MONTREAL- Air Canada (AC) has been fined $426,000 by the Canadian Transportation Agency (CTA) for violating federal passenger rights rules during a flight attendant labour disruption that upended travel plans for thousands of customers last summer.
The fine covers a five-day window in August 2025 and marks one of the most significant enforcement actions under Canada’s Air Passenger Protection Regulations (APPR).
According to the CTA, Air Canada committed 71 APPR violations between August 15 and 20, 2025, when it failed to offer passengers either a refund for any unused portion of their ticket or a confirmed reservation, free of charge, on the next available flight operated by any carrier.
The violations were identified through a targeted sample of affected passengers reviewed as part of the agency’s probe.
Air Canada’s $426,000 APPR Penalty
Under Canada’s Air Passenger Protection Regulations, airlines must provide passengers with either a full refund for unused ticket portions or a confirmed rebooking on the next available flight at no extra cost when a cancellation occurs due to circumstances outside the airline’s control, including labour disruptions.
Air Canada (AC) failed to meet this obligation during the August 2025 flight attendant strike, which grounded flights across Canada and affected passengers at major hubs including Toronto Pearson International Airport (YYZ) and Montreal-Pierre Elliott Trudeau International Airport (YUL).
The CTA confirmed that 71 separate violations were recorded against Air Canada (AC) based on a targeted review of impacted passengers.
The agency did not review all affected travellers, meaning the actual number of passengers who did not receive their entitled options could be significantly higher.
Air Canada now has until April 18, 2026, to request a review of the penalty before the Transportation Appeal Tribunal of Canada.
August 2025 Strike and Government Intervention
The fine stems directly from a labour dispute in August 2025, when more than 10,000 Air Canada (AC) flight attendants walked off the job, causing widespread flight cancellations across the country.
The federal government stepped in less than 12 hours after the strike began, invoking the Canada Labour Code to compel the airline and the union into binding arbitration. The Canada Industrial Relations Board then ordered workers back on the job the following day.
Union officials initially refused to comply with the board’s return-to-work order. The board later deemed the strike unlawful, even as negotiations between the two sides resumed.
The disruption left thousands of passengers stranded at airports, including Toronto Pearson (YYZ) and Montreal (YUL), with limited guidance from the airline on their refund or rebooking options.
How the Labour Dispute Was Resolved
The dispute centred partly on wages, after flight attendants rejected a tentative agreement in September. The matter was ultimately resolved through arbitration, which upheld most of the original deal while increasing first-year raises for some workers at Air Canada Rouge.
The final agreement runs until March 2029 and includes wage increases spread over four years. It also addresses compensation for ground duties, a longstanding point of contention between Air Canada management and its flight attendant workforce.
The arbitration outcome provided closure to a dispute that had already caused significant damage to passenger confidence in the airline.
Canada’s Air Passenger Protection Framework
The APPR, which came into full force in December 2019, sets out clear obligations for airlines operating in Canada.
When a flight is cancelled for reasons outside the carrier’s control, such as a labour strike, the airline must still offer passengers a choice between a refund and rebooking on any available carrier.
Fines for APPR violations were increased from $25,000 to $250,000 following legislative amendments that took effect on September 30, 2023.
As of May 2025, the CTA’s backlog of unresolved air travel complaints stood at 84,300, reflecting ongoing pressure on Canada’s passenger rights enforcement system.
Critics and aviation experts have long argued that stricter and more consistent enforcement is essential to ensure airlines take passenger rights obligations seriously rather than treating fines as an acceptable cost of doing business.
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