Chair and CEO Scott Streiner addresses the National Aviation Council of Canada on April 21, 2016
Check against delivery
April 21, 2016
Good morning everybody.
It's a pleasure to be here with you this morning. This is actually the first speech that I'm delivering in my role as Chair and CEO of the CTA, and it's nice to be doing so at the first aviation symposium organized by National Aviation Council of Canada (NACC).
Many of you will be familiar with the Agency, but I thought I would take a few minutes for those who aren't just to talk a little bit about our history, our mandate, and our key tools before turning to some of our priorities. I expect it's the priorities that are going to guide our work that are of most interest to you, so I'll try to keep most of my time for that.
The Agency is actually almost as old as aviation itself. It's Canada's longest standing administrative tribunal and independent regulator, and was born forty-five days after the Wright brothers first took flight at Kitty Hawk, and five years before the first successful flight in a Commonwealth country. That first flight, as many of you know, was made by Alexander Graham Bell's Silver Dart aircraft, which took off from a frozen Baddeck Bay in Nova Scotia.
The Agency's history pretty much parallels, in terms of time, that of the aviation sector. However, it only received an aviation role and mandate in 1938. That was the year the Agency's original incarnation, the Board of Railway Commissioners, was transformed into the Board of Transport Commissioners.
1938 is not a surprising time for this to have happened. That was the year after the government of Canada established TransCanada Airlines, a fledgling outfit at the time that has now evolved into an airline some of you may have heard of named Air Canada.
Eight decades ago, when TransCanada and the Agency assumed new roles for aviation, flying was a dream that only a few Canadians could hope to realize. Today, needless to say, it's a day-to-day reality that few Canadians don't experience.
Air travel ties this country together. It connects Canadians to one another. It connects Canadians to the world. And one of the most telling facts that speaks to the importance of the aviation sector in Canada is how resilient it's been over the last few years of economic turmoil.
Air passenger traffic at Canadian airports rose 5.4% in 2014, and that was the fifth consecutive year of increases. The total number of passengers enplaned and deplaned that year was 131 million, a rise of nearly 25% from 2009. And aviation today contributes 35 billion dollars to the annual GDP, employs more than 140,000 people, and supports over 400,000 jobs in other sectors.
As the air sector, and indeed the national transportation system have evolved over time and matured, the world of the Agency has evolved in kind.
Today, the emphasis is on letting market forces do most of the work. Healthy competition between different players in the sector is relied upon in most cases to establish reasonable prices, good levels of service, and innovation. Intervention is reserved for instances where the market fails or for situations where the market forces alone can't achieve desired public policy outcomes.
The Agency today essentially has three core mandates.
Its first mandate – and the one which dates back to the establishment of the organization in 1904 – is to help keep the national transportation system running efficiently and smoothly. And that's in the interest of all Canadians. It's in your interest, as operators in the system; it's in the interest of your consumers, of your clients; and it's in the interest of the economy as a whole.
The second mandate, far newer, is to protect the human rights of travellers with disabilities by ensuring that the transportation system – and first and foremost, the aviation system – is accessible to people with mobility impairments, and where it can't be made fully accessible, accommodation is offered to individuals.
And the third mandate, and that which is most recent but probably the one which is of most concern to those in this room, is consumer protection for air travellers. I'll come back and speak to that mandate a little bit later.
To deliver these three core mandates, the Agency has three types of tools at its disposal.
The first tool is to establish and implement rules of the game. We look to the Agency to establish regulations and develop less binding guidelines such as codes of practice in order to ensure that everybody understands where the boundaries lie.
Our second tool is dispute resolution. We have a role in ensuring that, where a disagreement arises between a transportation provider and a transportation consumer, mechanisms are available to resolve it. Those mechanisms run the gamut from very informal facilitation – and it's through facilitation that we resolve 95% of complaints from aviation consumers – to slightly more formal mediation, to court-like adjudication.
And our third tool is information. The Agency provides information on the functioning of the national transportation system and on its own services. Through doing so, it allows providers and consumers to better understand their rights and responsibilities and the market to function more effectively.
Having provided that quick overview of our three mandates and our three tools, let me turn to three areas of focus that will help guide the work of the Agency over the coming months and years.
The first area of focus is to try and provide as much clarity and predictability as possible with respect to the rules that apply to the work of the transportation sector.
There's really no point in having a rulebook if the rules inside it are understood differently by the different players. Whether we're talking about a friendly, cerebral game of chess, or a less friendly, less cerebral game of rugby, if the players don't understand what the rules of the game are, if the referees can't provide clarity on what is and isn't out of bounds, then the rules are rendered far less effective.
The Agency recognizes that many of the rules it applies are subject to some interpretation, and it will make efforts to ensure those interpretations are clear and consistent.
Let me give you one example of a recent instance in which we did this: the March 29 determination in the resellers' case, which many of you are probably aware of.
In a nutshell, this file came to the Agency's attention initially through what we observed as evolving industry practices, and then in a much more pointed way when NewLeaf announced that it was planning to undertake sales starting early this calendar year.
As a result, the Agency was confronted with a basic question: does a company that purchases seats in bulk from a licensed air carrier, and then resells those to the public, have to come to us for a licence? That question needed an answer, because we observed that different assumptions had underpinned the behaviour of different players over the years.
So the Agency turned its mind to this question, engaged in consultations with interested stakeholders (and with many of you), and with Canadians at large, before issuing a determination.
In essence, our determination said the following: if you're purchasing seats in bulk as a reseller, you do not need to obtain a licence, provided that you're working with a partner airline that has a licence, and provided that you do not hold yourself out to the public as an air carrier.
The Agency committed to both educating the public on the distinction between a reseller and an airline, but also to keeping a very careful watch on the evolution of the market.
And I can tell you with confidence that if we identify instances where a reseller is not respecting those boundaries, where a reseller is misrepresenting itself as an airline to consumers, or is trying to use the flexibility that we've provided to circumvent Canadian ownership requirements, the Agency will not hesitate to take enforcement action.
But providing clarity and predictability with respect to the existing rules may not be enough if those rules aren't consistent with, and reflective of, current industry practice.
One of the things that struck me when I arrived at the Agency nine months ago is that we administer nine sets of regulations on our own and the majority of those regulations haven't been comprehensively reviewed or updated in two decades or more.
Many of you who have to deal regularly with applications to the Agency will know that some of those regulations simply don't seem to make sense anymore. The world has changed. Industry has evolved.
The Agency is therefore going to take a complete look at all the regulations it administers. It's going to consult with industry, consult with stakeholders and it is going to ask some fundamental questions about existing regulatory provisions.
Do they make sense in the current context?
Are they still advancing the public policy purposes for which they were designed?
Do they need to be removed, amended, or replaced?
This is a big exercise. It's going to take some time and we're in the very early days. But you can expect that, in the months to come, officials from the Agency will reach out to NACC as a representative association and to its individual members, as well as to a range of other stakeholders, and seek your advice on the questions before it.
Now, because we're at an early stage, I don't want to go too far in signaling what some of the issues that we might look at might be, but I will give you a couple of questions that I think would naturally occur to anybody familiar with aviation regulations, and that we will at least be raising.
Are all the filing requirements currently imposed on licensed air carriers still sensible in the age of the Internet?
Are there any filing requirements that we could look to lighten while still achieving appropriate oversight?
Are the requirements that relate to tariffs logical if what we're trying to achieve is an understanding by consumers of their rights and responsibilities, but in ways that make sense in the era of social media and online access?
Should our accessibility codes of practice be converted into binding regulations to ensure that there's a level playing field for all airlines, and indeed for all transportation service providers, when it comes to meeting the needs of travellers with disabilities?
These and a wide range of other questions will underpin our regulatory modernization efforts and we look forward to input from all stakeholders, including the aviation community, as we start to think about that regulatory suite.
In addition to our commitments to offer clarity and predictability with respect to interpretations of the rules and to look at the regulatory ruleset itself and see if it needs updating, I also want to note a third commitment, a third area of focus – and that is a commitment to achieving the highest levels of engagement, transparency and information-sharing.
As an independent regulatory body and tribunal, the Agency needs to speak carefully when it speaks in public.
We have to preserve our neutrality and our impartiality, but at the same time, we can't hide in an ivory tower. If we're going to exercise our decision-making authority in ways that make sense in 2016 and going forward, we have to have a real understanding of what's happening in the world where we live.
And so the Agency is going to up its game in interacting with stakeholders, and it's going to make additional efforts to inform Canadians writ large. Not only about the legislative and regulatory framework, which are of less interest to people, but more generally, about people's rights and responsibilities. And I'll give you one example of how we've done that recently.
As some of you may know, the Agency has produced a set of videos targeted to air travellers. They strike a very neutral tone. They encourage air travellers to resolve any issues directly with the airline and they also explain to air travellers that, when there's an issue, the Agency is there to provide assistance.
Let me underscore that this is not a case of the Agency shopping for business. This is a means of getting useful information into the public domain, and it will help the Agency, but more importantly industry and its customers, achieve the underlying goals of the legislation that I spoke to earlier.
Let me finish on the theme of engagement, and indicate to you that not only is the Agency as a whole going to continue to engage with industry, but that I, as its Chair and CEO, will do so.
Being able to speak here today is an opportunity to initiate that dialogue with you, but it's not the last opportunity. In its 112 years of history, the Agency has done its job best when its work has been informed by the lived realities of the people who are subject to its oversight.
I want you to know that my door, and the door of my fellow members and senior management team, is open for further conversation.
Thank you very much for inviting me, and thank you for your attention.
Check against delivery