Canada makes negative changes to passenger bill of rights

Editor's note: This post has been updated to reflect Canada's new guidance on refunds. It was originally published on May 25, 2019.

If things go wrong while you're traveling, your first line of defense should and will often be travel insurance, either courtesy of your credit card or of a supplemental policy if you decided to purchase one. However once you've dealt with the immediate problem of getting your plans back on track, there's the question of compensating you for the time lost or wasted due to delays.

Related: The Best Credit Cards With Travel Protections

Obviously airlines don't want to pay out any more than they absolutely have to, so a number of governments around the world have stepped in to clearly define a passenger's rights in the events of delays, cancellation of involuntary denial of boarding. The best-known example of this would be EU261, which sets compensation requirements for passengers on certain delayed or cancelled flights to and from the European Union.

Canada backtracks on refund requirements

Last spring Canada passed a new passenger bill of rights with some incredibly generous protections in it, though in light of the mass cancellations caused by the spread of the coronavirus, Canada has now decided to scale back passenger protections. The most important change deals with reimbursements for flight cancellations, a hot button issue for passengers around the world.

Airlines need to ensure liquidity and sufficient cash flow at a time when new bookings are drying up and refund requests continue to pour in. On the other hand, passengers shouldn't be left footing the bill for flights they can no longer take, especially if the airline cancels the flight.

The Canadian Transportation Agency (CTA) has updated its guidance regarding refunds for cancelled flights to state the following:

"While any specific situation brought before the CTA will be examined on its merits, the CTA believes that, generally speaking, an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel, as long as these vouchers or credits do not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases).

This means that if a Canadian airlines cancels your flight, they aren't required to give you a refund and can instead issue you a travel voucher valid for two years or more. This ruling is likely to set a significant precedent that other countries around the world will follow, and it represents the first time in recent memory that a civil aviation body has advised airlines not to offer refunds in the event of a flight cancellation.

Compensation for flight delays and denied boarding

Mass cancellations are the most common problem facing travelers today, but if you're affected by something else like a lengthy delay or a denial of boarding, you'll still be protected by Canada's passenger bill of rights. If you are involuntarily denied boarding, i.e. bumped off a flight without volunteering, you're entitled to the following compensation (amounts in Canadian dollars, with 1 CAD equaling 0.74 USD at current rates):

• $900 if the delay is less than six hours
• $1,800 if the delay is between six and nine hours
• $2,400 if the delay is nine hours or more.

When it comes to flight delays, the following compensation amounts apply depending on the type of airline you're flying with. For large carriers:

• $400 for a delay between three and six hours
• $700 for a delay between six and nine hours
• $1,000 for a delay over nine hours

And for small carriers:

• $125 for a delay between three and six hours
• $250 for a delay between six and nine hours
• $500 for a delay over nine hours

You'll have up to one year from the anniversary of your flight to submit a claim form. The bill of rights defines a "large carrier" as any airline that carried worldwide at least two million passengers in each of the preceding years. Note that airlines are not required to provide compensation if the delays are due to factors outside their control, including but not limited to weather, airspace restrictions, airport operations, medical emergencies and more. While it seems entirely fair to hold larger carriers with a more robust network more responsible for their on time performance, and to excuse airlines for things they can't control, it does create a perverse incentive structure. Airlines would now be encourage to attribute delays to weather problems, something I've seen one US airline do over and over again on clear sunny days when its crews were simply delayed coming in from a different flight.

In addition to compensation requirements, the bill of rights also includes information on what services airlines are required to provide during a tarmac delay (including a reasonable amount of food and drink, access to the lavatories and communication with people outside the plane, if possible) and the standards of communication airlines are required to follow in the event of irregular operations.

Bottom Line

Airlines already have plenty of incentive to get flights airborne on time (with some even focussing a little too much on the perfect on time departure at the expense of other services), but delays do and will continue to happen. Canada's passenger bill of rights offers incredibly generous compensation amounts, and while you can't put a price on a lost day of vacation, most people would be happy to take a $700-$1,000 check and get on with their trips. Unfortunately, the new guidance suggesting that airlines offer travel vouchers instead of refunds for cancelled flights is likely to frustrate many passengers who have their travel disrupted by the coronavirus.