There are many threads on this topic, but roughly, it boils down to this for revenue passengers: In Canada, if the airline overbooks, and everybody shows, they have to get you to your destination by alternate means, either a later flight if within (I believe) two hours of the scheduled one, by a re-route (connection, again arriving within a certain time of the booked flight), put you on another airline if there is a reasonable alternative available, or they have to provide you with cash compensation plus cover some expenses if a lengthy delay is involved, like overnight lodging. The latter is called involuntary denied boarding, not to be confused with involuntary manslaughter.

First, the airline will tend to see what other arrangements it can make without paying out compensation. Then it will look for volunteers to open up seats. Only as a last resort will one be denied boarding, and then automatic compensation kicks in. This is the picture, grosso modo, for somebody in the back with some kind of economy fare. Others will have a much better idea what happens with a J booking. The compensation entitlements vary by country. Europe is more generous than Canada, IIRC.

Others can correct me on the details. Vouchers for future travel are usually offered and may be more generous than cash compensation. We have some people here who are only too happy to give up a seat for a voucher and travel a few hours later, knowing the voucher will cover a good portion of a future discretionary/personal trip.