Thank you for the question.
The very first thing the government should have done was to declare and enforce passengers' fundamental right to a refund. This happened in the United States on April 3, 2020, when the U.S. Department of Transportation issued an enforcement notice. In the European Union, it happened first around March 18, 2020. The European Union even went as far as suing some of its own states to ensure compliance with passengers' fundamental right to a refund. Had the Government of Canada done so, it would have probably been much easier to provide industry-wide relief because there would not have been such a strong opposition to it, publicly.
The other aspect is that Canada should have followed the German model—Lufthansa's model—whereby the state assumes a substantial stake in the airline that is being bailed out in exchange for taxpayers' money. The 6% that was provided to Canada's taxpayers in the current deal is dwarfed by the 20% in Germany, which actually has an option to go all the way up to 25%.
The last point is that those loans that were given to Air Canada were all unsecured loans, with one exception. Maybe Air Canada doesn't have sufficient assets as collateral—I don't know, and that's something to investigate further—but in the absence of assets, equity is a reasonable way to ensure that taxpayers receive a return on their investment.