Canadian travellers who are bumped from flights due to overbooking, or have to deal with lost or damaged luggage, could soon be eligible for hundreds of dollars in compensation.

The Canadian Transportation Agency (CTA) outlined today a proposed new regulatory regime with specific financial entitlements for travellers. The proposed regulations include:

A requirement for airlines to provide clear communications about flight delays or cancellations with regular updates by email, text or other methods.

Compensation for flight delays or cancellations, which will vary depending on the circumstances and how much is in the control of the airline. For larger airlines, compensation can range from $400 for a delay of three to six hours, to $700 for delays of six to nine hours, and $1,000 for a delay of more than nine hours. There also will be new standards for passenger treatment during flight delays, including requirements to supply food and drink and access to electronic communications.

Compensation for boarding denied a result of commercial decisions, such as overbooking. That compensation will be $900 for circumstances that lead to a late arrival of up to six hours, $1,800 for arrival delays of six to nine hours and $2,400 for delays of more than nine hours.

Compensation for lost or damaged baggage of up to $2,100.

Clear policies for tarmac delays. For delays of up to three hours, those policies require airlines to provide working washrooms, proper ventilation, food and drink and electronic communications. After a tarmac delay lasts more than three hours, the aircraft must return to the gate.

The compensation regime will offer smaller amounts for smaller airlines that serve northern or remote communities.

The changes are expected to result in an average price increase of about $2.75 per ticket, though it's not clear whether that will be passed on to the passenger.

Similar to EU system

Scott Streiner, chair and chief executive officer of the CTA, said the changes are comparable to the European compensation system, which is considered a global leader in passenger rights.

Transport Minister Marc Garneau officially unveiled the first version of the long-awaited air passenger bill of rights Monday morning. The details will be published in the Canada Gazette this week, and Canadians are being encouraged to submit their comments.

Federal Transport Minister Marc Garneau outlined the new draft regulations for passenger rights Monday at the Ottawa airport. 1:26

Garneau called it a "fair and balanced" approach that is clear and transparent.

"I believe it's the best passenger rights bill in the world," he said.

The draft regulations also prohibit the removal of seated passenger from a plane, except for safety reasons. They require the airline to rebook a passenger on a competitor's flight if a delay extends beyond nine hours.

The regulations will apply to all airlines flying into, out of and within Canada — something Garneau called "unique." His office said that in both the European Union and the U.S., air passenger rights do not apply to international air carriers flying into those jurisdictions.

The current U.S. and EU rules apply to flights on international air carriers flying out of those jurisdictions. They also apply to domestic carriers flying into or within those jurisdictions.

Canadians will have two months to comment on the draft regulations. The final regulations must be approved by cabinet; Garneau said he expects the new regulations will come into force this summer.

The bill also will include regulations that allow parents to sit next to their children without having to pay a fee.

Gabor Lukacs of the advocacy group Air Passenger Rights said the draft regulations don't go far enough to protect travellers.

He said the proposed regulations allow airlines to keep boarded passengers on the tarmac for up to three hours, which exceeds the limit of 90 minutes some airlines have already set. They also relieve airlines of the responsibility to compensate passengers for flight delays and cancellations caused by the airline's own maintenance problems.

Lack of accountability

"The proposed regulations give airlines a carte blanche to refuse paying compensation on the basis of unverifiable claims of maintenance issues," he said in a written statement. "This is inconsistent with international standards, and perpetuates a lack of accountability for airlines."

"This is bad news. The government is clawing back on the rights of passengers under the guise of an air passenger bill," says <a href="https://twitter.com/AirPassRightsCA?ref_src=twsrc%5Etfw">@AirPassRightsCA</a>’s Gabor Lukacs about the draft regulations outlined today <a href="https://twitter.com/hashtag/cdnpoli?src=hash&ref_src=twsrc%5Etfw">#cdnpoli</a> <a href="https://t.co/Pz1Rf7yvSi">pic.twitter.com/Pz1Rf7yvSi</a> —@PnPCBC

John McKenna, president of the Air Transport Association of Canada, said he wants to scrutinize the details of the regulations once they're published later this week, but is interpreting the compensation amounts listed in the new regulations as maximums, rather than flat compensation.

He also said he doesn't yet understand how the federal government arrived at these compensation sums. He said he does expect that any additional costs will still have to be picked up by the traveller.

Passenger costs

"Carriers are going to get insurance against this stuff. That insurance has got a price, and it's going to be passed on to the passenger, for sure," he said.

Air Canada said it is reviewing the announcement. It claims it already meets or exceeds some of the regulations proposed today.

"We will review the regulatory language which will be released on Dec. 22, and will be participating in the consultation process relating to the new regulations," said spokeswoman Isabelle Arthur in an email.

Transportation Minister Marc Garneau joined Power & Politics Monday to discuss the government's proposed passenger bill of rights. 7:33

Under 1999's international Montreal Convention, compensation is already required for delayed or cancelled flights and lost bags — but each airline presents its own tariff regime to the CTA and there are no prescribed amounts for compensation.

Consumer groups have long complained that the CTA does little to enforce the payment of those tariffs, and that most Canadians don't understand airlines' obligations or know how to file a claim.

Earlier this year, Parliament passed Bill C-49, which allows for the passenger rights regulations — but it fell to the Canadian Transportation Agency to craft the specifics on how compensation would work.

Ian Jack is a spokesman for the Canada Automobile Association, which has been pushing the government on the issue. He said it's good that airlines will have to compensate with cash rather than food or travel vouchers — but he worries that the exemption for maintenance issues could be interpreted too broadly by airlines.

Jack said it's critical for the new rules to come in play by July 1, 2019.

"We've been talking about it and consulting on it for years. It's time to move," he said.

With files from the CBC's Catharine Tunney