A-313-82
Nordair Ltd. (Appellant)
v.
Canadian Transport Commission (Air Transport
Committee) (Respondent)
Court of Appeal, Heald, Ryan JJ. and Cowan
D.J.—Ottawa, June 1 and 2, 1983.
Aeronautics — Appeal from CTC order that airline cease
offering passengers coupons for limousine and rent-a-car ser
vice — CTC having jurisdiction under s. 10(2) Aeronautics Act
to decide whether particular promotional practice proscribed
and order cessation — S. 112(10) of Regulations infringed
since coupons constituted rebate resulting in transportation at
toll different from tariff — Coupon having value though not
all would use — Offer of right to ground transport being "in
respect of transportation by air — Aeronautics Act, R.S.C.
1970, c. A-3, ss. 10, 14(1)(m), 15 — Air Carrier Regulations,
C.R.C., c. 3, ss. 2, 23, 112(10) — National Transportation Act,
R.S.C. 1970, c. N-17, s. 64(5) (rep. and sub. R.S.C. 1970 (2nd
Supp.), c. 10, s. 65 (Item 32)).
In November of 1981, the Air Transport Committee of the
Canadian Transport Commission ordered Nordair to terminate
certain promotional car-rental programmes. The Committee
considered the programmes to be in violation of subsection
112(10) of the Air Carrier Regulations, in that they involved
the giving of rebates, which resulted in transportation at a toll
different from that in Nordair's tariff. Subsequent to the date
for compliance stipulated in the order, Nordair ran an adver
tisement in a Montreal newspaper and, in accordance there
with, offered coupons entitling its passengers to limousine
service and rent-a-car service. It continued, however, to collect
the amounts that had been approved as tolls and were specified
in its tariffs. The Committee advised Nordair that this offer
apparently contravened the Committee's earlier rulings. Then,
pursuant to subsection 10(2) of the Aeronautics Act, it issued
the order in question, which required Nordair to cease and
desist from making such offers.
Nordair posed two questions in this appeal. First, did the
Commission have jurisdiction to make the order? Secondly, did
the Commission err in law when it found the limousine and
rent-a-car programmes to be infringements of subsection
112(10)?
Held (Heald J. dissenting), the appeal should be dismissed.
Per Cowan D.J. (Ryan J. concurring): In subsection 10(2) of
the Act, the Commission is clearly invested with jurisdiction to
order an air carrier, such as Nordair, to cease and desist from
any promotional practice which contravenes Part II of the Act,
a regulation, or an order of the Commission. The same provi
sion also gives the Commission "full jurisdiction to hear and
determine all matters ... of law or fact", for the purposes of
section 10; and therefore, the Commission is empowered to
decide whether a contravention has indeed occurred. It follows
that the Commission did have jurisdiction to make the order
appealed from.
Furthermore, the Committee did not err when it concluded
that the programmes offered were contrary to subsection
112(10). Under those schemes, every passenger who purchased
a ticket for air transportation could claim a promotional
coupon. Although it was not expected that every passenger
would use his coupon, the coupon was, nonetheless, of some
value to him. In the result, the passenger paid less for his air
transportation than he would have if, upon payment of the
approved toll, he had received nothing of value other than the
air transportation itself.
The fact that the benefit offered was a right to ground—
rather than air—transportation does not remove the case from
the ambit of subsection 112(10): the offer was one made in
respect of the transportation of passengers by air, and that is
the kind of offer prohibited by the subsection.
Per Heald J. (dissenting): The Committee was authorized,
by section 10 of the Act, to inquire into the matter with which
the order was concerned. In this narrow sense, the Committee
had jurisdiction to make that order. However, its ruling that
Nordair's programmes violated subsection 112(10) was
incorrect.
The terms "tariff' and "toll" are both defined, in section 2 of
the Regulations, with reference to "traffic". This in turn is
defined as "any persons ... that are transported by air".
Consequently, when these three expressions are used in subsec
tion 112(10), they must be understood as referring only to
transportation by air. In the case of the word "toll", this is true
notwithstanding that its definition refers not only to charges for
the transportation of traffic, but also to charges "in respect of
any service incidental thereto".
The subsection is therefore to be construed as prohibiting an
offer only if the proposed rebate or concession would affect the
price of the airline ticket itself. The reference to a rebate or
concession "in respect of the transportation" of any traffic
(emphasis added) is concerned with ticket price and nothing
else. In contrast, the programmes in the instant case relate to
ground transportation, which is something quite different and
which is outside the scope of subsection 112(10).
The respondent nevertheless argues that the expression "in
respect of the transportation" does comprehend benefits such as
those offered by Nordair, because their net effect is to change
the passenger's net cost of air transportation. However, the
French version of this phrase supports the more restrictive
construction of subsection 112(10) just set forth. Speaking as it
does of a benefit "qui permettrait le transport", the French
version plainly signifies that, if a rebate plan is to be enjoined
by subsection 112(10), the plan must be directly related to, and
an integral component of, the cost of air transportation. Else
where in the Regulations, clear and unambiguous language was
employed to indicate that "transportation" was intended to
include more than transportation by air, and in the absence of
similar language, subsection (10) should not be ascribed a
correspondingly comprehensive meaning.
It is unlikely that all Nordair passengers will utilize the
coupons offered them. For those who choose not to do so, the
coupons have no monetary value. The net effect for those who
do use the coupons is the reduction of their cost of travelling
from one point to another by air, but this does not change the
nature of the incentive offered. According to the interpretation
advocated by the respondent, any offer of a discount or other
benefit made by an airline in conjunction with the purchase of
an airline ticket would be caught by the prohibition of subsec
tion 112(10), no matter how remote from airline flight it might
be. Without words expressly proscribing any plan the net effect
of which might be the transportation of persons by air for an
amount different from that specified in the applicable tariff,
such an interpretation cannot be endorsed.
CASES JUDICIALLY CONSIDERED
APPLIED:
Service Employees' International Union, Local No. 333
v. Nipawin District Staff Nurses Association, et al.,
[1975] 1 S.C.R. 382; Canadian Union of Public
Employees Local 963 v. New Brunswick Liquor Corpo
ration, [1979] 2 S.C.R. 227; 26 N.R. 341.
COUNSEL:
J. R. Laffoley and P. Habib for appellant.
D. J. E. Scott for respondent.
SOLICITORS:
Campbell, Pepper, Laffoley, Montreal, for
appellant.
Legal Services, Canadian Transport Com
mission, Ottawa, for respondent.
The following are the reasons for judgment
rendered in English by
HEALD J. (dissenting): Two questions are raised
by this appeal. The first question is whether the
Canadian Transport Commission (Air Transport
Committee) had jurisdiction to make the order
herein impugned. In my view, the Committee did
have jurisdiction, in the narrow sense of authority
to enter into this inquiry, pursuant to the powers
given to it by section 10 of the Aeronautics Act
[R.S.C. 1970, c. A-3].' I think the Committee
"decided a matter which was plainly confided to it,
' Compare: Service Employees' International Union, Local
No. 333 v. Nipawin District Staff Nurses Association, et al.,
[1975] 1 S.C.R. 382, at page 389.
for it alone to decide within its jurisdiction". 2
Accordingly, I would answer the jurisdictional
question in the affirmative.
The second question is whether the Committee
erred in law when it ruled that the appellant's
programme offering free limousine service to and
from Nordair flights at Montreal (Dorval),
Toronto and Hamilton airports contravened the
provisions of subsection 112(10) of the Air Carrier
Regulations [C.R.C., c. 3]. Section 112 is [in Part
VI, which is] headed "TARIFFS AND TOLLS". Sub
section (10) thereof reads as follows:
112. ...
(10) No air carrier, or any officer or agent thereof, shall
offer, grant, give, solicit, accept or receive any rebate, conces
sion or discrimination in respect of the transportation of any
traffic by the air carrier whereby such traffic is, by any device
whatever, transported at a toll that differs from that named in
the tariffs then in force or under terms or conditions of carriage
other than those set out in such tariffs, unless with the prior
approval of the Committee.
Section 2 of the Air Carrier Regulations contains
the following definitions:
2. In these Regulations and in licences issued under the Act,
"tariff' means a publication containing terms and conditions of
carriage, tolls, rules, regulations and practices applicable to
the carriage of traffic by an air carrier, and includes an
amendment or a supplement to a tariff or a page of a
loose-leaf tariff;
"toll" means any charge, classification, fare, rate or allowance
made by an air carrier in respect of the carriage, shipment,
transportation, care, handling or delivery of traffic, or in
respect of any service incidental thereto;
"traffic" means any persons, goods or mail that are transported
by air;
"Tariff' as defined supra, is restricted to the
carriage of traffic by an air carrier. Likewise,
"toll" as above defined, is confined to "charges"
etc., made by an air carrier "in respect of the
carriage ... of traffic, or in respect of any service
2 This is the language used by Dickson J. in the case of:
Canadian Union of Public Employees Local 963 v. New Bruns-
wick Liquor Corporation, [1979] 2 S.C.R. 227, at page 237; 26
N.R. 341, at page 350.
incidental thereto", while "traffic" means "any
persons ... that are transported by air".
Accordingly, I think that the interpretation of
subsection (10) of section 112 must be approached
on the basis that when the words "tariff", "toll"
and "traffic" are used therein, they must be con
strued so as to apply only to transportation by air.
Approached from this perspective, it is my view
that the prohibition contained in subsection (10)
against the "offer" of "any rebate, concession or
discrimination in respect of the transportation of
any traffic by the air carrier whereby such traffic
is, by any device whatever, transported at a toll
that differs from that named in the tariffs ..." , is
restricted to any offer of a rebate, etc., relating to
the price of the airline ticket for air transportation
whereby an airline passenger is carried on the
airline for a dollar figure which is different from
that set by the subsisting tariff for that particular
flight. In my opinion, the words "in respect of" as
used in subsection (10) relate only to the cost of
the airline ticket. In the case at bar, the "rebate"
or "concession" offered relates to something quite
different from and outside the parameters of sub
section (10), namely, ground transportation. How
ever, counsel for the respondent submitted that the
words "in respect of the transportation" were wide
enough to include a plan such as this because the
net effect thereof would be to affect and change
the net cost to the passenger of the air transporta
tion. I do not agree with that interpretation. I
think subsection (10) speaks only to the cost of air
transportation. The French version of subsection
(10) is, in my view, supportive of the interpretation
which I favour. The French version of "in respect
of the transportation" reads "qui permettrait le
transport". In my opinion, those words make it
abundantly clear that the rebate plan must be
directly related to and an integral component of
the cost of air transportation. It is of interest to
observe that when the legislators wished to give the
word "transportation" a wider meaning than air
transportation, they were careful to do so in clear
and unambiguous language. I refer to Part IV of
the Air Carrier Regulations dealing with "Inter-
national Charters". In that Part, section 23 defines
"transportation" in respect of an inclusive tour as
"the transport of the tour participants and their
personal baggage by air or other modes between
(a) all points in the tour itinerary, and (b) airports
or surface terminals and the location where
accommodation is provided in the tour itinerary
other than the point of origin". [Emphasis added.]
In the absence of words of similar import in
subsection (10), I am not prepared to interpret
that subsection in the way suggested by respond
ent's counsel. Counsel also stressed the fact that in
the definition of "toll" supra, the following words
"or in respect of any service incidental thereto"
have the effect of widening that definition so as to
include ground-transportation services. I do not
agree. For the reasons expressed supra, I think
that since "toll" applies to traffic and since "traf-
fic" relates to transportation by air, as a conse
quence, "toll" as used in subsection (10) must also,
of necessity, relate and apply only to transporta
tion by air.
Accordingly, and for the above reasons, I con-
chide that the appellant's programme does not
offend the provisions of subsection 112(10) supra.
The fact that those Nordair passengers who utilize
the ground-transportation coupons receive a ben
efit, the net effect of which is to lessen their cost of
travelling from one point to another by air, does
not change the nature of the incentive offered. It is
unlikely that all Nordair passengers will utilize the
coupons. Some may be met at the airport by
friends or relatives, others may live within walking
distance or have their own car parked at the
airport. For passengers in this category, the free
transportation coupon has no monetary value. I am
not persuaded that subsection 112(10) is capable
of such a wide interpretation. Respondent's coun
sel conceded in argument that the interpretation
advanced by him would also bring within the
Committee's jurisdiction, for example, an offer by
the airline to its passengers of a post-flight compli
mentary beverage or a shoe-shine in the airport
terminal or reduced rates at a hotel. Other possible
examples of incentives and discounts quite far-
removed from airline flights can be visualized. If
the respondent is right, any offer of a discount by
an airline, no matter how remote from airline
flight it may be, so long as the offer is made in
conjunction with the purchase of an airline ticket,
would be within the sweep of the prohibitions of
subsection 112(10). In the absence of express
words in the section prohibiting any plan, the net
effect or result of which could be the carriage by
air of persons for a different monetary amount
than that permitted by the authorized tariff, I do
not accept the construction of subsection 112(10)
urged on us by counsel for the respondent.
For these reasons, and pursuant to subsection
64(5) of the National Transportation Act [R.S.C.
1970, c. N-17, rep. and sub. R.S.C. 1970 (2nd
Supp.), c. 10, s. 65 (Item 32)], I would certify to
the Commission the opinion of the Court that:
(1) the Canadian Transport Commission (Air
Transport Committee) had jurisdiction by virtue
of section 10 of the Aeronautics Act to make the
order herein impugned, and
(2) that the Air Transport Committee of the
Canadian Transport Commission erred in law
when it ruled that the appellant's programme of
offering free ground transportation to its air-
carrier traffic was contrary to subsection
112(10) of the Air Carrier Regulations.
* * *
The following are the reasons for judgment
rendered in English by
COWAN D.J.: The questions in respect of which
leave to appeal was granted are as follows:
1) Did the Canadian Transport Commission (Air Transport
Committee) have the jurisdiction by virtue of Section 10 of the
Aeronautics Act to order Applicant to cease and desist from
offering Luxury Limousine and Tilden Convenience Programs;
2) If the answer to the above question is in the affirmative, did
the Canadian Transport Commission err in law when it ruled
that such programs were "contrary to subsection 112(10) of the
Air Carrier Regulations".
By letter dated November 20, 1981, the Air
Transport Committee of the Canadian Transport
Commission issued a ruling that Nordair's Tilden
Car Rental Programs were contrary to subsection
112(10) of the Air Carrier Regulations on the
ground that such programs involved devices by
which rebates were given resulting in transporta
tion at a toll that differed from that named in the
company's tariffs in force and without prior
approval of the Committee. The Committee
ordered Nordair to cease and desist from offering
such programs as of December 31, 1981.
On January 7, 1982, Nordair inserted in the
Montreal Gazette an advertisement offering
"GIFTS" to anyone who flew Nordair full economy
return fare Monday through Friday between Mon-
treal, Toronto or Hamilton any time from January
11 through March 18, 1982.
The advertisement read as follows:
Nordair 'GIFTS' you the choice
Limousine Luxury With Nor-
dair, you travel in style all the
way! Catch our Bluebird for
top-flight service in the air
... and door-to-door. Take
the limousine to and from the
airport. The lift's on us! Just
pick up your special voucher
at the Nordair gate—and
enjoy ... Economy never
looked (or felt) so good!
Tilden Convenience A Tilden
car for 24 hours upon arriv-
al—with unlimited kilo-
metrage. That's what you
want? Fine! We'll take care
of the rental charge. All you
pay is your gas, and the sales
tax on the regular posted rate.
Simply pick up your special
voucher at the Nordair Gate.
Of course, there are a few
"rules and regulations"—for
instance, you have to be at
least 21 years of age—but
don't worry! This is one great
deal. After all, gifts have rib
bons, not strings!
Way to Go! (And we go often
...) With our schedule,
you've got 101 opportunities
each week to enjoy your gift
package! 34 Nordair flights a
week from Montreal to
Toronto ... 33 a week from
Toronto to Montreal. Hamil-
ton to Montreal? 17 flights a
week—and 17 a week from
Montreal to Hamilton. 101
flights in all—so take your
pick ... and pick up your gift
voucher. Call your travel
agent for details, or call us!
The Air Transport Committee sent a telex to
Nordair January 14, 1982, pointing out that the
offer made by Nordair appeared to be in defiance
of the previous rulings of the Committee, directing
Nordair to cease and desist from offering such
promotions immediately and stating that the order
was being made an order of the Federal Court.
The Committee then issued the order #1982-A-29,
pursuant to subsection 10(2) of the Aeronautics
Act, 3 requiring Nordair to cease and desist from
offering such programs.
Subsection 10(2) of the Aeronautics Act
provides:
1o. ...
(2) The Commission may order and require any person to do,
forthwith, or within or at any specified time and in any manner
prescribed by the Commission so far as it is not inconsistent
with this Act, any act, matter or thing that such person is or
may be required to do under this Part, or any regulation,
licence, permit, order or direction made thereunder by the
Commission and may forbid the doing or continuing of any act,
matter or thing that is contrary to this Part or any such
regulation, licence, permit, order or direction and, for the
purposes of this section, has full jurisdiction to hear and
determine all matters, whether of law or fact.
Paragraph 14(1)(m) of the Aeronautics Act
authorizes the Commission to make regulations,
14. (1) ...
(m) respecting traffic, tolls and tariffs and providing for
(i) the disallowance or suspension of any tariff or toll by
the Commission,
(ii) the substitution of a tariff or toll satisfactory to the
Commission, or
(iii) the prescription by the Commission of other tariffs or
tolls in lieu of the tariffs or tolls so disallowed;
Pursuant to the authority given by the Aeronau
tics Act the Commission made Air Carrier Regu
lations including subsection 112(10) which reads:
112. .. .
(10) No air carrier, or any officer or agent thereof, shall
offer, grant, give, solicit, accept or receive any rebate, conces
sion or discrimination in respect of the transportation of any
traffic by the air carrier whereby such traffic is, by any device
whatever, transported at a toll that differs from that named in
the tariffs then in force or under terms or conditions of carriage
other than those set out in such tariffs, unless with the prior
approval of the Committee.
Section 15 of the Aeronautics Act provides:
15. Notwithstanding any previous contract or commitment or
any other general or special Act or provision, no air carrier
shall issue free or reduced rate transportation except with the
approval in writing of the Commission and under such terms,
conditions and forms as the Commission may direct.
It is clear from a reading of subsection 10(2) of
the Aeronautics Act that the Commission has
jurisdiction to order an air carrier, such as
3 R.S.C. 1970, c. A-3.
Nordair, to cease and desist from a promotional
practice where that practice is contrary to Part II
of the Aeronautics Act, a regulation, a carrier's
licence or permit, or an order or direction of the
Commission. The subsection also states that a
decision as to whether or not such a violation has
occurred is within the jurisdiction of the Commis
sion which is given full jurisdiction to hear and
determine all matters of law or of fact for the
purposes of subsection 10(2).
In my opinion the Canadian Transport Commis
sion (Air Transport Committee) did have jurisdic
tion by virtue of section 10 of the Aeronautics Act
to order the appellant, Nordair, to cease and desist
from offering Luxury Limousine and Tilden Con
venience programs. The first question posed should
therefore be answered in the affirmative.
The second question is as to whether or not the
Commission, through its Air Transport Commit
tee, erred in law when it ruled that the programs
offered by Nordair were "contrary to subsection
112(10) of the Air Carrier Regulations".
That subsection provides that no air carrier shall
offer, grant or give "any rebate, concession or
discrimination in respect of the transportation of
any traffic by the air carrier whereby such traffic
is, by any device whatever, transported at a toll
that differs from that named in the tariffs then in
force or under terms or conditions of carriage
other than those set out in such tariffs, unless with
the prior approval of the Committee."
The words "tariff" and "toll" are defined in
section 2 of the Regulations as follows:
2. ...
"tariff' means a publication containing terms and conditions of
carriage, tolls, rules, regulations and practices applicable to
the carriage of traffic by an air carrier, and includes an
amendment or a supplement to a tariff or a page of a
loose-leaf tariff;
"toll" means any charge, classification, fare, rate or allowance
made by an air carrier in respect of the carriage, shipment,
transportation, care, handling or delivery of traffic, or in
respect of any service incidental thereto;
The appellant submitted that the limousine and
car-rental programs offered by it did not constitute
matters of tariff, and that subsection 112(10) of
the Regulations could only apply to the amount
payable for the transportation by air furnished by
the appellant. It was admitted that the appellant
collected from all passengers as fares the dollar
amounts provided for as tolls in the tariffs appli
cable to its service. The appellant submitted that
nothing offered by it to its passengers by way of
limousine service or car rental amounted to any
rebate, concession or discrimination in the tolls in
respect of its transportation of such passengers.
In my opinion there is no merit in the submis
sions of the appellant on this point. The evidence
on which the Committee based its order was that
the appellant collected the approved tolls from
passengers and offered to such passengers coupons
entitling such passengers to free limousine service
or to one day's free car rental. Not all passengers
were expected to use the coupons, but it is clear
that they had a value to the passenger, and that
every passenger who purchased a ticket for air
transportation at the approved toll had the right to
receive such a coupon.
The fact that what was offered to passengers
was a right to certain kinds of ground transporta
tion does not, in my opinion, prevent the operation
of subsection 112(10) of the Regulations. The
action which is prohibited by the subsection is the
offer by the air carrier "in respect of the transpor
tation of any traffic by the air carrier" of any
rebate, concession or discrimination, whereby such
traffic—i.e. in this case, the transportation of pas
sengers by air—is by any device whatever, trans
ported at a toll that differs from that named in the
relevant tariffs. Having paid the approved toll the
passenger is offered a coupon of some value with
the result that he pays less for his transportation
by air by the appellant than if he had paid the
approved toll and received nothing of value, apart
from the air transportation to which payment of
the approved toll entitled him.
There was evidence before the Committee that
the offer of ground-transportation coupons was
made by the appellant in respect of the transporta
tion of traffic, i.e. the transportation by air of the
passengers to whom the offer was directed, that
the coupons had a value to the passengers, and
that such action amounted to an offer of a rebate
or concession whereby traffic was transported at a
toll that differed from the approved toll.
In my opinion the Commission, through its Air
Transport Committee, did not err in law when it
ruled that the programs offered by Nordair were
"contrary to subsection 112(10) of the Air Carrier
Regulations".
I would therefore, in accordance with subsection
64(5) of the National Transportation Act, 4 certify
to the Commission the opinion of the Court, that
1. the Canadian Transport Commission (Air
Transport Committee) did have the jurisdiction
by virtue of section 10 of the Aeronautics Act to
order appellant, Nordair Ltd., to cease and
desist from offering Luxury Limousine and
Tilden Convenience programs;
2. the Canadian Transport Commission did not
err in law when it ruled that such programs were
"contrary to subsection 112(10) of the Air Car
rier Regulations".
RYAN J.: I concur.
° R.S.C. 1970, c. N-17, [as am. by R.S.C. 1970] (1st Supp.),
c. 44, s. 10 (Item 7), [and by R.S.C. 1970] (2nd Supp.), c. 10,
s. 65 (Item 32).
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.