What was meant to be a protest against expanding Billy Bishop Toronto City Airport instead became a celebration on Sunday, after the federal government announced on Friday that it rejected Ontario’s proposal to allow jets at the downtown waterfront airport.

Hundreds of people gathered at Harbour Square Park on Toronto’s waterfront carrying the blue “No Jets T.O.” signs that had dotted front lawns across Toronto for months. Instead of chanting against the proposal, attendees cheered, hugged neighbours and celebrated what they called a hard-fought victory after months of campaigning.

“This was going to be a rally, and instead it’s a celebration,” said NDP MPP Chris Glover, who represents the waterfront riding of Spadina–Fort York.

Toronto Mayor Olivia Chow, a long-time opponent of introducing jets at Billy Bishop, joined residents and organizers at the event, calling the federal government’s decision a victory for Toronto communities.

The celebration came two days after Transport Minister Steve MacKinnon said Ottawa would not proceed at this stage with Ontario Premier Doug Ford’s proposal to expand the airport to accommodate jets. The decision followed a federal public consultation that drew roughly 87,000 responses, the vast majority from Toronto residents opposed to the expansion, a senior government source told The Globe and Mail.

“The survey was a temperature check from the federal government, and the temperature is obviously very radioactive on this issue,” said Norm Di Pasquale, program manager for the advocacy group NoJetsTO.

Opponents argued the proposal would increase aircraft noise, threaten waterfront public spaces, harm the environment and undermine plans to build housing along Toronto’s waterfront.

Ginny Thomson, 75, a member of the advocacy group Seniors for Climate Action Now, said many of the organization’s roughly 800 members across Canada live near Billy Bishop Airport and are concerned about the health impacts of increased air traffic.

“We were ecstatic, but we’re also staying vigilant,” Ms. Thomson said of MacKinnon’s Friday decision. “We really needed a victory, and I think it showed people that if they organize, mobilize and keep at it, we can win.”

Still, the issue may not be settled. The Globe reported Saturday that Ontario believes Ottawa’s use of the phrase “at this stage” leaves open the possibility of revisiting jet expansion in the future.

“Yesterday’s announcement from the federal government on Billy Bishop Airport is disappointing,” Giles Gherson, president and chief executive of the Toronto Region Board of Trade, said in a statement, warning the decision would hinder the airport’s ability to modernize and serve the needs of a growing region.

Jeremy von Hollen, 40, has lived on Toronto’s waterfront for more than a decade, and felt compelled to attend Sunday’s event even after learning the proposal had been rejected. “We’re up on the waterfront, and we love it very much. And after the destruction of Ontario Place, now is a chance to actually do something. So that’s why we’re here,” he said.

Karishma Porwal, 28, who has used her Instagram platform of more than 134,000 followers to encourage people to oppose the proposal, said she was surprised by the turnout.

“I thought that people may not come out because we already have the win. But there’s so many people out here,” she said. “It’s important to celebrate that our voice does actually matter.”

She said Sunday’s gathering also served as a reminder to governments that public opposition to a larger airport remains strong. “We’re here, and the next time you try this, we’re going to show up again and again.”

The proposal to bring jets to Billy Bishop Airport had become a priority for Mr. Ford’s government, which passed legislation allowing the province to assume Toronto’s role in the tripartite agreement governing the airport, which also includes the federal government and the Toronto Port Authority, a federal agency.

Last year, Toronto approved an extension of the airport’s runway to adhere with Transport Canada safety rules.

Mr. MacKinnon said Friday that Ottawa’s focus remains solely on those safety upgrades. He also said any plans for the airport would need to reflect concerns raised during the consultation, including noise, environmental impacts, housing and quality of life.

Organizers said Sunday’s celebration was also a reminder that their fight may not be over. If the Ontario government attempts to revive the proposal, “they’re going to pay a huge political price,” Mr. Glover said. “Today we celebrate, but we’re not letting our foot off the gas on this one.”