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Canadian Transportation Agency clarifies statement on travel vouchers during COVID-19 pandemic

Airline credits versus full refunds
Across the country, many passengers who've had their flights interrupted by COVID-19 have been angered they can't get refunds. Airlines and travel companies were relying on a statement by the Transportation Agency that vouchers could be a reasonable option. Consumer Matters reporter Anne Drewa has some clarification that might help you get your money back.

The Canadian Transportation Agency has clarified its statement on travel vouchers for travellers affected by the COVID-19 pandemic in an online FAQ (Frequently Asked Questions) post.

“The CTA has received a number of questions since releasing its statement on vouchers on March 25, 2020, including questions about the nature of the statement, and recourse for passengers,” the agency told Consumer Matters in an email.

Airline chargeback tips for cancelled travel
Airline chargeback tips for cancelled travel

The CTA said its statement on travel credits is not a binding decision.

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The latest statement could open the door to more refunds from carriers which have cited the agency’s stance in denying passenger requests to get back cash for services not rendered.

“In terms of the public, this is a positive development because I’ve seen the original statement on vouchers being used by airlines and tour companies to dispute chargebacks by insurance companies relying on it,” said Gabor Lukacs, founder of non-profit consumer advocacy group Air Passenger Rights.

READ MORE: Coronavirus: Airlines obliged to offer credit, not refunds, watchdog says

Last month the CTA stated on its website:

“While any specific situation brought before the CTA will be examined on its merits, the CTA believes that, generally speaking, an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel, as long as these vouchers or credits do not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases).”

READ MORE: Coronavirus: U.S. and EU give airline passengers refunds, but Canada sticks with vouchers

Lukacs is challenging the CTA’s statement on vouchers in the Federal Court of Appeal and is asking the courts to order the regulator to take its statement on vouchers off its website altogether.

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“The Canadian Transportation Agency has now conceded that their statement is not a legally binding document and that it doesn’t affect the rights of passengers or obligations to airlines. It is a strategic move on their part to try and save face,” said Lukacs.

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Best Bets: Your travel questions answered

“The Canadian Transportation Agency now acknowledges that what they put out before was misleading.”

The CTA also clarifies that if passengers think they are entitled to a refund for a flight that was cancelled for reasons related to the COVID-19 pandemic and don’t want to accept a voucher, they can ask the airline for refund.

Consumer Matters has heard from countless airline passengers who’ve been frustrated by airlines refusing to offer refunds based on the CTA’s statement on vouchers.

The situation was made worse after the U.S. Department of Transportation issued enforcement to airlines stating passengers impacted by COVID-19 are entitled to refunds for cancelled flights.

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The European Union made a similar move.

COVID-19 pandemic: Advice around cancelled travel
COVID-19 pandemic: Advice around cancelled travel

“The American and European legislative frameworks set a minimum obligation for airlines to issue refunds when flights are cancelled for reasons outside their control. Canada doesn’t. That’s the reason for the difference in the statements,” said the CTA in its FAQ.

Lukacs suggested that affected travellers who are looking for refunds call their credit card company and tell them they paid for a service they did not receive and they have not agreed to take a voucher.

“The credit card company has to look at the agreement between the consumer and the merchant at the time the contract was made,” he said.