Stopping sticker shock: Airlines will soon include all fees in ads

OTTAWA – Four years after writing amendments into transport law requiring them, the Conservatives are pushing ahead with rules to make airfare ads more honest.

As Tory MP Pierre Poilievre put it, “the rules we are announcing today will ensure that what you see is what you pay.”

The regulations — dormant since the amendments were passed in 2007 — will require Canadian airlines to include all fees and taxes in their advertised prices.

Advertised ticket prices rarely include extra charges, which in some cases can virtually double the posted price of airline tickets.

The undisclosed amounts include Nav Canada fees, airport improvement charges, fuel surcharges, insurance and air security charges.

Consumers also have to add taxes — GST or Harmonized Sales Tax, and possibly sales tax or other taxes depending on the province or country.

A consumer affairs committee of federal and provincial bureaucrats has acknowledged a growing sense of so-called sticker shock when it comes to airfares.

“We want it to be easy for Canadian consumers to figure out which deal is really the best for them,” Poilievre said, “instead of having to pull out a magnifying glass to read the fine print, or a calculator to figure out the actual cost at the end of the day.”

But it will still be a year or more before the actual rules come into play. The Canadian Transportation Agency has to consult stakeholders and draft them.

They will need to figure out how the rules can be crafted so Canadian airlines are not put at a disadvantage to foreign carriers.

The United States and Europe already have airfare honesty laws. But other countries do not.

Take a flight between Canada and a major transit hub such as the United Arab Emirates.

When the new rules come into play, Air Canada will have to advertise the full cost of the flight. But competitor airline Emirates would not have to show the full fare for the same flight on its website. That could make it look like the Emirates flight is cheaper than Air Canada’s, even if that is not the case.

The head of a lobby group for Canada’s major airlines says the rules need to take such cases into account.

“It would definitely put Canadian carriers at a competitive disadvantage,” said George Petsikas of the National Airlines Council of Canada.

“Not just Air Canada, of course, (but also) anybody competing on similar segments. And of course, that’s exactly what we don’t want, and we expect that will be addressed in the regulations that will be drafted in the next several months.”

The other problem is travel agents, which the provinces regulate. Only three provinces — Ontario, Quebec and British Columbia — have honest-in-advertising rules for travel agents. But travel agents in the other provinces do not have to list the full airfare in their advertising.

“Does this address the seven other provinces?” Petsikas said. “No.”

He said he hopes the other provinces follow suit, but acknowledged there is nothing stopping travel agents there from advertising lower fares.

“That’s a problem,” Petsikas said.

Two of Canada’s major airlines welcomed the new rules.

“We recognize that the travelling public have been asking for all-inclusive fare advertising, and we have been looking at this very closely,” Air Canada said in a statement.

“Air Canada supports this initiative by the federal government if it meets consumer needs and have said publicly for years that we would happily comply with whatever advertising rules the government wishes to implement provided they apply equally to all carriers, domestic and foreign, against which we compete.”

WestJet also supported the change.

“WestJet is in favour of all-in pricing to provide the travelling public with comparability among all airlines,” said a statement from the airline.

“We look forward to working with the government during the consultation process in order to effect this change as quickly as possible.”

Air Transat, which flies to the Caribbean, Mexico and the Mediterranean, agreed that airfare advertising rules need to be clarified.

“Our company has long advocated for a harmonized approach to advertising as it relates to travel services,” Jean-Marc Eustache, the head of the airline, said in a statement.

“We commend the federal government for moving forward with this important initiative and look forward to advancing other efforts to protect consumers purchasing travel services.”

— with files from Ross Marowits in Montreal

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