Air transportation: amendments to the Canada Transportation Act tabled before Parliament

by DLA Piper
Contact

DLA Piper

On Tuesday, 16 May 2017, Minister of Transport Marc Garneau introduced Bill C-49, the Transportation Modernization Bill, amending several key provisions of the Canada Transportation Act (the “Act”). The Bill is in line with the Government’s stated objective of modernizing and updating the transportation regulatory framework in Canada and enhancing consumer protection.

The Bill contains several provisions that are specific to the air transportation sector. The proposed amendments include provisions relating to air passenger rights, foreign ownership interests in Canadian air operators and commercial arrangements between transportation undertakings providing air transportation.

Passenger rights regime to be implemented

Canada is a party to the Montreal Convention and accordingly passenger rights and air carrier liabilities for international flights to and from Canada are subject to the provisions of the Convention. That said, unlike certain other jurisdictions such as the United States and the European Union, the Canadian regulatory framework does not currently contain specific provisions relating to passenger rights, and only requires air carriers to include certain provisions regulating the rights of passengers in their tariffs, including in respect of compensation for denied boarding, flight delays and cancellations, etc. Any such provisions are required to be reasonable and non-discriminatory failing which they may be disallowed by the Agency.

Of significant interest and drawing the most attention thus far are the provisions of the Bill relating to air passenger rights. These amendments are aimed at establishing a new air passenger rights regime in Canada and would apply to Canadian air carriers and equally to foreign airlines operating services to and from Canada. It is important to note that the Bill does not contain any specific provisions regulating air passenger rights. Rather, it authorizes the Canadian Transportation Agency (the “Agency”) to make regulations in respect of various matters affecting air passengers including:

  • providing passenger with information regarding the terms and conditions of carriage and recourses available against the carrier;
  • establishing carrier obligations in cases of delays, cancellations and denial of boarding including minimum standards for passenger treatment in cases of delays, cancellations and denial of boarding in situations both within and outside the carrier’s control, carrier’s obligations to ensure that passengers complete their itinerary and are provided timely information and assistance; and
  • establishing minimum amounts of compensation payable in certain cases, including for lost or damaged baggage.

All of a carrier’s obligations established by regulation would be deemed to be included in the carrier’s tariff and hence form part of the contract of carriage between the passenger and the carrier.

Bill C-49 also restricts the right to make a complaint to the Agency alleging a violation of any term or condition of carriage by the holder of a domestic licence only by a person that was adversely affected.

Increased oversight of mergers, acquisitions and arrangements

The Act currently includes a review and approval regime for mergers and acquisitions involving transportation undertakings that exceed certain monetary thresholds, Bill C-49 creates a separate review regime for arrangements between two or more air operators involving collaborations to coordinate any aspect of the operation or marketing of air services including prices, routes, schedules, revenue sharing, etc.  Alliances and code-sharing – which are ubiquitous in international air transportation among airlines – are likely contemplated in these provisions.  A party to such a transaction may give notice to the Minister of Transport (the “Minister”) with a copy to the Commissioner of Competition (the “Commissioner”). If such a notice is given and the Minister is of the opinion that the proposed arrangement involves significant public interest, the arrangement would be subject to a review process, in which the Minister would also consider a report prepared by the Commissioner. If the Minister is satisfied that the proposed arrangement is in the public interest, the Minister is to authorize it and specify any terms and conditions relating to the public interest and competition that the Minister considers appropriate.

As currently drafted, the Bill grants a party to such a transaction the option of notifying the Minister and seeking pre-authorization of such an arrangement. The provision appears to be a mechanism for seeking competition or antitrust immunity for commercial transactions involving competitor collaborations.

Foreign ownership restrictions eased

A significant change introduced by Bill C-49 concerns the definition of “Canadian” for the purposes of the Act. Under the proposed amendments, a Canadian corporation or other incorporated entity may have up to 49% of its voting interests held by non-Canadians, provided that no single non-Canadian holds more than 25% of the voting interests. Further, non-Canadian air operators may not hold more than 25% of the voting interests in a Canadian corporation or an entity, either individually or in the aggregate. The Bill as it currently stands would not otherwise affect the requirement that air carriers must be controlled by Canadians.

What’s next?

The Agency currently adjudicates complaints brought by passengers, and has created a body of case law that carriers are counseled to follow, or risk sanction by the Agency. In these decisions, the Agency has addressed many of the issues that it is now charged with regulating under the Act. As such, it would not be surprising to see the Agency codify as regulations its past decisions.

DLA Piper (Canada) LLP will monitor the Agency’s progress in promulgating the new regulations and will provide regular updates on any developments. 

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© DLA Piper | Attorney Advertising

Written by:

DLA Piper
Contact
more
less

DLA Piper on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.