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CTA Dismisses Complaints Re:Air Canada Proposed Tariff Revision to Stop Transporting Non-Human Primates for Research

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CTA Dismisses Complaints Re:Air Canada Proposed Tariff Revision to Stop Transporting Non-Human Primates for Research Air Canada

In a decision released today, the Canadian Transportation Agency found that Air Canada's proposed tariff revisions to stop transporting non-human primates for research are not unreasonable or discriminatory and do not subject any person or description of traffic to any prejudice or disadvantage and has therefore dismissed the complaints.

The decision is the result of complaints submitted to the Agency against Air Canada's intention to no longer transport non-human primates for research purposes.

In assessing the reasonableness of the proposed tariff revisions, or whether they are unjustly discriminatory, the Agency considered:

  • the reason for the proposed tariff revisions, and the extent to which they result from a business decision by Air Canada, and
  • Air Canada's competitive environment, industry practices and the additional service options available to shippers of non-human primates for research.

"When balancing the shippers' rights against the carrier's obligations, the Agency must consider the whole of the evidence and the submissions presented by both parties and make a determination on the reasonableness or unreasonableness of the term or condition of carriage, or whether the tariff is "unjustly discriminatory" based on which party has presented the more compelling and persuasive case," said the Decision.

After assessing relevant facts and circumstances, and weighing the various factors and evidence presented by the parties involved in the case, the Agency found that Air Canada's decision to stop transporting non-human primates for research constitutes a rational business decision and does not differentiate between shippers on a specific characteristic or otherwise. Therefore, the proposed tariff provisions are not discriminatory.

As a result, the Agency has dismissed the complaints and rescinded the suspension of Air Canada's  proposed tariff revisions to discontinue to transport non-human primates for research, as set out in its decision issued on January 9, 2012. When Air Canada re-files its proposed tariff revisions, it can then choose not to transport non-human primates for research.

The Agency treats complaints on a case-by-case basis. Each decision is based solely on the individual merits of the case. The Agency does however refer to past decisions when the principles stated are relevant.

About the Canadian Transportation Agency

The Canadian Transportation Agency is an independent administrative body of the Government of Canada. It performs two key functions within the federal transportation system:

  • As a quasi-judicial tribunal, the Agency, informally and through formal adjudication, resolves a range of commercial and consumer transportation-related disputes, including accessibility issues for persons with disabilities. It operates like a court when adjudicating disputes.
  • As an economic regulator, the Agency makes determinations and issues authorities, licences and permits to transportation carriers under federal jurisdiction.

Additional Information

An air carrier's tariff is the contract between the air carrier and the user of the transportation service. Among other things, it includes their fares, rates, charges, and related terms and conditions for the transport of cargo.

An air carrier is free to set the terms and conditions contained in its tariff so long as the terms and conditions meet certain legislative requirements, which include not being unreasonable, unjustly discriminatory or unduly prejudicial.

The Agency enforces the application of tariffs and may hear complaints from users of air transportation services. Specifically, complaints may be filed with the Agency if it is felt that an air carrier has not acted in a manner consistent with the tariff, or if they feel the tariff is unclear, unjust, unreasonable or unduly discriminatory.

The Agency has the authority to address the terms and conditions of carriage for domestic and international traffic in a decision upon complaint, and for international traffic upon complaint and of its own motion. In this context, it has the power to suspend, disallow or substitute the terms and conditions of carriage.

Tariffs are governed by the Canada Transportation Act and the Air Transportation Regulations. The Agency evaluated the tariffs using these instruments.

Canada Transportation Act and Air Transportation Regulations

Subsection 67.2(1) of the Act which applies to domestic carriage, states that if, on complaint, 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.

Section 111 of the Air Transportation Regulations (ATR), which applies to international carriage, states 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.

Agency Decision

On November 22, 2011, Air Canada filed with the Canadian Transportation Agency, certain revisions to its international tariff, which were to become effective on January 10, 2012. These revisions reflected that Air Canada would no longer transport non-human primates for medical research purposes.

Before coming into effect, the Agency received complaints that Air Canada's proposed tariff revisions were unjust, unreasonable or unduly discriminatory as per the Canada Transportation Act and the Air Transportation Regulations. As a result, the Agency suspended Air Canada's proposed tariff revisions while it investigated the complaint through its formal adjudicative process and rendered its decision.

Unreasonableness

In considering whether an air carrier's proposed cargo tariff is reasonable, the Agency balances the rights of a shipper with the statutory, commercial and operational obligations of an air carrier. This consideration includes:

  • the rationale behind the proposed air cargo tariff provision,
  • industry practices in regard to the shipment of the same cargo in similar circumstances,
  • the applicable provisions of international instruments to which Canada is a party,
  • an air carrier's operational requirements and applicable legislative or regulatory provisions relating to safety or security; and,
  • the reason for the tariff, and the extent to which it results from a business decision.

Unjust discrimination

The Agency's assessment of whether or not a tariff is "unduly discriminatory" is a two step process.

While the Agency acknowledges that discrimination may result from a term or condition of carriage which applies equally to all, in order to constitute discrimination, it must be demonstrated that a burden, obligation, or disadvantage has been imposed on one person or group which is not imposed on others.

In determining whether a term or condition of carriage applied by a carrier is "unduly discriminatory" or "unjustly discriminatory", the Agency adopted a contextual approach which balances the rights of the users of transportation services 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.

The Agency must first determine whether the term or condition of carriage applied is "discriminatory." If 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 "unjust" in consideration of the statutory, commercial and operational reasons that led to the tariff.

In assessing whether Air Canada's tariff is "unduly discriminatory" the Agency also considered the commercial context of the transportation of air cargo and the fact that a refusal to carry certain cargo may result from a legitimate business decision.

When balancing the shippers' rights against the carrier's obligations, the Agency must consider the whole of the evidence and the submissions presented by both parties and make a determination on the reasonableness or unreasonableness of the term or condition of carriage, or whether the tariff is "unjustly discriminatory" based on which party has presented the more compelling and persuasive case.

Conclusions

After having examined the evidence and arguments of all parties, the Agency finds that there are significant statutory, commercial and operational reasons supporting Air Canada's tariff.

In terms of commercial requirements and industry practices, the Agency finds that:

  • Arguments presented by Air Canada's demonstrate that its proposed tariff revisions reflect a rational business decision.
  • Air Canada's decision to stop transporting non-human primates for research is representative of an ongoing business decision where elements are balanced against conflicting market forces impacting its financial position.
  • Air Canada's decision to stop transporting non-human primates for research follows general international industry practice.

The Agency is satisfied that Air Canada, in making its decision, has balanced the trade-off between lost cargo revenue from the transportation of non-human primates for research and the potential revenue impact of lost passenger business. The Agency accepts that one of the purposes for the proposed tariff revisions is to align Air Canada's commercial practices with those of many other major international carriers.

The Agency has considered the shipper's arguments challenging the proposed tariff revisions. As stated in the Decision, the Agency is of the opinion that there are service options available for shipping non-human primates for research and that there was no evidence provided to support the argument that transportation cost would increase or would increase to levels that would make the transportation of non-human primates for research economically unviable.

The Agency does not want to suggest that Air Canada's proposed tariff revisions won't cause inconvenience to the complainants; the Agency is of the opinion that, in balancing the impact that the proposed tariff revisions will have on them as shippers of non-human primates for research purposes with its conclusions on the reasons supporting the tariff, the Agency concludes that the proposed tariff revisions are not unreasonable.

The Agency has considered the complainants' positions respecting the transport of non-human primates for research, and finds that Air Canada's proposed tariff revisions are;

  • not discriminatory as they do not differentiate between shippers on a specific characteristic of any shipper or otherwise, and
  • do not subject any description of traffic to any "undue or unreasonable" prejudice or disadvantage within the meaning of paragraph111(2)(c) of the ATR.

In light of the above, the Agency has dismissed the complaints and rescinded its suspension of Air Canada's decision to discontinue to transport non-human primates for research, as set out in Decision No. LET-A-4-2012 issued on January 25, 2012. Air Canada can now choose not to transport non-human primates for research.

About the Agency

The Canadian Transportation Agency is an independent administrative body of the Government of Canada. It performs two key functions within the federal transportation system:

  • As a quasi-judicial tribunal, the Agency, informally and through formal adjudication, resolves a range of commercial and consumer transportation-related disputes, including accessibility issues for persons with disabilities. It operates like a court when adjudicating disputes.
  • As an economic regulator, the Agency makes determinations and issues authorities, licences and permits to transportation carriers under federal jurisdiction.

Decisions of the Canadian Transportation Agency are legally binding. Should a party disagree with an Agency decision, there are two options for contesting the decision:

  • Under section 41 of the Canada Transportation Act, a party can apply to the Federal Court of Appeal within 30 days of the issuance of an Agency decision for leave to appeal the decision on a question of law or jurisdiction; and
  • Under section 40 of the Act, a party can petition the Governor in Council to vary or rescind any decision made by the Agency.

For additional information, consult the News Release or Decision No. 482-A-2012

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