CANADA SPACE PROGRAM

Reaching for the stars: Space sector could generate $40B by 2040

BNN Bloomberg

Space exploration could launch significant economic opportunities for Canada, according to a new report by Deloitte Canada and Space Canada.

The report, published on Monday, examines the economic potential in the space sector for Canada’s economy. It estimated that the industry could generate up to $40 billion by 2040.

In an interview with BNN Bloomberg, Brian Gallant, CEO of Space Canada and former premier of New Brunswick, said the “massive” economic potential of the space sector should not be overlooked.

“It really is an exciting time for the sector. I think it could really have immense benefits for our country and for people around the world,” Gallant said in a Tuesday television interview.

“There are ways in which space can help us tackle global challenges like climate change … It could help us protect our oceans, our forests, it can help us with defense, security, sovereignty. It can help agriculture be more sustainable.”

Gallant added that space innovation also offers the potential for improved telecommunications services, including in rural, Indigenous and remote communities across Canada

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Space sector investment ‘imperative’: Deloitte

Scott Streiner, senior advisor of Deloitte Canada, said he believes strengthening Canada’s position in the space sector should be considered “imperative.”

“For the sake of the country’s economic competitiveness and productivity, and to help ensure national security and essential services for citizens, Canada needs to bring energy and determination to the new space race,” he said in a written statement on behalf of Deloitte Canada.

He said “now is the moment to act” and aim for the goal of a $40-billion space academic by 2040.

Gallant mentioned that Canadian NGOs, think-tanks, and governments have made “important investments” throughout the years when it comes to national contributions to the space sector.

But he made the case that Canada should not hold back on future investments.

“Canada’s in a different type of space race,” Gallant said. “We can’t sit on our hands.”

For the rest of Brian Gallant’s interview with BNN Bloomberg, watch the video above.

CANADA

Federal use of Emergencies Act was unreasonable, judge rules

A VERY POLITE RULING

Jim Bronskill, The Canadian Press

Police walk as heavy snow falls on the 21st day of a protest against COVID-19 measures that has grown into a broader anti- LIBERAL government protest, in Ottawa, on Thursday, Feb. 17, 2022. 

THE CANADIAN PRESS/Justin Tang

 

A judge has ruled it was unreasonable for the Liberal government to use the Emergencies Act to quell "Freedom Convoy" protests in the national capital and at key border points two years ago.

In a decision released Tuesday, Federal Court Justice Richard Mosley said invocation of the act led to the infringement of constitutional rights. 

The Canadian Civil Liberties Association and several other groups and individuals had argued in court that Ottawa ushered in the emergency measures without sound statutory grounds.

The government contended the steps taken to deal with the pan-Canadian turmoil were targeted, proportional, time-limited and compliant with the Charter of Rights and Freedoms. 

The Public Order Emergency Commission, which carries out a mandatory review after invocation of the Emergencies Act, found the government met the very high legal standard for using the law.

Mosley heard arguments in court over three days last April.

In his ruling, Mosley said he revisited the events with the benefit of hindsight and a more extensive record of the facts and the law than the government had when it proclaimed a public order emergency.

"I have concluded that the decision to issue the Proclamation does not bear the hallmarks of reasonableness — justification, transparency and intelligibility — and was not justified in relation to the relevant factual and legal constraints that were required to be taken into consideration," Mosley wrote.

Deputy Prime Minister Chrystia Freeland said the government respectfully disagrees with the decision and will appeal. 

In early February 2022, downtown Ottawa was filled with protesters, many in large trucks that rolled into the city beginning in late January. 

Ostensibly a demonstration against COVID-19 health restrictions, the gathering attracted people with a variety of grievances against Prime Minister Justin Trudeau and the Liberal government.  

The usually calm streets around Parliament Hill were beset by blaring rig horns, diesel fumes, makeshift encampments and even a hot tub and bouncy castle as participants settled in.  

The influx of people, including some with roots in the far-right movement, prompted many businesses to close temporarily, and aggravated residents with noise, pollution and harassing behaviour.

Public anger mounted over a lack of enforcement action by Ottawa police.  Meanwhile, trucks clogged key border crossings, including key routes to the United States at Windsor, Ont., and Coutts, Alta.  

On Feb. 14, the government invoked the Emergencies Act, which allowed for temporary measures including regulation and prohibition of public assemblies, the designation of secure places, direction to banks to freeze assets and a ban on support for participants.  

It was the first time the law had been used since it replaced the War Measures Act in 1988.  

In a Feb. 15 letter to premiers, Trudeau said the federal government believed it had reached a point "where there is a national emergency arising from threats to Canada's security.''

The civil liberties association maintained that legal threshold was not met.  

The Federal Court hearing included others who filed actions contesting use of the emergency measures: the Canadian Constitution Foundation, Canadian Frontline Nurses and Kristen Nagle, and individuals Jeremiah Jost, Edward Cornell, Vincent Gircys and Harold Ristau.

This report by The Canadian Press was first published Jan. 23, 2024.

Bank of Canada holds key rate at 5%, signals it's done with hikes

The Bank of Canada held its policy rate steady for a fourth consecutive meeting and explicitly stated for the first time that it won’t need to increase it again if the economy evolves in line with its forecasts.

Policymakers led by Governor Tiff Macklem left the benchmark overnight rate unchanged at five per cent on Wednesday, a pause that was widely expected by markets and by economists in a Bloomberg survey. Officials say the data show economic growth has stalled and will remain slow in the near term, which will help bring inflation back to the bank’s two per cent target next year.

“There was a clear consensus to maintain our policy rate at five per cent,” Macklem said in his prepared opening remarks for a news conference scheduled for 10:30 a.m. Ottawa time. “What came through in the deliberations is that Governing Council’s discussion about future policy is shifting from whether monetary policy is restrictive enough to how long to maintain the current restrictive stance.”

The dovish communications suggest the bank sees a rapidly slowing economy and believes its past rate increases — 475 basis points in less than two years — are sufficient to quell inflation. That potentially opens the door to rate cuts in coming months.

“If the economy evolves broadly in line with the projection we published today, I expect future discussions will be about how long we maintain the policy rate at five per cent,” Macklem said.

The Canadian dollar tumbled after the release, erasing earlier gains to trade at US$1.3468 at 9:54 a.m. New York time. The yield on the benchmark two-year note was down about four basis points on the day to 4.006 per cent. 

The governor reiterated the need to balance the risks of over- and under-tightening, but also noted concerns about the persistence of underlying price pressures, warning that policymakers haven’t ruled out further rate increases if new developments push inflation higher. Still, the bank removed language from its previous policy statements that said it remained prepared to hike again.

Officials want to see “further and sustained easing” in core inflation and will continue to focus on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing activity, the bank said in its statement.

Its forecasts suggest the economy is now in “modest excess supply” and it trimmed its economic growth projection to 0.8 per cent this year, from 0.9 per cent. Still, the Bank of Canada’s base case remains a soft landing, with growth picking up around the middle of the year.

Officials expect inflation to remain close to three per cent over the first half of 2024 before declining to around 2.5 per cent by the end of the year and returning to the bank’s two per cent target next year.

The consumer price index accelerated to a 3.4 per cent yearly pace in December, and has been stuck above the 3 per cent cap of the central bank’s target operating band for 32 of the past 33 months. A closely watched measure of the Bank of Canada’s preferred core metrics also spiked.

“Over the projection horizon, ongoing excess supply in the economy continues to weigh on prices, and corporate pricing behavior and inflation expectations gradually return to normal,” the bank said in its monetary policy report.

Wage growth, which is still rising at a four per cent to five per cent yearly pace, is expected to slow, falling closer in line with inflation and modest productivity growth, the bank said.

Shelter price inflation, however, is expected to remain “elevated for some time,” with growth in mortgage interest costs seen slowing gradually as financial conditions ease and the impact of additional households renewing and taking on new mortgages decreases.

Rental price inflation, which is supported by strong demand for housing and tight supply, is forecast to moderate due to a slowdown in population growth and an expected increase in new housing construction.

A stronger-than-expected rise in house prices is one of the main risks that could drive inflation higher than expected, the bank said.

Canada’s economy is more rate-sensitive than its peers due to higher debt loads and shorter-duration mortgages. Most economists see the Bank of Canada cutting the policy rate by June, and traders in overnight swaps are placing similar bets.

Read the Bank of Canada's full statement on its rate decision

BNN Bloomberg   

The Bank of Canada held interest rates at five per cent on Wednesday. Jan 24, 2024

Read the full statement on its decision:

Bank of Canada maintains policy rate, continues quantitative tightening

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

Global economic growth continues to slow, with inflation easing gradually across most economies. While growth in the United States has been stronger than expected, it is anticipated to slow in 2024, with weakening consumer spending and business investment. In the euro area, the economy looks to be in a mild contraction. In China, low consumer confidence and policy uncertainty will likely restrain activity. Meanwhile, oil prices are about $10 per barrel lower than was assumed in the October Monetary Policy Report (MPR). Financial conditions have eased, largely reversing the tightening that occurred last autumn.

The Bank now forecasts global GDP growth of 2½% in 2024 and 2¾% in 2025, following 2023’s 3% pace. With softer growth this year, inflation rates in most advanced economies are expected to come down slowly, reaching central bank targets in 2025.

In Canada, the economy has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024. Consumers have pulled back their spending in response to higher prices and interest rates, and business investment has contracted. With weak growth, supply has caught up with demand and the economy now looks to be operating in modest excess supply. Labour market conditions have eased, with job vacancies returning to near pre-pandemic levels and new jobs being created at a slower rate than population growth. However, wages are still rising around 4% to 5%.

Economic growth is expected to strengthen gradually around the middle of 2024. In the second half of 2024, household spending will likely pick up and exports and business investment should get a boost from recovering foreign demand. Spending by governments contributes materially to growth through the year. Overall, the Bank forecasts GDP growth of 0.8% in 2024 and 2.4% in 2025, roughly unchanged from its October projection.

CPI inflation ended the year at 3.4%. Shelter costs remain the biggest contributor to above-target inflation. The Bank expects inflation to remain close to 3% during the first half of this year before gradually easing, returning to the 2% target in 2025. While the slowdown in demand is reducing price pressures in a broader number of CPI components and corporate pricing behaviour continues to normalize, core measures of inflation are not showing sustained declines.

Given the outlook, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. The Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation. Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

 

European Central Bank leaves key interest rate at a record high as focus turns to timing of cuts

David Mchugh, The Associated Press

The European Central Bank left its key interest rate untouched at a record high Thursday, keeping credit expensive for businesses and consumers as it tries to make sure inflation is firmly under control before cutting borrowing costs — a move expected later this year.

The question is, how much later this year. Financial markets are expecting a rate cut from four per cent as early as April, while ECB President Christine Lagarde has indicated it likely would happen this summer.

Analysts expect her to use a news conference Thursday to underline that the bank needs to see more proof that painful inflation — which has made everything from groceries to energy more expensive — has been beaten down.

Lagarde has cautioned that the bank will make decisions based on the latest figures about the economy’s health rather than making longer-term promises.

The ECB’s statement dropped earlier wording that “domestic price pressures remain elevated” and noted that high rates are helping push inflation down. But it cautioned borrowing costs would stay high for “as long as necessary” without offering a future timetable.

Like the ECB, Norway’s central bank kept rates steady Thursday. The same day, the central bank in Turkey, which is suffering from out-of-control inflation of nearly 65 per cent, raised its key rate to 45 per cent, expected to be the last increase for some time.

With inflation falling in major economies, financial markets are frothing in hopes of cheaper credit that would boost business activity and stock prices.

Stock investors saw their holdings, such as those in U.S. retirement accounts, soar in the last weeks of 2023 as the U.S. Federal Reserve and ECB indicated that a rapid series of rate hikes was ending. Fed Chair Jerome Powell said officials discussed prospects for rate cuts at the bank's December meeting, and the U.S. central bank has indicated it would cut its key interest rate three times this year.

The S&P 500, a broad measure of U.S. large company shares, has hit record highs this week, and European indexes also have risen. The global stock rally faces questions about whether gains can continue.

Rate cuts make riskier investments like stocks more attractive than safer bets like money market accounts and certificates of deposit. They also stimulate business activity and thus prospects for share prices to go higher.

Expectations for rate cuts have been fueled by the rapid drop of inflation in Europe to 2.9 per cent in December from the peak of 10.6 per cent in October 2022. In a little over a year, the ECB raised its key rate from negative levels — which made it cheap to borrow money to buy a house or invest in a business — to a record-high four per cent.

While rate hikes are a central bank's chief weapon to snuff out inflation, they also can slow the economy — which has been seen in Europe and countries around the world, feeding expectations for cuts now that inflation has dropped closer to preferred levels.

The economy of the 20 European Union member countries that share the euro currency, where the ECB sets interest rates, shrank slightly in the July-to-September quarter of last year. Expectations are no better for the following months.

The economic squeeze follows a surge of inflation fueled by a supply chain crunch during the COVID-19 pandemic and then higher food and energy prices tied to Russia's war in Ukraine. The worst of the energy costs and supply problems have eased, but inflation has spread through the economy as workers push for higher wages to keep up with the boost in prices they're paying.

Analysts say there are good reasons for the ECB to move cautiously. For one, having to reverse course and raise rates if inflation doesn't keep falling — or spikes again — would only prolong the pain from tighter credit.

Another is the speed of pay raises for Europe's workers. ECB officials have indicated that they want to see figures for wage increases for the first months of this year before deciding where they think inflation is headed.

“Lagarde will likely keep the door wide open for a first cut in June without fully committing to it,” according to analysts at Berenberg bank. “By emphasizing the need for more data on inflation dynamics in early 2024, she may push back gently against market expectations for a first rate cut in April.”

Additionally, attacks by Yemen's Houthi rebels on ships in the Red Sea have forced many vessels bringing consumer goods and energy supplies to Europe to avoid the Suez Canal and take a longer journey around the tip of Africa.

The disruption has so far not led to higher oil prices but has added to shipping costs for companies and underlined uncertainty about energy supplies and whether businesses could pass along higher expenses to consumers that would fuel a new round of inflation.

 

Government looks at factory-built homes to increase supply

Daniel Johnson , BNN Bloomberg

The federal government hopes to utilize factory-built homes as one way to rapidly increase Canada’s housing supply, but experts and builders say regulatory issues stand in the way of widespread adoption. 

Housing Minister Sean Fraser told BNN Bloomberg last month the next phase of housing policy in Canada will be focused on increasing supply – and factory-build homes will be part of that industrial strategy to rapidly increase the scale of production.

Fraser characterized the strategy as ambitious but achievable through collaboration with various levels of government and the private sector.

The Canada Mortgage and Housing Corp. has estimated that Canada will have around 3.5 million fewer homes by the end of the decade than what is needed to restore affordability, as average home prices top $1 million in some cities. 

Housing starts rose 18 per cent in December compared to the previous month, CMHC said last week. On a seasonally adjusted annual basis, housing starts in December reached 249,255 units.

Factory-built homes, also known as modular homes, can help meet demand for housing, according to Sunil Johal, vice president of public policy at CSA Group, but getting them built is more complicated than it seems.

“Modular really represents an opportunity to give the construction sector different options to help meet that significant demand by fabricating different building components or modules in an off-site controlled factory environment,” Johal said in an interview with BNNBloomberg.ca. 

However, Johal flagged barriers to wide-scale adoption of factory-built homes, including “limited awareness” among regulators, which can slow down the approvals process.

“They tend to take quite a bit of time to review and approve these projects. That really eats into one of the big advantages that modular offers, which is the speed and timeliness with which it can be delivered,” Johal said. 

Targeted policy

The CSA Public Policy Centre released a report last week highlighting modular housing’s potential to help ease Canada’s critical shortage of housing. The report’s authors made recommendations for governments to capitalize on modular housing, including addressing gaps in building codes.

Johal said that will involve ensuring inspections and approvals are done in a “coordinated, streamlined fashion,” not just applying the same approaches from traditional construction to the modular market.

“Things are done differently and we need to make sure that we recognize that,” he said. “That could involve greater recognition of standards around how modular homes are built.” 

The report also noted a need to develop training and guidance for the industry and regulators, and called for improved access to financing. 

Builders at the ready

Some homebuilding companies are standing at the ready for a move to more modular building in Canada, and one is using new technology like AI to help speed up the homebuilding process.

Frank Cairo, co-founder and CEO of the Caivan Group of Companies, told BNNBloomberg.ca that his company leverages AI, generative design and various other technologies to automate large portions of the factory home-building process. 

Caivan is active in over 50 communities in Ontario, primarily Ottawa and GTA. They are a top three builder in Ontario by volume.

Caivan Group’s factory in Ottawa. Credit: Jairus Leeson

The standard building permit process applies to homes produced by Caivan, Cairo said. Going forward, he questions what the approval regime will look like for factory-manufactured homes compared to traditional builds. 

Caivan currently operates mostly in Ottawa and the Greater Toronto Area. In Ontario, Cairo said his company faces challenges around uneven flow of land development approvals, which can disrupt productivity.

He said the company’s Ottawa factory runs best when it is operating at an “even pace,” requiring predictability in the approvals process.

How modular building works

Johal said modular building approaches can offer “substantial” reductions in construction times with “completion schedule rates about 25 to 50 per cent faster than traditional methods. That’s because under the modular method, “builders can undertake tasks concurrently rather than sequentially.” 

Using this approach, about 80 per cent of construction occurs offsite, he explained.

Johal also noted that modular construction strategies can offer cost savings of up to 20 per cent when compared to traditional methods, and these types of construction projects can reduce waste by up to 46 per cent. 

In addition to factory building techniques, Cairo said the technology used by Caivan “shaves about three and a half months off the build cycle of a new home.”

Automating much of the process reduces human error, he added.

“Our factory will fully manufacture between four and six individual homes a day, and then it will take one day to install those homes,” Cairo said. 

This is partly possible due to “generative design algorithms” that automate large parts of the architectural process. 

“Those architectural sets that get generated through the algorithm directly connect with our equipment line for manufacturing processes,” Cairo said. 

At the moment, Caivan builds around 1,000 homes a year. The company has set an “ambitious target” to increase its annual manufacturing output, Cairo said, with a goal of building 4,000 homes per year within three years.

PROPERTY IS THEFT SOCIALIZE HOUSING

'Vicious cycle' between high interest rates and rents: expert

Jordan Fleguel, BNN Bloomberg

Canadians are grappling with high rent prices being driven up by interest rates, but experts say renters won’t see meaningful relief until significantly more housing supply is built – regardless of where rates ultimately fall.

“It's a bit of a vicious cycle as interest rates and rents are sort of aggravating each other at the moment,” Shaun Hildebrand, president of real estate data and research firm Urbanation, told BNNBloomberg.ca in an interview on Wednesday.

Hildebrand made the comments after the Bank of Canada held its key interest rate steady at five per cent for the fourth consecutive decision on Wednesday. The move was in line with unanimous expectations from economists surveyed by Bloomberg.

The central bank signaled that further rate hikes are unlikely for the time being, opening the door to rate cuts down the line.

However, Hildebrand said that even if rates are cut, relief for renters appears to be nowhere in sight as chronic supply shortages plague Canada’s housing market.

“The rental market is and will continue to be severely undersupplied,” Hildebrand said.

Aled ab Iorwerth, the Canada Mortgage and Housing Corporation’s (CMHC) deputy chief economist, echoed that sentiment, telling BNNBloomberg.ca that the Canadian rental system is “basically full.”

“With these high interest rates people are not moving from rental to ownership,” he said.

“The vacancy rate (for) rentals is extremely low, and there's not enough supply of rental units so there are real pressures in the rental system that are probably being increased by high interest rates.”

Shelter cost inflation

The Bank of Canada said Wednesday that shelter costs, which include rent prices and mortgage interest, continue to be one of the driving factors of inflation, which came in at 3.4 per cent last month – above the central bank’s two per cent target.

Statistics Canada also flagged rental costs as a major factor that drove up inflation in December – and highlighted the role higher interest rates have played in driving up rental costs.

The federal agency said the high-rate environment has increased the cost of home ownership, and put pressure on the rental market as a result, as potential homebuyers stay on the sidelines of the market.

Hildebrand said the relationship between shelter costs and higher rates creates a “complex layer” to the bank’s decision-making going forward, as rates at their current elevated levels will likely push rental prices up even further.

Bank of Canada Governor Tiff Macklem said Wednesday that despite the inflationary pressure that higher rates have put on shelter costs, other factors such as food prices are keeping core inflation "too high” to consider rate cuts just yet.

“I think in order for interest rates and rent inflation to start coming down, we will need to see more easing in some of those other factors like the labour market and population growth,” Hildebrand said.

He added that as the Bank of Canada’s tightening policy slows the economy, higher rates of unemployment will likely follow, adding that he thinks the federal government’s recently announced cap on international students should slow population growth to a degree.

Even with those factors, he said Canadians likely won’t see lower monthly rent bills.

“Ultimately, we're talking about slower rates of rent growth, not rent declines,” Hildebrand added.

Rental housing outlook

Both Hildebrand and ab Iorwerth made the case that the supply issues crippling Canada’s housing market will take many years to fix.

“We’re not building nearly enough purpose-built rentals … the supply situation does not appear to be seeing any meaningful improvement, in fact it’s probably looking worse,” Hildebrand said.

When it comes to the ownership market, ab Iorwerth said that home prices have become so prohibitive that even with lower rates, owning property will likely remain out of reach for many Canadians, keeping them in the rental system indefinitely.

Development barriers

Hildebrand argued that until the construction of rental projects becomes economically feasible, the issues plaguing the system will persist. He added that higher interest rates have made it harder for many developers to secure credit or capital for new builds.

Moves by policy makers to lessen the tax burden on developers have provided some incentive, Hildebrand said, but costs are still high.

“The removal of HST is obviously a good first step, but soaring construction costs, extremely high development charges and property taxes, they all create very large barriers for rental developers to begin construction on new projects,” he said.

“And this is troubling given that, even with rents at record highs, averaging close to $3,000 a month, developers still can't make the numbers work.”

CRIMINAL CAPITALI$M 

'It’s just not right': Passengers call out WestJet for breaching rebooking rules

Christopher Reynolds, The Canadian Press

On a frigid Saturday earlier this month, Mindy Watson learned that her family’s flight that day from Edmonton to Toronto, en route to Cuba, was cancelled.

WestJet offered to rebook their Varadero vacation on Sunday — not the following day, but eight days later on Jan. 21.

"My wife is Canadian military and needs to be back on base at CFB Comox on Jan. 22," Watson said. Her daughter needed to clock into her nursing shift the same day, and another family member on the trip — a veteran with disabilities — had to be home for appointments.

One agent told her he was not allowed to book them on another airline, she said, adding that multiple representatives said the same.

They ended up scrapping the trip, a getaway the family had been looking forward to for months.

Watson was among thousands of WestJet customers whose flights were cancelled amid an extreme cold snap in Alberta earlier this month. And many say the airline would not reschedule them within the required window, in what one advocate framed as just the latest example of a failure to uphold travellers' rights.

If a carrier has to call off a trip for reasons outside its control — severe weather, for example — Canada’s passenger rights charter requires it to rebook passengers on its own planes or those of a partner airline within 48 hours. If it can’t, it must put them on board “the next available flight that is operated by any carrier” to reach their destination.

The Canadian Press has spoken or emailed with more than two dozen passengers who say they were not rebooked within the prescribed time frame — many of them for WestJet trips scheduled this month, but others for flights over the past couple of years across several airlines.

Calgary-based WestJet says it rebooks customers, including with rival airlines, after cancellations in accordance with federal rules.

“We understand how frustrating it is when travel doesn’t go as planned during extreme weather events and are committed to our guests and ensuring their safe and expedient journey,” spokeswoman Madison Kruger said in an email.

"We sincerely apologize to our guests who were impacted by the extreme weather events of the past week, but safety will always be our first priority," she said. 

Kruger said the airline rebooks with a number of different carriers.

“WestJet books reaccommodation flights on partner and non-partner airlines during irregular operations for domestic and international flights in compliance with the (passenger rights charter) and in certain circumstances as a gesture of goodwill.”

Recordings of phone conversations between passengers and WestJet agents suggest that isn't always the case.

WestJet cancelled Winnipeg resident Kelly Regula’s connecting flight back home from Toronto on Jan. 12. In recordings of her phone conversations with airline agents shared with The Canadian Press, company representatives say they were barred from booking her on one of the multiple Air Canada flights apparently available that Friday, slotting her into a Monday departure with WestJet instead — well over 48 hours later.

Regula wound up booking a trip with Air Canada for herself, her husband and child at a price of $2,855.

“It’s just not right," she said. "But I can see why people just give up. It’s exhausting.”

Ashley Armstrong, whose Saskatoon-Orlando flight was also cancelled by WestJet on Friday, Jan. 12, was rebooked for the following Wednesday even after she highlighted other trip options.

“There is an Air Canada flight that travels on Sunday, and so I don't understand why we couldn't get booked onto that flight,” she told the agent the next day, according to a recording she made and shared with The Canadian Press.

“I'm unable to do interline stuff. I can only deal with WestJet,” he replied.

Asked about Armstrong and Regula's experiences, WestJet said it had forwarded their files to its guest team for review to ensure the airline's policies were properly applied.  

Transport Minister Pablo Rodriguez told The Canadian Press on Thursday that airlines "can't and they shouldn't" get away with consumer rights violations. "They have to respect that."

An overhaul of the passenger rights charter is underway, he noted, with stricter rules expected to take effect this year.

Some passengers said carriers informed them of a cancellation by email and that a message on rebooking options would follow — but it never actually landed in their inbox.

Even when it does, customers can spend hours waiting — on the phone or in person — to try for a different booking.

Colin MacRae called the number given to make alternate arrangements after his Toronto-Calgary flight on Dec. 23 was cancelled and he was rebooked on a flight three days later.

"After being on hold for over six hours, we were asked if we wished for a callback. We said yes, we would. They then scheduled their 'earliest possible callback,' which was for 8 a.m. on the 30th of December — the same day as our scheduled return flight," MacRae said.

Some customers, like Regula, simply rebook with another airline themselves and hope to reclaim the cost from the original carrier later. This requires filling out a form on the airline's website and waiting 30 days for a response. If it's denied, passengers can file a complaint with the Canadian Transportation Agency, a process can take up to two years due to a backlog of about 64,000.

Gabor Lukacs, president of the Air Passenger Rights consumer advocacy group, says he believes airlines have been failing to meet rebooking requirements since they came into force in 2019.

“I believe it’s very widespread, and it’s one of the prime examples of airlines blatantly sabotaging the (regulations) with complete impunity," he claimed.

To stress the regulations' intent, he pointed to a 2022 federal impact assessment stating "that large carriers will have to rebook the passenger on the next available flight of any carrier, including competitors."

The Canadian Transportation Agency needs to crack down on rule breakers, he said.

Fines have shot up from a total of $725,000 in 2022-23 to $1.17 million so far this fiscal year, which ends March 31.

But that tally is a drop in the sea of revenue that carriers earn each year — Air Canada alone took in $6.34 billion in the first nine months of 2023. And the penalties were spread across foreign and domestic airlines, as well as railways.

The agency's enforcement team tracks complaints to scan for a pattern of contraventions, and looks to impose fines when it sees a problem as "systemic," said Tom Oommen, the agency's director general of analysis and outreach, in an interview.

"So far, we haven't found that yet," he said of rebooking violations.

The agency plans to ratchet up its maximum fines by a factor of 10 as part of upcoming regulatory reforms, Oommen said.

Over the past four years, the regulator has issued a total of $16,700 in fines for breaches around rebooking. All 30 instances involved WestJet and Sunwing — since bought by WestJet.

The two carriers are not the only targets of customer ire. Last week, a B.C.-based tour operator launched a $28,000 lawsuit against Air Canada, aiming to recoup money it spent on taxis, hotels and flights when 31 British Columbians found themselves stranded in Toronto after heading off for a two-week tour of Newfoundland in June 2022.

The airline offered to book the passengers of Wells Gray Tours three to five days after the cancellation, according to the filing. None of the allegations has been proven in court and Air Canada did not respond to a request for comment about the suit.

As for Mindy Watson, after calling off their Cuban getaway and rebooking a flight back home to Vancouver Island for Jan. 14, the family was again hit with a cancellation and rebooked for three days later.

“We couldn’t incur any more expenses," she said. “We have been trapped in Edmonton for days, waiting to see if today's booking actually happens.”

That flight too fell through. They finally touched down in Comox, B.C., at 3 a.m. last Friday — nearly a week after they tried to leave on vacation, without ever taking one.

This report by The Canadian Press was first published Jan. 25, 2024.

With files from Mia Rabson in Ottawa