The Supreme Court of Canada will hear an appeal from several airlines looking to overturn federal regulations that permit higher compensation for passengers experiencing cancelled or delayed flights and lost or damaged luggage.

In 2020, 19 airlines, including Air Canada and other international airlines, challenged the validity of the federal government's Air Passenger Protection Regulations (APPR), which set out various guidelines on passenger compensation.

Canada's APPR was established in 2019 and "clarified minimum requirements and compensation" following increased delays, cancellations, and budget issues during the pandemic.

The airlines argued that Canada's regulations "exceed" the Canadian Transport Agency's authority and contravene the Montreal Convention. This multilateral treaty established rules for airlines regarding compensation for lost and damaged luggage and baggage delays.

The federal government dismissed the appeal in 2022, but an exception was made to the regulations around the temporary loss of baggage.

In April 2023, the federal government announced it would be updating its laws to further strengthen passenger rights by making several amendments to the APPR.

Those amendments were approved with the Budget Implementation Act, and the federal government launched a consultation period, which closed on August 10.

On Thursday, the Supreme Court of Canada confirmed that it would hear the appeal from the airlines.

The federal government is spending $75.9 million over three years to help reduce a massive backlog of passenger complaints.

With files from Daily Hive's Imaan Sheikh