Airlines face 'truth in pricing' advertising rules
Four years after changing the law to require airlines to advertise fares with fees and taxes included, the federal government said Friday the time is now right to bring in new regulations.
But it could still be another year before customers shopping for airline tickets will start seeing prices without the fine print.
The Canadian Transportation Agency will develop the new regulations in consultation with the industry over the coming year and Steven Fletcher, minister of state for transport, said Friday morning when making the announcement that the process will be wrapped up by the end of 2012.
"What we are doing is we are moving forward with regulations that will ensure ... there's truth in pricing and in advertising so what you see will be the price you pay. This is what airlines across the country will have to do," he said.
Will honest pricing lead to better flight deals?
"By moving forward to develop these regulations our government shows its commitment to promoting fair competition and enhancing consumer protection by making the full cost of airline tickets more transparent and clear in advertising," said Fletcher.
If the government was as committed as it says it is to protecting consumers it wouldn't have waited so long to enact the regulations, the NDP's consumer protection and industry critic, Glenn Thibeault, said in reaction to the announcement.
"It boggles the mind," he said about the delay.
"It's great to see it's finally happening but four and a half years was a long time to wait," said Thibeault, adding that consumers will still have to wait even longer until the regulations are finally in place.
The government made changes to the Canada Transportation Act in 2007 to allow it to bring in these regulations but until now, it hadn't acted on that authority.
Former transportation minister Lawrence Cannon told the House of Commons transport committee in 2008 that the all-in advertising rules wouldn't be enforced any time soon. He said his government wouldn't bring in the regulations while there was no national consensus on the issue.
On Friday, Fletcher defended the government's decision to wait and said it didn't want to put airlines at a competitive disadvantage. In 2008, he said the European Union introduced the advertising regulations and Canada waited to see how those played out and the government also wanted to make sure stakeholders were prepared for the rule changes.
"We feel that right now the time is right," he said.
Consumer advocates have been calling on federal and provincial governments to change the rules for airline advertising for years. Recommendations for more transparency in airline advertising were made as far back as 2002 in the Air Travel Complaints Commissioner's Report to Parliament.
Advocates wanted the federal government to develop an all-in pricing regulatory framework so that consumers wouldn't experience "sticker shock" when they added all the surcharges to the advertised price.
The regulation of airlines is federal jurisdiction, but provinces also have their own consumer protection laws which has meant various advertising practices in different sectors across the country. Quebec, for example, already requires full fare price advertising.
Industry says it will follow the rules
The national trade association for the airline industry was given a heads-up on Thursday about the government announcement.
John McKenna, president and CEO of the Air Transport Association of Canada, said Friday morning that after years of delay, the move was not unexpected.
"We were not surprised because it's been on the books for a long time," he said in an interview.
"We will conform to what the government says of course, but it has to be within reason of what we can do," said McKenna.
The association represents about 200 members from commercial operators and flight training operators.
There are a range of fees that consumers must pay on top of the ticket price and not all are under the airline's control. Airport improvement fees vary from one airport to another, for example, and security fees imposed by governments vary depending on where a traveller is going.
McKenna said it's a "full-time job" for airlines to try to keep on top of all of the different fees. Details on what fees airlines will have to include in their advertised prices, and what responsibilities they have to inform customers of changes to fees after a ticket is purchased, aren't known yet to the industry, he said.
"We were never opposed to being frank about what we're selling."