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Publicly Available Air Service
Published in the June 2010 issue of Transportation Notes - View Article
When is it necessary to hold a licence from the Canadian Transportation Agency in order to operate an air service? The simple answer is—when the service is made publicly available.
However, whether an air service is publicly available or not may well be an issue which gives rise to significant dispute. The question has been the subject of proceedings before the Agency on a number of occasions but, because of a practice which we discuss below, it is difficult to extract a general rule or principle from the Agency decisions. A recent decision of the Transportation Appeal Tribunal of Canada does attempt an answer to the question which could be widely applied but this decision will not be the last word on the issue as the Agency has filed a request for appeal. The decision made on May 31, 2010 was by a single member of the Tribunal. The merits of that decision will now be considered by a three member panel of the Tribunal.
The difficulty with extracting a general rule from Agency decisions arises from the fact that, in those cases where the Agency has had occasion to pronounce on the issue, it is not possible to know the full detail of the circumstances in which the service is provided. Those details are commercially sensitive and are typically filed in confidence. Thus, when reading a decision, the most one can normally determine is that a particular service is or is not publicly available. How that particular service might relate to another service cannot be determined and accordingly the individual decision is of little or no precedential value.
Typical of these cases is Decision 645-A-2001 in which the Agency determined that a particular flexible ownership program operated by Bombardier did not involve a publicly available air service and accordingly no licence was required. On one or two occasions the Agency has identified factors which, if present, will result in a determination that a service is not publicly available but we believe there is no decision which provides significant guidance concerning the factors which will result in a determination of public availability.
The Tribunal member did attempt to give such guidance in the case of Borgata Hotel Casino v. Canadian Transportation Agency. The Borgata Hotel offered a service, on a completely discretionary basis, to some of its best customers. Favoured individuals might be offered free air transportation to and from the hotel/casino. In the cases considered in this decision the transportation was on a corporate jet. The offer was on a “no strings attached” basis in that an individual who accepted such an offer did not commit to gamble at any particular level in the casino. However, there was evidence that the individuals who accepted the offer of free transportation understood that there was a relationship between their gambling and the offer. The individuals knew that the offer arose from the fact that they were major players and that offers would not continue to be made if they were to gamble at a more common level.
The service was offered to a very small number of the casino’s customers and a typical customer could not have any expectation of receiving an offer of transportation on the corporate jet.
The Agency investigated the circumstances in which the transportation was provided and came to the conclusion that it was publicly available. Borgata was given notice that it was in breach of the statutory obligation to hold a licence and it sought review of that decision from the Tribunal. The Tribunal member found in favour of Borgata, noting that most members of the public could have no expectation of receiving the service. He proposed a test which, it appears to us, has considerable appeal: suppose a member of the public calls to inquire about the service and is ready to abide by terms respecting payment, does he have a reasonable expectation that the service will be available to him? If so, the service is publicly available; otherwise not. Applying that test to this case, the Tribunal member found the service was not publicly available and in this regard, surely, no fault can be found with his decision. Accordingly, the question is whether he applied the right test.
The Agency argues that the Tribunal member failed to apply the correct test and cites a decision of high authority, but drawn from a different statutory context. The Supreme Court of Canada has defined “public” in very broad terms when construing human rights legislation. The impact of any different construction would potentially place inappropriate limits on the types of service providers who are obliged to apply human rights principles to their provision of service. Given the objectives of the Canada Transportation Act it is, we believe, strongly arguable that the human rights jurisprudence is not applicable. It appears to us that where a service is offered to a very small segment of the public, the individual members being well placed to protect their interests from potential abuse, there is no need for the expansive definition which prevails in another context. We believe there is reason to believe the decision of the Tribunal member should be upheld.
Borgata Hotel Casino & Spa v. Canadian Transportation Agency (May 31, 2010 ),
TATC File No. H-3587-80; CTA File No. 08-08492