THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Wednesday, September 23, 2026
The Standing Senate Committee on Transport and Communications met with videoconference this day at 6:48 p.m. [ET] to study the subject matter of those elements contained in Division 17 of Part 4 of Bill C-31, A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025; and, in camera, for consideration of a draft report.
Senator David M. Wells (Chair) in the chair.
[English]
The Chair: I call this meeting of the Standing Senate Committee on Transport and Communications to order. I would like to note the cards that we have in front of us. Please keep your headsets away from the microphones. Thank you for your cooperation.
My name is David Wells, and I’m a senator from Newfoundland and Labrador. I’d like to ask my colleagues to introduce themselves, please.
Senator Simons: Senator Paula Simons. I’m from Alberta, Treaty 6 territory.
[Translation]
Senator Quinn: Jim Quinn from New Brunswick.
Senator Cormier: René Cormier from New Brunswick.
[English]
Senator Mohamed: Farah Mohamed, Ontario.
[Translation]
Senator Arnold: Dawn Arnold from New Brunswick.
Senator Aucoin: Réjean Aucoin from Nova Scotia.
Senator Miville-Dechêne: Julie Miville-Dechêne from Quebec.
[English]
The Chair: I’d like to welcome everyone with us today as well as those listening to us online on the Senate’s website, sencanada.ca.
Today we are meeting to continue our study of the subject matter of those elements contained in Division 17 of Part 4 of Bill C-31, budget 2025 implementation act, no. 2, which relates to amendments to the Canada Transportation Act.
With that, I would now like to introduce our witnesses. From Air Passenger Rights, Gábor Lukács, President; from Flight Claim, Jacob Charbonneau, Cofounder and Chief Executive Officer; and from Option consommateurs, Sara-Ève Levac, Lawyer and Analyst. Welcome, all. Thank you for joining us today.
Witnesses will provide opening remarks of approximately five minutes, which will be followed by a question-and-answer session with the senators.
I will now invite Mr. Lukács to give his opening remarks, to be followed by Mr. Charbonneau. Mr. Lukács, the floor is yours.
Gábor Lukács, President, Air Passenger Rights: Mr. Chair and honourable senators, Air Passenger Rights is Canada’s independent, non-profit organization of volunteers devoted to empowering travellers. We have a track record of successfully predicting shortcomings and loopholes in legislation relating to air passenger rights. For example, in 2023, we cautioned that the government’s proposal in Bill C-47 violates Charter-protected freedom of expression rights. Earlier this year, the Ontario Superior Court of Justice declared that the provision in question was contrary to the Charter.
Since 2017, we have testified before multiple parliamentary committees. Each time, we cautioned that Canada’s existing and proposed passenger protection regimes were inadequate and would result in a soaring backlog of passenger complaints. By 2026, the Canadian Transportation Agency had a 97,000‑complaint backlog, thereby validating our predictions.
After nine years of denial, the government acknowledged that “the system is broken” and that “Canadians deserve better.”
In Bill C-31, the government proposes to solve the crisis by privatizing passenger complaint adjudication. Proposed clause 85.21 would allow airlines to hand-pick the adjudicators who decide passenger complaints. Proposed clause 85.24 would make decisions rendered by the airline-chosen adjudicators binding on passengers. In our view, the government’s proposal is illusory, ineffective, unfair to passengers and unprecedented in the Western world.
It is illusory and ineffective because it does not remedy the root causes.
First, despite Bill C-47, the Government of Canada failed to implement and impose significant fines on airlines that violate passengers’ rights.
Second, the Air Passenger Protection Regulations, or APPR, are filled with loopholes that shield airlines from liability and make the regime unnecessarily complex and unworkable. The regime is so complex that a decision maker must review hundreds, if not thousands, of pages of documents, consuming a full working day, on average, to resolve a mere $400 case.
A private third-party adjudicator will not render decisions any faster unless humans are replaced with artificial intelligence, or AI, whose reliability and accuracy in legal matters remain very limited at this time. In sharp contrast, under the European and the U.K. regimes, eligibility for compensation can be determined in minutes using publicly available data rather than hundreds of pages and lengthy adjudication.
Bill C-31 proposes to merely swap decision makers without closing any loopholes, without improving enforcement and with the existing complexity left intact. Without fixing these root causes, any complaint system, however structured, will perpetuate, not resolve, the crisis.
Bill C-31 also proposes creating a regime that is unprecedented in the Western world and dissimilar to any existing alternative dispute resolution, or ADR, regime in Canada, the European Union or the United Kingdom. Regulation 261/2004 and its U.K. counterpart contain no provision for private third-party adjudication binding on passengers. The ADR schemes that do operate in Europe supplement these legislative frameworks, leaving passengers free to reject outcomes and pursue legal action.
Canada’s own telecommunication complaint system, the Commission for Complaints for Telecom-television Services, or CCTS, similarly lacks binding authority over consumers. In no comparable jurisdiction have lawmakers granted private entities selected by airlines the authority to impose legally binding decisions on passengers. The government’s claim that Bill C-31 follows the European or the U.K. model is untrue.
Bill C-31 is also unfair to passengers because the airlines would hand-pick private entities to adjudicate complaints against themselves and render legally binding decisions, a glaring conflict of interest. No impartial adjudicator can emerge where the adjudicator’s livelihood depends upon the airlines’ goodwill. This would create the most airline-friendly passenger protection regime in the Western world, surpassing even the broken Canadian Transportation Agency.
We ask you, senators, to harmonize proposed clause 85.24 with existing ADR systems, such as the CCTS, where decisions are binding only on the service providers and consumers are free to accept or reject them.
Thank you.
The Chair: Thank you very much, Mr. Lukács.
Mr. Charbonneau, the floor is yours.
[Translation]
Jacob Charbonneau, Cofounder and Chief Executive Officer, FlightClaim: Thank you, Mr. Chair and ladies and gentlemen of the Senate.
For the past decade, FlightClaim has helped thousands of Canadian travellers obtain statutory compensation. If the carriers were acting in good faith, I wouldn’t be here before you today.
The House was unable to consider Division 17 separately from this omnibus bill. Thank you for looking into this. I’d like to present a specific case that illustrates how carriers use the regulations and the existing system to their advantage.
This past August, WestJet’s flight attendants went out on strike. The strike lasted only a few hours, as a tentative agreement was reached overnight, but WestJet cancelled flights for four days — before, during and after the strike. Approximately 250,000 passengers had their flights cancelled.
Those who filed a claim received the same standard response: The strike was beyond our control, with no compensation or reimbursement of expenses. However, a flight cancelled before a strike begins or after it ends is a scheduling decision made by the carrier.
Internationally, the Montreal Convention requires the carrier to reimburse expenses incurred due to a delay, regardless of whether there has been a strike. For flights out of Europe, European regulations consider a staff strike to be within the carrier’s control and passengers are entitled to compensation and reimbursement of expenses. Those who are currently contesting the matter can expect a decision in 2029.
That’s the crux of the issue. The carrier is the sole holder of the information, and it costs nothing for it to refuse. When the Canadian Transportation Agency finally rules, it finds in the passenger’s favour in 57% of cases. Three years later, the carrier will pay the same amount, without interest or penalties. As a result, nearly 100,000 complaints are pending and there’s a backlog of up to 36 months.
It’s not a capacity issue; it’s an incentive issue. We’re encouraging bad practices among carriers.
Division 17 doesn’t address the root cause of the problem; it merely shifts it elsewhere. By shifting it, it strips travellers of their only guarantee of impartiality. It transfers the powers of the Canadian Transportation Agency — a quasi-judicial and independent tribunal — to the minister, and it creates designated individuals whom the carrier selects and compensates. There are no criteria for independence, and the decision is binding on the passenger. Nor is there any provision for review, other than before the Federal Court, which is neither accessible nor proportionate for a $1,000 claim. When one of the parties selects and compensates the decision maker, that is not a court. Canada has already gone down this road with the banks: Ottawa was forced to backtrack in 2024. The minister is now proposing to make that same mistake.
Furthermore, the federal government remains Air Canada’s creditor, holds shares in Air Transat, and serves as both the regulator and promoter of the industry. Division 17 would also make it both judge and legislator.
The risk of interference is not merely theoretical. In 2023, Parliament directed the Canadian Transportation Agency to impose fees on carriers for substantiated complaints. The agency proposed $790. Documents obtained through access to information requests reveal a letter from the minister at the time asking the agency to hold off while the industry held nearly 150 lobbying meetings. Professor Paul Daly of the University of Ottawa described this intervention as “constitutionally inappropriate.” The fees still haven’t been implemented. With Bill C-31, the requirement adopted by Parliament becomes a discretionary provision. What was mandatory in 2023 — the law stating, “you must” — becomes optional in 2026 — the bill stating, “you may” — thereby handing power back to the very entity that had blocked it.
Yet solutions exist and are well known. In 2023, the Standing Committee on Transport, Infrastructure, and Communities made 21 recommendations. In addition, there are the regulations harmonized with Europe, published in the Canada Gazette on December 21, 2024, for which the costs to carriers represent around $0.99 per passenger segment. Finally, there are also fees for cases ruled in the passenger’s favour.
None of this has been implemented. Yet strict rules are in effect. Europe, which has a cutting-edge system, has up to 70% fewer long delays of more than three hours and 20% fewer same-day cancellations than what we’re seeing in North America.
I’m not asking you to block the bill; I’m asking you to add an impartial judge to it.
I recommend four amendments — none of them have any fiscal impact — the full text of which is included in my brief.
First, we must add independence criteria for all designated persons. No entity may be controlled or majority-owned by a carrier.
Second, the choice of the designated person must be determined by the passenger, rather than by the carrier.
Furthermore, the burden of proof must rest with the carrier when it invokes a situation beyond its control or a safety concern, since it is the only party with access to the facts.
Finally, interest should be automatically added after a 30-day period, and there should be a right to appeal to the Canadian Transportation Agency.
If it’s not possible to amend the bill in this way, I have three alternative suggestions for you. A parliamentary review within 24 months would be necessary. Furthermore, it would be wise to adopt the 2024 regulations and the fees approved in 2023. Finally, the carrier should submit proof of the backlog within 60 days; otherwise, it should be required to pay. This is how we eliminate the backlog without changing the judge.
Since 2019, Canadian travellers have had an independent tribunal to enforce their rights. It is a slow process, to be sure, but it is impartial. Division 17 addresses the slowness but sacrifices impartiality.
Only you can prevent this. No one can be a judge in their own case. This is not an opinion; it is a principle — and it is the only one this bill overlooks.
Thank you.
I’d be happy to answer your questions.
[English]
The Chair: Thank you, Mr. Charbonneau.
I will now go to Ms. Levac. The floor is yours.
[Translation]
Sara-Ève Levac, Lawyer and Analyst, Option consommateurs: Mr. Chair, ladies and gentlemen of the Senate, thank you for giving us the opportunity to present our remarks to you this evening.
My name is Sara-Ève Levac; I am a lawyer and analyst at Option consommateurs.
Since it was founded in 1983, Option consommateurs’ mission has been to help consumers and defend their rights. As part of our work, many airline passengers contact us regarding delayed or cancelled flights. These consumers often feel they’ve been left to fend for themselves after their flight was disrupted and they received inadequate information and assistance.
To assert their rights, dissatisfied passengers can file a complaint with the Canadian Transportation Agency. However, as you know, the backlog of complaints at the Canadian Transportation Agency is nearing 100,000 cases and continues to grow. A passenger may have to wait more than two years before their complaint is processed.
With Bill C-31, the government is proposing to clear the backlog of complaints by allowing carriers to appoint private organizations to handle their passengers’ complaints.
Tonight, we would like to draw your attention to the shortcomings of this reform.
At Option consommateurs, we’ve noticed that the bill doesn’t include guidelines to ensure the independence, transparency and accessibility of these organizations to Canadians. Because we are a consumer advocacy group, this situation concerns us and leaves many crucial questions unanswered. Who will serve as the directors of these organizations? Will passengers be able to use these organizations free of charge? Will they be required to periodically report on their activities? Will consumers be able to have representation if they feel the need?
Bill C-31 is all the more concerning, given that other solutions to clear the backlog of complaints have been on the drawing board for more than three years. The 2023 amendments to the air passenger protection regulations have yet to take effect. These amendments were intended to simplify the rules governing flight delays and cancellations. The law passed in 2023 was also intended to allow for the recovery of complaint-handling costs from the airlines.
These solutions have never been implemented. Instead, the government is proposing a complete overhaul of the complaint-handling system, with all the uncertainties we have mentioned.
Canada has already experimented with a private complaint-handling system in the banking sector. Until 2023, banks could choose a private organization to handle their customers’ complaints. Recognizing that the proliferation of private complaint-handling organizations was not in consumers’ best interest, the Government of Canada designated the ombudsman for banking and investment services as the sole complaint-handling body in that sector.
To ensure that consumers’ interests are adequately served, Option consommateurs recommends implementing the simplification of the air passenger protection regulations, which has been planned for over three years. If the reform is adopted, it would be advisable to hold public consultations to establish strict regulations for private complaint-handling organizations. Such regulations are essential to ensure the transparency and impartiality of the private organizations chosen by carriers, in order to set standards so that the complaint-handling process remains accessible and fair for consumers.
Thank you for your attention. I would be happy to answer your questions.
[English]
The Chair: Thank you, Ms. Levac.
We will now move to questions from senators.
Senator Simons: Thank you very much to all of our witnesses.
Professor Lukács, I want to start with you. You flagged what I think is a very important issue, which is the question of who guards the guardians. If the adjudicators are selected and paid by the airlines, will they find themselves in a conflict of interest?
If they were official mediators and arbitrators, they would have a code of conduct, but there’s nothing in this bill that requires that those people be officially trained mediators who belong to an organization that has a code of ethics.
Would it be helpful if the bill specified the kinds of people who could adjudicate? Or do you think that still wouldn’t go far enough to solve the problem?
Mr. Lukács: In my view, it wouldn’t go far enough to solve the problem because it still would allow some form of judge shopping. Let’s remember that we have judges in superior courts who hold themselves to the highest ethical conduct you can imagine, yet no party can decide that they want their case heard before a specific judge.
Senator Simons: It’s not just that they’re being paid; they’re being chosen by the airline.
Mr. Lukács: That’s right.
Senator Simons: Is there any way to fix that?
Mr. Lukács: The fact that the airline chooses the provider means that they have some leverage in discontinuing to use a particular provider and going somewhere else, so there’s economic pressure there. One solution might be that those decisions should not be binding on passengers, and passengers should be free to reject them and then take the matter to small claims court, which is what the European norm is. In the U.K., that’s how it works. In Germany, you have only a conciliation-mediation service, but it’s not a legally binding decision.
Another option would be to have very significant screening and on top of it a random selection of decision makers. It would be just a rota, and nobody would have control over where a particular case goes.
Senator Simons: You raised the issue of freedom of speech. By that, you were referring to non-disclosure agreements where people couldn’t talk about the settlement after the fact. This bill would eliminate all those privacy rules.
Is there any danger? One of our witnesses yesterday suggested that it might be an imposition on complainants who might not feel comfortable complaining for fear that embarrassing things about them might become public.
Mr. Lukács: First of all, unfortunately, the Transport Canada witness forgot to mention that those provisions were already declared unconstitutional, contrary to the Charter, by a court in Ontario this July. Those provisions, which now graciously the government is saying they are going to repeal, have already been read down. It’s really not a meaningful step.
In terms of concern from a passenger perspective, we have to remember that in Canada we have a constitutionally protected open-court principle. Barring very specific privacy concerns, such as a specific type of crime or very significant personal health information, generally, court proceedings are open to the public, whether it’s a small claims court or any other forum. There is no expectation of privacy in this situation. Quite frankly, there’s nothing particularly embarrassing about being denied boarding or being delayed on a flight. Those are just common experiences, unfortunately.
Senator Simons: Unless they denied you boarding because of your bad behaviour.
Mr. Lukács: If someone is being falsely accused of bad behaviour, definitely I would like to see that being tried in public. Unfortunately, sometimes those allegations are made without a cause or a reason.
On the other hand, if a passenger does indeed misbehave and causes a disruption in the airport, surely the public should know, and there should be some public, societal control, which could be far more powerful than any kind of penalty.
[Translation]
Senator Aucoin: I have two questions. My first is this: Could someone walk me through the complaint process—from the moment the flight is delayed until it ends up in a pile of 100,000 complaints? I’ve never filed a complaint, so I’m not really sure how to go about it or how the airline might drag its feet or let the complaint fall by the wayside. Can someone tell me more about this?
Mr. Charbonneau: We’ve been helping passengers for 10 years. To date, we’ve dealt with tens of thousands of complaints.
Essentially, an initial request is made to the carrier, often through a portal owned by the carrier. Some carriers even block passengers from filing a complaint in the first 72 hours. After that, the complaint can be filed on the portal. In theory, they have 30 days to offer a refund, compensation or a denial. Very often, more than 30 days go by before a response is received, and responses are very vague. For example, they may cite weather or safety issues and not provide details about what actually happened. Passengers often realize that more than one issue has occurred, and yet they only get a partial explanation. The passenger, who is not an expert in air law, accepts the carrier’s response.
A small percentage of people continue their case before the Canadian Transportation Agency. Another process begins when they fill out a new form on the agency portal. The airline also enters its information there. Afterwards, the case is placed in a queue of nearly 100,000 complaints — not individuals, because complaints often involve more than one person. The current wait time is 36 months before moving on to the next stage, where the agency opens a case and requests specific information from both parties. The agency then rules on the matter.
Senator Aucoin: Thank you.
Second, you mentioned the possibility, for example, of appointing an impartial ombud in accordance with the established rules. Whether the government appoints an ombud or designated persons, I still haven’t heard anything about the airlines’ obligations to provide the appropriate or necessary information so that a complaint can be objectively assessed. Nor have I seen anything in the regulations to that effect. Can someone comment on this to confirm whether I’m right or wrong?
Ms. Levac: Right now, the agency responsible for dealing with air passenger complaints is the Canadian Transportation Agency, and it’s an independent body.
The amendments to the air passenger protection regulations, which we’ve been waiting on since 2023, were supposed to simplify the system and provide compensation to consumers by default. If the flight was cancelled for reasons beyond the carrier’s control — which meant the carrier had not compensated the passenger — the burden of proof lay with the carrier to demonstrate this situation. However, this measure has still not been implemented. In our opinion, if it had been, it would have reduced the number of complaints at the source, since the system would have been simplified to just two possible scenarios: compensation is provided or it is not. However, the carrier must explain why it refuses to provide compensation — for example, if it was for reasons beyond the airline’s control.
Senator Aucoin: In your opinion, is it absolutely necessary for this part of the 2023 regulations to take effect if we move forward with the new act?
Ms. Levac: Yes. Right now, the problem is that people are saying the system is broken and that they want to replace it with a system involving private organizations. However, we’ve never put all the pieces together to give the system a chance to work properly. We’ve never implemented the regulatory changes or allowed airlines to cover the costs of handling complaints. In our view, that would have encouraged airlines to settle with passengers, and fewer people would be turning to the Canadian Transportation Agency.
Senator Aucoin: There’s no guarantee that carriers will provide the information required under the new legislation.
Ms. Levac: Not at the moment. Under the proposed amendment to the regulations, passengers were supposed to be regularly informed of developments in the event of a cancellation or delay. However, this is still not required. For example, many of the people who call us are told that their flight has been cancelled due to weather — that’s all. Not having this information leads to dissatisfaction. If consumers received clearer and more transparent information from carriers, there would be less dissatisfaction and, consequently, fewer complaints to the Canadian Transportation Agency.
Senator Miville-Dechêne: I would like you to tell us about the independence of private mediation firms. How does this differ from the approach taken in Europe? In France, private mediation firms are commissioned and some claim that this system is better. What framework governs them? I imagine there must be a directive. Nothing prevents the government from setting out a directive in its regulations. In France, who hires these private firms? Who hires mediators in Europe?
Mr. Charbonneau: Systems vary from one country to another. In all systems, the key difference compared with what is being proposed today is that the decision is binding only on the carrier and not on the passenger. The passenger is not obliged to accept the decision and may still take their case to court or appear before a judge to obtain an impartial ruling. This option is always available. However, it is not provided for in the current Bill C-31, where the decision is binding on the passenger. They cannot challenge it. That is the first point.
Secondly, depending on the country, it is either the state, the passenger or the carrier who makes the choice. To my knowledge, the United Kingdom is the only country where it is the carrier. In this case, the passenger is not obliged to go through this process and the decision is binding only on the carrier.
Senator Miville-Dechêne: Do you feel that this amendment you are proposing could resolve the issue?
Mr. Charbonneau: Several questions currently remain unanswered. It is not simply a matter of switching entities.
Senator Miville-Dechêne: Even though it is said that the organization must be independent, the fact remains that it is the airlines that do the hiring.
Mr. Charbonneau: That is correct. There are several shortcomings in the current system. Changing the judge or the entity will not solve the whole problem. On the contrary, it undermines impartiality, and all the issues that have been raised — which should be addressed by the 21 solutions proposed by the Standing Committee on Transport, Infrastructure and Communities in 2023 — remain unresolved. However, Bill C-31 does not address this aspect.
To bring the system more into line with what we see in Europe, we need to have de facto compensation schemes; otherwise, we are imposing the burden of proof based on information known only to the carrier. It is therefore impossible for passengers to know whether the issue is genuinely a mechanical fault, or whether it is related to maintenance or not. Only the carrier has all this information. It is not included in the replies sent to passengers. The only way to obtain these details is to go to the transport authority and wait 36 months to, for example, gain access to the logbook.
Senator Miville-Dechêne: Has the Transportation Agency done its job properly? Is this a case of bureaucratic inefficiency? My question is addressed first and foremost to Ms. Levac.
[English]
Mr. Lukács: I would be happy to answer that, if I may. I’m not sure if the question is for everyone.
Senator Miville-Dechêne: Well, I first asked Ms. Levac, and we’ll come to you afterwards.
[Translation]
Ms. Levac: At present, the Transportation Agency receives around 40,000 complaints from air passengers each year. It is estimated that only 3% of passengers lodge complaints. This figure is higher than that of the Commission for Complaints for Telecom-Television Services, or CCTS, and the Ombudsman for Banking Services and Investments, or OBSI, combined. This is a very high number of complaints.
We were never given the powers or the opportunity to establish a simpler system through the planned amendment to the air passenger regulations. So I would say this to you: Give them the power to do their job properly.
[English]
Mr. Lukács: There are two aspects here. First, the Canadian Transportation Agency is not the only avenue for passengers to go. A small claims court is often a substantially faster and fairer venue, where there is an impartial, independent judge who is not influenced by the federal government or by Transport Canada either.
You may remember that during the time of COVID, Transport Canada officials had been interfering with what the Canadian Transportation Agency was doing and had been pressuring and persuading Canadian Transportation Agency officials to issue dubious statements about passengers’ rights to a refund, where billions of dollars of consumers’ money was misappropriated and eventually had to be refunded from the public purse.
Certainly, while I agree with much of what has been said before, I don’t believe the Canadian Transportation Agency itself is an impartial body as it stands currently.
The Chair: Thank you.
[Translation]
Senator Cormier: If I have correctly understood the essence of Division 17, the aim is first to liquidate the backlogs, and then to ensure there is a streamlined process for resolving complaints. From what I gathered from the witnesses who appeared yesterday and from my reading, there are four mechanisms for resolving complaints.
Firstly, what generally prevents passengers from obtaining redress? Is it solely a matter of time? If not, what factors make it more difficult for passengers to obtain redress when there are delays?
Mr. Charbonneau: Actually, there are a couple of things.
The first is often a systematic or almost systematic refusal by the carrier, which has everything to gain by refusing, knowing that very few passengers will take it further. They know that most people will just bow, believing what the carrier says.
This is also due to the three-year interest-free and penalty-free period to pay the indemnity, which happens in 57% of cases. Unfortunately, that encourages the carriers’ bad practices. That’s another area.
Also, for people who decide to take it further, having to wait three years and spend hours and hours on their complaint without knowing whether they are eligible leads them to drop it. That’s what we see. People don’t start the process, because they wonder if they really want to spend years and years for $400 or $500. They eventually give up.
Senator Cormier: You spoke at length about the regulations that were supposed to be implemented in 2023 and that, if the Canadian Transportation Agency had been properly resourced, the problem would now be less apparent.
Since we can’t go back to 2023, I’m trying to figure out what message to send to the current government based on what’s on the table. I’m thinking of passengers who have been waiting for years. How will this problem be quickly resolved? What would your silver bullets be to get this done in a timely manner?
I would like to say that I travel with Air Canada, with whom I have some complaints. However, in the event of delays, we do get a lot more texts sent to us to explain the reason for the delays.
There is more follow-up being done than ever before. We have to acknowledge that. In that sense, what would be some quick and effective solutions to solve the problem?
Ms. Levac: The first thing I would say is that the 2023 amendments were established in legislation. What’s missing is implementation. The regulations were first published in the Canada Gazette, so there is a written version of the updated regulations. It is just a matter of implementing them.
Unfortunately, I don’t have a silver bullet for you. Furthermore, I am not convinced that hiring a private organization, which does not have expertise or knowledge of the regulations, will resolve complaints quickly. The organization has to adapt and learn the rules, whereas we already have an organization that has expertise in the Air Passenger Protection Regulations.
Senator Cormier: One of our major concerns is also the delivery of services and communications in both official languages. Would it be challenging to use private companies to assess and deliver services in both official languages?
Mr. Charbonneau: I think it’s a relevant question, not only in terms of official languages, but also in terms of application. Currently, the Transportation Agency has interpretation guides for regulations. For example, even if a case does not qualify for compensation, the carrier has a duty to have backup plans, including crews and aircraft. That verification needs to be done. Will an arbitrator hired by the carrier simply rely on the text of the legislation and say that a weather issue will automatically mean that no compensation will be paid, or will that person also look at all related factors, including service and official languages?
Senator Cormier: Thank you.
[English]
Senator Mohamed: You have really captured my attention with the idea that there is really no incentive for a resolution. In your testimony, Mr. Charbonneau, you said that maybe there are 60 days, and if you do not have a resolution, you automatically pay. Or maybe there is a situation that if you go beyond a certain time, interest starts to accumulate. We could probably talk for hours about why there is a backlog, and there will be a backlog that is resolved. This is really about looking at the future.
Does anyone else have a system in place that says, “If you don’t resolve it by this date, you have to compensate,” or, “If you don’t resolve it by this date, there is interest that is levied”? How do we incentivize resolution?
I think you are right that the majority of people give up. They don’t have the time or money to pursue a small claims court. They have other things going on. I am captured by how to not find ourselves in the same situation in terms of a backlog if we don’t put measures in place that incentivize — I will say that kindly — a resolution.
[Translation]
Mr. Charbonneau: You’re absolutely right. In fact, that’s the crux of the problem. A few moments ago, we were talking about silver bullets. The only solution that can really have a quick impact would be something that incentivizes the airlines to solve the problem themselves. That doesn’t currently exist, and the problem is being postponed. They fund themselves using money they do not have to pay right away. It’s a win for the carriers.
That’s why there should be a fee of $790 per complaint in favour of the passenger. Obviously, if the complaint is unfounded, the carrier doesn’t have to pay. In addition, if compensation for a valid complaint had to be paid within 30 days by the carrier, that will cost them. Adding interest and penalties can change the bad behaviour of carriers. That’s the only way.
[English]
Senator Mohamed: Are there any other countries currently that do that or have close to that kind of regime, and if so, has it worked?
[Translation]
Mr. Charbonneau: The small claims division of the Court of Quebec applies moral damages and interest, which is not currently the case at the Transportation Agency.
[English]
Senator Arnold: Thank you for being here. My question also has to do with penalties, but it’s more about the increase in the penalties from $25,000 to $100,000 for the corporation. I’m just curious if any of you have a comment on that. Will that be effective?
Mr. Lukács: I would be pleased to respond to that, senator. Unfortunately, the greatest problem is a lack of willingness to implement and impose meaningful penalties. If meaningful financial penalties were imposed, it would change the balance of profitability. Currently, a good economic calculation shows that it’s far more profitable for airlines to break the law and, on a few occasions, just pay a small fine, which is just the cost of doing business. If the fines were increased, then that would change. However, as was pointed out, in 2023, the maximum fine was raised by Parliament to $250,000, yet the government failed to follow up and implement that in the regulations. The maximum penalty in the regulations remains $25,000.
Senator Arnold: They’re saying that it’s going to be $1 million.
Mr. Lukács: It’s going to $1 million in the legislation, the same as it went to $250,000 in the legislation. That doesn’t mean it will happen because it also has to be implemented in the regulations, and the government has not done that.
The same thing happened with the cost recovery fee, which Parliament explicitly ordered the Canadian Transportation Agency to implement. But then CBC’s Go Public unearthed documents showing that transport ministers and Transport Canada interfered and intervened so that those would not actually be imposed because airlines were lobbying transport ministers and Transport Canada. There has been a lot of interference, and the same fate has happened with the various loopholes in the Air Passenger Protection Regulations. The 2024 proposal continues the “required for safety reasons” loophole and the strike-related loophole, which Mr. Charbonneau mentioned. These were kept there at the specific request of two Ministers of Transport, as documents received under access to information show, which I circulated to members of the committee as exhibits.
Senator Arnold: Thank you.
Senator Quinn: Thank you to the witnesses for joining us tonight.
It’s very frustrating to be part of this process because this is an important topic. We heard from witnesses yesterday and this evening, which convinces me this is a very important topic. Last year, 86 million people travelled.
I’d be interested in a comment from each of you with respect to the level of consultations that have taken place. It’s in our budget 2025 implementation act, no. 2. It’s very difficult to make changes. Yesterday, I think we talked a little bit about this as being something that’s deserving of much deeper consideration.
What was the level of consultation as far as you, your associations, or colleagues were aware? Were you aware of the consultation levels that caused it to end up in the budget 2025 implementation act, no. 2?
[Translation]
Mr. Charbonneau: A number of House of Commons and Senate committees have looked at the consultations that took place when Bill C-49 was put in place and following the amendments. This time, it was included in an omnibus bill in the economic update.
There is no committee. There hasn’t been a specialized transportation committee that has studied the issue, at least in the House of Commons. The request was made by the opposition parties and was put to a vote. The Speaker of the House of Commons found it absurd to have such major changes in an economic bill. Unfortunately, the vote took place, and there were not enough votes to separate them.
We are aware and very grateful that you are now looking into the issue. Obviously, these are major changes that will have an impact on millions of passengers for years to come. It has to be taken seriously. These are decisions that will impact millions of passengers.
Ms. Levac: I would like to make a comparison with the CCTS, back when there was a request to create an independent consumer complaints body. Public consultations by the CRTC were set up to study the mandate and operations. At the time, there were consultations on governance, accountability, mandate and funding that led to the creation of the CCTS.
There is no information in this bill on how to ensure that the organization will be independent. That’s the issue that’s worrying.
[English]
Mr. Lukács: Unfortunately, in this case, there has been no consultation with our organization. To my knowledge, no other organization has been meaningfully or at all consulted. The overarching concern here is that, as the senator mentioned, this provision, Division 17, is included in a budget bill, which makes it, at least by custom, very difficult for senators to step in. However, in our submission, this is an abuse of past customs, and certainly there is strong support and strong evidence for this committee to make it clear that such an abuse may not be acceptable, and amendments could be put forward.
The Chair: Thank you.
For round two, we have about eight or nine minutes left, and we have three senators wishing to ask questions. Could you please keep your questions brief and the answers brief as well?
Senator Simons: This is a question for Mr. Charbonneau and Mr. Lukács.
I think you’ve each flagged — Mr. Charbonneau, in your brief, and Mr. Lukács, when I spoke to you outside of this committee — the issue of plane swapping. Your plane is fine, but they reassign you to a broken plane and then say, “Oh, the plane was broken, and it was beyond our control.” It points out the imbalance in who has the information. This is something Senator Mohamed talked about yesterday. If you’re filing a complaint, you don’t really know what happened to your airplane. What has to be done to make sure that if people file a complaint, they have equality of information so they can make a case?
[Translation]
Mr. Charbonneau: You’re absolutely right. I think it’s a symptom of a systemic problem that is much bigger than that and shows how carriers are using the system in place and the regulations for their own benefit. It also shows how willing they are to cheat sometimes so they do not have to pay compensation.
The only way to change that is to put the burden of proof on the carrier and have access to that information, either publicly or through a direct link to the specific case.
In our files, we usually try to get a copy of the log containing all the information that cannot be tampered with. Unfortunately, only the carrier has the log and can decide whether or not to share it. However, the Canadian Transportation Agency can request it.
[English]
Mr. Lukács: Plane swapping is simply a form of fraud. The fraud is not swapping planes; the fraud is telling passengers that their own plane broke down. This issue has been exposed on a large scale by CBC’s Go Public in several reports. Those reports have been forwarded to the Canadian Transportation Agency, which could be issuing fines and investigating this, but, to my knowledge, no fines to this date have been issued for this practice. That is where the problem starts, but there is an even bigger problem, which is that this type of fraud is beneficial for airlines. In Europe, it doesn’t matter why the plane broke down. In Europe, when an aircraft breaks down, that is still something that the airline has to provide full compensation for. It’s their airplane. In Europe, maintenance issues are not considered extraordinary circumstances.
In Canada, even under the 2024 proposal, the minister specifically insisted on retaining that loophole and the treatment of maintenance issues as exceptional or extraordinary circumstances.
[Translation]
Senator Aucoin: Am I wrong in thinking that the bill is trying to resolve the entire backlog, which includes about 100,000 complaints? Am I mistaken in thinking that there is no mechanism provided for in the current bill? I don’t mean the act and the regulations from 2023. I understand that there was a mechanism at the time. Are we not delaying the problem, since there will be no process requiring the carriers, who will appoint the new arbitrator, to provide the information? Isn’t it the same thing? Is it just going to delay the process? Is that the case?
Ms. Levac: Yes, you’re right, that’s correct.
Mr. Charbonneau: You are absolutely right, in fact. The proposed solutions simply transfer the point of contact; the basic problems remain unresolved.
Senator Aucoin: Thank you.
[English]
The Chair: Mr. Lukács, did you have a brief comment on that?
Mr. Lukács: On which question?
The Chair: The question from Senator Aucoin. Would you like to ask it again, Senator Aucoin?
[Translation]
Senator Aucoin: Without a policy, isn’t the process that the government is proposing for the backlog of 100,000 complaints just deferring the problem?
[English]
Mr. Lukács: I very much agree. What this is doing is swapping decision makers and hoping that, miraculously, those decision makers will work faster, but that is an illusion. While I have significant misgivings about a systematically impartial Canadian Transportation Agency, I don’t believe the backlog is deliberate or due to any incompetence. The backlog is happening because the rules are so complicated that even judges complain that it takes a full day to just deal with one single case. It takes poring through hundreds of pages of maintenance and mechanical report logs because the APPR decides eligibility for compensation based on what actually causes a disruption as opposed to understanding that most events are normal operation, like in Europe, and compensation should be paid.
[Translation]
Senator Cormier: I’d like you to talk to us about the following topic. I come from an area served by small carriers. A number of small carriers in Canada are trying to serve the regions as well as possible.
Looking at the issue of penalties, which can be as high as $1 million, I have some concerns. It could happen that smaller airlines may not be able to pay these amounts and then ultimately stop serving routes to remote destinations.
Could the idea of asymmetric penalties, depending on the type of carrier and the type of region, be a long-term option to try to maintain services and respect for passengers, in your opinion? What can you tell us about that? What are your thoughts?
Mr. Charbonneau: That’s a great question.
As it stands, regulations already differentiate between large and small carriers in terms of minimum standards to be met. As for the fines, obviously, they have to be proportional to the offence, because where there is a fine, there is an offence.
Right now, we’re seeing the opposite. In fact, fines are used very little. The amounts have already been increased, but increasing them doesn’t change a thing when they are not used.
If a fine is imposed, it must be proportionate to what was done. Obviously, if there is a serious offence, the fine should be proportional to the offence, regardless of the type of carrier. If there is no offence, no fine would be applied.
When it comes to regulations, compensation and so on, I agree. The regulations already address this issue by differentiating between large and small carriers.
[English]
Senator Cormier: Mr. Lukács, do you have a comment to make?
Mr. Lukács: On the issue of small and large carriers, there’s obviously a question of proportionality. Different penalties would likely be issued for an incident on a plane of 200 passengers as opposed to five passengers. However, unfortunately, this is a very futuristic problem because, currently, a typical penalty per violation basis is a couple hundred dollars, maybe a couple thousand dollars, certainly nowhere near the $25,000 maximum. That’s where the problem starts. That is why we see these problems happening. Airlines find it more profitable to disobey the law rather than to obey the law.
The Chair: We’ve come to the end of our questions. I’d like to thank our witnesses — Mr. Charbonneau, Ms. Levac and Mr. Lukács — for their presentations today. We appreciate it.
Thank you, colleagues. We will prepare to go in camera.
(The committee continued in camera.)