Aviation companies are making the pitch to Ottawa that stricter rules designed to boost customer compensation and improve service could put passenger safety at risk — an argument consumer advocates reject as “ridiculous.”
The push, made in regulatory submissions and meetings on Parliament Hill, comes on the heels of sweeping reforms to the passenger rights charter announced in April and currently being hashed out by Canada’s transport regulator before going into effect next year.
The changes appear to scrap a loophole through which airlines have denied customers compensation for flight delays or cancellations when they were required for safety purposes. The sector wants that exemption restored, and says it doesn’t want pilots to feel pressured to choose between flying defective planes and costing their employer money.
“We want our pilots to be entirely free from any financial consideration when they take a safety-related decision,” WestJet CEO Alexis von Hoensbroech said in a video chat from Ottawa this week, where he was meeting with federal ministers on the reforms. The Air Line Pilots Association raised similar concerns in a submission to the Canadian Transportation Agency.
“Regulation should never be punitive for safety decisions,” he said.
In the European Union, however, where rules and precedents comparable to the impending passenger rights charter are in place, flight safety remains uncompromised, advocates say.
“Did it make it less safe to fly in Europe? I don’t think so,” said Sylvie De Bellefeuille, a lawyer with the advocacy group Option consommateurs.
In the EU, compensation rules have not compromised safety, passenger advocates say. (Matej Kastelic/Shutterstock)
The EU code came into force nearly two decades ago, shored up by court rulings that require compensation even for trip disruptions caused by safety concerns, such as mechanical issues. No major accidents involving EU-registered planes have occurred in commercial aviation since 2015.
“It lays pretty ill in the mouth of the industry to say that if you … take away that excuse then we will therefore fly unsafe planes,” said John Lawford, executive director of the Public Interest Advocacy Centre.
“I’m surprised that they would have the chutzpah to say that.”
Air Passenger Rights advocacy group president Gabor Lukacs called the claim “ridiculous,” and NDP transport critic Taylor Bachrach also slammed the argument.
“It’s quite alarming that the airlines would suggest that if the government holds them to a higher standard of customer care, there’s going to be a risk to passenger safety,” Bachrach said in a phone interview from northwestern B.C.
Loopholes and exemptions
Organizations from Nav Canada to the International Air Transport Association — as well as Canada’s main pilots union — maintain that safety will be jeopardized unless delays due to malfunctions or mechanical issues are exempted from what the Atlantic Canada Airports Association called “punitive measures.”
Proposed changes under the Air Passenger Protection Regulations would not exempt flight disruptions that are caused by “normal … technical problems” from cash penalties given to customers.
However, “airport operational issues” or “hidden manufacturing defects” would be considered beyond the airline’s responsibility under the would-be reforms, most of which are still months away from being finalized.
The first phase of the overhaul comes into effect on Saturday, kicking off a more streamlined complaints process that currently creaks under the weight of more than 57,000 complaints.
That backlog has continued to mount despite a slowdown in filings, which can take up to two years for the regulator to process. The new system will be managed by “complaint resolution officers” — 40 have been hired, with 60 more expected to be trained over the next year, according to the agency.
Among the provisions slated to kick in next year are fees imposed on airlines by the regulator to recover some or all of the cost of handling those complaints. If a passenger files one due to a flight disruption or denial of boarding, the reformed rules put the onus on the airline to prove the move was for reasons outside its control, such as bad weather.
Airlines make the case that regional routes would be pricier for customers — or simply cancelled outright — as slim profit margins would tip into red ink amid higher costs from complaints and fees.
“That could potentially have an impact on regional connectivity and accessibility for routes that might not be as profitable,” said Jeff Morrison, who heads the National Airlines Council, which represents airlines including Air Canada and WestJet. “There’s always a trade-off.”
The National Airlines Council, which represents Air Canada and Westjet among other airlines, says airline profit margins are already slim and cutting into them by imposing stricter compensation rules could affect services offered. (Nathan Denette/The Canadian Press)
The average profit for large carriers amounts to less than $10 per passenger, said WestJet’s CEO.
“If we have to compensate the passengers, it’s thousands,” von Hoensbroech said, noting that WestJet’s average one-way ticket price hovers around $200. “You need many, many flights to recover.”
Advocates Lawford and Gabor Lukacs said the airlines’ warnings around routes to smaller or far-flung communities are tantamount to “blackmail,” while Bachrach framed the notion of pitting sturdier customer rights against regional flights as a “false choice.”
“If you’re cutting regional routes, we’re going to open the whole country for more competition,” Lukacs said, framing the potential scale-back as an opportunity for other airlines.
He suggested subsidies to support regional trips, whose fares have shot up over the past four years, even as ticket prices on busier routes fell.
Von Hoensbroech also said accountability for flight disruptions, including the cost burden, must be shared across the industry, not borne by airlines alone — an argument some advocates are receptive to, given the highly integrated nature global air travel that hinges on players ranging from baggage handlers to security and border agents to air traffic controllers.
The Canadian Transportation Agency is currently working on a draft of the new Air Passenger Protection Regulations, expected to be published this year before the new charter is implemented in 2024.
“The ultimate goal of air passenger protection shouldn’t be to get compensation to passengers; it should be to incentivize airlines to treat passengers better,” Bachrach said.
Frustrated passengers take airlines to court for compensation
Complaints against Canadian airlines are piled so high the backlog dates back more than a year. Now, some passengers are taking airlines to small claims courts to get compensation.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
