Air Canada is piloting an alternative process to resolve compensation claims as Canada's transportation watchdog struggles to handle a backlog of cases.
In an email 08APR, the airline said 500 customers had been randomly selected and given the option of transferring outstanding Canadian Transportation Agency (CTA) claims to an "independent and impartial" third-party provider.
The airline says it has "consulted" with Transport Canada and the CTA on the pilot project's design, choosing Canada Aviation Dispute Resolution (CADR) to decide on the claims.
The firm specializes in resolving air travel complaints using a process called Alternative Dispute Resolution (ADR). CADR is a subsidiary of The CDRL Group, a not-for-profit agency, certified in the UK and other European countries to resolve air complaints.
Marc Barbeau, Executive Vice President, Chief Legal Officer and Corporate Secretary at Air Canada says the pilot program is proposed as an “independent, fair and effective method" to resolve customer complaints quickly.
“For airlines, it has the potential to address customer concerns, bring efficiency and consistency to the process and reduce issues associated with unresolved claims by shortening the adjudication timeline,” he said.
During the Air Canada pilot project, CADR will make a decision on claims within 90 days "after full information is received from both parties." The airline says any outcomes "will not be binding on customers unless they accept them" and it will "consult with government on possible next steps" once the pilot project has ended.
Traveller compensation claims are filed under Canada’s Airline Passenger Protection Regulations (APPR). As Open Jaw reported in February, the CTA has been battling a record backlog of more than 93,000 cases, with officers handling just one passenger complaint a day on average.
The backlog swelled sharply in 2022 off the back of the COVID pandemic and has seen passengers waiting more than a year to begin the formal resolution process after filing a complaint online.
Once a complaint is filed, airlines are given time to respond with a complaints officer conducting a review and possibly facilitating mediation. If no settlement is reached, a binding decision must be issued within 90 days of the process formally starting. The process for a claim begins only once it has reached the front of the complaints queue.
As reported by Open Jaw in February, analysis conducted by legal tech firm Courtready found that as of September 2025 the average time between a passenger’s flight and a final ruling had reached 987 days, almost three years.
The details of Air Canada's pilot project:
- Customers can agree to their CTA case information and documentation being automatically transferred electronically to CADR. There is no need to re-enter any data, documents or information;
- A CADR arbitrator will review their documents and Air Canada’s response;
- Customers have an opportunity to reply to Air Canada’s submission;
- A decision will be issued within 90 days of complete information being received from both parties;
- All decisions are binding for Air Canada but not for the customer, who can decline the arbitrator’s decision and continue with the regular CTA process;
- There is no cost to participate in the pilot project and no impact on the customer’s claims before the CTA.
