Feds to hike max fine for airlines abusing passenger protection regulations to $1M

OTTAWA — The federal government plans to quadruple to $1 million the maximum fine for airlines that repeatedly violate passengers’ rights.

Transport Minister Steven MacKinnon said fining airlines is a last resort but the current system isn’t working.

The Canadian Transportation Agency, which handles passenger complaints, is facing a backlog of more than 97,000 cases.

“The system is broken. Decisions by the Canadian Transportation Agency can take years. This is not acceptable. Canadians deserve better,” MacKinnon said Friday at a press conference in Ottawa.

When asked what circumstances would cause the CTA to levy a $1 million fine, MacKinnon deferred to the agency.

In a statement to The Canadian Press, the CTA didn’t address questions on in what circumstances an airline could be hit with a $1 million fine, noting the changes announced Friday have not come into force.

“Once the changes come into force, the Canadian Transportation Agency will update its compliance and enforcement policy accordingly,” spokesperson Jadrino Huot wrote.

The CTA ordered $1.4 million in fines last year for airlines that violated the air passenger protection regulations.

In one instance, Air Canada was hit with $426,000 worth of fines for 71 violations during a five-day span in August of last year.

“Following flight cancellations for a reason outside the carrier’s control, Air Canada … failed to, at the passengers choice, provide a refund for any unused portion of the ticket, or provide the passenger, free of charge, with a confirmed reservation for the next available flight that is operated by any carrier,” a summary of the penalty reads.

The agency last month ordered three fines amounting to $87,400, mostly for airlines failing to provide clear information on how passengers must be treated and the minimum compensation they’re owed under the regulations.

Right now, the maximum fine the CTA can levy is $25,000. The government proposed amendments to the regulations in 2024, which included increasing the maximum fine to $250,000. Those amendments have not come into force, however.

In Ottawa’s spring economic update this week, the Liberals said they plan to import a model used in the United Kingdom and Europe that sees independent adjudicators resolve complaints on issues ranging from refunds to accessibility.

And while MacKinnon said Friday the changes are meant to enhance accountability and transparency and simplify the complaints process, his predecessor Omar Alghabra had the same message when the Liberals took a crack at regulatory reforms three years ago.

In June 2023, the federal government passed legislation that aimed to make good on the Liberals’ vow to tighten passenger rights rules after a year marked by travel chaos and a ballooning complaints backlog.

The overhauled regime included provisions that would see customers compensated for a wider range of flight disruptions and make airlines pay a per-complaint fee — regardless of the outcome — to discourage violations.

However, progress on those reforms has stalled and no regulatory changes have been finalized.

On Friday, MacKinnon wouldn’t answer questions about what happened to that work. Asked whether the government is still considering charging airlines a fee when a complaint is lodged, the minister said the airlines will be responsible for paying the cost of the new proposed dispute resolution process.

Earlier this month, Air Canada launched an alternative process to resolve compensation claims through a pilot project that taps an external arbitrator. Funded by the airline, the parallel arbitration track will be run by a subsidiary of U.K.-based CDRL Group, a non-profit that resolves dispute claims in areas ranging from retail to utilities.

But the move to take the dispute resolution process out of the hands of the CTA — despite the agency hiring more than 100 “complaint resolution officers” over the past few years — is being met with skepticism from air passenger rights advocates who say they worry about the neutrality of the proposed process.

“For the CTA’s complaints resolution office, its temporary funding has just been renewed for two years and, until further notice, the CTA will continue to handle air travel complaints using the resources currently at its disposal,” Huot, the CTA spokesperson, wrote in a statement.

This report by The Canadian Press was first published May 1, 2026.

— With files from Chris Reynolds in Montreal

Nick Murray, The Canadian Press