Updates to the Legislative Framework Governing Air Carriers Complaints: An Overview of Bill C-31

Key Takeaways:

• Bill C‑31 would transfer to the Minister of Transport responsibilities currently exercised by the Canadian Transportation Agency regarding the processing of complaints.
• The Minister could designate private third parties to resolve certain complaints, the associated costs of which would be borne by the air carriers.
• The privacy rules surrounding complaints would be relaxed and more information could be made public.
• Administrative penalties applicable to certain offences related to air passenger rights could reach up to $1,000,000.

On May 6, 2026, the federal government introduced Bill C-31, A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025 (the “Bill”). Part 4, Division 17 of the Bill proposes a series of amendments (the “Reform”) to the Canada Transportation Act, SC 1996, c 10, Part 1 (the “Act”) regarding the processing of passenger complaints in the aviation sector.

The Reform is being introduced amid continued scrutiny of passenger rights, complaint processing delays, and the effectiveness of the air transportation complaints regime. Without completely overhauling the current system, the Bill proposes the reorganization of certain complaint-handling functions, an increased use of third parties for the management of certain complaints, the transfer of certain institutional responsibilities, including for regulatory matters, to the Minister of Transport and adjustments regarding the disclosure of confidential information and the framework of administrative monetary penalties.

Air carriers should closely monitor these proposed changes, as they may affect both the administration of passenger complaints and engagement with the authorities responsible for overseeing the regime.

Overview of the Current Framework

Under the Act’s current framework, passenger complaints relating to the application of a fare, rate, charge, or condition of carriage set out in an air carrier's tariff must be filed with the Canadian Transportation Agency (the “Agency”). Complaints are then assigned to a complaint resolution officer (an “Agent”), appointed from within the Agency's membership and staff.

Once a complaint has been received, an Agent may decline its review, including where the conditions of the Act have not been satisfied or the complaint appears to be frivolous or vexatious. If the complaint is accepted for consideration, an Agent must first attempt to resolve the matter through mediation. Where mediation is unsuccessful, an Agent may issue an order granting or denying the relief sought.

The Act generally provides that the complaint resolution process is confidential.

New players in the complaint-handling process

The Bill would significantly change the parties involved in the complaint-handling process and their respective roles. In particular, the Bill would transfer to the Minister of Transport (the “Minister”) functions currently exercised by the Agency and Agents. The Minister would assume responsibility for receiving, reviewing, and processing complaints, acting as mediator between carriers and complainants, and issuing orders in respect of such complaints.

While the Bill would transfer primary responsibility for complaint-handling to the Minister, it contemplates an ongoing role for the Agency. Under the new framework, the Minister would be empowered to direct the Agency to administer all or part of the complaint resolution process, including receiving and reviewing complaints, facilitating mediation, and issuing orders.

The establishment of an alternative process for certain complaints

Further, the Bill would permit the Minister to designate and authorize certain third parties (“Designated Persons”) to resolve complaints contemplated by a separate regime. Designated Persons would exercise complaint-handling powers similar to those of the Minister, including the authority to refuse to examine a complaint, facilitate mediation, render decisions, or order the payment of compensation or refunds.

Complaints subject to this alternative process would be designated by order. Accordingly, the Governor in Council could exempt certain complaints or categories of complaints (“Specified Complaints”) from the application of the general complaint resolution framework and require that they be resolved by a Designated Person. Following the issuance of such an order, carriers would have 90 days to enter into an agreement with a Designated Person and publish such person’s name on their website.

The text of the Bill suggests that carriers would bear the costs associated with this Designated Person mechanism.

The Bill also establishes a separate mechanism aimed at reducing the existing backlog of air transportation complaints. Under such mechanism, the Governor in Council may, by decree, designate complaints already filed with the Agency before an order respecting Specified Complaints comes into force and that have not yet been assigned to an Agent. The Minister, or the Agency acting on the Minister's direction, could then engage a third party to assist in resolving such outstanding complaints.

Third parties would therefore serve a dual purpose under the proposed framework: (i) adjudicating certain future complaints through the Designated Person regime; and (ii) facilitating the resolution of the existing complaints backlog through a separate transitional mechanism.

Procedural adjustments to complaint handling

Beyond modifying the roles of the parties involved in complaint handling, the Bill would also make a number of changes to the complaint resolution process itself.

First, the Bill would introduce a new eligibility requirement for complaints relating to the non-application of a tariff. A complainant would be ineligible to pursue such a complaint if the matter is already the subject of proceedings before a court of competent jurisdiction or has already been decided by such a court.

The Bill would also revise the timelines and procedures governing complaint resolution. Under the current framework, an Agent must first act as mediator and, if no settlement is reached, issue a decision within 60 days of the start of mediation. Under the proposed framework, the Minister would instead offer mediation, which may be declined by either party. If mediation is unsuccessful or declined, the Minister would be required to issue an order within 90 days of the filing of the complaint. Any compensation or refund awarded under a settlement agreement or order would be payable within 30 days.

Increased publicity for the framework

Beyond the procedural changes described above, the Bill would also modify the transparency framework applicable to passenger complaints, including the rules governing confidentiality and the disclosure of information.

The Bill would repeal the provisions of the Act that currently provide for the confidentiality of the complaint review process, except where the complainant and the carrier agree otherwise.

While the existing publication requirements relating to orders would largely remain unchanged, the Bill would require the disclosure of the flight number associated with the complaint.

Increased severity of certain administrative penalties

The Bill would also strengthen the administrative monetary penalty regime applicable to air carriers. The proposed amendments would increase the maximum penalties available for certain contraventions relating to passenger information requirements, flight delays, cancellations and denied boarding, standards of treatment, passenger compensation, baggage handling, the seating of young children near a parent or guardian, the transportation of musical instruments, and lengthy tarmac delays. For certain contraventions, including those under the air passenger rights regime, the maximum penalty applicable to a legal entity could be increased to $1,000,000.

Implications for Air Carriers and Next Steps

The proposed Reform of the complaint-handling process could have various implications for both passengers and carriers.

For passengers, the Reform could allow for faster resolution of complaints and greater transparency in the process. However, some stakeholders have indicated that allowing air carriers to choose the private organization responsible for handling complaints could place individuals in a situation where air carriers act as both judge and jury, potentially undermining the credibility of the process.

For air carriers, the proposed amendments could result in a more streamlined complaint resolution process. At the same time, carriers would be required to promptly comply with orders and satisfy any refund or compensation obligations within prescribed timeframes, which may require adjustments to existing internal processes. The Bill would also increase the potential financial consequences of non-compliance by raising the maximum administrative monetary penalties for certain contraventions. Finally, the proposed changes to the confidentiality and disclosure framework could increase the visibility of complaints and related decisions, potentially exposing air carriers to greater public and media scrutiny and increasing the risk of reputational harm.

As of June 23, 2026, the Bill is at the committee stage in the House of Commons. In a separate vote, Part 4, Division 17 of the Bill, which contains the Reform, was adopted at second reading. However, the Bill must still complete the remaining stages of the legislative process before coming into force and may be amended before its final adoption. Air carriers and other industry participants should therefore continue to monitor the Bill’s progress through Parliament, as the final version may confirm, refine, or alter the proposed amendments.