Executive Summary: Key Legal and Evidentiary Issues

• ITPS (Canada) Ltd. sought an interlocutory injunction to prevent the Minister of Transport from enforcing a section 5.1 Aeronautics Act notice restricting Specialized Air Combat Training (SACT) to Class F - Restricted airspace, which prohibited a significant part of its military training activities near London, Ontario.

• Reasonableness of the Notice was challenged on the basis that Transport Canada provided shifting justifications, relied on safety incidents unrelated to SACT, and conducted its internal risk assessment only after the decision to restrict SACT had already been made in 2023.

• Procedural fairness concerns arose because ITPS was not afforded a meaningful opportunity to respond before the Notice was issued, and key internal documents relied upon by the Minister's delegate were never shared with ITPS prior to the decision.

• Irreparable harm was established through uncontested evidence of at least $1.5 million in unrecoverable costs, threats to a government contract representing 75% of ITPS's business, and risks to a $14.5 million milestone payment due in May 2026.

• Transport Canada's prolonged inaction from 2019 to 2025 and its November 2025 assurance that ITPS could continue SACT operations until July 2026 undermined the Minister's claim of urgency in issuing the Notice one month later.

• The Court applied the three-part RJR-MacDonald test and found all elements satisfied, granting a time-limited injunction enjoining enforcement of the Notice against ITPS until the earlier of July 13, 2026 or the determination of the underlying judicial review.

Background and facts of the case
ITPS (Canada) Ltd. is an accredited test pilot school based in London, Ontario, that has been training pilots since 2001 out of London International Airport (YXU). Since 2019, ITPS has used ex-military aircraft to train military pilots and is currently under a government of Canada contract to train about 80 military pilots from Ukraine by April 2029. This contract accounts for about 75% of the company's business, with approximately 50% of the training consisting of Specialized Air Combat Training (SACT)—defined as any civil training whose prime function is to provide training related to air-to-air and/or air-to-surface combat operations, including but not limited to air combat maneuvers, evasive maneuvers, and simulated weapons delivery.
On December 22, 2025, the Minister of Transport published a Notice of Restriction under section 5.1 of the Aeronautics Act, RSC 1985, c A-2, which prohibited any person from conducting certain SACT operations outside of segregated airspace designated as "Class F - Restricted." Because there is no Class F - Restricted airspace near YXU, the restrictions in the Notice prohibited ITPS from carrying out activities near YXU that account for a significant part of its military training.

The regulatory framework and the notice at issue
Section 5.1 of the Aeronautics Act permits the Minister of Transport, or a person authorized by the Minister, to prohibit or restrict the operation of aircraft on or over any area or within any airspace, either absolutely or subject to exceptions or conditions, if in their opinion the prohibition or restriction is necessary for aviation safety or security or the protection of the public. The Notice required that, except for the purpose of Tactical Navigation Training, all other SACT operations be conducted in Class F - Restricted airspace. Class F - Restricted airspace is essentially closed to air traffic unless the agency controlling the airspace authorizes the flight. ITPS, as a civilian SACT operator, falls within Transport Canada's regulatory mandate and is governed by the Aeronautics Act and the Canadian Aviation Regulations, SOR/96-433 (CARs). According to the Minister, the existing legislative framework for civil aviation does not adequately capture the specialized aviation operations of SACT, and the Notice was issued to prevent ITPS and other air operators from engaging in SACT activities in non-segregated civilian airspace shared with commercial airlines, flight training schools, and other civilian air traffic.

Years of discussions between the parties
In 2022, Transport Canada raised concerns about ITPS using airspace near YXU for military training, and the parties discussed ITPS using airspace in a more remote location like North Bay. Between 2023 and 2024, the parties discussed Transport Canada's intention to issue a section 5.1 notice restricting SACT operations to segregated airspace. In the first half of 2025, Transport Canada, NAV Canada, and the Department of National Defence (DND) provided assurances that they would support the creation of segregated airspace near North Bay's Jack Garland Airport (YYB). ITPS began the process of moving its operations from YXU to YYB, purchasing an aircraft hangar at YYB and contracting with a construction company to update the hangar to meet DND safety standards—an $8 million investment. ITPS informed Transport Canada that it expected to be operating out of YYB by July 13, 2026.
Transport Canada worked with NAV Canada and DND to create CYR 599, a volume of airspace near YYB temporarily designated Class F - Restricted. CYR 599 came into effect in July 2025, and ITPS received assurances that it would remain in effect until the government contract ends on April 30, 2029. At a meeting on November 13, 2025, the parties agreed to a series of next steps: Transport Canada would send ITPS the definition of SACT, consider and analyze other options to address SACT operations up to mid-July 2026, and launch an aeronautical study with NAV Canada and DND for a long-term solution. Transport Canada also stated that these next steps would not prevent ITPS from conducting tactical training operations outside CYR 599 between the meeting and July 2026.

The November 18, 2025 incident and the sudden issuance of the notice
Five days after the November 13 meeting, on November 18, 2025, there was an incident involving an ITPS ex-military aircraft on its approach to land at YXU. An investigation is underway but is not complete. The parties offered sharply conflicting accounts: the Minister alleged the ITPS aircraft missed numerous calls from the air traffic control tower, and a midair collision was only avoided because the other pilot changed course. According to ITPS, there was never a risk of a midair collision—the tower used the wrong call sign, and messages were missed when the instructor pilot and the tower were attempting to communicate at the same time. ITPS stated the instructor pilot took control from the student pilot, received the tower's message of non-conflicting traffic about one nautical mile away, followed the tower's directions, and always had the other aircraft in sight, never coming closer than one nautical mile.
On December 15, 2025, Transport Canada sent ITPS a letter citing "two near collisions in the past few years" involving ITPS aircraft (referring to the November 18 incident and an April 10, 2021 incident in airspace near Goderich) as well as five monetary penalties issued to ITPS aircraft in the last five years regarding failure to comply with instructions from air traffic controllers. The letter stated these events taken together raise significant safety concerns and concluded that SACT activities in shared airspace posed an aviation safety risk requiring prompt action. ITPS responded on December 19, 2025 at 10:24 am, giving reasons why it believed immediately issuing the notice would not serve the intended purpose, but rather would reduce aviation safety and severely impact ITPS's ability to meet its timelines for training Ukrainian pilots. At 4:09 pm that same day, Transport Canada informed ITPS that it had moved ahead with issuing the Notice—the Notice was signed and would be released on December 22, 2025. There is no indication that the Minister's delegate considered ITPS's December 19 response before deciding, on that same day, to issue the Notice.

The motion for interlocutory injunction
ITPS brought a motion before the Federal Court seeking a time-limited interlocutory injunction to prevent enforcement of the Notice until July 13, 2026—the date of its planned move to YYB—or earlier if the underlying application for judicial review was heard and decided on an expedited basis. The motion was assessed under the three-part test from RJR-MacDonald Inc v Canada (Attorney General), 1994 CanLII 117 (SCC), requiring ITPS to demonstrate: (i) a serious issue to be tried in the underlying application for judicial review; (ii) irreparable harm if the injunctive relief is not granted; and (iii) the balance of convenience favours the issuance of the injunction.

Serious issue to be tried
The parties disagreed on the applicable threshold. The Minister argued for an elevated standard, contending that the underlying application for judicial review was unlikely to be decided before ITPS's July 2026 move and that an interlocutory injunction would effectively grant ITPS the relief it seeks in the application, requiring the Court to be satisfied that the applicant is likely to prevail. The Court rejected this argument, finding that the motion and the underlying application did not seek the same outcomes—the motion sought temporary non-enforcement while the judicial review sought an order quashing the Notice. Applying the usual low threshold that the underlying claim is neither frivolous nor vexatious, the Court found that ITPS raised serious issues regarding the reasonableness of the Notice, including that Transport Canada provided shifting justifications, that the Notice was based on incidents that were not SACT operations and bore no logical relationship to the SACT restrictions imposed, and that the Notice potentially exceeded the purpose of a section 5.1 notice by limiting the manner in which aircraft may be used and operated rather than restricting operations over a particular area or airspace. The Court also found that ITPS raised a serious issue of procedural unfairness, noting that an affidavit by Transport Canada employee Marcia George identified concerns not shared with ITPS—including those in an internal risk assessment that ITPS first received on the motion—and that there was no indication the Minister's delegate considered ITPS's December 19 response before deciding to issue the Notice that same day.

Irreparable harm
ITPS presented uncontested affidavit evidence—its affiants were not cross-examined—demonstrating that, due to the restrictions in the Notice, it would have to conduct all training operations out of YYB by the start of February 2026, or not at all. To do so before the facilities under construction were ready, ITPS had to deploy personnel to North Bay on a temporary basis and lease equipment and space, incurring at least $1.5 million in additional costs that are not recoverable through a successful judicial review application and cannot be passed on through the government contract, which was for a fixed price. Operating from temporary facilities without access to its full fleet of aircraft, maintenance facilities, and personnel threatened ITPS's ability to meet contractual milestones that trigger payments. The next milestone deadline, for a $14.5 million payment, was in May 2026, and delay in triggering milestone payments would create a material funding gap and significant cashflow issues that may need to be bridged with external financing, which may not be available. The Court rejected the Minister's arguments that the harm was avoidable or of ITPS's own making, noting that Transport Canada's own internal documents acknowledged that the distance between YXU and CYR 599 prevented ITPS from flying there and back because it exceeded the range the aircraft can cover on a tank of fuel. The Court found ITPS established irreparable harm with clear and convincing evidence, demonstrating a likelihood of significant financial harm and more than a mere possibility of bankruptcy.

Balance of convenience
The Court acknowledged the weighty public interest in aviation safety and accepted that Parliament had empowered the Minister to issue a section 5.1 notice for the protection of public safety. However, the Court found that ITPS's harm outweighed the Minister's harm and the public interest considerations of the case. Several factors informed this conclusion: ITPS was requesting relief that would allow it to continue doing what it had been permitted to do for many years without the Minister issuing a section 5.1 notice or enacting a regulatory restriction, which in the Court's view signified that the nature and magnitude of any risk to public safety was not as high as the Minister suggested; Transport Canada's own internal risk assessment, based on hypothetical safety scenarios, concluded that the probability of those scenarios occurring was assessed as 2 on a 5-point scale (corresponding to remote or unlikely), and the assessment did not trigger immediate remedial action; and the November 18, 2025 incident that appeared to accelerate the issuance of the Notice happened during landing, which is not a SACT activity, and the Minister did not argue that the incident would have contravened the Notice had it been in place. The Court further noted equitable considerations in ITPS's favour, including that both parties had been acting in good faith to find a solution and that the decision to issue the Notice following the November 18, 2025 incident seemed to be a change of course, and a relatively sudden one, that Transport Canada knew would significantly impact ITPS. The short duration of the requested injunction—3.5 months at most—also weighed in ITPS's favour.

The ruling and outcome
Madam Justice Pallotta of the Federal Court granted ITPS's motion on April 2, 2026. The Court ordered that the Minister of Transport and his delegates are enjoined from enforcing the Notice as against ITPS until the earlier of July 13, 2026 and the date the application for judicial review is decided. ITPS was also relieved of the rule 373(2) undertaking to abide by any order concerning damages caused by granting the injunction, on the basis that the injunction would be short and there was no evidence it would cause the Minister financial harm. No specific monetary award was ordered in favour of either party, as this was an interlocutory injunction rather than a final determination on the merits. The disposition on costs was deferred, with the parties given five days to jointly propose a disposition or alternatively propose a timetable for written submissions.