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Transportation - Canada Transportation Agency

. Berenguer v. Sata Internacional - Azores Airlines, S.A.

In Berenguer v. Sata Internacional - Azores Airlines, S.A. (Fed CA, 2023) the Federal Court of Appeal considers airline licences and regulations issued under the Canadian Transportation Act:
[42] At the time of the appellant’s alleged flight delay in 2017, the relevant contract of carriage was subject to regulation under the Canada Transportation Act, S.C. 1996, c. 10 [CTA] and the Air Transportation Regulations, S.O.R./88-58 [Regulations]. The regulatory scheme was amended in 2019, but the amendments are not relevant to the appellant’s claim and will not be discussed.

[43] Under the applicable regulatory scheme in the CTA, the Canadian Transportation Agency [Agency] issues licences for scheduled international air service. The licences may be subject to terms and conditions on specified matters which include “tariffs, fares and carriage of passengers” (CTA, ss. 69(1), 71(1)). The term “tariff” means a schedule containing the terms of the contract of carriage (CTA, s. 55(1)).

[44] The CTA also authorizes the Agency to make regulations, including regulations respecting the terms and conditions of carriage (CTA, s. 86(1)(h)). Clause 122(c)(v) of the Regulations, as it read at the relevant time, required the tariff to state the carrier’s policy regarding flight delays. It read:
122 Every tariff shall contain

122 Les tarifs doivent contenir :

. . .

(c) the terms and conditions of carriage, clearly stating the air carrier’s policy in respect of at least the following matters, namely,

(c) les conditions de transport, dans lesquelles est énoncée clairement la politique du transporteur aérien concernant au moins les éléments suivants :

. . .

(v) failure to operate the service or failure to operate the air service according to schedule,

(v) l’inexécution du service aérien ou le non-respect de l’horaire prévu pour le service aérien,

[45] The tariff is required to be filed with the Agency (Regulations, s. 110(1)). Importantly, s. 110(4) of the Regulations requires the carrier to apply the terms and conditions specified in the tariff:
110 (4) Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.

[Emphasis added.]

110 (4) Lorsqu’un tarif déposé porte une date de publication et une date d’entrée en vigueur et qu’il est conforme au présent règlement et aux arrêtés de l’Office, les taxes et les conditions de transport qu’il contient, sous réserve de leur rejet, de leur refus ou de leur suspension par l’Office, ou de leur remplacement par un nouveau tarif, prennent effet à la date indiquée dans le tarif, et le transporteur aérien doit les appliquer à compter de cette date.

[Emphasis added.]

[62] Under the CTA, the Agency issues licences for scheduled international air service and the licences may be subject to terms or conditions on specified matters which include tariffs (CTA, ss. 69(1), 71(1)).

[63] Pursuant to ss. 110(1) and 110(4) of the Regulations, the air carrier’s tariff is to be filed with the Agency and the carrier “shall … charge the tolls and apply the terms and conditions of carriage specified in the tariff.” Further, the tariff must set out the carrier’s policy in respect of flight delays and the terms and conditions must be fair and reasonable (Regulations, ss. 122(c)(v), 111(1)).

[64] In general, the CTA has “considerable power and discretion over carriers.” (reasons at para. 120). Accordingly, it is reasonably arguable that the degree to which the CTA and the Regulations govern the contracts of carriage is sufficient to satisfy the plain and obvious test with respect to step 2 of the ITO test.
. 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.


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Last modified: 18-08-23
By: admin