Garneau looks to close the CTA loophole on refunds

OTTAWA — A new statement issued this morning by Transport Minister Marc Garneau impacts the direction the Canadian Transportation Agency will take on airline refunds for future flights, with potential consequences for out-of-pocket travellers and agents facing commission recalls.

“Air travel is essential to Canada’s economic growth and prosperity, and when Canadians buy an airline ticket, they expect airlines to meet their obligations,” said Garneau in today’s statement.

“The ongoing COVID-19 pandemic has highlighted a gap in the air passenger protection framework, which did not foresee the potential for large-scale and lengthy flight cancellations and groundings of air carrier fleets not only in Canada but globally.

“In the event of a future situation that causes similar large-scale flight cancellations, this gap needs to be closed so that travellers are treated fairly.

“Today I issued a Ministerial Direction to provide the Canadian Transportation Agency (CTA) with the authority to develop a new regulation on the issue of refunds to passengers.

“This new regulation will apply to future flights that are cancelled for reasons outside an air carrier’s control, such as a pandemic, and where it is not possible for the carrier to complete the passenger’s itinerary within a reasonable timeframe.

“This updated regulation should be made in a manner that is fair and reasonable to passengers, and to the extent possible not impose an undue financial burden on air carriers that could lead to their insolvency.

“As I announced on November 8, 2020, the Government of Canada is developing a package of assistance to Canadian airlines, airports and the aerospace sector that will include strict conditions to protect Canadians and the public interest, including issuing refunds for flights cancelled as a result of the COVID-19 pandemic. The new regulation will ensure that a similar situation doesn’t occur again in the future.”


Since the start of the pandemic suppliers and agents have directed refund-seeking clients to the CTA’s website, which put forth that under the unprecedented circumstances, future travel credits and vouchers are an appropriate alternative to refunds.

Last month the CTA updated its statement on vouchers, writing that “the law does not require airlines to include refund provisions” in their passenger contracts — known as tariffs — for flights cancelled due to reasons beyond carriers’ control, such as the COVID-19 pandemic. That update raised the ire of consumer rights advocacy groups.

Previously, back in June, Scott Streiner, who heads the Canadian Transportation Agency (CTA), said officials should ask “the obvious question” of why airlines do not have to refund passengers when flights are cancelled for reasons beyond the carrier’s control — such as a global virus outbreak.

“The situation that we’ve encountered over the past several months was unprecedented, it was completely unanticipated,” said Streiner in June.

“And as a result of it we may need to collectively take a look at the framework that we’ve put in place for air passenger protection and ask ourselves whether there are lessons learned and whether there are any gaps that we need to address.”

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