Canada Gazette, Part I, Volume 152, Number 51: Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection)

December 22, 2018

Statutory authority
Canada Transportation Act

Sponsoring department
Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Background

In November 2016, the Minister of Transport announced a commitment to create a new rules-based approach to ensuring air passenger rights in Transportation 2030: A Strategic Plan for the Future of Transportation in Canada. The Transportation Modernization Act, introduced in May 2017, moved this commitment forward in two key ways:

• (a) Directing the Canadian Transportation Agency (the "Agency") to develop new regulations regarding air carrier obligations towards passengers (the "Air Passenger Protection Regulations"); and
• (b) Authorizing the Governor in Council to make regulations to collect information respecting the performance of air carriers and stakeholders providing services related to air transportation in regard to the air passenger experience [the "Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection)"]. The proposed amendments are made under the authority of subsections 50(1) and (2) of the Canada Transportation Act (the "Act").

The Agency, responsible for developing the Air Passenger Protection Regulations will ensure clear and consistent passenger rights by establishing minimum standards of treatment, and in some situations, minimum levels of compensations that all airlines must provide.

Transport Canada, responsible for developing the Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection), will ensure more accountability and transparency from air transportation services by collecting data from stakeholders relating to air passenger experience and publicly reporting key performance metrics. This data would also be used to monitor the effectiveness of, and compliance with, the anticipated Air Passenger Protection Regulations.

Accordingly, Transport Canada proposes to amend the Transportation Information Regulations to establish data collection and reporting requirements for major air carriers travelling to, from, or within Canada; for the Canadian Air Transport Security Authority ("CATSA"); and for NAV CANADA.

Issues

Despite the importance of air travel, prior to the Transportation Modernization Act, there was no regulatory authority under the Act to collect and publish data regarding the air passenger experience.

Currently, the lack of information collected and shared with the public regarding the performance of air travel stakeholders hinders transparency and reduces passengers' ability to make informed air travel choices. Given the Agency's anticipated air passenger protection rules, a lack of data would also limit the ability to measure the effectiveness of the Air Passenger Protection Regulations.

Objectives

The objectives of the proposed amendments are to collect and publish air travel performance information necessary to

• Assist in assessing and monitoring the effectiveness of the Agency's Air Passenger Protection Regulations, which are in development;
• Assess and monitor air passengers' experience, and make evidence-based policy changes; and
• Monitor industry performance trends and inform consumers.

Description

Subsection 50(1) of the Act states that the Governor in Council may make regulations requiring information to be provided to the Minister. The Transportation Information Regulations^{footnote 1} currently require Canadian and foreign air carriers to provide certain information — such as the flight number, number of passengers enplaned and deplaned, and the mass of freight transported — to Transport Canada with respect to scheduled and charter services that they operate.^{footnote 2} These information reporting obligations apply to both domestic and international flights originating in or destined for an aerodrome in Canada.

As set out in paragraph 50(2)(d) of the Act, information that must be provided to the Minister may include "the performance of air carriers and providers of services in relation to air transportation with regard to passenger experience and the quality of service." Transport Canada proposes to amend the Transportation Information Regulations to establish new information collection and reporting obligations related to passenger experience for air carriers, CATSA and NAV CANADA.

The proposed amendments would establish information reporting requirements for

• Certified air carriers (Canadian and foreign) that operate a scheduled^{footnote 3} or charter^{footnote 4} service, where the seats are resold to the public, that originates in or is destined for an aerodrome in Canada,^{footnote 5} with at least one aircraft with a certificated maximum carrying capacity of 39 passengers or more;
• CATSA; and
• NAV CANADA.

To avoid creating significant administrative burden on smaller air carriers, the proposed data obligations would only impose detailed reporting requirements on air carriers that operate at least one aircraft certified to carry 70 passengers or more ("large air carriers"^{footnote 6}). Air carriers that only operate aircraft certified to carry fewer than 70 passengers (but that operate at least one aircraft certified to carry 39 passengers or more) would only be subject to aggregated data reporting requirements ("small air carriers"^{footnote 7}). Air carriers that only operate aircraft certified to carry fewer than 39 passengers would not be subject to the reporting requirements.

Large air carriers would be required to submit monthly reports on data related to on-time performance, such as departure and arrival times; delays; and cancellations on a per-flight basis. They would also provide information on denial of boarding; lost and damaged checked baggage; and complaints related to child seating, transportation of musical instruments, and the timely provision of information to passengers aggregated by route (flight segment). These requirements are set out in the proposed subsections 7.2(1) and (2) and (5) to (7) of the Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection).

Small air carriers would be required to submit quarterly reports on data related to the number of cancelled and delayed flights, denial of boarding aggregated by route, and lost and damaged checked baggage aggregated by arrival aerodrome. These requirements are set out in the proposed subsections 7.2(3) to (6) of the Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection).

CATSA would be required to submit monthly reports for each passenger screening checkpoint at all airports with boarding pass scanning technology. The data reported would include average security screening wait times; the number of passengers screened; and the number of security screening lanes used to screen passengers, aggregated by 15-minute periods. These requirements are set out in the proposed section 50 of the Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection).

NAV CANADA would be required to submit monthly reports on aircraft movements at each aerodrome where it operates. These requirements are set out in the proposed section 22.2 of the Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection).

All the stakeholders listed above would be required to submit the information through Transport Canada's Electronic Collection of Air Transportation Statistics ("ECATS") program. Transport Canada would align the proposed obligations with any new definitions used in the Agency's anticipated Air Passenger Protection Regulations.

Regulatory and non-regulatory options considered

Voluntary (non-regulatory) options

Voluntary options, such as memoranda of understanding ("MOUs"), were considered for this proposal. This would involve the adoption of MOUs between Transport Canada and CATSA, NAV CANADA, and every small and large air carrier that operates passenger flights that originate in or are destined for an aerodrome in Canada (approximately 80 air carriers). The cost to Transport Canada of negotiating piecemeal agreements would be significant.

Regulatory options

Regulatory option 1: Create the same detailed reporting requirements for all Canadian and foreign large and small air carriers. While this would create uniformity in the level of data reported, this could impose a significant administrative burden on small air carriers, which only account for about 2% of passenger seats on flights that originate in or are destined for an aerodrome in Canada.

Regulatory option 2: Create detailed reporting requirements for large air carriers and aggregated reporting requirements for small air carriers. This option would ensure that Transport Canada receives sufficient data to achieve the objectives of this proposal, while also reducing the administrative burden on small air carriers.

Ultimately, amendments to the Transportation Information Regulations in line with regulatory option 2 were chosen for the reasons set out below:

• Accurate data from all regulated air transportation service providers are necessary to achieve the policy objectives of this proposal, which could not be achieved on a voluntary basis.
• There is little incentive for regulated air transportation service providers to voluntarily disclose detailed data that could reveal poor performance or non-compliance with the anticipated Air Passenger Protection Regulations.
• Given the importance of the information collected, Transport Canada should have access to a range of enforcement tools, including administrative monetary penalties where appropriate, in order to address any non-compliance commensurately and effectively.
• Amending the Transportation Information Regulations creates certainty and continuity for stakeholders, most of which are already familiar with the regulatory framework under the Transportation Information Regulations as well as with the ECATS submissions database.

Benefits and costs

The quantified benefits and costs of the proposed amendments are a present value net cost of $16.3 million. Of the benefits that can be quantified, Canadians who directly access data reports online would enjoy a welfare benefit worth $1.8 million. Other substantial benefits, including a growth in reliable data for future regulatory development, are unquantifiable. Air carriers, CATSA and NAV CANADA would assume a total present value cost of $13.9 million to collect and report data. Transport Canada would assume a total present value cost of $4.1 million to process data and publish reports online. The present value total cost of the proposed amendments is $18 million. A detailed cost-benefit analysis report is available upon request.

Analytic framework

This cost-benefit analysis considers the benefits and costs of the regulatory changes (the policy scenario) compared to a world in which these changes did not occur (the baseline scenario). Monetized values are reported in present values over 2019–2028, discounted at 7% and expressed in 2017 Canadian dollars unless otherwise noted.

Regulated community

This analysis considers the incremental benefits and costs on Canadian carriers and consumers.

In 2018, there were 17 (12 large and 5 small) Canadian air carriers operating scheduled or charter services, where the seats were resold to the public, that originated in or were destined for an aerodrome in Canada that meet the application criteria for the proposed amendments. Two additional Canadian air carriers that would meet the large air carrier criteria are expected to begin operations within the period of analysis. Just over 60 foreign carriers also operated scheduled or charter services, where the seats were resold to the public that originated in or were destined for an aerodrome in Canada.

NAV CANADA and CATSA would also be required to submit data to Transport Canada.

Baseline scenario

Canadian air passenger carriers currently collect extensive data on flight times, passenger loads and baggage handling for various reasons. The current Transportation Information Regulations require Canadian air carriers to provide the Government with certain data such as financial information, flight times, cargo and passenger totals. This data is used for national transportation policy development, operational planning, and to assist in developing an annual report providing a brief overview on air travel performance in Canada. In addition, Canadian air carriers sometimes voluntarily share data with national and international industry associations. In the baseline scenario, Canadian air carriers would continue to track, compile and report data that are required currently by the Transportation Information Regulations and for business intelligence reasons.

During the period of analysis, air passenger traffic in Canada, as measured by origin-destination passengers, is expected to increase at an average annual rate of 3%. In 2017, there were nearly 90 million air passengers in Canada aerodromes. This is expected to rise to approximately 126 million by 2028.^{footnote 8} Air travel demand is expected to grow in proportion to the general economy, aided by persistently declining real fares (net of inflation). The extent to which real fares decrease depends on a variety of factors, including the impact of competitive pressures and evolving demand. Growth is expected to be stronger for passengers travelling internationally (3.7%) and across the United States (U.S.) border (3.4%) than domestically (2.1%).

Policy scenario

The proposed amendments are not expected to significantly alter the demand or supply for air travel in the policy scenario relative to the baseline scenario. As shown in the « Distributional impact analysis » section below, the cost per passenger is less than $0.02. Even if that cost is passed entirely onto the passenger, it is not expected to reduce the demand for air travel. Likewise, when costs cannot be passed on to passengers, the increase in marginal cost for Canadian air carriers would be insufficient to reduce the availability of seats or flights; therefore, supply would be essentially unchanged.

The newly accessible data would better inform travellers before purchasing flights, but this information is not expected to impact the decision to fly or not; therefore, overall demand would be unchanged.

As shown in the « Distributional impact analysis » section below, the average annual cost per passenger is very low and not expected to discourage travellers or reduce the availability of seats or flights; therefore, supply would be essentially unchanged.

Reporting requirements

As stated above, a total of 19 Canadian air carriers (14 large and 5 small) would be required to collect and submit new reports to Transport Canada. NAV CANADA and CATSA would be required to submit new reports on aircraft movement and security screening wait times at Canadian airports, respectively.

Large air carriers would be required to submit four new monthly reports. The On-Time Performance Report would include all information that is collected on a per-flight basis. This report would include around 35 separate data elements for each flight operated over the reporting period.

The Denied Boarding Report, the Lost / Damaged Baggage Report, and the Complaints Report would contain data aggregated by flight segment. Each report would contain around eight data elements for each flight segment.

In 2017, the 12 large Canadian air carriers operated just over 1 million flights on approximately 1 300 routes. In the first year of the proposed amendments coming into force, the large Canadian air carriers would submit approximately 40 million unique data elements. Adjusting for industry growth and including the two new carriers, this total would rise to 55 million by 2028.

Small air carriers would be expected to submit two new quarterly reports. The Flight Performance / Denied Boarding Report would contain data reported by flight segment. This report would include around 20 unique data elements for each flight segment operated by the air carrier over the reporting period.

The Lost / Damaged Baggage Report would contain data for each arrival aerodrome. This report would contain around six data elements for each destination aerodrome served by the air carrier.

In 2017, the five small air carriers operated around 120 000 flights on 250 routes. Adjusting for industry growth, small air carriers would be expected to submit around 11 500 data elements in the first year of the proposed amendments coming into force, increasing to 14 000 data elements in 2028.

CATSA is currently tracking wait-time information for each 15-minute period that each screening checkpoint is open. The proposed amendments would require CATSA to submit monthly reports with this data. In the first year of the proposed amendments coming into force, CATSA would be expected to submit reports containing 5.7 million unique data points in the first 12 months of the proposed amendments coming into force. This would rise to nearly 7.5 million unique data points by 2028.

NAV CANADA currently tracks and reports most commercial aircraft movements in Canada to Statistics Canada. This would also be shared with Transport Canada. An estimated 55 million data elements would be submitted in the first 12 months that the proposed amendments enter into force. This would rise to 74 million data elements by 2028.

Benefits

The majority of the benefits of the proposed amendments are not quantified. The proposed amendments provide the Government of Canada with a big data source where analysis and its potential applications would enhance and support air travel policy development.

The total present value of the quantified benefit of the proposed amendments is $1.8 million. This is the expected welfare increase for Canadians who directly access air passenger performance reports from the Canadian Centre for Transportation Data (CCTD) website. Between April 1, 2017, and April 30, 2018, around 98 000 unique visitors accessed Transport Canada or Canadian Transportation Agency websites concerning air passenger travel. The average length of each visit was around four minutes. Assuming similar web traffic for the CCTD website, that increases at the same rate as passenger growth, around 135 000 unique visitors would directly access the air travel reports on the CCTD website per year on average over 2019–2028. Individuals accessing the air travel data through the CCTD website would receive a welfare benefit that would not be possible without the proposed amendments. The value placed on time spent accessing the CCTD website is based on the national average hourly wage rate obtained from Statistics Canada.^{footnote 9}

Substantial non-quantifiable benefits would also be derived from the proposed amendments:

• Data provided to Transport Canada at the flight and route level would enable Transport Canada to assess and monitor the effectiveness of the Air Passenger Protection Regulations.
• The proposed amendments would give regulators enhanced ability to assess and monitor air passengers' experience to make policy changes based on better evidence.^{footnote 10}
• By making data publicly available, the proposed amendments may encourage competition among air carriers on the basis of on-time performance, baggage handling, and denied boardings.

The data may also allow for a more efficient planning by the Canadian airport authorities. Improvements in these areas would be an indirect benefit to consumers.

Costs

The present value of the total costs associated with the proposed amendments is $18 million. Canadian air carriers, NAV CANADA and CATSA would assume a total present value cost of $13.9 million to collect and submit data. The total present value of government costs are estimated around $4.1 million to build and maintain data submission and reporting portals, as well as analyze the data.

Costs for air carriers

The total present value cost to Canadian air carriers is $13.9 million. Over the period of analysis from 2019 to 2028, the average annual total cost is $1.4 million.

Air carriers would assume three types of costs. In the first year of the proposed amendments, air carriers would assume costs to purchase, develop or modify data collection processes (set-up costs). Once a system is in place, air carriers would assume costs to collect data (collection costs), and would subsequently produce and submit reports to Transport Canada (submission costs). A summary of the costs to industry is presented in Table 1.

Table 1: Summary of industry costs for large and small air carriers
(Total present value cost over the period from 2019 to 2028; $2017)

	Set-up Costs ($, millions)	Collection Costs ($, millions)	Submission Costs ($, millions)	Total Costs ($, millions)	Average Annual Total Cost per Carrier ($)
Large air carriers	3.6	6.1	2.9	12.6	89,876
Small air carriers	0.1	0.8	0.4	1.3	26,023
Total	3.7	6.9	3.3	13.9	73,073

Set-up costs

Air carriers would assume costs to modify their existing systems or implement new data collection processes to begin collecting the required data. Initial set-up costs, assumed in the first-year of the proposed amendments coming into force, total an estimated $3.7 million.

The average expected set-up costs are $255,000 for large air carriers and $29,000 for small air carriers.

Collection costs

The total present value of collection costs is $6.9 million. Ongoing collection costs assumed would be the time to maintain automatic collection systems and/or the time to record the information manually.

Over the period from 2019 to 2028, the average annual collection cost is $611,000 for large air carriers and around $70,000 for small air carriers.

Submission costs

The total present value cost of submitting reports is $3.3 million. Submission costs are assumed to compile, review, approve, and submit reports to Transport Canada. These are assumed monthly or quarterly, depending on the requirement of the airline. The estimated submission times are based on similar reports required in other jurisdictions.^{footnote 11}

For the 2019–2028 period, the average annual submission cost would be $290,000 for large air carriers and $34,000 for small air carriers.

Cost for NAV CANADA and CATSA

The total present value cost to NAV CANADA and CATSA is $11,000. The incremental impact of the proposed amendments would be one hour for each agency, per reporting cycle, to prepare the data file, transmit to Transport Canada, and confirm receipt.

Cost to Government

The total present value cost for the Government is estimated at $4.1 million. Costs are divided between developing and maintaining the online services as well as enforcing the proposed amendments.

Online services

Additional hardware and the initial programming to create a new submission window capable of accepting multiple submission methods (direct business-to-business, file upload, or manual entry), and the reporting website, would be a one-time cost of $750,000. Half of a full-time-equivalent (FTE) government employee with a computer science classification would be required to maintain the hardware and the website in each subsequent year.

Submitted data would be published on the CCTD website. One FTE with a computer science classification would be required to design and program the air traveller data reporting web pages in the first year. In subsequent years, the equivalent of one half of an FTE would be needed to maintain and update the reporting website. The total present value cost to Government to provide online services is $1.65 million.

Compliance promotion, enforcement and analysis

The total present value cost for compliance promotion, enforcement and analysis is $2.5 million. Promotional material would require the equivalent of two months (or 0.17 FTE) to produce. Enforcement and analysis would be conducted by employees in the Economics and Social Science classification. Activities would consist of analyzing reports to ensure accuracy and completeness, and following up on late or incorrect submissions, when necessary. Enforcement and analysis would require 3.5 FTEs annually.

Consolidated cost-benefit statement

Table 2: Cost-benefit statement

	Base Year	Discount Rate	Price Year	Final Year	Total (Present Value)	Annual Average
	2018	7%	$CAN 2017	2028	−$16.3 million	−$1.6 million
A. Quantified impacts (CAD, 2017)
Benefits	Canadian public ($, millions)	2019	2025	2028	Total (Present Value)	Annual Average
		0.2	0.2	0.1	1.8	0.2
Costs	Air carriers ($, millions)	4.3	1.0	0.9	13.9	1.4
	Government ($, millions)	1.2	0.3	0.2	4.1	0.4
	NAV CANADA / CATSA ($)	1,442	961	784	10,836	1,084
Total costs ($, millions)		5.5	1.4	1.2	18.0	1.8
Net benefit ($, millions)		−5.3	−1.2	−1.0	−16.3	−1.6
B. Qualitative benefits Reinforce the objectives of the Air Passenger Protection Regulations. Provide data to support the development of evidence-based regulations.

Sensitivity analysis

Uncertainty has been taken into account in this cost-benefit analysis by assigning probability distributions to several variables. The results of the cost-benefit analysis summarized in Table 2, above, is the middle value calculated using the median of probabilistic inputs.

To further control for uncertainty, simultaneous Monte Carlo simulations of 10 000 observations were run to obtain 95% confidence intervals for total costs and benefits. The low and high values of the 95% confidence interval for estimated costs and benefits are presented in Table 3. The modelling of government, NAV CANADA and CATSA costs did not use probabilistic inputs, so results do not vary. Finally, sensitivity tests were conducted to determine which factors contributed the most to the variation of outcomes. As shown in Table 3, the proposed amendments would impose a net cost between $9.7 and $26 million. Collection costs for the On-Time Performance Report and the Lost / Damaged Baggage reports contributed the most to the variability in the analysis.

Table 3: Low, middle, and high values of the 95% confidence interval from 10 000 Monte Carlo simulations
(Present value — $, Million)

		Low	Middle	High
Benefits	Canadian public	1.1	1.8	2.3
Costs for air carriers	Set-up costs	2.7	3.7	4.8
	Collection costs	2.1	6.9	13.7
	Submission costs	1.7	3.3	4.9
Total cost	All stakeholders (including Government)	10.6	18.0	25.7
Net benefit		−9.5	−16.3	−25.2

Note: Values in this table are presented as the present value using a 7% discount rate.

The central results of the cost-benefit analysis were calculated using a 7% discount rate. It is a lower net cost compared to the result when a lower rate (or no rate) is applied.

Table 4: The net present value of the central case at different discount rates
($, Million)

	No Discounting	3%	7%
Present value of benefits	2.5	2.1	1.8
Present value of costs	24.6	21.3	18
Net present value	−22.1	−19.2	−16.3

Distributional impact analysis

Eight of the affected air carriers are regional operators that serve mostly northern or remote communities. The other nine air carriers operate flights to larger urban centres or fly international routes.

Air carriers serving northern or remote communities carry around 5% of the air passengers on flights covered by the proposed amendments. As shown in Table 5, regional carriers would assume around 35% of the total present value cost of the proposed amendments. National carriers and carriers that fly international routes, would assume around 65% of the total present value cost of the proposed amendments, while carrying around 95% of passengers.

Based on passenger forecasts using the average annual growth rate, the average cost per passenger for regional carriers is $0.45. The average annual cost for national carriers is $0.09. The combined average annual cost per passenger would be $0.30.

Table 5: Summary of distributional impacts

	Portion of Enplaned Passengers (%)	Portion of Total Costs (%)	Average Cost per Passenger ($)
National / international carriers	95	65	0.09
Regional carriers	5	35	0.45

"One-for-One" Rule

The proposed amendments are considered an "IN" under the Government of Canada's "One-for-One" Rule. The annual administrative costs to comply with the requiregulatory rements over a 10-year time frame are estimated to be $341,779 for all stakeholders, or $17,988 per air carrier.^{footnote 12}

Administrative costs are calculated as the time to prepare reports, then review and submit each report. Submission times per reporting cycle are based on estimates for similar reports in other jurisdictions.

The estimated time required for large air carriers to collect and report their submissions is 50 hours per month. The detailed breakdown is provided below:

• 20 hours for the On-Time Performance Report;
• 20 hours for the Lost / Damaged Baggage Report;
• 5 hours for the Denied Boarding Report; and
• 5 hours for the Complaints Report.

The estimated time required for small air carriers to collect and report their submissions is 45 hours per quarter. The detailed breakdown is provided below:

• 25 hours for the Flight Performance / Denied Boarding Report; and
• 20 hours for the Lost / Damaged Baggage Report.

For each report, a data scientist or comparable employee (with a wage rate of $38.08 per hour in 2012 dollars) would take three quarters of the submission time to compile and prepare reports. A senior manager (with a wage rate of $50.17 in 2012 dollars) would take the remaining time to review and approve reports before submitting them to Transport Canada.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small business.

Consultation

Industry stakeholders have been aware of this regulatory initiative since May 2017, when the Transportation Modernization Act was tabled in Parliament. Parallel to the development of a new air passenger protection framework by the Agency, Transport Canada began discussing data and performance issues by initiating a working group with key stakeholders, including air industry and government representatives. In the spring of 2018, after the Transportation Modernization Act received royal assent, Transport Canada began consultations with industry stakeholders and the Canadian public to discuss regulatory amendments needed to support the implementation of the new legislation.

Data and Performance Monitoring Working Group

The Data and Performance Monitoring Working Group (the working group) was created under the umbrella of the Air Consultative Committee, co-chaired by Transport Canada and the Canada Border Services Agency. Composed of aviation industry and government representatives, the working group provided a platform to discuss data collection and performance monitoring issues. During the winter of 2018, both in-person and teleconference meetings were held in preparation for the proposed regulatory amendments. Participation included three Canadian air carriers, four airports, one Canadian airline association and four federal agencies.

During these meetings, air carriers provided insight on the scope of their data collection practices for measuring passenger experience. A survey was also circulated to members of the working group and key feedback that was incorporated into the proposal includes the following:

• Air carriers operating aircraft with fewer than 39 seats do not have the resources to handle additional reporting burdens;
• Small air carriers have limited resources to implement additional reporting requirements;
• Many stakeholders play a vital role in passenger experience, not just air carriers. Therefore, performance data should also be collected from other providers of services related to air transportation; and
• It may be difficult to collect comprehensive data on the seating arrangements of children, transportation of musical instruments, compensation provided to passengers, and flight notifications and announcements.

Stakeholder consultation paper

On May 28, 2018, Transport Canada circulated a consultation paper to key stakeholders, including airport authorities, industry associations, consumer associations, and Canadian and foreign air carriers (through several international associations, including the International Air Transport Association). The consultation paper detailed elements of the proposed amendments, including a list of data reporting requirements needed to monitor the Agency's anticipated Air Passenger Protection Regulations. It also incorporated feedback gathered from the working group. This part of the consultation process was held until August 17, 2018.

Stakeholders identified a number of issues and recommendations, including the following:

• Air carriers, airports, and consumer and airline associations suggest increasing the consistency with current U.S. reporting requirements, such as limiting the scope of data collection (i.e. domestic flights only) and publicly reporting metrics using aggregation and percentages;
• Air carriers recommend reducing administrative burdens by limiting reporting requirements to a per-flight basis, rather than by passenger, and to only report flight delays over a specific time period;
• Consumer associations recommend conducting a regular review of the data requirements to ensure efficiency in measuring stakeholder performance; and
• Air carriers suggest that the new data requirements are outside the scope of their current data collection practices, resulting in administrative burden and difficulty in compliance.

Stakeholders shared differing views on the following issues:

• Air carriers are concerned about the misrepresentation of data collected, resulting in unfair comparisons. Consumer associations consider this comparison as necessary to measure performance; and
• Some air carriers and consumer associations prefer identical reporting requirements for carriers of all sizes, but disagree on whether the data should be reported on a monthly or quarterly basis.

Public consultations were conducted through online questionnaires, formal written submissions and by participating in online forums, posted on Transport Canada's consultations website. Consultations took place from May 28 to August 28, 2018. The results demonstrate strong public support for the proposed amendments, showing that the public is likely to consult published air travel performance data when booking air travel.

Addressing stakeholder concerns and recommendations

The feedback gathered from the consultation processes was collectively considered and incorporated into Transport Canada's proposal. Some key changes that were drawn from stakeholder feedback include the following:

1. Regulatory requirements based on size of air carrier: Excluding air carriers only operating aircraft with fewer than 39 seats from the new reporting requirements to avoid imposing this administrative burden on these carriers. Similarly, small air carriers would now be required to only submit aggregated information in their data reports.
2. Collecting data from other stakeholders involved with passenger experience: Data collection requirements were expanded to include CATSA and NAV CANADA.
3. Burden: Transport Canada has made an effort to focus on data elements that are already collected by air carriers, NAV CANADA and CATSA, or that can be collected without significant incremental efforts. For example, Transport Canada has reduced data requirements related to denied boarding to a per-flight segment basis (rather than per passenger). To accommodate current data collection practices, Transport Canada has further simplified data requirements related to musical instruments, flight notifications, and child seating, which will now only require the number of recorded complaints.

However, some stakeholder feedback was not adopted into the proposal:

1. Regulatory alignment with other jurisdictions: Transport Canada is aligning the proposed amendments with the scope of the anticipated Air Passenger Protection Regulations and, therefore, must include Canadian-specific obligations. For instance, the proposed amendments must apply to both domestic and international flights in alignment with the Agency's anticipated regulations.
2. Metrics: This proposal requires data to be submitted in raw counts or totals (rather than percentages or rates), as the goals of the proposed amendments are not only to assess the effectiveness of the anticipated Air Passenger Protection Regulations, but to use the data to develop evidence-based policies. For this reason, raw data would be collected for the purpose of policy development, and publishing would be done in a form that accounts for confidentiality and commercial sensitivities, and provides a fair comparable between air transportation service providers.
3. Timelines: To achieve the objectives of this proposal, the coming-into-force date must be aligned with the timelines set out by the anticipated Air Passenger Protection Regulations. To accommodate stakeholder concerns regarding implementation, Transport Canada is proposing a 120-day period before stakeholders must file their first reports. Given the significance of establishing a regulatory framework that protects passengers, this gives an appropriate amount of time for stakeholder compliance.

In summary, the consultation process facilitated by Transport Canada provided an effective platform to gather information about current data collection practices. It highlighted ways to improve the breadth of measuring passenger experience to assess the effectiveness of the Agency's Air Passenger Protection Regulations.

Regulatory cooperation

This regulatory proposal would harmonize the proposed amendments with the anticipated Air Passenger Protection Regulations, which are being developed by the Agency.

This proposal would also introduce specific Canadian requirements that may differ from existing regulations in other jurisdictions. For instance, the United States currently requires air carriers to report performance data on domestic flights only, while Transport Canada's proposal would, in a manner somewhat similar to the framework in the European Union (EU), require certain data to be reported on all flights that originate in or are destined for an aerodrome in Canada. The EU regulation focuses on collecting data related to flight delays and cancellations from air operators (that operate a number of flights over a certain threshold in EU airspace) for the purpose of developing performance targets, whereas Transport Canada's proposal would also collect data on other metrics related to passenger experience such as denial of boarding, checked baggage and security screening wait times. The U.S. rules also require air carriers to report the total number of lost or damaged baggage and total instances of denied boarding, on a network-wide basis, across all flights they operated in the month. Transport Canada's proposal, however, would require air carriers to break these data down by routes (flight segments) flown that month.

These Canadian-specific requirements are necessary. The Canada Transportation Act creates a more comprehensive air passenger protection regime that applies to all flights to, from and within Canada and includes new rules that will be established by the Agency's anticipated Air Passenger Protection Regulations. As the proposed amendments would help assess the effectiveness of the Agency's upcoming air passenger protection rules, it is necessary to collect sufficiently detailed data in order to achieve that objective. By collecting specific data, such as the number of lost or damaged baggage by route, Transport Canada would also be able to assess problem areas and make evidence-based policy decisions.

This regulatory proposal does not constitute one of the 23 projects defined under the Joint Action Plan for the Canada-United States Regulatory Cooperation. Therefore, the Joint Action Plan has limited application in this case.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, the strategic environmental assessment process was followed for this proposal, and a Sustainable Transportation Assessment was completed. The assessment took into account potential effects to the environmental goals and targets of the Federal Sustainable Development Strategy. No significant environmental effects from this proposal were found.

Gender-based analysis plus

This proposal is not expected to create positive or negative impacts on any of the population groups, as part of the gender-based analysis plus (GBA+). In examining this proposal in the context of the GBA+ analysis, Transport Canada looked at similar regulations from other jurisdictions that currently collect air travel performance metrics. In doing so, Transport Canada concluded that this proposal will have no differential impacts on the basis of identity, including race, gender, ethnicity, religion, age, and mental or physical disability.

Rationale

The proposed amendments would achieve the policy objectives of this proposal while ensuring that only information that is critical to assessing the air passenger experience and measuring the effectiveness of the Agency's anticipated Air Passenger Protection Regulations is collected from the regulated community.

The data reporting obligations would apply to passenger flights that originate in or are destined for an aerodrome in Canada. Where a passenger takes more than one flight to arrive at the final destination, air carriers would only be required to provide information on the flights that departed from or arrived in Canada. This would allow Transport Canada to assess the experience of all air passengers travelling to and from Canada, as well as the performance of all stakeholders in the Canadian air transportation service chain, to develop evidence-based policies.

Without the proposed amendments, Transport Canada would not have the information needed to assess the effectiveness of the Agency's anticipated Air Passenger Protection Regulations; monitor trends and issues affecting the passenger experience; and evaluate the need for policy changes. Making key data on the passenger experience publicly available would also be beneficial to the public by helping Canadian travellers make informed decisions.

Consultations with stakeholders informed this proposal. Transport Canada undertook consultations throughout the regulatory development process and has considered the feedback, including the type of information that could be collected and reported in the short term; the appropriate level of administrative burden needed to achieve the objectives; and alignment with the broader Canadian air passenger protection framework. Transport Canada is further proposing a 120-day implementation period after the coming-into-force of these amendments before regulatees must file their first reports.

The current proposal would result in a net cost of $16.3 million. However, the data collected would be needed to assess the effectiveness of the anticipated Air Passenger Protection Regulations and to monitor the air passenger experience with a view to making evidence-based policy changes. This proposal is expected to generate benefits in the long term by allowing Transport Canada to become a more efficient and effective regulator.

Implementation and enforcement

Implementation

Transport Canada is proposing a 120-day implementation period to give the regulated community time to fully adopt and implement the new requirements. While the air transportation service providers subject to this proposal would be required to begin collecting data upon the coming-into-force of the proposed amendments, the first data reports would only be due 120 days afterward.

Stakeholders, particularly air carriers, are already familiar with the ECATS program and with existing data reporting requirements under the Transportation Information Regulations. Upon the coming-into-force of the proposed amendments, Transport Canada would publish additional resources and conduct outreach activities with stakeholders. These include the following:

• Contacting air carriers individually to inform them of the new reporting obligations through ECATS;
• Developing a user guide to assist air carriers with the new reports and additional ECATS website functionalities;
• Developing a Frequently Asked Questions resource on the new reporting obligations; and
• Making contact resources available to answer questions on reporting instructions.

Transport Canada already uses the ECATS reporting infrastructure, and internal staff will incorporate the new surveys and analytical tools required in time for submission of the first data reports. Data submitted through the ECATS system would be verified and validated by Transport Canada IT systems and by Transport Canada staff.

Compliance and enforcement

Transport Canada's goal is to create a fair and equitable compliance and enforcement environment that allows the regulated community to take corrective actions first. The enforcement of these amendments would be achieved through the compliance and enforcement regime set out in the Canada Transportation Act, including the creation of corresponding administrative monetary penalties (AMPs) ministerial regulations.

Transport Canada would generally consider imposing an AMP only after employing other compliance tools intended to promote voluntary compliance (e.g. oral counselling, warning letter). Where compliance is not achieved on a voluntary basis, or where there are serious or repeated violations, however, it may be appropriate to impose an AMP. The amount of the AMP may be determined based on a number of factors, such as whether the violation was carried out by an individual or a corporation, the seriousness of the violation, and the circumstances of the violation.

Compliance and enforcement of these amendments would require additional Transport Canada resources, including the hiring and training of an enforcement officer.

Interested persons may submit comments concerning these proposed amendments within 60 days after pre-publication in the Canada Gazette, Part I.

Contact

Greg Zawadzki
Director
National Air Services Policy
Transport Canada
Place de Ville, Tower C
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Telephone: 613-993-4361
Fax: 613-991-6445
Email: greg.zawadzki@tc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsections 50(1)^{footnote a} and (2)^{footnote b} of the Canada Transportation Act^{footnote c}, proposes to make the annexed Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection).

Interested persons may make representations concerning the proposed Regulations to the Minister of Transport within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Greg Zawadzki, Director, National Air Services Policy, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, Ottawa, Ontario K1A 0N5 (tel.: 613-993-4361; fax: 613-991-6445; email: greg.zawadzki@tc.gc.ca).

Ottawa, December 13, 2018

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Transportation Information Regulations (Air Travel Performance Data Collection)

Amendments

1 (1) Subsection 3(1) of the Transportation Information Regulations ^{footnote 13} is amended by adding the following in alphabetical order:

large air carrier means an air carrier that operates a charter service or a scheduled service with at least one aircraft equipped for the carriage of passengers with a certificated maximum carrying capacity of 70 passengers or more. (grand transporteur aérien)

small air carrier means an air carrier that operates a charter service or a scheduled service with at least one aircraft equipped for the carriage of passengers with a certificated maximum carrying capacity of at least 39 but not more than 69 passengers. (petit transporteur aérien)

(2) Section 3 of the Regulations is amended by adding the following after subsection (2):

(3) For the purposes of the definitions large air carrier and small air carrier, aircraft that are used solely for charter services are not included if the block of seats of the aircraft that is reserved is not resold to the public.

2 The Regulations are amended by adding the following after section 7.1:

7.2 (1) Subject to subsection (7), a large air carrier must provide to the Minister the following information for each passenger flight that originates in or is destined for an aerodrome in Canada, on a monthly basis:

• (a) the aircraft's registration mark;
• (b) the flight number;
• (c) the aerodromes of origin and destination;
• (d) the marketing air carrier and operating air carrier codes;
• (e) the scheduled date and time of departure and arrival at the gate;
• (f) the actual date and time of departure and arrival at the gate;
• (g) the date and time of take-off and landing;
• (h) the delay in number of minutes, by cause, if applicable;
• (i) an indication of whether the passengers were deplaned following a tarmac delay of over three hours;
• (j) an indication of whether the flight was cancelled and the cause; and
• (k) an indication of whether the flight was diverted.

(2) Subject to subsection (7), a large air carrier must provide to the Minister the following information in respect of passenger flights that originate in or are destined for an aerodrome in Canada, aggregated by flight segment, on a monthly basis:

• (a) in the case of denial of boarding without fault on the part of the passenger
  • (i) the number of passengers who gave up their seat on a voluntary basis,
  • (ii) the number of passengers who gave up their seat on an involuntary basis, and
  • (iii) the reason for the denial of boarding;
• (b) the number of pieces of checked baggage;
• (c) the number of pieces of lost checked baggage;
• (d) the number of pieces of damaged checked baggage; and
• (e) the number of complaints received and recorded by the air carrier in respect of
  • (i) the assignment of seats to children under the age of 14 years,
  • (ii) the transportation of musical instruments, and
  • (iii) the provision of information to passengers in a timely manner, in the case of flight delay, flight cancellation or denial of boarding.

(3) A small air carrier must provide to the Minister the following information in respect of passenger flights that originate in or are destined for an aerodrome in Canada, aggregated by flight segment, on a quarterly basis:

• (a) the number of
  • (i) cancelled flights, by cause,
  • (ii) delayed flights, by cause, and
  • (iii) tarmac delays of over three hours; and
• (b) in the case of denial of boarding without fault on the part of the passenger
  • (i) the number of passengers who gave up their seat on a voluntary basis,
  • (ii) the number of passengers who gave up their seat on an involuntary basis, and
  • (iii) the reason for the denial of boarding.

(4) A small air carrier must provide to the Minister the following information in respect of passenger flights that originate in or are destined for an aerodrome in Canada, aggregated by arrival aerodrome, on a quarterly basis:

• (a) the number of pieces of checked baggage;
• (b) the number of pieces of lost checked baggage; and
• (c) the number of pieces of damaged checked baggage.

(5) A large air carrier or a small air carrier must provide to the Minister the information referred to in subsections (1) to (4), as applicable, for flights operated by a regional operator on its behalf.

(6) The information required by subsections (1) to (4) must be provided using Transport Canada's Electronic Collection of Air Transportation Statistics program within 30 days after the last day of the reporting period.

(7) A large carrier must provide the information required by subsections (1) and (2) for the 90-day period beginning on the day on which this section comes into force, within 30 days after the last day of that period.

7.3 Section 7.2 does not apply in respect of a charter service operated by an air carrier if the block of seats of an aircraft that is reserved is not resold to the public.

3 The Regulations are amended by adding the following after section 22.1:

22.2 (1) Subject to subsection (3), NAV CANADA must provide to the Minister the following information for each aircraft movement at an aerodrome, on a monthly basis:

• (a) the name of the aerodrome where the movement took place;
• (b) the date and time of the departure or arrival;
• (c) the flight number or, if there is no flight number, the registration mark of the aircraft;
• (d) the code, if any, assigned to the aircraft's operator by the International Civil Aviation Organization;
• (e) the aircraft's model;
• (f) the aerodrome that the flight is arriving from or departing for;
• (g) an indication of whether the aircraft is taking off or landing;
• (h) the runway used; and
• (i) an indication of whether the movement was conducted by visual flight rules or instrument flight rules.

(2) The information required by subsection (1) must be provided using Transport Canada's Electronic Collection of Air Transportation Statistics program within 30 days after the last day of the reporting period.

(3) NAV CANADA must provide the information required by subsection (1) for the 90-day period beginning on the day on which this section comes into force, within 30 days after the last day of that period.

4 The Regulations are amended by adding the following after section 41:

[42 to 49 reserved]

PART XII

Canadian Air Transport Security Authority

Information

50 (1) Subject to subsection (3), the Canadian Air Transport Security Authority must provide to the Minister the following information for each passenger screening checkpoint at an airport where boarding pass scanning technology is available, for each 15-minute period, on a monthly basis:

• (a) the name of the airport;
• (b) the name of the passenger screening checkpoint and whether the screening checkpoint is designated for domestic flights, flights to the United States or other international flights;
• (c) the date;
• (d) the start and end time of the 15-minute period;
• (e) the average wait time for a passenger to reach the passenger screening checkpoint;
• (f) the greatest number of lanes used to screen passengers; and
• (g) the number of passengers screened.

(2) The information required by subsection (1) must be provided using Transport Canada's Electronic Collection of Air Transportation Statistics program within 30 days after the last day of the reporting period.

(3) The Canadian Air Transport Security Authority must provide the information required by subsection (1) for the 90-day period beginning on the day on which this section comes into force, within 30 days after the last day of that period.

Coming into Force

5 These Regulations come into force on the day on which they are published in the Canada Gazette, Part II.