Airlines lose bid to skirt some of Canada’s air passenger rights rules

Airlines must compensate travellers for international flight disruptions based on the Canadian Transportation Agency’s rules, the Supreme Court of Canada ruled in a landmark decision for air passengers.

The decision released Friday upholds Canada’s Air Passenger Protection Regulations (APPR) after a group of airlines appealed to have them declared invalid for international flights.

At the heart of the case was whether Canada’s passenger rights charter, enacted in 2019, could stand alongside rules set out in the Montreal Convention, the international standard signed by Canada in 2001.

While the APPR sets out a standardized compensation scheme for delays and cancellations and lost baggage when the factors are within the airline’s control or for safety reasons, the Montreal Convention takes a more individualized approach.

According to that standard, a passenger can attempt to argue in court that they were wronged and if successful receive compensation accordingly.

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That was challenged by a group of airlines that included Air Canada, Porter Airlines and international carriers such as Lufthansa and Air France.

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These airlines argued that the APPR extend beyond the Canadian Transportation Agency’s powers and were inconsistent with the rules set out in the Montreal Convention. The CTA and attorney general argued there is no clash between passenger protections and the Montreal Convention.

The Federal Court of Appeal dismissed the airlines’ challenge in late 2023 and the case was heard by the Supreme Court in March of this year.

On Friday, the Supreme Court stated in a decision written by Justice Malcolm Rowe that the regulations “do not conflict with the Montreal Convention.”

Under the federal rules, passengers must be compensated with up to $2,400 if they were denied boarding because a trip was overbooked — so-called flight bumping.

Delays and other payments for cancelled flights warrant compensation of up to $1,000.

Travellers can receive up to about $2,300 for lost or damaged baggage, though the exact number fluctuates based on exchange rates.

Transportation Minister Anita Anand said in a statement that the ruling backs the federal government’s push to improve protections for travellers.

“Today, the Supreme Court ruled in favour of passengers and our view that passengers need protection. We will always stand up for Canadians and their rights as travellers,” she said.

Since the rules came into force five years ago, the government has taken further steps to tighten them, a move prompted by scenes of airport chaos, endless security lines and overflowing baggage halls in 2022.

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In 2023, the government amended the law to close loopholes that have allowed airlines to avoid paying customers compensation and worked to establish a more streamlined complaints resolution system.

The new provisions also sought to ratchet up penalties via a $250,000 maximum fine for airline violations — a tenfold increase over the previous regulations — in an effort to encourage compliance.

Another amendment — both are yet to take effect — would place the regulatory cost of complaints on carriers’ shoulders. The measure, which would cost airlines $790 per complaint under a recent proposal from the regulator, aims to encourage them to brush up their service and thus reduce the number of grievances against them.

Meanwhile, the complaints backlog at the country’s transport regulator continues to mount, standing at about 78,000 as of last month.

— with files from the Canadian Press