Canada Has Changed Its Flight Refund Rules & It Just Got Easier To Get Your Money Back

There's finally some good news for travellers in Canada.

The rules and regulations around flight refunds have changed and it should become easier for passengers to get their money back from airlines following cancellations or delays.

Earlier this summer, the federal government announced an amendment to Canada's Air Passenger Protection Regulation, adding new refund requirements.

It came into effect on Thursday, September 8 and the new rules will require airlines to offer a refund or rebooking to passengers who are impacted by a cancellation or "lengthy delay," regardless of the reason for the disruption.

The changes apply to all flights departing from Canada, including domestic and connecting flights.

If travellers experience long delays or a cancellation, the airline must now offer an alternative flight within 48 hours of the initial departure time. Large airlines, like Air Canada or WestJet, must try to rebook passengers on the next available flight of any airline, including competitors.

If they are unable to do this, airlines must provide travellers with another rebooking option in the future, or a full refund.

If an individual is eligible for a refund, they will be entitled to have their money back for any unused portion of their ticket (including unused add-on costs, like seat selection, luggage or meals). They should be refunded to their original payment method and must have their money back within 30 days.

Airlines are allowed to offer the refund in other forms — like vouchers or credits — however the customer is not obliged to accept this and can still demand a monetary refund. Any vouchers or credits offered by the airline are not allowed to have an expiry date.

Carriers that fail to follow the new rules could face fines of up to $25,000 per incident for non-compliance.

What were the rules before?

Before September 8, airlines were only required to offer a refund to passengers if the reason for the delay or cancellation is considered to be within the carrier's control and they were unable to offer alternative travel arrangements.

According to Canada's Air Passenger Protection Regulations, reasons considered to be within the carrier's control were usually around "commercial decisions the airline makes." This could be related to its operations, such as the management of aircraft maintenance, or staffing schedules.

Prior to September 8, in cases where a cancellation or flight delay is considered to be outside of an airline's control, the only requirement was to provide a free rebooking service.

Examples of circumstances outside of the carrier's control included bad weather or natural disasters that make the safe operation of the flight impossible, security threats, medical emergencies, labour disputes and manufacturing defects in aircrafts, among others.

Why did the rules change?

The Canadian Transportation Agency says the new rules were developed after the COVID-19 pandemic "revealed a gap in Canada's air passenger protection framework."

It found that there was no requirement for airlines to refund tickets when flights are cancelled or delayed if the reason for the disruption was outside of the airline's control.

It was decided that this gap would be closed, with the minister of transport setting the new rules "in a manner that is fair and reasonable to passengers."

How have airlines responded?

Not everyone is pleased with the changes though, with some airlines arguing that this puts too much pressure on carriers during a period when Canada's travel and tourism sector is facing many challenges.

Jeff Morrison, CEO of the National Airlines Council of Canada, told the National Post that “Airlines will essentially be required to shoulder the entire burden of responsibility for flight disruptions, despite the fact that so many other partners and players are involved in the air travel experience."

He said the new rules should not come into effect until Canada's travel restrictions have ended, as pandemic-related measures continue to impact the industry.

However, Canada's travel rules are not set to end until September 30 at the earliest.

It's a message backed up by airlines like WestJet. A spokesperson said the company is "disappointed" by the regulation changes, noting that "airlines continue to be singled out as the only point of ownership and accountability for travel in Canada."

“Requiring airlines to be the sole provider of reimbursement for delays outside of the airline’s control creates an unbalanced system that does not reflect the responsibility that we collectively hold to the Canadian traveller."

This article's cover image was used for illustrative purposes only.