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Decision No. 746-C-A-2005

December 23, 2005

IN THE MATTER OF a complaint filed by Robert Black against Air Canada regarding its reduction of the free baggage allowance from 70 lbs. to 50 lbs. for travel between points in Canada, between points in Canada and points in the United States, and between points in Canada and points outside Canada other than the United States, applicable to reservations made on or after August 29, 2005, and for travel commencing on or after October 12, 2005.

File No. M4370/05-51368

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[1] On August 26, 2005, Robert Black filed with the Canadian Transportation Agency (hereinafter the Agency) the complaint set out in the title.

[2] On September 27, 2005, Agency staff requested that Air Canada address the complaint within the context of subsection 67.2(1) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), and sections 111 and 113 of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR).

[3] Air Canada filed its answer on October 27, 2005. Mr. Black submitted his reply to Air Canada's answer on November 7, 2005.

[4] In its submission, Air Canada contends that Mr. Black's complaint does not meet the requirement for the Agency to take jurisdiction in this matter, in that the complainant has not demonstrated nor does he allege that the holder of a licence has applied conditions of carriage applicable to the services that it offers that are unreasonable or unduly discriminatory. In this regard, Air Canada asserts that the Agency should exercise its jurisdiction only when confronted by "a real and precise factual background involving the application of terms and conditions".

[5] The Agency is of the opinion that it is not necessary for a complainant to present "a real and precise factual background involving the application of terms and conditions" for the Agency to assert jurisdiction under subsection 67.2(1) of the CTA and section 111 of the ATR. In this regard, the Agency notes that subsection 67.2(1) of the CTA provides that, on the basis of a "complaint in writing to the Agency by any person", the Agency may take certain action if the Agency determines that the terms or conditions at issue are unreasonable or unduly discriminatory. The Agency is of the opinion that the term "any person" includes persons who have not encountered "a real and precise factual background involving the application of terms and conditions", but who wish, on principle, to contest a term or condition of carriage. With respect to section 111 of the ATR, the Agency notes that there is nothing in the provisions that suggests that the Agency only has jurisdiction over complaints filed by persons who may have experienced "a real and precise factual background involving the application of terms and conditions". The Agency further notes that subsection 111(1) of the ATR provides, in part, that "All tolls and terms and conditions of carriage [...] that are established by an air carrier shall be just and reasonable [...]". The Agency is of the opinion that the word "established" does not limit the requirement that terms or conditions of carriage be just and reasonable to situations involving "a real and precise factual background involving the application of terms and conditions", but extends to situations where a person wishes, on principle, to challenge a term or condition that is being offered.

[6] The Agency is of the opinion that by virtue of incorporating terms and conditions of transport in a tariff, Air Canada is applying those terms and conditions, and is conveying such information to the travelling public. There would be no purpose to set out the terms and conditions of transport in a tariff if it could be argued that, in doing so, Air Canada is not really applying these terms and conditions.

[7] Furthermore, it would be inappropriate to require a person to experience an incident that results in damages being sustained before being able to file a complaint. To require a "real and precise factual background" could very well dissuade persons from using the transportation network.

[8] The Agency is therefore of the opinion that it has jurisdiction to consider complaints that, on principle, allege that terms and conditions of carriage are inconsistent with subsection 67.2(1) of the CTA and section 111 of the ATR.

[9] In view of the foregoing, the Agency will consider the present complaint.

[10] The issue to be addressed is whether Air Canada's reduced free baggage allowance, as set out in the carrier's tariffs, is inconsistent with subsection 67.2(1) of the CTA, in respect of carriage between points in Canada, and section 111 of the ATR, with respect to travel between points in Canada and points in the United States, and between points in Canada and points outside Canada other than the United States.

[11] Mr. Black submits that, as a business traveller who carries equipment weighing 70 lbs. in one piece of luggage, he will incur an additional cost of $70 for each business trip because of Air Canada's reduction of the free baggage allowance. Mr. Black asserts that the reason given by Air Canada that the reduction is to offset the price of fuel is the same as that provided for fuel surcharges, and that such surcharges seem to be a fairer way to address the carrier's increased fuel costs. Mr. Black submits that the reduced free baggage allowance may cause a hardship for some business travellers.

[12] Air Canada submits that its new free baggage allowance is neither unreasonable nor unduly discriminatory as it applies to all passengers, and that Mr. Black has failed to demonstrate why this allowance is unjust or unduly discriminatory, or towards whom the allowance is being applied in a discriminatory manner. Air Canada argues that Mr. Black "appears to direct his grievance to what he believes is the sole rationale for the new proposed condition".

[13] Mr. Black argues that Air Canada's claim that the reduced free baggage allowance is non-discriminatory ignores a class of traveller, specifically the businessman who must travel with samples, equipment, etc. that is essential to the service the businessman provides.

[14] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings. The Agency has also examined Air Canada's free baggage allowance set out in the carrier's tariffs.

[15] The Agency's jurisdiction over complaints concerning domestic tariffs is set out in sections 67, 67.1 and 67.2 of the CTA. Pursuant to subsection 67.2(1) of the CTA, the Agency may take certain remedial action following receipt of a complaint where the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory. More particularly, subsection 67.2(1) states that:

If, on complaint in writing to the Agency by any person, the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory, the Agency may suspend or disallow those terms or conditions and substitute other terms or conditions in their place.

[16] The Agency's jurisdiction over complaints concerning terms and conditions of carriage applicable to transportation to and from Canada is set out in sections 111 and 113 of the ATR.

[17] Section 111 of the ATR provides that:

(1) All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.

(2) No air carrier shall, in respect of tolls or the terms and conditions of carriage,

(a) make any unjust discrimination against any person or other air carrier;

(b) give any undue or unreasonable preference or advantage to or in favour of any person or other air carrier in any respect whatever; or

(c) subject any person or other air carrier or any description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatever.

(3) The Agency may determine whether traffic is to be, is or has been carried under substantially similar circumstances and conditions and whether, in any case, there is or has been unjust discrimination or undue or unreasonable preference or advantage, or prejudice or disadvantage, within the meaning of this section, or whether in any case the air carrier has complied with the provisions of this section or section 110.

[18] Further, if the Agency finds that the air carrier has contravened section 111 of the ATR, the Agency may, pursuant to section 113 of the ATR:

(a) suspend any tariff or portion of a tariff that appears not to conform with subsections 110(3) to (5) or section 111 or 112, or disallow any tariff or portion of a tariff that does not conform with any of those provisions; and

(b) establish and substitute another tariff or portion thereof for any tariff or portion thereof disallowed under paragraph (a).

[19] Rule 220, Free Baggage Allowance, of Air Canada's tariffs governing travel between points in Canada, and between points in Canada and points in the United States, namely, the Canadian Domestic General Rules Tariff, and Canadian General Rules Tariff, respectively provide, in part, that:

NOTE: Effective for reservations made on/after August 29, 2005 and for travel commencing on/after October 12, 2005.

The free baggage allowance in Executive First/Executive/Club Classes (J/C/D/I/S Booking Classes) are 3 pieces / total maximum weight of 150 lbs./69 kg (Maximum weight of 70 lbs./32 kg each). The free baggage allowance in Economy Cabin is 2 pieces / maximum of 50 lbs./23 kg each.

[20] Rule 117, Baggage Regulations, of Air Canada's tariff governing travel between points in Canada and points outside Canada, except the United States, provides, in part, that:

Baggage Regulations (For tickets issued on/after 29AUG05 and for travel on/after 12OCT05)

...

(O) FREE BAGGAGE ALLOWANCE

...

(2) Economy Class Fares:

(a) (Except between Canada and Asia/Brazil)

The free baggage allowance for each passenger paying the Adult Economy Class fare except as otherwise provided will be 2 pieces checked whose overall dimensions (length plus breadth plus height) not to exceed 62 inches (158 cm) for 1 bag and not to exceed 55 inches (140 cm) for the other bag, provided the weight of each piece does not exceed 23 kilos (50 lb.) plus....

(b) (Between Canada and Asia/Brazil)

The free baggage allowance for each passenger paying the Adult Economy Class fare except as otherwise provided will be 2 pieces checked whose overall dimensions (length plus breadth plus height) not to exceed 62 inches (158 cm) for 1 bag and not to exceed 55 inches (140 cm) for the other bag, provided the weight of each piece does not exceed 32 kilos (70 lb.) plus....

[21] The Agency notes that while the terminology used in subsection 67.2(1) of the CTA and section 111 of the ATR is not identical, it broadly refers to the issue of unreasonable or undue discrimination. Therefore, the words "unreasonable or unduly discriminatory" used in subsection 67.2(1) of the CTA encompass and capture the meaning of the terms used in section 111 of the ATR.

[22] In Decision No. 666-C-A-2001, dated December 24, 2001, relating to a complaint filed by Del Anderson, the Agency had an opportunity to examine the scope of the word "unreasonable" found in subsection 67.2(1) of the CTA. The Agency stated in part:

According to the principles of statutory interpretation, words of a statute are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme and object of the statute as well as the intention of Parliament. As stated by M. Justice Rouleau of the Federal Court Trial Division in ECG Canada Inc. v. M.N.R., [1987] 2 F.C. 415:

There is no question that the literal approach is a well established one in statutory interpretation. Nevertheless, it is always open to the Court to look to the object or purpose of a statute, not for the purpose of changing what was said by Parliament, but in order to understand and determine what was said. The object of a statute and its factual setting are always relevant considerations and are not to be taken into account only in cases of doubt.

[23] Therefore, the word "unreasonable" must be read not only within the context of subsection 67.2(1) of the CTA and section 111 of the ATR, but also keeping in mind the scheme and object of the CTA.

[24] Although the scope of the word "unreasonable" as it relates to terms and conditions of carriage has not been judicially considered in Canada, the meaning of the word has repeatedly been examined by the courts in contexts such as judicial review (C.U.P.E. v. New Brunswick Liquor Corporation, [1979] 2 R.C.S. 227) or the review of a discretionary decision based on irrelevant consideration, improper purpose or bad faith (Associated Provincial Picture Houses v. Wednesbury Corporation, [1948] 1 K.B. 233; City of Montréal v. Beauvais, (1909) 42 S.C.R. 211; Canadian Transportation Agency Decision No. 445-R-2000 dated June 30, 2000). While it is difficult to extrapolate distinct principles on the meaning of the word "unreasonable" from these cases, the courts have consistently held that:

- The meaning of the word cannot be determined by recourse to a dictionary;

- A contextual meaning must be given to the word; and

- In general terms, the word means "without a rational basis".

[25] In the Agency's opinion, the specific wording of subsection 67.2(1) of the CTA and section 111 of the ATR reflects a recognition by Parliament that regulation was needed in order to attain the stated objective of the national transportation policy found in section 5 of the CTA, which provides, in part, that:

...

(g) each carrier or mode of transportation, as far as is practicable, carries traffic to or from any point in Canada under fares, rates and conditions that do not constitute

(i) an unfair disadvantage in respect of any such traffic beyond the disadvantage inherent in the location or volume of the traffic, the scale of the operation connected with the traffic or the type of traffic or service involved.

[26] This position is also in harmony with section 12 of the Interpretation Act, R.S.C., 1985, c. I-21, which provides that:

Every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.

[27] In determining whether a term or condition of carriage applied by a carrier is "unreasonable" within the meaning of subsection 67.2(1) of the CTA and section 111 of the ATR, the Agency must therefore ensure that it does not interpret the provision in such a way that impairs or jeopardizes the ability of the travelling public to efficiently use the recourse put in place by Parliament to protect it against the unilateral setting of terms and conditions of carriage by air carriers.

[28] Conversely, the CTA dictates that the Agency must also take into account:

- the operational and commercial obligations of the particular air carrier that is the subject of the complaint;

- the other consumer protection provisions found under Part II of the CTA which compel air carriers to publish, display or make available for public inspection tariffs that contain the information required by the ATR and only apply the terms and conditions of carriage set out in those tariffs; and

- the fact that air carriers are required to establish and apply terms and conditions of carriage designed to apply collectively to all passengers as opposed to one particular passenger.

[29] The Agency is therefore of the opinion that in order to determine whether a term or condition of carriage applied by a carrier is "unreasonable" within the meaning of subsection 67.2(1) of the CTA and section 111 of the ATR, a balance must be struck between the rights of the passengers to be subject to reasonable terms and conditions of carriage, and the particular air carrier's statutory, commercial and operational obligations.

[30] In the case at hand, Air Canada has revised its tariff provisions so as to reduce the carrier's free baggage allowance from 70 lbs. to 50 lbs. The Agency is of the opinion that, generally, air carriers should have the flexibility to price their services as they see fit, subject to legislative or regulatory constraints. The Agency is of the opinion that Air Canada's reduction in the free baggage allowance is a legitimate means for the carrier to offset increased costs of operation, while applying an allowance that still accommodates many travellers.

[31] Furthermore, the Agency notes that according to Air Canada's tariffs, the definition of the term "baggage" which is "equivalent to the term "luggage", means such articles, effects and other personal property of a passenger as are necessary or appropriate for wear, use, comfort or convenience in connection with his trip". As such, the concept of baggage refers to the passengers' personal items for use during a trip, not commercial goods or property.

[32] In light of the foregoing, the Agency finds that Air Canada's reduced free baggage allowance is not "unreasonable" within the meaning of subsection 67.2(1) of the CTA and section 111 of the ATR.

[33] As with the word "unreasonable", the phrases "unduly discriminatory" and "unjustly discriminatory" are not defined in the CTA or the ATR.

[34] In Decision No. 666-C-A-2001, quoted above, the Agency also had an opportunity to examine the scope of the words "unduly discriminatory" found in subsection 67.2(1) of the CTA. In that Decision, the Agency made the following statements:

With respect to the meaning of the word "discriminatory", the Supreme Court of Canada, in Andrews v. Law Society (British Columbia), [1989] 1 S.C.R. 143, held that "discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burden, obligation, or disadvantages on such individual or group not imposed on others, or which withholds or limits access to opportunities, benefits, and advantages, available to other members of society".

The Agency notes, however, that, contrary to the human rights and labour relations contexts in which those decisions were rendered, where the overriding principle is that no discrimination is tolerated, the CTA provides that "discriminatory" terms or conditions of carriage may be tolerated provided that they are not "unduly discriminatory".

The determination of whether a term or condition of carriage applied by a carrier is "unduly discriminatory" is, therefore, a two-step process. In the first place, the Agency must determine whether the term or condition of carriage applied is "discriminatory". In the absence of discrimination, the Agency need not pursue its investigation. If, however, the Agency finds that the term or condition of carriage applied by the domestic carrier is "discriminatory", the Agency must then determine whether such discrimination is "undue".

[35] The Agency is therefore of the opinion that in determining whether a term or condition of carriage applied by a carrier is "unduly discriminatory" within the meaning of subsection 67.2(1) of the CTA or "unjustly discriminatory" within the meaning of section 111 of the ATR, it must adopt a contextual approach which balances the rights of the travelling public not to be subject to terms and conditions of carriage that are discriminatory, with the statutory, operational and commercial obligations of air carriers operating in Canada. This position is also in harmony with the national transportation policy found in section 5 of the CTA.

[36] The first question for the Agency to consider in determining whether a term or condition of carriage applied by an air carrier is "unduly discriminatory" within the meaning of subsection 67.2(1) of the CTA or "unjustly discriminatory" within the meaning of section 111 of the ATR is whether the term or condition of carriage is discriminatory.

[37] A term or condition would be discriminatory if it singled out a particular category of traffic for different treatment for reasons that could not be justified. In the present case, given that Air Canada's reduced free baggage allowance applies to passengers purchasing Economy Class fares, the Agency finds that there is no evidence before it to suggest that such provision is discriminatory or that the provision has been applied in a discriminatory manner.

[38] Given that Air Canada's reduced free baggage allowance is not "discriminatory" within the meaning of subsection 67.2(1) of the CTA and section 111 of the ATR, the Agency need not examine the question of whether the provision is "unduly discriminatory" or "unjustly discriminatory".

[39] Based on the above findings, the Agency hereby dismisses the complaint.

Members

• Guy Delisle
• Baljinder Gill
• Beaton Tulk