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Published March 14, 2023

Transport minister pledges to close passenger compensation loophole used by airlines

Alghabra promised an additional $76 million to reduce the backlog of complaints at the Canadian Transportation Agency

By Christopher Reynolds in Montreal

Transport Minister Omar Alghabra said Tuesday the federal government will close a loophole that allows airlines to deny customers compensation for cancelled flights.

The reform will come as part of an overhaul of passenger rights to be tabled in Parliament this spring, he said at a press conference.

Asked whether he would end the exemption that lets carriers reject compensation claims by citing safety issues, Alghabra answered in the affirmative.

"The short answer is yes. We are working on strengthening and clarifying the rules to ensure that we make a distinction," he said.

"Obviously we don't want planes to fly when it's unsafe to do so. But there are certain things that are within the control of the airlines, and we need to have clearer rules that puts the responsibility on the airlines when it's their responsibility."

Alghabra's pledge came during a press conference at Toronto's Pearson airport Tuesday morning, where he promised an additional $76 million to reduce the backlog of complaints at the Canadian Transportation Agency (CTA).

The money will allow the transport regulator to hire 200 more employees who can chip away at the 42,000 complaints currently filed there, he said.

"The backlog is huge."

The announcement comes after the government boosted the agency's funding by $11 million in last year's budget — shortly before travel chaos erupted over the summer as flight demand surged, prompting another wave of complaints.

Gabor Lukacs, president of the Air Passenger Rights advocacy group, expressed skepticism that the new cash will make a big dent in the backlog.

"The government is throwing good money after bad," he said. "It will not improve lack of enforcement on its own."

Alghabra hinted at other changes upcoming in a revamped passenger bill of rights, including potential reforms to the regulator's role as an investigative and enforcement body.

"We are looking at strengthening the rules, as I said, and perhaps looking at increasing the authorities that the CTA has. But I leave it up to the CTA to exercise its judgment and when and how to impose these fines," Alghabra told reporters.

The agency has a dual mandate as a tribunal handling complaints and a regulatory authority, though advocates say it has not gone far enough to punish violations under the latter.

The compensation loophole in Canada's Air Passenger Protection Regulations does not exist under European rules.

The European Union requires compensation on top of refunds if an airline cancels a flight for any reason that falls under its control — mechanical problems or staffing shortages, for example — covering most situations except for strikes, extreme weather or war.

In Canada, a flight cancelled fewer than 15 days before takeoff or delayed by three hours or more that is caused by an event within the airline's control also triggers a refund — except in the case of safety-related concerns.

Banner image: THE CANADIAN PRESS/Cole Burston

This report by The Canadian Press was first published March 14, 2023.

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