Air Canada launches pilot project to resolve claims amid growing complaints backlog

MONTREAL – Air Canada has launched an alternative process to resolve compensation claims in a pilot project that seeks to avert the massive backlog at the country’s transport regulator.

Met with skepticism by consumer rights advocates, the move hints at mounting frustration with the existing framework under the Canadian Transportation Agency, where cases can take years to conclude despite a staffing boost over the past few years.

The country’s largest airline said Wednesday it is asking 500 randomly selected claimants who have filed complaints with the CTA if they want their cases referred instead to an independent arbitrator. The claims often revolve around demands for refunds or compensation after a flight delay or cancellation.

Funded by Air Canada, 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. The adjudicator would rule on the claims within 90 days of receiving “full information” from both sides, Air Canada said.

Decisions by the arbitrator will not be binding, though that could change if the effort is scaled up and made permanent. For now, customers can decline the ruling and revert to the CTA process if they prefer — without losing their spot in line — said Marc Barbeau, Air Canada’s chief legal officer.

The airline hopes the project will stoke faith in its brand and tamp down the customer resentment that can fester during wait times of up to three years amid a CTA backlog that now tops 96,000 complaints, a record high.

“That trust can be shaken,” Barbeau told reporters on a briefing call Tuesday.

“During that whole time, they are thinking that we are withholding funds that we owe to them … For us that’s an issue, because we would like to restore that client’s confidence in us, restore the trust.”

About 55 per cent of all CTA decisions have been in favour of passengers, the regulator said in an email. Barbeau said Air Canada bucks the trend, with only about one-quarter of claims against the airline landing in favour of passengers.

Consumer advocates have so far taken a dim view of the alternative process.

Air Passenger Rights president Gabor Lukacs described it as “smoke and mirrors.”

“It’s like if somebody is divorcing, your ex hires their best friend to be the impartial arbitrator between you.”

He pointed to consumer review platform Trustpilot, where CDRL earned 1.3 stars out of five amid a litany of negative feedback from angry complainants.

The new process risks adding to customer confusion over an already complex system of rules and claims procedures, said Sylvie De Bellefeuille, a Quebec-based lawyer with advocacy group Option consommateurs.

It also remains unclear how the model would speed up claims, aside from opening what amounts to another counter for the complaints queue.

“The logic that says it’s going to be faster is very difficult to prove because they will be comparing two different scales,” De Bellefeuille said. She cited the contrast between the 30,000 complaints closed by the CTA over the past two years and the pilot project’s 500 upcoming cases.

Air Canada’s Barbeau pointed to Europe, where he said similar third-party adjudications are resolved in less than three months. But he could not speak to “why exactly that’s the outcome.”

Some advocates say a better solution lies in reforming the current system to close loopholes for airlines, simplify the process for travellers and incentivize carriers to provide better service in the first place.

In June 2023, the federal government passed legislation that aimed to make good on the Liberals’ pledge 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 under a wider range of flight disruption scenarios and make airlines pay a per-complaint fee — regardless of the outcome — to discourage violations.

However, progress on the reforms has stalled, with no regulatory changes finalized.

Air Canada’s alternative process would allow the carrier to pay fewer complaint fees since more claimants would be funnelled away from the CTA, advocates pointed out.

The Montreal-based airline noted that participants will be free to discuss the experience, with no non-disclosure agreements involved. That transparency marks a change from the current arrangement at the regulator, which bars customers and airlines from publicly disclosing the outcome of complaints on matters ranging from lost baggage to compensation for a cancelled flight unless both parties agree to waive confidentiality.

Air Canada consulted with the CTA and Transport Canada on the pilot project.

“The Canadian Transportation Agency was made aware of this forthcoming initiative by Air Canada and, as per its usual practice, encourages airlines to find ways to resolve complaints directly with their passengers,” said spokesman Jadrino Huot in an email.

This report by The Canadian Press was first published April 8, 2026.

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