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Transportation - Canada Transportation Act (CTA). International Air Transport Association v. Canada (Transportation Agency) [summary]
In International Air Transport Association v. Canada (Transportation Agency) (SCC, 2024) the Supreme Court of Canada dismissed an appeal, here involving "the vires of the Air Passenger Protection Regulations, SOR/2019-150 (“Regulations”) [SS: under the 'Canada Transportation Act'], and the nature and scope of the “exclusivity principle” set out in Article 29 of the 1999 Convention for the Unification of Certain Rules for International Carriage by Air" [SS: the 'Montreal Convention'].
This is the court's summary of the case:[2] The appellants submit that, because the Regulations require that air carriers compensate passengers on international flights when their flights are delayed or cancelled, or when passengers are denied boarding or their baggage is lost or damaged, the Regulations conflict with the Montreal Convention’s exclusivity principle. In light of this purported conflict, and because the Montreal Convention has been implemented by way of the Carriage by Air Act, R.S.C. 1985, c. C-26 (“CAA”), the appellants assert that the Regulations are ultra vires the regulation-making authority given to the Canadian Transportation Agency (“Agency”) by the Canada Transportation Act, S.C. 1996, c. 10 (“CTA”). I will hereafter refer to the issue of whether the Regulations are within the jurisdiction of the Agency, as conferred by the CTA, as the Regulations being “ultra vires the CTA” or “intra vires the CTA”.
[3] The parties also disagree concerning the admissibility of expert affidavits on questions of international law; such affidavits were introduced in the proceedings below regarding state practice. The law relating to the admissibility of expert evidence, as I explain below, has been settled since this Court’s decision in R. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9.
[4] This Court examined the scope of the exclusivity principle under the Montreal Convention in Thibodeau v. Air Canada, 2014 SCC 67, [2014] 3 S.C.R. 340 (“Thibodeau”), and in that case affirmed that the Montreal Convention is exclusive within the scope of the matters that it addresses, but that the Montreal Convention does not deal comprehensively with all aspects of international carriage by air (para. 47). The same conclusion guides the result in this case. The exclusivity principle in Article 29 of the Montreal Convention applies to any “action for damages”. However, the Regulations do not provide for an “action for damages” because they do not provide for individualized compensation. The entitlements provided for are not tied to harm suffered by the claimant as a result of injury caused by another. Rather, the Regulations create statutory entitlements as part of a consumer protection scheme that operates irrespective of the harm (if any) suffered by the claimant. Thus, the Regulations do not give rise to liability that is pre-empted by Article 29 and so do not conflict with the Montreal Convention as implemented by the CAA. Accordingly, the appeal is dismissed. . International Air Transport Association v. Canada (Transportation Agency) [summary]
In International Air Transport Association v. Canada (Transportation Agency) (SCC, 2024) the Supreme Court of Canada dismissed an appeal, here involving "the vires of the Air Passenger Protection Regulations, SOR/2019-150 (“Regulations”) [SS: under the 'Canada Transportation Act'], and the nature and scope of the “exclusivity principle” set out in Article 29 of the 1999 Convention for the Unification of Certain Rules for International Carriage by Air" [SS: the 'Montreal Convention'].
Here the court canvasses the history and content of the Air Passenger Protection Regulations, made under the Canada Transportation Act:C. The Development and Content of the Regulations
[10] In 2014, the Minister of Transport (“Minister”) launched a review of the CTA. Following this review, Parliament enacted the Transportation Modernization Act, S.C. 2018, c. 10, in 2018; this amended the CTA to add s. 86.11, which stated that “[t]he Agency shall, after consulting with the Minister, make regulations in relation to flights to, from and within Canada, including connecting flights” with respect to a number of areas, notably including carriers’ obligations in case of flight delay, flight cancellation or denial of boarding, and lost and damaged baggage. The Agency published draft regulations thereafter; these came into force in 2019.
[11] As mandated by the addition of s. 86.11 to the CTA, the Regulations establish minimum air carrier obligations towards passengers when flights are delayed, cancelled, when a passenger is denied boarding, or when baggage is lost or damaged. This appeal concerns the provisions of the Regulations dealing with:(a) standardized amounts of compensation for international flight delays, cancellations and denial of boarding when the disruption occurs for reasons within a carrier’s control and is not required for safety purposes (ss. 12(2)(d), (3)(d) and (4)(d), 19 and 20); and
(b) refunds of baggage fees paid by passengers when the carrier has lost or damaged their baggage on international flights (s. 23). [12] The Regulations also establish air carrier obligations to passengers with respect to other topics not at issue in this appeal including: tarmac delays, seating assignment of children, and the transportation of musical instruments.
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C. What Is the Scope of the Regulations?
[80] I now turn to the Regulations, the manner in which they are enforced and the compensation that they provide for passengers who are affected by a delay, cancellation, denial of boarding, or damage or loss of baggage.
(1) Compensation
[81] Under the Regulations, a carrier must pay compensation to a passenger when the carrier cancels or delays a flight for reasons within its control and notifies the passenger 14 days or less before the flight, except if the cancellation or delay is required for safety purposes (ss. 11 and 12(2)(d) and (3)(d)). Compensation must also be paid when a passenger is denied boarding for reasons within the carrier’s control, unless required for safety (s. 12(4)(d)).
[82] Sections 19 and 20 of the Regulations set out the amount of compensation payable in the event of delay, cancellation or denial of boarding. The amount of compensation is calculated, in the case of delay or cancellation, by reference to the size of the carrier and the time by which the passenger’s arrival at the intended destination is delayed (s. 19(1)). For denial of boarding, compensation is calculated by reference to the time by which the passenger’s arrival at the intended destination is delayed.
[83] Passengers are also entitled to compensation for lost or damaged baggage. In those instances, the Regulations stipulate that the passenger is to be paid the compensation they would be owed under the Montreal Convention, in addition to a refund of their baggage fees (s. 23(1)).
[84] So, although the Regulations purport to address “compensation for inconvenience” (see ss. 12(2)(d), (3)(d) and (4)(d) and 21), the compensation is not contingent on inconvenience per se, as ss. 19 and 20 do not have regard to individualized harm or inconvenience. For example, a passenger whose flight is delayed and who uses the opportunity to visit a relative during the layover enjoys the same entitlement to compensation under the Regulations as does a fellow passenger for whom the delay occasioned considerable inconvenience.
[85] The Regulations do not provide for compensation that is individualized in the manner of a damage award. The compensation for delay, cancellation, denial of boarding or loss or damage to baggage is not contingent “on proof of damage”, is not linked to a showing of “damage sustained” or “occasioned by delay” to the claimant, and does not vary depending on the extent of the harm (if any) that results from wrongdoing by the carrier. The fact that the compensation owed under the Regulations may vary depending on whether it relates to a cancellation, delay, or denial of boarding, the amount of time that a passenger was delayed, and the size of the carrier does not change the standardized nature of the compensation, which addresses conditions experienced “identically by all passengers” (Nelson, at para. 52).
(2) Enforcement
[86] The obligations imposed on carriers by the Regulations “are deemed to form part of the terms and conditions set out in the carrier’s tariffs in so far as the carrier’s tariffs do not provide more advantageous terms and conditions of carriage than those obligations” (CTA, s. 86.11(4)). When the Regulations were promulgated, the Air Transportation Regulations, SOR/88-58 (“ATR”), were also amended to require carriers to incorporate the Regulations into tariffs applicable to international carriage (s. 122(c)(xxi)). In this manner, the obligations with respect to compensation set out in the Regulations become part of the carrier’s conditions of carriage.
[87] If a carrier fails to compensate a passenger in accordance with the Regulations, the passenger can file a complaint with the Agency (CTA, ss. 85.04(1)(a) and (c) and 86.11(4)). A complaint resolution officer first attempts to resolve the complaint through mediation (s. 85.05(1)). If unsuccessful, the officer will adjudicate the matter (s. 85.06). If the officer finds that a carrier has not applied the terms and conditions of carriage set out in its tariff (including the Regulations), that officer can order the carrier to apply the relevant terms and conditions, including by paying the amount set out in the Regulations (ATR, s. 113.1; CTA, s. 85.07(1) and (3)). Complaint resolution officers can also consider prior decisions regarding whether a flight delay, cancellation or denial of boarding was within a carrier’s control (CTA, ss. 85.08 and 85.14). The CTA (s. 86(1)(h)(iii.1)) further enables the Agency to make applicable to some or all passengers on the same flight a decision respecting a complaint in the case of flight delay, cancellation, or denial of boarding. In addition to addressing passenger complaints, the Agency can also enforce the Regulations by imposing administrative monetary penalties not exceeding $5,000 (in the case of an individual) or $250,000 (in the case of a corporation) (s. 177(1)).
[88] Read together, these provisions of the CTA and the Regulations enable the Agency to enforce carrier compliance with the compensation provided for in the Regulations, and to extend compensation owed to one passenger to others who are impacted by the same disruption.
(3) The Regulations Operate as a Consumer Protection Scheme
[89] The Attorney General and the Agency submit that the Regulations mark an evolution in the government’s approach away from a “piecemeal” system that relied on carrier-led tariff development towards one that ensures predictable payments to passengers who are inconvenienced during carriage by air to, from or within Canada. The Regulations were put in place, following a review of the CTA, with a view to correcting an “‘acute imbalance in market power’ between air passengers and air carriers, and the ‘unusual situation’ where Canadian air passengers had to rely on foreign customer protection measures when traveling abroad” (R.F., Attorney General, at para. 11). Parliament responded to this situation by directing the Agency to put in place a system of standardized compensation.
[90] The Regulations are, thus, best understood as providing for statutory entitlements under a consumer protection scheme. Passengers claiming under the Regulations need not show what harm, if any, they have suffered in order to claim compensation. The Regulations do not tie compensation to harm and inconvenience; rather they mandate compensation for delay, cancellation or denial of boarding based on the time by which a passenger’s arrival at their ultimate destination is delayed. Unlike the Montreal Convention, the Regulations do not enable a carrier to avoid having to pay compensation otherwise due to a passenger by invoking a due diligence defence or pointing to contributory negligence. As long as the disruption in question occurred for a reason within the carrier’s control and was not required for safety purposes, the compensation is fixed. Moreover, the Agency is empowered to extend a finding that compensation is owed to one passenger to other passengers similarly situated. Compensation owed under the Regulations for lost or damaged baggage is tied to the baggage fees charged by the carrier, not to the harm. The Regulations are enforced by Agency-designated complaint resolution officers whose primary adjudicative duty consists of ensuring that carriers adhere to terms set in their tariffs.
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