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

Passengers wait to check in at Toronto's Pearson International Airport on Thursday July 3, 2025. THE CANADIAN PRESS/Chris Young

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

Transport Minister Steven MacKinnon says 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, which has not yet responded to inquiries from The Canadian Press.

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

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.

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.

The CTA also did not immediately respond to questions about what will happen with those workers it recently hired.

Nick Murray, The Canadian Press

With files from Chris Reynolds in Montreal.