Supreme Court will hear airlines' challenge of federal passenger protection rules

The Supreme Court of Canada has agreed to hear an appeal on a case concerning the scope of Canada's protections for air travellers, including rules for compensating passengers for cancelled or delayed flights and lost baggage.

In 2020, the International Air Transportation Association, Air Canada, Porter Airlines and several foreign carriers filed a civil suit with the Federal Court of Appeal challenging a number of Canadian Transportation Agency (CTA) regulations. 

The regulations, which the federal government directed the agency to create between 2018 and 2019, impose obligations on airlines in cases of flight delays, cancellations, boarding denial and lost or damaged luggage.

The regulations require that airlines explain to passengers the reasons for flight delays and cancellations and provide certain free services — such as food and drink and access to washrooms — if a flight is delayed on the tarmac and the disruption is within the airline's control.

The appellants argue the regulations overstep the CTA's authority under the Canada Transportation Act and contradict international law — particularly the Montreal Convention, a treaty on airline liability Canada signed in 2002.

The Federal Court unanimously dismissed the appeal in 2022 but agreed that a CTA regulation on compensation for delayed baggage went beyond the agency's authority.

The Supreme Court announced its decision to hear the case in a news release Thursday.

In response to widespread flight delays, cancellations and passenger complaints last year, the federal government put forward a series of amendments which would increase the fines airlines could face for violations. The government said the amendments also would close loopholes airlines have used to avoid compensating customers.

The amendments passed as part of the government's budget bill. The CTA then sought public input on the regulations it will need to create in order for the changes to go into effect. Those consultations closed on Aug, 10 and the agency is now analyzing the feedback before bringing forward the regulations.

The CTA is a quasi-judicial body which operates independently of government. It oversees a wide range of matters concerning air, rail and marine travel in Canada.

The agency had a complaints backlog of approximately 52,000 as of July 2023 — three times the number it had a year before. In March 2023, the federal government announced $75.9 million in new CTA funding over three years to reduce that backlog.

Opposition parties have called on the Liberal government to adopt stronger passenger protections and take a tougher stance with airlines. NDP transport critic Taylor Bachrach has called on the government to create a "passenger bill of rights" similar to the one in the European Union, and argued that the government's proposed regulatory changes do not go far enough.