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Daniel Tsai teaches law and business at the University of Toronto and Toronto Metropolitan University and is a former senior policy advisor for the government of Canada. He’s also the editor of ConsumerRights.ca.

When the Liberal government implemented its passenger-rights regulations starting in 2019, it declared victory. The regulations promised compensation for passengers and to hold airlines accountable – up to $1,000 for delays and inconvenience.

But these obligations depend on whether the disruption is within the “control” of the airline. If the delays are the result of a “required for safety” issue, then the airline can deny the passenger compensation.

Today, despite the regulations, issues around cancelled and delayed flights, lost luggage, apathetic airlines, and stranded travellers being denied proper service and compensation have now reached epic proportions. The struggling Canadian Transportation Agency (CTA) has a backlog of more than 18,000 passenger complaints – a number that’s growing daily.

And it didn’t take long for an airline to try and turn the tables on the passenger-rights regulations. In July, the CTA ruled that staffing is under the control of the airline and could not be classified as a safety issue. But in August, WestJet appealed that decision – despite the massive layoffs that it and other airlines made to cut costs during the pandemic (even though the government had offered support and loans to retain staff) and despite its failure to hire sufficient staff while simultaneously overbooking flights during this busy summer season, leading to cancellations.

There’s a perverse logic in WestJet’s legal argument: Because it won’t manage itself better, it has effectively created a safety issue – which then denies passengers the compensation they’re entitled to.

If WestJet wins, airlines can be rewarded for shirking their responsibilities to passengers by keeping their staffing levels to a minimum to save money, while claiming that this is in the interest of so-called safety. Notably, they can use their staffing problems as an excuse to avoid facing penalties or own up to their responsibilities to consumers, or to avoid accountability to the CTA as their regulator.

The Canadian government is also complicit in its failure to anticipate and staff up airport security for the busy summer season, which has helped produce miserably long lines, delays, and cancellations.

Still, there are ways to make airlines truly accountable to protect passengers.

Airlines have an oligopoly in Canada’s highly regulated and restricted environment. They benefit from higher profits, lack of domestic and foreign competition, weak regulation, and poor enforcement mechanisms.

Adhering to a system by which compensation is paid to passengers who are due is only fair.

Canada’s airlines need to be subject to an open system of transparency and accountability to earn the public’s trust.

Passengers are typically not lawyers, and do not have the legal tools to force disclosure if the airline refuses or plays games. But creating a publicly accessible register of delayed flights with a disclosure requirement of the airlines’ reasons and evidence – with the threat of severe fines for failing to comply – would keep airlines honest and level the playing field with passengers on complaints.

Passenger rights regulations should also clearly spell out airlines’ obligations to provide compensation, and close loopholes or ambiguity, including for “staffing issues,” so the airlines and passengers have certainty of their rights and obligations.

The CTA must also be empowered to issue and enforce significant fines of up to $250,000 for corporate penalties, plus escalating penalties for repeat offences to a maximum fine in the millions. The current maximum fine of $25,000 has, astonishingly, never been handed out.

The complaints process itself needs to be held to strict standards, too, including a requirement that complaints must be decided by the CTA within a reasonable period of time.

Finally, the CTA should have the power to penalize the airlines’ executives, so that their hefty bonuses can be paid to passengers as compensation in addition to corporate fines. Perhaps then they can develop empathy for the passengers they are meant to serve.

The chaos at Canada’s airports points to the importance of Prime Minister Justin Trudeau’s 2019 mandate letter to the Minister of Innovation, Science, and Industry. That letter promised that the Liberal government would create “a new Canadian Consumer Advocate” to help consumers with a single point of contact for “federally regulated banking, telecom or transportation-related complaints.”

This crisis with airlines and passenger rights should serve as an impetus to get going on that important work, and to strengthen consumer rights across Canada in any industry where vulnerable consumers face stark power imbalances and abuse.

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