Refunds for Outside-Control Flight Cancellations

Summary#

This is the ministerial direction Direction Respecting Flight Cancellations for Situations Outside of a Carrier’s Control: SOR/2020-283. It tells the Canadian Transportation Agency to make rules requiring refunds when flights are cancelled for reasons outside an airline’s control and passengers cannot finish their itinerary within a reasonable time. The direction was registered on December 18, 2020 and published in the Canada Gazette on January 6, 2021.

What it does#

• Directs the Canadian Transportation Agency to make a regulation about refunds for flight cancellations caused by situations outside a carrier’s control.
• Requires those future regulations to provide refunds when cancellations prevent passengers from completing their itinerary within a reasonable time, including the situations listed in subsection 10(1) of the Air Passenger Protection Regulations.
• Gives the Agency the option to include lengthy delays (not just cancellations) caused by situations outside the carrier’s control, if the delay prevents completing the itinerary within a reasonable time.
• Is issued under subsection 86.11(2) of the Canada Transportation Act and came into force on the day it was registered (December 18, 2020).

Who's affected#

• Passengers whose flights are cancelled or very delayed for reasons outside an airline’s control (the direction specifically notes situations such as a pandemic).
• Air carriers operating in Canada, because they will need to follow the new refund rules the Agency develops.
• The Canadian Transportation Agency, which must write the detailed regulation that sets how refunds will work.

Why it matters#

• It fills a gap in the current Air Passenger Protection Regulations by making clear that refunds can be due when cancellations are outside an airline’s control but passengers can’t complete their trip within a reasonable time.
• The change was prompted in part by the COVID-19 pandemic, which exposed uncertainty about refunds in such situations.
• The direction sets the policy goal, but the detailed rules (how long counts as a “reasonable time,” how refunds are paid, etc.) will be decided later by the Canadian Transportation Agency.
• The published regulatory note says there are expected to be no additional costs to industry, no identified GBA+ impacts, and no need for a strategic environmental assessment.