Most provisions of Canada’s new Air Passenger Protection Regulations went into effect July 15. They lay out new rules that apply to flights to, from, and within Canada – including connecting flights.
One of the rules is that when an airline damages or loses luggage they must refund checked baggage fees they collected. After all, they didn’t provide the service they charged for – prompt transport of luggage from one place to the next, delivering it in the condition it was received (outside of normal wear and tear).