What You Need To Know About Canada’s New Refund Rules For Flights

As of September 8, 2022, airlines flying to, from and within Canada (including connecting flights) must now issue a full refund for flight cancellations and delays if passengers can’t be accommodated on a new flight within 48 hours.

The new rule is a result of changes to Canada’s Air Passenger Protection Regulations, which are enforced by the Canadian Transportation Agency (CTA) and were announced in the Regulations Amending the Air Passenger Protection Regulations.

Launched in 2019, the original rules stated that refunds were to be provided only for flight disruptions that were within the control of airlines. The CTA press release notes that “As of September 8, 2022, under the new requirements, if a delay of three hours or more or a cancellation is outside the airline’s control, and the airline cannot provide the passenger with a confirmed reservation on the next available flight operated by them or a partner airline leaving within 48 hours of the departure time on the passenger’s original ticket, the airline is required to, at the passenger’s choice:

  • Provide a refund; or
  • Make alternate travel arrangements for the passenger, free of charge
  • Large airlines have to rebook the passenger on the next available flight of any airline, including competitors.

Passengers are free to change their decision and choose a refund at any time before being provided a confirmed reservation on an alternate flight.”

The rules apply to all flights to, from and within Canada, including connecting flights, as of September 8, 2022. Note that the requirements are not retroactive. Passengers can see a list of what constitutes “ outside the airline’s control” on the Air Passenger Protection website. Note that issues like crew staffing shortages and maintenance will generally be regarded as within the airline’s control.

Previously, the regulations stated that:

If a flight delay or cancellation is within the control of the airline and is not due to safety issues, passengers will legally be entitled to a set level of compensation based on the length of the delay:

  • A delay of 3 to 6 hours=$400
  • 6 to 9 hours=$700
  • 9 hour or more=$1000

Small airlines (companies with less than two million passengers in each of the two preceding years) will have lesser compensation amounts: $125, $250 and $500, respectively.

With the amendments, airlines must now:

  • Provide a passenger affected by a cancellation or a lengthy delay due to a situation outside the airline’s control with a confirmed reservation on the next available flight that is operated by them or a partner airline, leaving within 48 hours of the departure time indicated on the passenger’s original ticket. If the airline cannot provide a confirmed reservation within this 48-hour period, it will be required to provide, at the passenger’s choice, a refund or rebooking;
  • Identify what costs must be refunded (unused portion of the ticket, which includes any unused add-on services paid for);
  • Identify the method to be used for refunds (same as the original payment, e.g., a return on the person’s credit card);
  • Require airlines to provide a refund within 30 days.

The CTA states that they developed the Regulations Amending the Air Passenger Protection Regulations, taking into account input received from the public, consumer rights organizations, and the airline industry during two rounds of consultations. “The COVID-19 pandemic revealed a gap in Canada’s air passenger protection framework: the absence of a requirement for airlines to refund tickets when flights are cancelled, or where there is a lengthy delay, for reasons outside airline control and it is not possible for the airline to ensure that the passenger’s itinerary is completed within a reasonable time.

On December 21, 2020, the Minister of Transport issued a direction giving the CTA the authority to develop new regulations to close this gap for future travel. In a letter accompanying the direction, the Minister asked that the CTA design the regulations in a manner that is fair and reasonable to passengers and, to the extent possible, not impose an undue financial burden on carriers that could lead to their insolvency.

Consultation process On December 21, 2020, the CTA launched a consultation process seeking feedback on certain questions to help shape the new requirements. A summary of this input can be found in the resulting What We Heard report.”

France Pégeot, Chair and CEO of the Canadian Transportation Agency said that “These regulations will close the gap in the Canadian air passenger protection regime highlighted by the COVID-19 pandemic and ensure that even when cancellations and lengthy delays occur that are outside the airline’s control, passengers will be protected if the airline cannot complete their itinerary within a reasonable period of time. Starting September 8, 2022, if an airline cannot rebook passengers within 48 hours of their original departure time, it will be required to provide at the passenger’s choice, a refund or rebooking, regardless of the type of ticket they purchased.”

If the airline does not comply with the new requirements, passengers can file a complaint via the CTA’s website.

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