Did you even think about calling your Embassy? Personally I would have refused to allow anyone in my family to reboard the plane, or at very worst have offererde to write Air Canada a note there and then saying that if they were in fact charged a fine then you would have covered it. After all, sending them back seems to have cost you a lot more than that fine would have been ($2800 and counting as they will have to fly back). The Chinese consulate seems to have screwed up, AC seems to have screwed up, and now you are paying for it. As you sent them back to Cnada, I find it highly unlikely that you'll see your money back.