Ottawa moved to relax compensation rules for airlines: report

The federal government pushed for rules that gave airlines more leeway to avoid paying passengers compensation, even as Canada’s transport regulator resisted, the Canadian Press has found.

Following legislation to reform the Air Passenger Protection Regulations in 2023, the Canadian Transportation Agency (CTA) had proposed rules that would prevent airlines from using technical issues as a reason to deny compensation for flight delays or cancellations.

But briefing notes prepared for then-transport minister Anita Anand show that under pressure from at least two federal transport ministers, the regulator later agreed to changes exempting airlines from compensating passengers when disruptions were caused by mechanical problems.

In December 2024, the government published the agency’s draft regulations – which have yet to take effect – removing “unforeseeable technical defects” as grounds for compensation.

The records, along with a federal registry, also show a strong lobbying push by airlines, with the government echoing industry concerns while scaling back some of the regulator’s proposed reforms, CBC News first reported.

Federal law stipulates that the CTA must consult with the minister when making regulations.

Limited compensation protections

Passenger rights advocate Gabor Lukacs has criticized the government for yielding to airline lobbying, arguing that Canadians now have narrower compensation protections than their European counterparts.

In November 2023, the agency had proposed that technical issues — “an inherent part of normal airline operations” — could trigger compensation. But with that change removed, progress on the reforms has slowed significantly, CP reports.

Nearly three years after legislation overhauled the passenger rights charter, updates to the Air Passenger Protection Regulations remain incomplete.

Anand’s briefing note also reflected airline concerns, warning that requiring compensation for technical problems could pose “significant safety considerations as it might incent air carriers to operate unfit aircraft to avoid paying compensation.”

WestJet CEO Alexis von Hoensbroech expressed a similar view in September 2023, saying pilots should be “entirely free from any financial consideration when they take a safety-related decision.”

Documents also show lobbying on other fronts. In October 2024, Anand referenced concerns similar to those raised by WestJet executives regarding a proposed $790 per-passenger complaint fee.

She called the fee “unduly punitive” for airlines and suggested lower rates — $250 for large carriers and $150 for smaller ones. Records indicate the agency may settle on $450, CP reports.

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