Background
Highlights of new rules


On 8 September 2022, new refund rules will come into effect under the Air Passenger Protection Regulations (APPRs). In particular, the APPRs will include rules governing air carriers' obligations in cases of flight cancellation or lengthy delay caused by situations outside their control and where alternate arrangements cannot be provided to affected passengers within a reasonable time.

Background

These new rules are being brought in to fill a gap in the regulations that was discovered at the outset of the covid-19 pandemic, after restrictions on travel resulted in the mass cancellation of flights around the world. At the time, the APPRs, which had come into full effect just months before the declaration of the pandemic, did not require carriers to refund passengers except when the reason for the flight disruption was caused by reasons within the carrier's control. Where other jurisdictions, including the European Union and the United States, required airlines to provide refunds to passengers whose flights had been cancelled due to the pandemic, this was not the case in Canada.

After several Canadian airlines refused to provide refunds to Canadian passengers – instead, they announced policies through which affected passengers could claim vouchers or travel credits – there was an outcry in the media and a number of proposed class actions were launched. That pressure (and, in some cases, conditions attached to financial support provided by the federal government to those carriers that accepted it) eventually caused most carriers to change their policies and start providing refunds.

In addition, in December 2020, the minister of transport directed the Canadian Transportation Agency to make regulations to address the regulatory gap relating to flight disruptions in situations outside a carrier's control.

After two periods of consultation, on 22 June 2022, the Agency published the new regulations in their final form.

Highlights of new rules

As was the case before, where there is a flight cancellation or a delay of three hours or more, carriers must rebook affected passengers on the next available flight operated by them or a partner airline.

However, under the new rules, if a confirmed reservation cannot be provided on a flight leaving within 48 hours of the original departure time, carriers must offer a choice between a refund or a booking on the next available flight. In the case of large carriers – that is, those that have transported at least 2 million passengers during each of the past two calendar years – the "next available flight" must take account not only of those that they or their partners operate, but also of flights operated by other carriers, including competitors.

In addition, even if they initially choose the rebooking option, passengers will be able to change their decision and opt for a refund at any time prior to being provided a confirmed reservation on another flight.

In terms of what is covered, the new rules governing refunds where the delay or cancellation is outside of the carrier's control will mirror the existing refund rules that apply where the cause of the disruption is within its control:

  • The refund must cover the unused portion of the ticket, and any unused add-on services (eg, seat selection or extra baggage) the passenger paid for.
  • If the passenger is no longer at their point of origin and their travel no longer serves a purpose, in addition to refunding the cost of the ticket (and any additional services), the carrier must book the passenger on a flight back to their point of origin at no cost.

However, where, currently, any refund must be paid to the person who purchased the ticket or service "using the method used for the original payment", the new rules will allow for alternative methods, if certain strict requirements are adhered to. In particular, while the default will be that any refunds required by the APPRs be paid to the purchaser using the method used for the original payment, the new rules will allow them to be provided in "another form" – such as a voucher or travel credit – if the following conditions are met:

  • The person entitled to the refund has been informed in writing of the monetary value of the original ticket or additional service and the availability of a refund by the method used for the original payment.
  • The "other form" in which the refund is to be provided does not expire.
  • The person entitled to the refund confirms, in writing, that they have been informed of their right to receive the refund by the method used for the original payment and that they have chosen to receive the refund in another form.

These requirements for providing a refund in an alternative form mirror those that currently apply to the obligation to pay standard compensation for inconvenience where these payments are required under the APPRs.

When the new regulations come into effect, all refunds required under the APPRs must be provided within 30 days after the obligation is triggered.

For further information on this topic please contact Carlos P Martins or Andrew MacDonald at WeirFoulds LLP by telephone (+1 416 365 1110) or email ([email protected] or [email protected]). The WeirFoulds LLP website can be accessed at www.weirfoulds.com.