Transportation Modernization Act
Ottawa, Ontario – Canada is a vast country that relies on a complex transportation network to move its citizens and its goods. All Canadians benefit from a competitive and efficient transportation system.
The Government of Canada today introduced legislation to provide a better experience for travellers and a transparent, fair, efficient and safer freight rail system to facilitate trade and economic growth.
This proposed legislation is the result of over a year of consultation and is informed by the feedback and guidance of citizens and stakeholders across the country. The Transportation Modernization Act would promote transparency, system efficiency and fairness. Key measures would include:
- establishing new air passenger rights;
- liberalizing international ownership restrictions for Canadian air carriers to provide travellers with more choice through increased competition;
- improving access, transparency, efficiency, and sustainable long-term investment in the freight rail sector; and
- increasing the safety of transportation in Canada by requiring railways to install voice and video recorders in locomotives.
“In a vast nation like Canada, Canadians rely on economically viable modes of transportation to travel and move commodities within the country, across the border, and to our ports for shipment overseas. The time has come to modernize our policies and practices to provide a safer, more competitive and respectful system that can respond to modern conditions and to Canadians’ expectations.
When Canadians purchase an airline ticket, they expect the airline to provide the service that they paid for and to be treated with respect. When things don’t go the way they are planned, travellers deserve clear, transparent, fair and consistent compensation.”
The Honourable Marc Garneau
Minister of Transport
Air Passenger Rights
The Government of Canada has introduced legislation that would mandate the Canadian Transportation Agency (Agency) to make new regulations to strengthen Canada’s air passenger rights.
Air passenger rights should be clear, consistent, transparent and fair for passengers and air carriers. A more predictable and reasonable approach would benefit Canadian travellers.
While the Agency would develop precise details through a regulatory process, the new initiative would establish clear standards of treatment for air travellers in common situations as well as financial compensation under certain circumstances. Examples include:
- Denied boarding (including in case of overbooking), delays and cancellations;
- Lost or damaged baggage;
- Tarmac delays over a certain period of time;
- Seating children near a parent or guardian at no extra charge; and
- Ensuring carriers develop clear standards for transporting musical instruments.
Clear information will be provided to passengers in plain language about carriers’ obligations, how to seek compensation and file complaints.
The bill would provide the Governor in Council the authority to make regulations that would require air carriers and service providers to report to the Minister on different aspects related to the traveller experience.
The new air passenger rights would ensure that fair compensation standards are in place for those who give up their seats voluntarily, and would ensure that no one is involuntarily removed from an airplane due to overbooking. The Minister would also be able to direct the Agency in the future to develop new standards as necessary.
International Ownership of Air Carriers
The Government of Canada has introduced legislation proposing to amend the Canada Transportation Act to liberalize international ownership restrictions from 25 to 49 per cent of voting interests for Canadian air carriers, with accompanying safeguards. There would be no change to the 25 per cent limit for Canadian operators of specialty air services (e.g. firefighting, heli-logging, aerial photography).
Liberalizing international ownership restrictions means that Canadian air carriers, including all-cargo services, would have access to more investment capital (money). The Government of Canada expects this would bring more competition into the Canadian air sector, more choice for Canadians, and benefits for airports and suppliers, including the creation of new jobs.
Under the proposed amendments, a single international investor (individually or in affiliation) would not be able to hold more than 25 per cent of the voting interests of a Canadian air carrier, and no combination of international air carriers could own more than 25 per cent of a Canadian carrier (individually or in affiliation).
Last December, the Minister issued exemptions to the international ownership restrictions to two companies, Jetlines and Enerjet, to allow them to pursue new investment opportunites while the legislative process is underway.
The Government of Canada has introduced legislation seeking the authority to allow the Minister of Transport to consider and approve applications for joint ventures between two or more air carriers providing air services. This process would be undertaken in consultation with the Commissioner of Competition, and would consider proposed joint ventures from the perspective of both competition and the public interest.
Currently, joint ventures are only subject to review as collaborations between competitors under the Competition Act. The proposed amendments to the Canada Transportation Act and the Competition Act would open the process in Canada to both competitive and public interest considerations. This new, transparent and predictable assessment process would take into account the particularities of the air transportation sector, as well as the wider public interest and competition factors.
Joint ventures are an increasingly common practice in the global air transport sector. They allow two or more air carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, marketing and sales. Joint ventures would be one way to open up new markets for Canadian travellers and allow access to more destinations without needing to book separate tickets on different carriers.
CATSA screening services on a cost-recovery basis
The Transportation Modernization Act would support Canadian airports by creating new opportunities for smaller airports to attract new commercial routes, and by allowing the major hubs with an option of purchasing additional services to expedite passenger screening.
The amendment to the Canadian Air Transport Security Authority Act would provide a more flexible framework for the Canadian Transport Security Authority (CATSA) to provide new or additional screening services on a cost-recovery basis. Such services would be beyond normal CATSA services and would need to be approved by the Minister.
Airports would be responsible for paying CATSA for the new or additional services they require. It would be up to each airport to determine how it would cover these costs. The operating costs at small airports would be based on a number of factors, such as the number of screening hours the airport would like to purchase and the equipment needed. Airport Authorities would also need to secure a commercial agreement with commercial operators before screening begins.
Source: Transport Canada