The Supreme Court of Canada ruled Friday that airlines can be required to compensate passengers for certain international flight disruptions, marking a significant development in the realm of air passenger rights in the country.
This case originated from an appeal regarding the authority of the Canadian Transportation Agency (CTA) to enforce compensation rules for passengers facing delays, cancellations, or denied boarding on international flights. In 2018, Parliament enacted the Transportation Modernization Act, which amended the Canada Transportation Act to empower the CTA to create a new air passenger rights regime, leading to the introduction of the Air Passenger Protection Regulations in 2019. These regulations outline the obligations airlines have toward passengers, including standardized compensation for specific disruptions and the requirement to refund baggage fees when luggage is lost or damaged.
The regulations were introduced following widespread consumer advocacy for better rights and protections for air travelers. Many passengers had experienced frustration with inconsistent airline policies and inadequate compensation in the wake of disruptions, prompting calls for a more standardized approach. The Air Passenger Protection Regulations were designed to address these concerns by establishing clearer guidelines and ensuring that airlines are held accountable for their service commitments.
However, several airlines and industry associations, including the International Air Transport Association, challenged these regulations, claiming they conflicted with the Montreal Convention. This international treaty, which Canada adopted in 2001, governs compensation for air travel disruptions and sets specific limits on what airlines can be required to pay passengers. The airlines argued that the compensation outlined in the regulations fell under the “exclusivity principle” of the Montreal Convention, which restricts the grounds for legal claims against airlines regarding damages.
The Federal Court of Appeal previously upheld most provisions of the regulations, apart from those concerning temporarily lost baggage. Following this, the airlines appealed to the Supreme Court, which unanimously dismissed their claims. Justice Malcolm Rowe, writing for the court, clarified that the compensation required by the regulations does not qualify as an “action for damages” under the Montreal Convention. Instead, the regulations create a consumer protection framework that offers standardized compensation without requiring individual claims for damages.
While the Montreal Convention sets certain standards, it does not encompass all aspects of international air travel. The Air Passenger Protection Regulations operate alongside the Montreal Convention without infringing on its provisions. Passengers seeking compensation under these regulations do not need to prove individual harm; compensation is based on the duration of delays or cancellations.
