The dog named 'Simba' was flying from Tel Aviv (Israel) to Toronto when the the pilot noticed a problem with the cargo area's heating system.
"As soon as the crew became aware of the temperature issue, the captain grew rightfully concerned for the dog's comfort and well-being," Air Canada spokesman Peter Fitzpatrick told CNN.
"With the altitude it can become very uncomfortable, and possibly the situation could have been life-threatening if the flight had continued," he added.
"While we recognise this was an inconvenience for our customers, the overall reaction was positive, particularly once people understood the dog was in potential danger but safe as a result of the diversion," Peter said.
"It's my dog, it's like (my) child. It's everything," Simba's owner German Kontorovich, who was also in the plane, said.
"It was definitely the right thing to do," a fellow passenger said.
According to aviation expert Phyl Durby, the diversion could cost the airline thousands of dollars in fuel costs, but called it the right decision as "the captain is responsible for all lives on board.
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