Feds pressed regulator to cut airlines more slack around passenger compensation: docs

MONTREAL — The federal government pushed for travel rules that cut airlines more slack around paying compensation to passengers, despite resistance from Canada’s transport regulator, internal documents show.

Following legislation to reform the passenger rights charter in 2023, the Canadian Transportation Agency proposed regulations that would rule out technical problems as a reason to deny customers compensation for flight delays or cancellations.

But under pressure from at least two transport ministers, regulators later conceded to changes that would exempt airlines from compensation payments if the trip disruptions resulted from mechanical issues, according to briefing notes prepared for then-transport minister Anita Anand and reviewed by The Canadian Press.

“I am disappointed that you are re-introducing issues related to the list of exceptional circumstances, namely mechanical malfunctions and labour disruptions. These issues were resolved months ago,” reads one note from the transport office drawn up in advance of a meeting between Anand and agency chairwoman France Pégeot on Nov. 20, 2024.

“I want to be clear: I expect that all the commitments and agreements you have reached with my predecessors stand,” state the documents, obtained through the Access to Information Act.

The next month, the government published the agency’s draft regulations — they have yet to take effect — that rule out a disruption caused by an “unforeseeable technical defect” as grounds for compensation.

The documents as well as records from a federal registry also reveal a heavy lobbying push by airlines, with the government echoing industry concerns in its efforts to scale back some of the regulator’s proposed reforms, as first reported by CBC News this week.

Federal law stipulates that “the Canadian Transportation Agency must consult with the minister when making regulations,” agency spokesman Jadrino Huot said in an email.

“The CTA cannot comment on the specifics or ongoing discussions.”

The transport minister’s office did not respond to requests for comment.

Gabor Lukacs, president of the Air Passenger Rights advocacy group, argues that government pressure on the agency following that lobbying campaign has failed customers, leaving them with a narrower range of compensation options than travellers in Europe enjoy thanks to what he calls the “loophole” for carriers.

“This is not evidence of wrongdoing. This is just ethically damning,” said Lukacs.

“The CTA is trying to do the right thing here, and the minister is the one who actually forces things to go the wrong way.”

In a consultation paper in November 2023, the agency laid out a proposal for when flight disruptions would trigger compensation, including those caused by “technical problems that are an inherent part of normal airline operations.”

Since that change was nixed in draft regulations, progress on the reforms has slowed to a crawl.

Nearly three years after the government passed legislation aimed at overhauling the passenger rights charter — first rolled out by the Liberals in 2019 — updates to the Air Passenger Protection Regulations remain unfinalized.

“We’re still waiting for the government to fix and hopefully improve the passenger rights regime in this country. The initiative appears to be stalled, and it’s not very heartening to see that, in the past at least, the government has been listening to the carriers,” said Ian Jack, vice-president at the Canadian Automobile Association.

“We clearly have evidence here of the agency and the department being at loggerheads. And ultimately the losers here are consumers.”

Anand’s 2024 briefing note echoes concerns raised by airline executives.

It explains that allowing compensation for technical problems could have “significant safety considerations as it might incent air carriers to operate unfit aircrafts to avoid paying compensation.”

WestJet CEO Alexis von Hoensbroech expressed a similar view in a September 2023 interview with The Canadian Press from Ottawa, where he met with federal ministers on passenger rights reforms.

“We want our pilots to be entirely free from any financial consideration when they take a safety-related decision,” he said in a video chat.

The Air Line Pilots Association raised comparable concerns in a submission to the Canadian Transportation Agency.

Advocates see things differently.

Even though the European Union entitles travellers to compensation for delays caused by technical defects, “we haven’t seen any more accidents in Europe than we have in Canada,” said Sylvie De Bellefeuille, a Quebec-based lawyer with advocacy group Option consommateurs.

“This is one of the loopholes that was supposed to be covered by the new regulations.”

A trail of correspondence reveals lobbying efforts on other fronts of the fight over passenger rights, a campaign that seemed to bear fruit.

In an October 2024 letter to the agency head, Anand highlighted concerns that carried echoes of a letter from WestJet’s chief executive 10 days earlier around a proposed airline fee of $790 per passenger complaint. Currently, taxpayers rather than carriers fund the complaints process — with the backlog now at 96,000 and a wait time of up to three years.

Anand called the price tag “unduly punitive” for airlines, and pushed for fees as low as $250 for large carriers and $150 for smaller ones, as CBC noted and the documents confirm. The agency appears poised to settle on a $450 fee, the records show.

Anand’s letter also expressed concern that the $790 administrative fee risked de-incentivizing “airlines from participating in the complaint process.”

This report by The Canadian Press was first published April 1, 2026.

Christopher Reynolds, The Canadian Press