation that confronted the Federal Court in Larny Holdings Ltd. v. Canada (Minister of Health), 2002 FCT 750, relied on by APR, where the statement in issue included a clear statement of how, in the respondent’s view, the law was to be interpreted and the statement in issue was intended to be coercive in nature.

[26] As a general principle, CTA policy documents are not binding on it as a matter of law: Canadian Pacific Railway Company v. Cambridge (City), 2019 FCA 254, 311 A.C.W.S. (3d) 416 at para. 5. Moreover, in this case the Statement on Vouchers specifically states that "“any specific situation brought before the Agency will be examined on its merits”". It thus remains open to affected passengers to file complaints with the CTA (which will be dealt with once the current suspension of dispute resolution services has ended) if they are not satisfied with a travel voucher, and to pursue their remedies in this Court if they are not satisfied with the Agency’s decisions.

[27] It thus cannot be said that the impugned statements affect rights, impose legal obligations, or cause prejudicial effects on either APR or airline passengers. While this finding is sufficient to dispose of APR’s motion for mandatory relief, as will be explained below, I am also not persuaded that it has satisfied the irreparable harm component of the test.

5. Irreparable Harm

[28] A party seeking interlocutory injunctive relief must demonstrate with clear and non-speculative evidence that it will suffer irreparable harm between now and the time that the underlying application for judicial review is finally disposed of.

[29] APR has not argued that it will itself suffer irreparable harm if the injunction is not granted. It relies instead on the harm that it says will befall Canadian airline passengers whose flights have been cancelled for pandemic-related reasons. However, while APR appears to be pursuing this matter as a public interest litigant, it has not yet sought or been granted public interest standing.

[30] As a general rule, only harm suffered by the party seeking the injunction will qualify under this branch of the test: RJR-MacDonald, above at 341; Manitoba (Attorney General) v. Metropolitan Stores Ltd., 1987 CanLII 79 (SCC), [1987] 1 S.C.R. 110, 38 D.L.R. (4th) 321 at 128. There is a limited exception to this principle in that the interests of those individuals dependent on a registered charity may also be considered under this branch of the test: Glooscap Heritage Society v. Minister of National Revenue, 2012 FCA 255, 440 N.R. 232 at paras. 33-34; Holy Alpha and Omega Church of Toronto v. Attorney General of Canada, 2009 FCA 265, [2010] 1 C.T.C. 161 at para. 17. While APR is a not-for-profit corporation, there is no suggestion that it is a registered charity.

[31] I am also not persuaded that irreparable harm has been established, even if potential harm to Canadian airline passengers is considered.

[32] Insofar as APR seeks to enjoin the CTA from dealing with passenger complaints, it asserts that the statements in issue were published contrary to the CTA’s own Code of Conduct. This prohibits members from publicly expressing opinions on potential cases or issues relating to the work of the Agency that may create a reasonable apprehension of bias on the part of the member. According to APR, the two statements at issue here create a reasonable apprehension of bias on the part of the CTA’s members such that they will be unable to provide complainants with a fair hearing.

[33] Bias is an attitude of mind that is unique to an individual. As a result, an allegation of bias must be directed against a specific individual who is alleged to be unable to bring an impartial mind to bear on a matter: E.A. Manning Ltd. v. Ontario Securities Commission, 1995 CanLII 1706 (ON CA), 23 O.R. (3d) 257, 32 Admin. L.R. (2d) 1 (C.A.), citing Bennett v. British Columbia (Securities Commission) (1992), 1992 CanLII 1527 (BC CA), 69 B.C.L.R. (2d) 171, 94 D.L.R. (4th) 339 (C.A.).

[34] As is the case with many administrative bodies, the CTA carries out both regulatory and adjudicative functions. It resolves specific commercial and consumer transportation-related disputes and acts as an industry regulator issuing permits and licences to transportation providers. The CTA also provides the transportation industry and the travelling public with non-binding guidance with respect to the rights and obligations of transportation service providers and consumers.

[35] There is no evidence before me that the members of the CTA were involved in the formulation of the statements at issue here, or that they have endorsed them. Courts have, moreover, rejected the notion that a "“corporate taint”" can arise based on statements by non-adjudicator members of multi-function organizations: Zündel v. Citron, 2000 CanLII 17137 (FCA), [2000] 4 FC 225,189 D.L.R. (4th) 131 at para. 49 (C.A.); E.A. Manning Ltd., above at para. 24.

[36] Even if it subsequently turns out that CTA members were in fact involved in the formulation of the statements, APR’s argument could be advanced in the context of an actual passenger complaint and any bias concerns could be addressed in that context. Relief could then be sought in this Court if the complainant is not persuaded that they have received a fair hearing. The alleged harm is thus not irreparable.

[37] APR also asserts that passengers are being misled by the travel industry as to the import of the CTA’s statements, and that airlines, travel insurers and others are citing the statements as a basis to deny reimbursement to passengers whose flights have been cancelled for pandemic-related reasons. If third parties are misrepresenting what the CTA has stated, recourse is available against those third parties and the alleged harm is thus not irreparable.


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