In December 2011, the Government of Canada announced that the Canadian Transportation Agency, as Canada's economic regulator and aeronautical authority, would develop regulations requiring all-inclusive air price advertising.
The Agency took a broad, inclusive and transparent consultative approach throughout the regulatory process. Before drafting the amendments, the Agency held face-to-face meetings with industry, consumer interest groups, and representatives of certain provincial and foreign governments. The Agency also made use of Web 2.0 technology and held an online consultation to gather input from all stakeholders and individual Canadian consumers. The input received helped guide the Agency's development of the amendments.
The proposed regulations were pre-published in Part I of the Canada Gazette on June 30, 2012 with a 75-day public comment period ending September 13, 2012. The pre-publication was actively promoted to Canadians, stakeholders and other interested parties during the comment period to ensure continued transparency in the regulatory process. The majority of the Canada Gazette I comments received were strongly supportive of the amendments.
The regulations requiring all-inclusive air price advertising were enacted and will be published in Part II of the Canada Gazette.
Objectives
The regulations support two key objectives:
1. Enable consumers to clearly determine the total advertised air price.
The display of the total price in air price advertising reduces confusion and frustration as to the total price and increases transparency. It also allows consumers to more easily compare prices and make informed choices.
2. Promote fair competition between all advertisers in the air travel industry. The regulations promote competition by achieving a level playing field for all persons who advertise air prices for travel within, or originating in Canada.
Advertising
Advertising is a communication of the air price to the public, either by an interactive or a non-interactive format, for travel within or originating in Canada.
Interactive media include online booking systems and telephone-based services such as call centres and service desks.
Non-interactive media may include:
- print: newspapers, magazines, billboards, flyers and pamphlets
- broadcast: television and radio
- social media: tweets, certain Facebook posts and YouTube videos
Application
The regulations apply to any person who advertises air prices to the public, for travel within, or originating in Canada, through any media.
The regulations do not apply to advertisements of prices of:
- air cargo services
- charter services negotiated with a private business or fares available through corporate travel offices (and not available to the general public) or obtained through a global distribution service
- package travel services
- services originating outside Canada
- loyalty reward programs
The regulations also do not apply to services excluded under section 56(2) of the Canada Transportation Act and section 3 of the Air Transportation Regulations.
Inclusions
Air price advertising directed at the public must include:
- The total price, inclusive of all taxes, fees and charges, which a consumer must pay to obtain the air service.
- A minimum level of description of the air service offered, including:
- the point of origin and point of destination;
- whether the service is one way or round trip; and
- limitations with respect to booking or travel availability periods.
- Access to a breakdown of the taxes, fees and charges and any optional services offered for a fee or charge.
Optional Services
An optional service is an option, service or amenity offered which the consumer is not obligated to purchase to complete the travel at the total advertised price. The optional service is supplemental to the services in the advertised total price. Examples of optional services may include checked baggage, unchecked baggage, in-flight entertainment, and meals and beverages.
While optional services do not have to be included in the total advertised airfare price, the price of individual optional services must be displayed as a total price, including taxes, etc.
Third-Party Charges
A third-party charge is any tax or prescribed fee or charge established by a government, public authority or airport authority, or by an agent of a government, public authority or airport authority. Examples of third party charges include: Airport Improvement Fees, Air Travellers Security Charge, Harmonized Sales Tax (HST).
An advertiser must provide a breakdown of all third-party charges under the heading "Taxes, Fees and Charges". Specific breakdown criteria apply to different media:
Non-interactive Media
All advertisements placed in non-interactive media (i.e., newspapers, billboards etc.) must provide an accessible location where the breakdown and amounts of third-party charges can be easily obtained. The advertisement might, for instance, make reference to an air carrier's website where a consumer can review the third-party charges or provide a toll-free number a consumer can call to speak to an air carrier representative.
Interactive Media
In the case of advertisements via interactive media (i.e., the internet, telephone reservations line, etc.) the breakdown and amounts of third party charges must be provided in the advertisement. The information can be provided verbally upon request if the information is conveyed over the telephone.
Compliance
The agency will work cooperatively with air price advertisers and provide direction to ensure early compliance with the regulations and overall success in the implementation. The agency will use a proactive educational approach to ensure that air price advertisers are aware of their responsibility to comply as early as possible with the regulations, and reach out to associations representing the air travel industry, as well as provincial government organizations dealing with travel agencies.
Repeat offenders can be fined up to $25,000.
For further information, please visit the Canadian Transportation Agency's information repository on All-Inclusive Air Price Advertising at www.cta.gc.ca.
December 2012
