The Canadian Transportation Agency (CTA) has a proposal to charge airlines hundreds of dollars every time the government has to resolve a consumer complaint against an airline, even if the airline isn’t found to be in the wrong. I can’t decide how I feel about this…
In this post:
Canada wants to shift cost of complaints to airlines
In many countries, it’s possible to file a complaint with the government if you’re unable to resolve a problem with an airline (we have it here in the United States as well). Canada has some consumer protections when it comes to air travel, so if air passengers feel that they’re not getting anywhere by communicating directly with the airline, they can submit a complaint to the CTA.
Along those lines, the CTA has a couple of issues. The first issue is that there’s a massive backlog of complaints — around 78,000, which is the highest ever, and it keeps getting longer. So this makes it difficult for the government to actually process complaints in a timely manner.
The second issue is that this is super costly for the government, and in turn, taxpayers. The agency estimates that it can resolve 22,600 air travel complaints per year, and closing those complaints costs the government around $29.8 million CAD (~$22 million USD). This comes mostly in the form of salaries and benefits for the agency’s resolution officers. That’s right, it costs the government somewhere around $1,320 CAD (~$973 USD) to resolve each complaint.
With this proposal, the government hopes to recoup around 60% of this cost, or around $17.9 million CAD (~$13.2 million USD). The agency would do this by charging airlines $790 CAD (~$583 USD) for each complaint it has to get involved in and resolve. The proposal is that this fee would apply regardless of whether the airline is found to be in the wrong or not.
Another motive here seems to be to encourage airlines to resolve issues directly, and dissuade them from breaking consumer laws.
The CTA has started a one-month consultation period on these proposed reforms, allowing consumers and airlines to chime in with their thoughts on this proposal.
I’m not sure what to make of this proposal
I’ve gotta be honest, I’m not sure what exactly to think here.
On the one hand, it seems absurd that taxpayers are paying over $1,000 CAD per resolved consumer complaint. I suspect in a vast majority of situations, that’s more than the amount being disputed. I suppose that’s what the government is ultimately there for.
Countries spend billions (and tens of billions, and hundreds of billions) as if it’s nothing, so perhaps the government is the right party to be footing the bill. After all, it’s in the best interest of consumers to at least have an agency they can go to when things go wrong with airlines, to keep them honest.
I’d also say that it’s kind of wild that resolving a complaint costs the government so much, but I don’t think that’s anything that’s going to change overnight.
On the other hand, it seems a little ridiculous to charge airlines for consumer complaints, even if airlines aren’t found to be in the wrong. I don’t think this will do much to make airlines act more ethically with resolving complaints, given the backlog of tens of thousands of complaints. It seems like the resolution officers will stay busy no matter what, even if complaints decline. After all, they have years worth of complaints to get to already.
Furthermore, while airlines often are in the wrong, many consumers do take things to the extreme, and have unrealistic expectations from airlines. I imagine when consumers know this policy is in place, they may try even harder to hold it against the airline (“if you don’t resolve my issue I’ll report this to the CTA, and it will then cost you $X”).
Not to feel too bad for airlines, but the airline industry is incredibly low margin, and when you think that airlines could be paying hundreds of dollars to have a complaint resolved, well, that seems a bit much. If this were implemented, it would essentially cost the Canadian aviation industry $17.9 million CAD.
Bottom line
The Canadian Transportation Agency (CTA) has a proposal that would shift the cost of consumer complaints from taxpayers to airlines. The agency essentially wants airlines to pay 60% of the costs incurred from resolving consumer complaints, and that comes out to a whopping $790 CAD per incident.
What do you make of the CTA’s proposal?
If you are going to use a USD amount when talking about Canada (or any other country that uses the '$' symbol) you should at least specify it is USD. I mean, I get that Americans often think they are the only people in the world that matter, but if you say, 'Canada wants to charge $583' it definitely implies that you are saying CAD...
This article is misleading, has wrong facts. I know people make mistakes but Ben should consider editing it to reflect reality.
The proposed process is to charge airlines for complaints by an RO (Resolution Officer). In other words, step 5 of the resolution process.
Before it gets there:
Consumer filed complaint
- Airline responds
if there is no agreement it goes to RO.
If AC/WS deny a claim that...
This article is misleading, has wrong facts. I know people make mistakes but Ben should consider editing it to reflect reality.
The proposed process is to charge airlines for complaints by an RO (Resolution Officer). In other words, step 5 of the resolution process.
Before it gets there:
Consumer filed complaint
- Airline responds
if there is no agreement it goes to RO.
If AC/WS deny a claim that is valid, they can pay up before RO stage and avoid the fee.
The point about customer complaining at any occasion is also wrong. Annex B on the announcement clearly says which dossiers are recevable or not. You only have a dossier that is recevable if it’s about compensation. Consumer complaints that are clearly frivolous would likely be discarded before stage 5. Complaints about accessibility and others are clearly excluded.
So no, not every complaint will cost airlines $. It’s a consumer friendly move and airlines won’t be footing the bill for a government agency. It’s actually quite smart
Absolutely ridiculous government operation. The numbers given imply that each employee resolves approximately 1 complaint case per day. (111 employees, 22000 complaints per year). A government agency like this should be sacked.
$1k CAD per resolved complaint is genuinely quite insane. Not by any means a fiscal conservative but Canada needs to figure out how to cut that number down
Canadians are kind, but they are not intelligent.
A problem created by excessive government regulations isn't going to be solved by more regulations, it's just going to get worse.
If Air Canada wasn't absolute sh!t, this wouldn't be an issue.
50% on time performance garbage airline.
The problem is that airlines in Canada don't act in good faith. Similarly to EU261 claims against low cost carriers in Europe, they either don't respond or make up excuses why they shouldn't have to pay compensation that is due. This has turned into a dance where you contact the airline, they deny your claim for made up reasons, and then you have to file a CTA complaint to eventually get it resolved 2 years...
The problem is that airlines in Canada don't act in good faith. Similarly to EU261 claims against low cost carriers in Europe, they either don't respond or make up excuses why they shouldn't have to pay compensation that is due. This has turned into a dance where you contact the airline, they deny your claim for made up reasons, and then you have to file a CTA complaint to eventually get it resolved 2 years later. Having to pay whether or not they win will discourage Canadian airlines from doing this. They'll offer $500 in expiring vouchers instead, and most people will happily take these instead of dealing with the very long process of resolving a CTA complaint. I think this will ultimately be good for Canadian consumers.
Note that YVR is my home airport.
A better way would be:
No fee if not guilty
2x the cost + any compo to passenger if guilty
Annual review of complaint trends with draconian fines if evidence of a systemic problem.
In the event of draconian fine, airline has the ability to appeal the penalty (not the guilt) and if regulator is satisfied with the airlines strategy to address the issue going forward, fine can be cut to 50%
Yeah absolutely. AC is horrible, there's no denying that; anyone flying anywhere near Canada knows it. But having a fee even if not guilty incentivizes consumers to threaten to report things they know aren't against policy to try to get something out of it. Or just set up something like EU261 that makes regulations clearer
Totally brilliant, it will take insufferable operators like Air Canada think twice about sending automated responses denying any and all claims.
Ben is just too US focused for this issue. Canadian aviation market is just beyond broken now. AC, and especially WS, deny almost every claim even after legitimate proof is peovided, because there is no recourse. It cost them less work to just deny claims, regardless of compensation amount. A Canadian writer who actually has dealt with insane reasonings of Canadian airlines would provide more in depth and nuianced take. I miss the trial momths...
Ben is just too US focused for this issue. Canadian aviation market is just beyond broken now. AC, and especially WS, deny almost every claim even after legitimate proof is peovided, because there is no recourse. It cost them less work to just deny claims, regardless of compensation amount. A Canadian writer who actually has dealt with insane reasonings of Canadian airlines would provide more in depth and nuianced take. I miss the trial momths of multi-national writers on OMAAT.
Yes, I also miss the travel reviews from those temporary OMAAT writers. They provided different perspectives. Besides those people, whatever happened to the seasoned OMAAT writers like Tiffany and Travis.
The idea is to stop AC from automatically refusing all claims, that's what they are doing right now. But they do need to think of a way to keep people from filling fasle claims just becuase ts cheaper for AC to give in.
Doesn't Canada already charge various taxes with every ticket issued? Why not use that to fund government services related to air travel, including processing complaints?
You're not understanding, Jim. The point is not to offload the cost on the consumer, but to have the airlines take onus of the problem and find a solution before a claim is needed to be filed against the airline.
Effectively; "Airlines, deal with the problems and don't let them escalate, or else you'll have to cover a larger portion of the fees involved with escalations"
Airlines have been ceating customers out of money for cancelations and this needs to change. Canadian airlines will sell tickets or wait until the last minute to cancel flights to help ensure high load factors to help compete on prices. It has been know that planes that were delayed/canceled for safety reasons are miraculously able to fly on a different route for example. Consumers are hidden from the true reasons for the safety cancelation. As...
Airlines have been ceating customers out of money for cancelations and this needs to change. Canadian airlines will sell tickets or wait until the last minute to cancel flights to help ensure high load factors to help compete on prices. It has been know that planes that were delayed/canceled for safety reasons are miraculously able to fly on a different route for example. Consumers are hidden from the true reasons for the safety cancelation. As well these big corporations have had many labor problems that have also canceled flights but again the airlines use the crutch it's for safety reasons. I love flying in Europe where the stronger delay laws actually protect the consume away from shady business practices.
I agree that there's a high risk of customers just filing more complaints because they know it will cost the airlines a lot and it's likely they will rather pay some compensation.
What I would like more:
- In case the airline is found at fault, charge them the full cost instead of "just" 60%
- In case the airline is not found at fault, don't charge them; or maybe charge them a...
I agree that there's a high risk of customers just filing more complaints because they know it will cost the airlines a lot and it's likely they will rather pay some compensation.
What I would like more:
- In case the airline is found at fault, charge them the full cost instead of "just" 60%
- In case the airline is not found at fault, don't charge them; or maybe charge them a small fee like $10-20, as an incentive for them to solve small issues with customers even if they're not at fault (for example some minor baggage damage that's not due for compensation, but they could still pay a little repair cost as a gesture of goodwill)
That way, the airlines wouldn't get "punished" for greedy customers, but highly incentivized to solve legitimate issues.
This sounds like a good idea--really hit them hard if it's their fault.
Canada has crazy taxes and prices.
They should charge frequent flyer elites a fee for each booking to pay for regulation. Let the rich pay their fair share. Harris2024 is aware of making the rich pay their fair share.
@Derek you think every frequent flyer elite is rich or wealthy???? A lot of those flyers fly in discounted economy as well or needs to travel for work to make a living. A better proposal would be to close any tax loopholes on the corporations so that they pay their fair share of the taxes.
Ben, I’m a little surpassed by your compassion for airlines. Margins may be low but that’s looking at all of this in a vacuum. In essence you’re saying quality customer service should stay bad because margins are low in the industry. I feel this is flawed logic.
I like the Canadian governments idea. it’s frankly a similar mechanism to that of the EU: penalty for flight delays and cancellations. Yes of course who gets...
Ben, I’m a little surpassed by your compassion for airlines. Margins may be low but that’s looking at all of this in a vacuum. In essence you’re saying quality customer service should stay bad because margins are low in the industry. I feel this is flawed logic.
I like the Canadian governments idea. it’s frankly a similar mechanism to that of the EU: penalty for flight delays and cancellations. Yes of course who gets paid is different, but this kind of thing helps discourage the airline from not addressing operational issues and failures which directly impact customers. Airlines will always sacrifice individual customers in the name of reducing expense, only cash penalties will make a difference. Just remember what Air Canada did to their customers during Covid… it was far worse than what we experienced the United States.
@Scott Totally well-written. If the situation has gotten so bad then something like this needs to be done. Lots of readers here write about how terrible of an airline Air Canada is, so put pressure on them to do better. They may be able to reject claims from the public but probably not so much with the government.
Whacky anti-capitalist insanity. "Tear it all down"
Maybe the government should have to pay the citizens every time there are complaints against the government about their loony blackface PM and radical leftist policies like this.
I see you opted for irrational comment that has no bearing in reality or relation to the content of Ben's post.
Your parents should be more mindful of your internet time, and be a tad more watchful of your bed time, child.
It's a desperate ploy to win back some popularity, because Justin Trudeau is so on the nose right now that his approval ratings are marginally higher than tertiary syphilis, and desperate times call for desperate, populist measures. Airlines have a "reputation" with the public, so it's a natural target. Passengers expect a flawless experience with no delays or hiccups on every occasion they take to the skies. Unfortunately aircraft break down, the weather is unpredictable,...
It's a desperate ploy to win back some popularity, because Justin Trudeau is so on the nose right now that his approval ratings are marginally higher than tertiary syphilis, and desperate times call for desperate, populist measures. Airlines have a "reputation" with the public, so it's a natural target. Passengers expect a flawless experience with no delays or hiccups on every occasion they take to the skies. Unfortunately aircraft break down, the weather is unpredictable, and the entire system is managed by fallible humans. Many complaints are justified, but a large number are not only trivial and pathetic, they're downright vexatious.
Lady Justine of Canada's dismal poll numbers are what it's all about. Expect more and more 'populist' measures like this in the weeks ahead to staunch the bleeding. It won't work, of course. She'll be come the next election. But oh what fun to see the blackface leftist radical squirm and twist looking for salvation which will never come..
In Canada, there is no effective passenger rights regulations and airlines pay approximately zero for any flight delays and cancellations. That's because regulations contain loopholes making almost all delays and cancellations ineligible for compensation. In rare cases when the compensation is due, the airlines still refuse to pay them and CTA is toothless.
Waiting for @DimSum to regale us with 'facts' and 'figures' about how Detla will never be caught up in this new gov't scheme, because Detla is so premium there will be 0.00% complaints lodged against it.