Refunds for Flights Outside Carrier's Control

Summary#

The Canadian Transportation Agency has made final changes to the Air Passenger Protection Regulations (SOR/2022-134). From September 8, 2022, passengers whose flights are cancelled or face long delays for reasons outside a carrier’s control can choose a refund if the carrier cannot rebook them on a confirmed flight leaving within 48 hours.

What it does#

• Requires carriers to offer a confirmed reservation on the next available flight (their own or a partner) that departs within 48 hours of the original ticket time.
• If the carrier cannot provide that confirmed reservation, the passenger can choose either:
  • a refund of the unused portion of the ticket (including unused add‑on services), or
  • alternate travel arrangements (rebooking).
• If alternate travel is a lower class than the original ticket, the carrier must refund the fare difference.
• Refunds must be paid to the person who bought the ticket, using the original payment method unless that person agrees in writing to another non‑expiring form (for example, a voucher).
• Refunds must be issued within 30 days after the carrier becomes obligated to refund.
• Adds rules to refund additional services if they were not provided or were charged twice.
• Updates the penalty schedule so breaches of these new rules can carry administrative fines up to $25,000 for corporations and $5,000 for individuals.
• Fixes a few wording and French-language issues in the regulations.

Who's affected#

• Travellers on flights to, from, and within Canada — including connecting and certain charter flights — are the main beneficiaries.
• All commercial air carriers operating these flights in Canada will have to follow the new rules. Large and small carriers face slightly different rebooking obligations (large carriers may need to rebook on other carriers more readily).
• The Canadian Transportation Agency will handle disputes and enforce the rules.
• Small and northern carriers (which have fewer rebooking options) may feel the changes more in operational terms.

Why it matters#

• Passengers are less likely to be left out of pocket when cancellations or long delays happen for reasons outside the airline’s control (for example severe weather or certain security incidents).
• Refunds now clearly cover unused add‑ons (seat selection, checked baggage, etc.) and must be timely (30 days). That reduces uncertainty and the need to complain to the regulator.
• The government’s analysis estimates costs to carriers of $47.06 million (present value) and benefits to passengers and the regulator of $47.72 million, for a net benefit of about $0.66 million over 10 years.
• Carriers will absorb the direct cost of more refunds and some administrative work. This could lead to small fare adjustments over time, but the analysis expects the per‑ticket impact to be small.