Critics blast proposal to outsource air passenger complaints, say system favours airlines

Under the proposal, airlines would be required to choose and enter into an agreement with one of the dispute resolution providers from a list provided by Transport Canada within 90 days with the minister issuing a decision within 90 days after a complaint is filed, according to the bill.

“In practice, airlines would be able to choose their own arbitrators,” said Barsalou-Duval in French in a press conference on Monday. “They would decide who handles complaints against them and ultimately who gets compensated and who does not, all in a completely opaque manner.”

“I find this situation very concerning,” he said.

Air passenger rights advocate Gabor Lukacs said that outsourcing complaints to arbitrators chosen by airlines is not a “genuine solution” because it fails to address the root cause of the backlog: the exemptions in the law.

Canada’s Air Passenger Protection Regulations contain far more exemptions than Europe’s rules, making cases much more time-consuming to resolve, said Lukacs. Those exemptions include provisions allowing airlines to deny compensation for disruptions deemed within their control, such as safety-related issues.

While the government promised to tighten those exemptions in 2023, nothing has changed, he said.

“What the government is doing is an illusion,” he said. “It is pretending that we are solving something, but not really solving it.”

Lukacs said that his other main concern with the third-party arbitration system is that, in Europe, customers can choose not to accept an arbitrator’s decision and continue fighting their case in court, whereas the bill proposed by the Canadian government would make those decisions legally binding.

According to Transport Canada, the model of independent dispute resolution — already used in other jurisdictions such as Europe — will deliver “faster and fairer outcomes for travellers.”

“Canadians are waiting far too long for answers,” the office of Transport Minister Steve MacKinnon said in an email to the Star. “With these changes, we are fixing a system that is no longer delivering timely or reliable results for passengers.” 

The minister did not directly answer the Star’s question about airlines being able to select independent arbitrators, but said the organizations would have to meet strict accreditation standards, including protections for official languages, safeguards to ensure independence from airline influence, and clear national service requirements.

Three weeks before Ottawa revealed its new plan to clear the backlog of air passenger complaints, Air Canada announced a pilot project to test whether binding arbitration could speed up the resolution of complaints.

The airline said it would invite 500 passengers selected at random from the CTA’s backlog, and offer to have their cases adjudicated by Canada Aviation Dispute Resolution, a subsidiary of U.K.-based dispute resolution company CDRL Group.

Barsalou-Duval said that he is troubled to see the similarity between the pilot project and the proposed legislation.

“I find it quite remarkable to see a government essentially implementing the wishes of an airline company directly into law,” he said in French.

Transport Canada did not respond to Barsalou-Duval’s comments.

Christophe Hennebelle, Air Canada’s spokesperson, told the Star that the airline has kept the government informed of its plan to launch the pilot project, but the reform is being designed by the government.

“In other jurisdictions where (alternative dispute resolution) is used, customer sentiment is positive,” he said.

John Gradek, a lecturer in aviation management at McGill University, told the Star that he supports the way Europe handles alternative dispute resolution, but warned that the system will only be effective in Canada if the government tightens the exemptions in the current law.

“The European model has very few loopholes in it, so it’s very difficult for the airline to basically make its point to rule in its favour.”