Canada could have a new policy in place for airline refunds by next summer, and that could significantly impact thousands of Canadian travel advisors and agents.

The Canadian Transportation Agency on Monday (December 21) said it will launch consultations seeking input from members of the public, consumer organizations, airlines and experts on a proposed regulation establishing additional refund obligations for airlines. Presumably that includes travel agents and advisors, who definitely have an opinion on refunds and how they impact their businesses.

Marc Garneau, the Minister of Transport, sent a letter to the CTA last week stating his intention to provide the CTA with the authority to develop new regulatory requirements for airlines to provide passengers with refunds when flights are cancelled, or there is a lengthy delay, for reasons outside airlines’ control and it is not possible to complete the passengers’ itinerary within a reasonable time.

The CTA can only develop regulations if given the appropriate authority by Parliament in legislation or by the Minister of Transport through a formal direction.

After reviewing all feedback from the public, consumer organizations, airlines and experts, the CTA will develop the regulation, with the goal of having new rules in place by next summer..

Airline refunds have been a huge issue this year after Canadian airlines – and airlines around the world – were forced to cancel flights due to COVID-19.

The Canadian government just recently began talking about a financial assistance package for Canada’s troubled aviation industry, but Garneau has said any compensation has to be linked to refunds for Canadian travellers.

A spokesman for Air Transat told TravelPulse Canada that talks with the Trudeau government in Ottawa are now underway

“The CTA welcomes the action by the Minister of Transport to give it the legal authority to establish a new obligation for airlines to issue refunds when flights are cancelled or significantly delayed for reasons outside their control, and it isn’t possible for the airline to complete the passenger’s itinerary within a reasonable time,” said Scott Streiner, Chair and CEO of the Canadian Transportation Agency. “The CTA will move quickly to consult Canadians, consumer groups, and industry on the specifics of the new regulatory provisions, and work to bring them into force by the summer.

“Until these requirements are in effect, airlines are encouraged to adopt policies that ensure no passenger is left out of pocket for the value of a cancelled flight, irrespective of the fare purchased or the reason for the cancellation,” Streiner said.

The head of the National Airlines Council of Canada said the government has to be sure that Canadian airlines aren’t permanently damaged by any new rules and procedures.

“As has been publicly recognized on numerous occasions by the federal government, the aviation sector is reeling from the economic chaos created by the pandemic,” NACC President and CEO Mike McNaney said in an email. “Tens of thousands of employees have lost their jobs, billions of dollars in aircraft are parked and out of operation, and passenger numbers have collapsed to approximately 10% of typical levels.

“Canadian carriers have been forced to initiate substantial reductions in service in all regions of the country, as they take every measure to preserve liquidity but maintain operations to as many communities as possible,” he said. “The objective now is not simply to try and position the industry for recovery, but to ensure permanent damage is not inflicted on the sector, and by extension the communities across Canada that rely on substantive air connectivity. “

McNaney said the review of Canada’s regulations “must reflect the reality that catastrophic disruption created by extraordinary events such as a global pandemic, by definition threaten the financial viability of airlines and are out of their control. Any additional regulations that flow from the consultation process must recognize this financial and operational reality. This is precisely why countries around the world have provided over $200 Billion in support for their respective aviation sectors, and Canada continues to discuss sectoral support.”

Our members are doing everything they can to ensure a healthy and strong aviation sector emerges from the destruction of the pandemic, so that we can play the role aviation must play in Canada’s economic recovery and support the hundreds of thousands of jobs overall across the country that are dependent on aviation and travel.

WestJet spokeswoman Lauren Stewart said WestJet “is the most progressive and proactive airline with respect to our refund policies and remains the only national airline in Canada to provide refunds across all fare types for flights cancelled by WestJet.

“We look forward to working with the Government of Canada to develop globally competitive refund standards while ensuring that air travel remains affordable for Canadians,” she said in an email.