Transport Canada's role in aviation seems to be the most detailed. Until 1996, Transport Canada was responsible for both regulation of aviation and the operation of air traffic services, as well as the operation of most major airports. On November 1, 1996, these responsibilities were split: Transport Canada remains responsible for regulation, but a new regulated non-profit company, NAV CANADA, took over responsibility for all civilian air traffic services. This change was (and remains) controversial because NAV CANADA began charging for services that were previously funded through general tax revenue. In 2005, the United States was discussing a similar delegation of the FAA's air traffic services to an "arm's-length" government corporation.

During the 1990s, Transport Canada also began privatizing the operation of large airports, and divesting itself of small airports altogether (typically handing them over to municipalities). Following the 1994 National Airports Policy, Transport Canada retains ownership of most airports with 200,000 or more annual passenger movements, as well as the primary airports serving the federal, provincial, and territorial capitals, but leases most of these airports (which make up the National Airports System) to outside operators; currently, there are 26 airports in the system.

In 2003, Transport Canada launched its Electronic Collection of Air Transportation Statistics program to collect passenger and cargo data in real-time from air carriers flying in Canada. ECATS will expand into the field of general aviation during 2008. Transport Canada also collects data on all accidents and incidents, no matter how minor, using the Civil Aviation Daily Occurrence Reporting System (CADORS).

Transport Canada continues to be responsible for licensing pilots and other aviation specialists (such as dispatchers and mechanics) as well as registering and inspecting aircraft. It is also responsible for the safety certification and continuous safety oversight of most forms of commercial operations. These responsibilities are carried out by 6 regions, Atlantic, Quebec, Ontario, Prairie & Northern, Pacific and the sixth region based in Ottawa (National Capital Region) is responsible for air operators operating international flights and certain types of large aeroplanes. The Canadian Air Regulations (CARs) are also under Transport Canada control.