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Canada has long punched above its weight in space. Canadarm 1 on the Space Shuttle. Canadarm 2 on the International Space Station. Canadarm 3 joining NASA’s Artemis lunar missions. And just this month, astronaut Jeremy Hansen completed a successful trip around the moon. Canada’s space credentials are impeccable — yet until now, Canada has been the only G7 nation without sovereign launch capacity, meaning the ability to reach orbit and beyond from its own soil, on its own terms.
That is finally changing.
On April 21, 2026, the Minister of Transportation and the Leader of the Government in the House of Commons introduced Bill C-28: An Act to amend the Aeronautics Act and other Acts — better known as the Canadian Space Launch Act. This is not a patchwork fix. It is Canada’s first comprehensive, purpose-built legal framework for the space industry, replacing a fragmented regime that relied on temporary Transport Canada programs and the aging Remote Sensing Space Systems Act of 2005.
Why This Matters — and Why Now
The economic case for acting is overwhelming. Approximately 20% of Canada’s economy depends on space systems,1] underpinning everything from wildfire response and agriculture to public health and national security. The legal framework has not kept pace — until now.
In its 2024 report Reaching Beyond — A $40 Billion Canadian Space Economy by 2040, developed in consultation with Space Canada, Deloitte projects the domestic space market to balloon from $5.5 billion in 2019 to $40 billion in only 14 years. Notably, modernizing the legal framework and strengthening governance were key elements of Deloitte’s recommendations.
The timing aligns with real momentum: spaceports are in development in Newfoundland and Labrador and Nova Scotia, the Minister of National Defence announced $200 million in new federal space funding in March 2026, and Canada’s space ecosystem — from satellite giants to startups — is ready to scale, pending the legal certainty this Bill now provides.
What Bill C-28 Aims to Achieve
The Canadian Space Launch Act aims to give the government the tools to safely regulate space launches and re-entries on Canadian soil, while providing industry with legal certainty, encouraging investment and infrastructure growth, and fulfilling Canada’s international space obligations.
By amending the Aeronautics Act, Bill C-28 carves out deliberate and much-needed space for Canada’s burgeoning aerospace industry. In doing so, it delegates significant powers and responsibilities — spanning site certification, financial responsibility, indemnification, permitting, emergency stop powers, and zoning — to the Governor in Council and the Minister of Transport, providing the regulatory flexibility necessary to build out a robust and forward-looking framework. The result is a solid foundation from which Canada’s space law regime can continue to develop and mature.
Here is what the Bill actually does:
1. New Definitions — Clarity and Future-Proofing
The Bill introduces intentional carve-outs for aerospace operations, with built-in flexibility for future regulatory change.
Key new defined terms include:
“Launch vehicle” — a rocket, or any other vehicle designed to ascend to Earth orbit or beyond.
“Re-entry vehicle” — a vehicle designed to return substantially intact from Earth orbit or beyond to Earth.
“Certified launch/re-entry site” — an aerodrome authorized for the launch or re-entry of such vehicles within or into Canada.
“Designated launch/re-entry site” — land declared by order of the Governor in Council to be required for use as a certified launch or re-entry site, where title is vested in His Majesty or a notice of intention to expropriate has been registered.
The Governor in Council will have the power to refine these definitions by regulation over time.
Additionally, “aircraft” and “airport”, as defined in the Aeronautics Act, will now also make reference to space launch/vehicles, with “aircraft” including “launch vehicles” and “re-entry vehicles”, and airports being narrowed to an aerodrome other than a “certified launch site” or “certified re-entry site”. Conversely, “launch” and “re-entry vehicles” are being deliberately carved out of the definition of “aircraft” in the Carriage by Air Act, the meaning of “air services” in the Canada Transportation Act, and the definition of “air carrier” in the Secure Air Travel Act — a necessary legislative clean-up to separate space vehicles from the application of existing aviation law.
2. National Security and Keeping Pace with International Space Law
The Minister’s emergency powers will extend to stopping the launch of a launch vehicle, the re-entry of a re-entry vehicle, or any related activity — a clear and unambiguous authority that is critical for public safety in a high-risk industry. These powers also enable Canada to uphold its Technology Safeguards Agreement with the United States, ensuring that launches involving U.S. components comply with ITAR and Canada’s commitments on technology transfer and data security, while the Minister of Transport may separately halt any launch on national security grounds, fulfilling Canada’s obligations under the Outer Space Treaty as the state responsible for space activities conducted by its nationals or from its territory. Complementing this framework, the Minister’s regulatory powers now extend to all international conventions and standards to which Canada is a party — not just the Chicago Convention — ensuring Canada’s domestic regime keeps pace with the rapid evolution of international space law.
3. Permits and Site Certificates — A Full Regulatory Toolkit
The Minister will have the power to issue, renew, amend, suspend, transfer, and cancel certificates relating to aerodromes used for launches or re-entries, as well as permits and notices of determination relating to launch and re-entry vehicles themselves. The deliberate separation of site certificates from vehicle permits mirrors the existing aviation model, which regulates both facilities and aircraft independently.
4. Financial Responsibility — Minimum Liability Standards for Operators
The Governor in Council will have the power to issue regulations governing the financial responsibility of the operators of launch and re-entry vehicles for third-party liability caused by a launch or re-entry, including establishing minimum financial liability amounts. The Governor in Council may also define “financial responsibility” by regulation.
The Minister retains discretion to exempt operators from financial responsibility regulations, or to reduce minimum liability requirements, where the public interest warrants — subject to applicable Privy Council oversight carve-outs.
This gives the regime meaningful flexibility — important in an industry where the risk profile of a university research payload and a commercial orbital launch are vastly different.
5. Indemnification — Risk Allocation Made Explicit
This is one of the most commercially significant features of the Bill.
The Minister will have the power to indemnify owners and/or operators of launch or re-entry vehicles against third-party liability for loss or damage caused by a launch or re-entry carried out under the Act, on any terms and conditions the Minister considers to be in the public interest, thereby providing a safety net for claims exceeding available private insurance limits, encouraging investment in the Canadian commercial space sector.
Equally, the Minister may require an owner or operator to indemnify the Government of Canada against third-party claims for loss or damage caused by a launch or re-entry — including claims brought against Canada under the Convention on International Liability for Damage Caused by Space Objects.
For industry, this indemnification framework provides a much-needed mechanism to allocate catastrophic risk — a prerequisite for attracting serious investment into Canadian launch infrastructure.
6. Zoning — Federal Authority Over Launch and Re-Entry Sites
The Aeronautics Act already regulates airport zoning across Canada. Bill C-28 extends federal zoning jurisdiction to certified and designated launch and re-entry sites. The Governor in Council’s power to create regulations will include the prevention of land use or development adjacent to or in the vicinity of such sites that would be incompatible with safe operations.
The Minister must first seek agreement with the relevant provincial government(s) on land use — but can act unilaterally if immediate action is needed to prevent incompatible development. The Minister may also delegate land use regulation to provincial authorities — a pragmatic nod to cooperative federalism that balances federal aerospace authority with provincial jurisdiction over land.
The Bottom Line
Bill C-28 serves to catch up and modernize the legal framework supporting the space industry, providing certainty and a platform for furthering this critical work. For operators, investors, landowners, and infrastructure developers in and around Canada’s emerging spaceport ecosystem, this Bill has immediate implications — from permitting and site certification to liability allocation, zoning restrictions, and financial responsibility requirements.
The Bill is currently at second reading in the House of Commons. We will continue to monitor for updates. If you have questions about how Bill C-28 or other recent space industry developments may affect your business, please do not hesitate to reach out to us.
Footnote
1. See remarks by Brigadier-General Chris Horner at SpaceBound 2025. Reflecting on Canada’s evolving role in space at SpaceBound 2025.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
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