The federal government is cracking down on airlines that break passenger protection rules, quadrupling the maximum penalty they can face to $1 million a sharp escalation from the $250,000 ceiling that had been in place following a previous increase from just $25,000 under the 2023 federal budget.
Transport Minister Steven MacKinnon announced the change on May 1 in Ottawa, framing the higher ceiling as a warning shot rather than a routine enforcement tool. “When there is a clear breach, there should be a stiff penalty,” he told reporters, adding that he expects airlines to meet the government’s expectations without having to be pushed.
The announcement arrives at a moment of genuine frustration for Canadian air travellers. The Canadian Transportation Agency is currently sitting on a backlog of more than 97,000 unresolved passenger complaints a figure that underscores just how strained the existing system has become.
MacKinnon did not mince words about how the country got here. The regulatory framework introduced in 2023, he acknowledged, simply did not deliver what was promised. Designed during a period of pandemic-era disruption, the system turned out to be too cumbersome, too expensive to navigate, and far too slow to actually help people. “We put in place a system that, in hindsight, was onerous, expensive, and took too long,” he said.
The penalty increase is one piece of a broader reform package tied to the federal government’s spring economic update. The update also signals Ottawa’s intent to explore governance changes at Canadian airports, including alternative ownership models and new ways to draw in investment. MacKinnon was careful to temper expectations, describing the process as early-stage and dependent on consultations with industry.
To address the complaint backlog, the government plans to bring in a neutral third-party dispute resolution body that would draw on private-sector expertise. Once rulings are made, airlines found to be at fault would be required to settle with affected passengers promptly. The government also intends to lift confidentiality obligations on passengers involved in the complaints process a move aimed at making the system more transparent and less tilted in favour of carriers.
Separate from the ministerial announcement, the Canadian Transportation Agency published proposed amendments to the Air Passenger Protection Regulations back in December 2024 and wrapped up public consultations in March 2025. Those proposed changes target clearer compensation rules, faster refund timelines, and stricter requirements for how airlines communicate when they reject a passenger’s claim. Final rules, however, have not yet come into force.
Taken together, the measures represent an admission that Canada’s passenger rights regime needs a significant overhaul and a commitment, at least in intent, to build something simpler, fairer, and harder to game. Whether the reforms will translate into meaningful relief for the hundreds of thousands of travellers who have filed complaints or given up doing so entirely remains to be seen.
