1 Legal framework

1.1 Which legislative and regulatory provisions govern the aviation sector in your jurisdiction?

In Canada, the aviation sector is governed primarily at the federal level. With respect to licences, permits and certificates, piloting, ownership requirements, aircraft registration and passenger rights, the main governing statutes are:

  • the Aeronautics Act (RS, 1985, c A-2), which sets out the foundations of the Canadian civil aviation regulatory system;
  • the Canada Transportation Act (SC 1996, c 10), which creates and governs the Canadian Transportation Agency (CTA), a federal body that acts both as an administrative tribunal and as a regulator for the aviation sector; and
  • the Carriage by Air Act (RS, 1985, c C-26), which incorporates into Canadian law a number of international conventions pertaining to aviation.

Under the authority of these governing statues, the following regulations set out the Canadian aviation regime framework in more detail:

  • The Canadian Aviation Regulations (SOR/96-433) (CARs) set out safety regulations applicable to air transport in Canada, including rules applicable to:
    • the identification, registration, leasing, airworthiness and operation of aircraft;
    • certification requirements for aerodromes and airports;
    • training and licensing of flight crew, aircraft maintenance engineers and air traffic controllers;
    • the use of aircraft and helicopters in commercial air services; and
    • the provision of air navigation services generally.
  • The Air Transportation Regulations (SOR/88-58) set out the obligations that air carriers must meet in order to operate passengers or cargo air services in Canada.
  • The Air Passenger Protection Regulations (SOR/2019-150) (APPR) provides the minimum obligations that air carriers have towards passengers, including obligations relating to flight disruptions, seating of children, lost or damaged baggage, and publication of air fares.
  • The Accessible Transportation for Persons with Disabilities Regulations (SOR/2019-244) (ATPDR) and the Personnel Training for the Assistance of Persons with Disabilities Regulations (SOR/94-42) regulate the accommodation of persons with disabilities.
  • The Transportation Safety Board Regulations (SOR/2014-37) set out safety requirements.

1.2 Which bilateral and multilateral instruments on aviation have effect in your jurisdiction?

The main multilateral instruments to which Canada is a party include the following:

  • with regard to airspace, aircraft registration, safety, security and sustainability, as well as international aviation generally the Chicago Convention on International Civil Aviation of 7 December 1944, including its annexes and various standards and recommended practices;
  • with regard to the liability of international air carriers:
    • the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air of 12 October 1929, the Hague Protocol of 28 September 1955 and Montreal Protocol 4 of 25 September 1975 (collectively, the ‘Warsaw Convention'); and
    • the Guadalajara Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other than the Contracting Carrier of 18 September 1961; and
    • the Montreal Convention for the unification of certain rules for international carriage by air of 28 May 1999;
  • with regard to safety, the Tokyo Convention on offences and certain other acts committed on board aircraft of 14 September 1963;
  • with regard to hijacking, the Hague Convention for the suppression of unlawful seizure of aircraft of 16 December 1970; and
  • with regard to the financing and leasing of aircraft and the taking of securities over aviation assets, the Cape Town Convention on International Interests in Mobile Equipment of 16 November 2001 and the Protocol on Matters Specific to Aircraft Equipment (collectively, the ‘Cape Town Convention').

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The CTA is responsible for monitoring air carriers' compliance with the Canada Transportation Act and its regulations. The CTA can conduct investigations, impose administrative monetary penalties and suspend or revoke licences.

Under the responsibility of the minister of transport, Transport Canada is responsible for the enforcement of the Aeronautics Act and the CARs. Transport Canada can conduct inspections and take enforcement or surveillance measures.

The administrative decisions of Transport Canada and the CTA are subject to review by the Transportation Appeal Tribunal of Canada.

1.4 What is the regulators' general approach in regulating the aviation sector?

The recent adoption of the APPR and the ATPDR indicates that the Canadian regulatory regime has recently tilted towards expanding passengers' rights. The CTA's core mandate includes protecting human rights, including the rights of disabled persons. However, when adopting new regulations, the CTA typically turns to the industry for comments and input.

The CTA also promotes education and outreach by elaborating guidelines, interpretation notes and FAQs to help carriers and passengers to understand their rights and obligations. It also provides helplines for carriers and passengers.

2 Licensing and market access

2.1 What licences are required to provide aviation services in your jurisdiction? Does this vary depending on route?

Pursuant to the Canada Transportation Act, three types of licences exist to operate air services in Canada:

  • a licence for domestic service (to operate air service between points located within Canada);
  • a licence for scheduled international service (to operate air service between a point in Canada and a point in another country); and
  • a licence for non-scheduled international service (to operate international air service between a point in Canada and a point in another country that is not considered as a scheduled international service).

2.2 What nationality requirements must be satisfied to obtain a licence?

As a general rule, in order to apply for a licence to operate a domestic service, the applicant must be a Canadian.

However, Transport Canada can issue an order allowing a non-Canadian to apply for a licence for domestic service if such a licence would be necessary or advisable in the public interest.

Licences for scheduled and non-scheduled international service can be delivered to both Canadian and foreign operators depending on the bilateral agreements existing between Canada and the foreign country.

In 2018, following the passage of the Transportation Modernization Act (SC 2018, c 10), restrictions on the foreign ownership of Canadian air carriers was eased allowing such foreign ownership to increase from 25% to 49%.

2.3 What financial requirements must be satisfied to obtain a licence?

Financial requirements are applicable only to Canadian applicants that are applying for a licence to operate services with aircraft having a certificated maximum capacity of more than 39 passengers.

The Canadian Transportation Agency (CTA) determines the financial requirements that an applicant must meet in order to operate the proposed air service on a case-by-case basis.

Moreover, before initiating flight operations, an applicant must prove to the satisfaction of the CTA that it has already acquired, or that it can acquire, the funds required as per the CTA's determination, and that the funds are available and will remain available to finance the proposed air service.

2.4 What other requirements must be satisfied to obtain a licence? Do specific requirements or restrictions apply to foreign operators?

In order to obtain a licence, both Canadian and foreign operators must:

  • hold a Canadian aviation document (either an air operator certificate (AOC) for Canadian applicants or, for foreign operators, a Canadian foreign air operator certificate (FCAOC)); and
  • have liability insurance coverage corresponding to the service to be provided under the licence (see question 5.2).

Moreover, for licences for scheduled international service (other than for scheduled international service between Canada and the United States or the European Union):

  • Canadians must be designated in writing by Transport Canada as eligible; and
  • non-Canadians must provide evidence that they have been designated by the government of their home country as so eligible under a bilateral agreement or arrangement between Canada and such home country. Non-Canadians should also hold a document issued by their home country that is equivalent to a scheduled international licence in respect of the proposed air service

2.5 What is the procedure for obtaining a licence?

The applicant should apply for an AOC or an FCAOC to Transport Canada.

Once the AOC or FCAOC, as the case may be, is issued by Transport Canada, the applicant should submit the licence application form and all required documents to the CTA to issue its licence.

Once it receives a complete application, the CTA will aim to issue the licence within seven business days.

3 Safety and maintenance

3.1 What key safety requirements apply to operators in your jurisdiction?

National requirements are mainly set forth in the following laws and regulations:

  • the Canadian Aviation Regulations (CARs);
  • the Transportation Safety Board Regulations;
  • the Civil Aviation Directorate policies (Transport Canada's policies, guidelines, regulations, standards and educational materials to advance civil aviation safety in Canada); and
  • the Canadian Criminal Code.

The CARs require that a safety management system (SMS) be put in place. The SMS is expected to be a comprehensive "documented process for managing risks that integrates operations and technical systems with the management of financial and human resources to ensure aviation safety or the safety of the public".

The SMS must include at least the following elements:

  • a written safety policy;
  • a process for setting goals and measuring improvement;
  • a process for identifying hazards and managing the associated risks, including internal reporting;
  • a process for ensuring proper employee training, including making employees aware of the SMS processes;
  • a document containing all SMS processes; and
  • a process to periodically review and improve the SMS.

3.2 What key maintenance requirements apply to operators in your jurisdiction?

In addition to the regulations mentioned above and the requirement to adopt an SMS, airline operators must ensure that aircraft respect the airworthiness standards prescribed by Transport Canada

3.3 Do these requirements differ depending on whether the operator is providing commercial, cargo or private services?

Similar general safety requirements apply in all cases.

3.4 What are the potential consequences of breach of the safety and maintenance requirements?

Transport Canada can conduct safety audits and reviews, including reviews of the SMS adopted by each aircraft operator. Non-compliant aircraft operators can be fined or even shut down.

Moreover, certain breaches of safety and maintenance could be considered as criminal offences in Canada. For example, operating an unsafe aircraft will be deemed criminal negligence as defined under Article 219 of the Criminal Code. Moreover, operating an aircraft while a person's abilities are impaired by alcohol and/or drugs constitutes an offence under Article 320.14(1) of the Criminal Code.

3.5 What best practices in relation to safety and maintenance should operators consider adopting in your jurisdiction?

Aircraft operators should carefully monitor news and publications issued by the Transportation Safety Board of Canada, as well as by Transport Canada. Foreign aircraft operators should also consider establishing a relationship with a local regulatory specialist to act as a local intermediary with Canadian authorities and regularly monitor and report regulatory changes.

4 Consumer protection

4.1 What rights do passengers enjoy in your jurisdiction in relation to: (a) Flight delays or cancellations? (b) Overbooking? (c) Denied boarding for other reasons? (d) Baggage delay, damage or loss? and (e) Disabled access?

(a) Flight delays or cancellations?

In case of flight delay or cancellation, passengers are entitled to receive an alternative travel arrangement. The delay in which this alternative travel solution should be provided depends on whether the situation is within or outside the carrier's control.

Moreover, when the delay or cancellation is due to a situation within the carrier's control, whether or not it is required for a safety reason, passengers are entitled to:

  • food and drink in reasonable quantities, access to a means of communication and accommodation (if required to stay overnight), as well as transportation to and from said accommodation; and
  • a refund of their ticket (or portion thereof) when no alternative travel arrangements that meet the passengers' needs can be provided.

In situations within the carrier's control that are not required for safety reason, passengers are entitled to compensation of between C$125 and C$1,000.

(b) Overbooking?

In case of overbooking (or in other situations of denied boarding within the carrier's control that were not required for safety purposes), passengers are entitled to:

  • food and drink in reasonable quantities, access to means of communication and accommodation (if required to stay overnight), as well as transportation to and from said accommodation;
  • alternative travel arrangements or a refund of their ticket (or portion thereof) when no alternative travel arrangements that meet the passengers' needs can be provided; and
  • compensation of between C$900 and C$2,400, depending on the delays at arrival.

(c) Denied boarding for other reasons?

In case of denied boarding outside of the carrier's control, passengers are entitled to receive alternative travel arrangements.

When the denied boarding is due to a situation within the carrier's control, but required for safety reason, passengers are also entitled to:

  • food and drink in reasonable quantities, access to means of communication and accommodation (if required to stay overnight), as well as transportation to and from said accommodation; and
  • a refund of their ticket (or portion thereof) when no alternative travel arrangements that meet the passengers' needs can be provided.

(d) Baggage delay, damage or loss?

For international travel, in case of baggage that is delayed, damaged or lost, passengers are entitled to the indemnities that can be claimed pursuant to the Warsaw Convention or the Montreal Convention, as applicable.

For domestic travel, the Air Passenger Protection Regulations (APPR) provide that passengers are entitled to the amount that would have been payable had the Montreal Convention applied.

In all cases (international or domestic), passengers are also entitled to reimbursement of the baggage fees relating to delayed, damaged or lost baggage.

(e) Disabled access?

The Accessible Transportation for Persons with Disabilities Regulations (ATPDR), which are set to enter into force progressively beginning in June 2020, define the services that carriers are required to provide to passengers with disabilities.

For international travel, these services should be provided free of charge, except for services requiring the provision of an additional seat for the transport of the disabled person himself or herself and his or her support person or a service dog.

For domestic travel provided by large carriers, the ATPDR imposes a ‘one person, one fare' rule, pursuant to which even an additional seat must be provided free of charge.

The ATPDR also provides certain technical requirements applicable to the aircraft and equipment used by large Canadian carriers to operate domestic and international flights.

4.2 Are airfares regulated in your jurisdiction? What other requirements apply to the pricing and sale of flights?

All carriers providing domestic or scheduled international service should have a tariff in place, which includes all fares, rates, charges and terms and conditions of carriage applicable to the air service provided. Tariffs should be made available to the public and, in case of scheduled international services, should also be filed with the Canadian Transportation Agency (CTA), all prior to commencement of the carrier's operations.

In addition, the CTA can:

  • upon receipt of a complaint regarding unreasonable fares, cancel the fare, direct the licensee to reduce the fare by the amounts and for the periods that it considers reasonable, or direct the licensee to refund certain amounts to persons determined by it; and
  • upon receipt of a complaint regarding an inadequate range of fares, direct the licensee to apply one or more additional fares in respect of that service for a period that it considers reasonable.

4.3 What other marketing and advertising requirements apply to operators in your jurisdiction?

Pursuant to the APPR, all advertisements of prices for air passenger travel within or originating in Canada, made by any person and through any medium, must include:

  • the total price (inclusive of all taxes, fees and charges) that must be paid to obtain the service;
  • a minimum description of the air service offered (the points of origin and destination; whether the service is one way or round trip; and any limitations with respect to booking or travel availability periods); and
  • an access to a breakdown of the taxes, fees and charges and any optional services offered for a fee or charge.

4.4 What requirements apply in relation to the retention and protection of passenger data in your jurisdiction?

Carriers are subject to the rules set out in the Personal Information Protection and Electronic Documents Act (SC 2000, c-5) (PIPEDA). These rules apply to private sector organisations across Canada that collect, use or disclose personal information in the course of a commercial activity (ie, any particular transaction, act or conduct, or any regular course of conduct that is of a commercial character).

For the purpose of PIPEDA, ‘personal information' includes any information about an identifiable individual. The information can be factual or subjective, recorded or not. It includes nominal information such age, name, ID numbers, income, ethnic origin or social status. It also includes the existence of a dispute between a consumer and a merchant.

Under PIPEDA's guiding principles, an organisation can only collect personal information that is essential for the business transaction. It has a duty to take security measures to protect passengers' personal information. It must also destroy the information once it is no longer needed for the reasons it was collected. Passengers can ask to review the information an organisation holds about them and ensure that the information is complete and accurate. The review should be at minimal or no cost.

The organisation shall report any breach of security safeguards involving personal information as soon as possible if it is reasonable to believe that the breach creates a real risk of significant harm to an individual. In such cases, it must notify the affected individuals. Failure to provide such notice is an offence punishable by a fine of up to C$100,000.

4.5 What other general consumer protection requirements are of relevance for operators in your jurisdiction?

Several provisions require that services and security information be given in both English and French:

  • International Civil Aviation Organization Amendment 164 to the Standards and Recommended Practices;
  • the Canadian Aviation Regulations;
  • Article 96 of the Civil Air Navigation Services Commercialization Act (SC 1996, c-20);
  • the Air Canada Public Participation Act (RSC 1985, c-35) (4th Supp); and
  • the Quebec Charter of French Language (CQLR c C-11).

The Federal Competition Act imposes restrictions regarding deceptive practices and false advertising. Each province and territory in Canada also has its own consumer protection regime, including provisions against deceptive practices and false advertising.

4.6 How are consumer complaints in relation to aviation services handled in your jurisdiction?

The CTA has jurisdiction to adjudicate passenger claims. Besides its adjudication power, it also offers facilitation, mediation and arbitration services.

Moreover, all provincial Canadian courts can also hear consumer claims, in accordance with their respective jurisdictions and powers.

5 Accidents and liability

5.1 What is the applicable aviation liability regime in your jurisdiction?

Canada is party to several treaties relating to passenger injury or death, including:

  • the Warsaw Convention;
  • the Guadalajara Supplementary Convention;
  • the Tokyo Convention; and
  • the Montreal Convention.

At a national level, the Canadian Transportation Accident Investigation and Safety Board Act (SC 1989, c-3) governs accidents and incidents falling under Canadian jurisdiction. In addition, passenger injury, death and damages are governed by the private damages laws of each Canadian province.

5.2 What insurance requirements apply to operators in your jurisdiction?

In accordance with the Air Transportation Regulations, carriers shall not operate a domestic or international service unless they have, for every accident or incident related to the operation of that service:

  • liability insurance covering death or injuries sustained by passengers for a minimum amount of C$300,000 multiplied by the number of passenger seats on the aircraft with which the service is operated; and
  • insurance covering risks of public liability for a minimum amount of:
    • C$1 million for services by aircraft with a maximum certificated take-off weight (MCTOW) of 7,500 pounds or less;
    • C$2 million for services by aircraft with an MCTOW between 7,500 pounds and 18,000 pounds; and
    • C$2 million plus an amount determined by multiplying C$150 by the number of pounds by which the MCTOW of the aircraft exceeds 18,000 pounds for services by aircraft with an MCTOW greater than 18,000 pounds.

Pursuant to a recent amendment of the Air Transport Regulations that will take effect as of 1 July 2021, these amounts will be increased as follows:

  • liability insurance covering death or injuries sustained by passengers: C$595,000 multiplied by the number of passenger seats of the aircraft with which the service is operated; and
  • insurance covering risks of public liability:
    • C$1,985,000 for services by aircraft with an MCTOW of 3,402 kilograms (kg) or less;
    • C$3,970,000 for services by aircraft with an MCTOW of between 3,402 kg and 8,165 kg; and
    • C$3,970,000 plus an amount determined by multiplying $655 by the number of kilograms by which the MCTOW of the aircraft exceeds 8,165 kg for services by aircraft with an MCTOW greater than 8,165 kg.

Moreover, once this amendment comes into force, these amounts will be automatically adjusted every five years.

5.3 What body is responsible for investigating accidents in your jurisdiction and what procedure will it follow in doing so?

Pursuant to the Canadian Transportation Accident Investigation and Safety Board Act, the Transportation Safety Board (TSB) is in charge of investigating accidents in Canada. The investigators are certified as pilots, aircraft maintenance engineers, air traffic controllers and airworthiness engineers. The TSB's function is to identify the causes and contributing factors of a transportation occurrence. The TSB does not assign fault or determine civil or criminal liability.

In order to advance transportation safety, the TSB can:

  • conduct independent investigations into accidents, including public inquiries;
  • identify safety deficiencies; and
  • make recommendations and report publicly on its findings.

When conducting its investigation, the TSB first examines the occurrences in the field. Next, its analysis turns to, among other things:

  • examining company records and selected wreckage in the laboratory;
  • testing selected components and systems;
  • creating simulations;
  • interviewing witnesses; and
  • reviewing autopsy and toxicology reports.

The TBS ends its investigation by issuing a report.

In the case of an accident with fatal consequences, a coroner, under the applicable provincial law, can also investigate.

5.4 What reporting requirements apply to accidents and incidents in your jurisdiction?

Pursuant to the Canadian Transportation Accident Investigation and Safety Board Act, the owner, operator, pilot in command, any crew member of the aircraft or, where the accident or incident involves a loss of separation or a risk of collision, any air traffic controller having direct knowledge of the accident or incident must report the incident or an accident to the TSB. The initial report must be sent as soon as possible. The complete report must be submitted within 30 days of the occurrence.

In addition, as mentioned in question 3, the Canadian Aviation Regulations require the adoption of a safety management system, which should include a policy to internally report, document and investigate hazards, incidents and accidents.

6 General operation

6.1 What requirements apply to charter services in your jurisdiction?

Generally, in addition to holding a licence for non-scheduled international services, carriers should have a charter permit issued by the Canadian Transportation Agency (CTA) in order to operate charter services. However, as from 2019, there are some exceptions to this rule. Indeed, a notification to the CTA could suffice, depending on the origin/destination of the flight, the size of the aircraft and the nature of the service.

The most burdensome requirements are applicable to charter permits for passenger resaleable charter flights. To obtain such charter permits, the operator must provide a financial guarantee issued by a Canadian financial institution.

6.2 What requirements apply to the carriage of cargo in your jurisdiction?

Although there are many rules dealing with the carriage of cargo – in particular, depending on the nature of such cargo – the licensing requirements applicable to the carriage of cargo are generally the same as those applicable to the carriage of passengers, except for certain details. For example, no financial requirements are applicable to Canadians applying for a licence for services to be operated with all-cargo aircraft only. Advertisements for cargo services are not subject to the obligation to disclose all-inclusive prices, as required for advertisement of passenger services (see question 4.3).

6.3 What environmental requirements apply to operators in your jurisdiction?

Regulation of the environment is a shared competence in Canada between the federal and the provincial authorities. There are also requirements at the municipal level.

At the federal level, the main relevant pieces of legislation are:

  • the Canadian Environmental Protection Act (SC 1999, c 33);
  • the Transportation of Dangerous Goods Act (SC 1992, c 34), and
  • the Canadian Aviation Regulations (CARs).

The International Civil Aviation Organization noise standard has been incorporated into the CARs. All aircraft operators must comply with the noise operating restrictions and noise abatement procedures. Nav Canada is in charge of publishing these procedures. Depending on the aerodrome or airport, there are also restrictions regarding the hours in which flights can be operated.

6.4 How are aviation services taxed in your jurisdiction? Do any special tax regimes apply to this sector? What indirect taxes are of relevance to operators?

Several service and sales taxes are applicable in relation to aviation services in Canada. These include the following:

  • Airport fees: Many Canadian airports apply an airport improvement fee. These fees are collected by operators and remitted to the airports.
  • Air travellers' security charge (ATSC): The federal authorities created the ATSC to fund improvements to security-related infrastructure, following the 11 September 2001 attacks. The charges that apply for each trip are C$7,12 for domestic flights and C$12,10 for transborder flights departing from Canada.
  • Nav Canada fees and surcharges: These are collected to cover fees paid to Nav Canada to operate terminal and en route air navigation systems.
  • Goods and services tax (GST): GST is a value-added sales tax that applies to base fare, Nav Canada fees and surcharges, and ATSC charges for all transborder flights originating from Canada.
  • Provincial sales taxes are also applicable, along with the GST in all Canadian provinces for domestic flights.

6.5 What is the applicable employment regime in your jurisdiction and what specific implications does this have for operators in the aviation sector?

The regulation of labour and employment relationships in relation to air transport, aircraft operations and aerodromes falls within federal jurisdiction. The Canada Labour Code deals with collective bargaining, health and safety in the workplace, and minimum employment standards. The minimum wage rate is established by each province and territory.

7 Ownership, financing and leasing

7.1 What body administers the aircraft register in your jurisdiction?

The Canadian Civil Aircraft Register (CCAR), maintained by Transport Canada, is in charge of the aircraft registry.

7.2 What are the formal and documentary requirements for registration?

New Canadian-manufactured aircraft and imported aircraft must be registered by completing the relevant registration form provided by Transport Canada and paying the registration fees. The applicant must provide a proof of ownership (eg, a bill of sale)and a photo of the aircraft's ID plate (showing the name of manufacturer, model serial number and type certificate number (if applicable)). For imported aircrafts, there are additional requirements, including establishing that the aircraft is not registered in a foreign registry and that it meets airworthiness requirements.

7.3 What is the process for registration?

The applicant can mail its registration to one of the Transport Canada offices and pay the fees online.

7.4 Is registration of real estate rights, transactions and encumbrances mandatory? What are the consequences of failure to register?

Canada is a signatory to the Cape Town Convention. Any lease or security interest must be registered on the registry.

Encumbrances or security over an aircraft are also regulated at the provincial level. Securities must be registered in the proper provincial personal property register. For an aircraft operated in multiple Canadian provinces or territories, it may be necessary to register the security in more than one provincial register.

Registration is essential to assert priority over a property. Failure to register securities in the various applicable Canadian registers could affect the efficacy of the security.

7.5 What operational requirements are of relevance for aircraft lessors and financiers in your jurisdiction?

Lessors and financiers need not be licensed or experienced in the aviation field.

7.6 What rules govern the detention and seizure of aircraft

Provincial and federal laws govern the detention and seizure of aircraft. At the provincial level, any debtor will have to take the appropriate measure before a provincial court to have its claim recognised and enforced. Federal insolvency rules come to play in case of insolvency.

In addition, pursuant to the Airport Transfer (Miscellaneous Matters) Act (SC 1992, c 5) and the Civil Air Navigation Services Commercialization Act (SC 1996, c-20), most airport authorities and Nav Canada can seize and detain an aircraft for unpaid services.

Any transfer of control must be registered in the CCAR. In order to do so, an irrevocable deregistration and expert request authorisation can be filed with Transport Canada.

8 Airports

8.1 How are airports owned and regulated in your jurisdiction?

Further to the Aeronautics Act, an ‘aerodrome' is any area of land, water or supporting surface designed, prepared, equipped or set apart for the arrival, departure, movement or servicing of aircraft. There are three main types of aerodromes: unregistered, registered and certified. A certified or licensed aerodrome is also defined as an ‘airport' (or ‘heliport'). Thus, all airports are aerodromes, but not all aerodromes are airports. There are thousands of aerodromes in Canada, but only a fraction of those are licensed ‘airports'. A regular passenger service must be conducted from an ‘airport'. Further, any take-off or landing of any aircraft in the ‘built up area' of a city or town must be conducted from an ‘airport'.

Aerodromes, including airports, can be privately owned. Historically, the largest airports in Canada were owned and operated by Transport Canada. Late in the last century, the national government through the National Airports Policy began a programme to privatise the operation of airports in Canada. Thus, the largest airports are operated by airport authorities which manage the airports as a commercial enterprise. Many other airports were turned over to municipalities or private operators further to the Airport Transfer (Miscellaneous Matters) Act (SC 1992, c 5).

All aerodromes (including all ‘airports') are regulated by Transport Canada further to Part III (Aerodromes, Airports and Heliports) of the Canadian Aviation Regulations (CARs).

8.2 What requirements must be satisfied to obtain airport authorisation in your jurisdiction? What is the procedure for obtaining authorisation?

An airline doing business with air transportation must operate from airports (certified aerodromes). The requirements are set out in Sections 302 and following of the CARs. A certificate applicant must submit an application and a copy of the proposed airport operations manual to Transport Canada for approval. One of the more significant requirements within the airport manual is to conduct surveys of the approaches to the airport to ensure that they are safe for all types of proposed operations or to define those limitations. This would include establishing the parameters of any instrument approaches.

The CARs set out several obligations for the operator of an airport, which include:

  • complying with the standards set out in the aerodrome standards and recommended practices publications (TP312);
  • inspecting the airport after any aviation incidents or accidents; and
  • assigning duties on the movement area and any other area only to employees who have successfully completed a safety-related initial training course on human and organisational factors.

Aerodrome and airport operators must also have a wildlife management programme and follow the International Civil Aviation Organization's published set of standards and recommended practices.

8.3 What key safety and maintenance requirements apply to airports in your jurisdiction?

The key safety and maintenance requirements are set out in the CARs and in similar standards and recommended practices. As is the case for aircraft operators, airports also must adopt a formal safety management system (SMS).

Each airport operation manual must also contain elements pertaining to safety and maintenance, including:

  • all information necessary to verify that the airport meets the applicable requirements with regard to physical characteristics, obstacle limitation surfaces, declared distances, lighting, markers, markings, signs, emergency response measures, airport safety measures, access to the movement area and control procedures, and apron management plans and apron safety plans;
  • an enumeration of the facilities and services provided and the measures in effect at the airport, including movement area maintenance services, measures for the removal of disabled aircraft, air traffic services and aeronautical information and communication services, navigation aids and aviation weather services;
  • a description of movement area services and facilities provided at the discretion of the operator;
  • a description of the SMS components; and
  • a list of the titles, dates and locations of any documents that are not in the airport operations manual and that describe how the operator is meeting its obligations with respect to the SMS.

8.4 What requirements can airports impose on operators that use their facilities?

Each airport and aerodrome can impose its own requirements on carriers. However, in general, these requirements include:

  • the provision of a financial security;
  • the payment of the landing and parking fees;
  • the execution of an agreement in relation to the airport improvement fee to be collected by the carrier; and
  • the execution of an agreement to use the airport facilities.

8.5 How are the following regulated in your jurisdiction: (a) Airport charges? (b) Slot allocation? (c) Air traffic control? and (d) Ground handling?

(a) Airport charges?

Each airport imposes its own payment of landing and parking fees, payment of pre-security fee, provision of financial security and other fees.

(b) Slot allocation?

Slots are allocated individually by each airport. There is no uniform or regulated national system. The busiest airports participate in the slots allocation system administered by the International Air Transport Association (IATA) and governed by the Worldwide Airport Slot Guidelines.

Air traffic restrictions to address the COVID-19 pandemic and the decrease in consumer demand led IATA to request a worldwide suspension of the slot usage rules (80/20 ‘use it or lose it').

(c) Air traffic control?

Nav Canada is designated as the authority responsible for providing air traffic control services in Canada pursuant to the Civil Air Navigation Services Commercialization Act (SC 1996, c-20). Fees are payable by operators using Nav Canada services.

(d) Ground handling?

Ground-handling and ramp operations are governed by the same rules and regulations as apply to the airports they are servicing.

9 Competition

9.1 What specific challenges or concerns does the aviation sector present from a competition perspective? Are there any pro-competition measures that are targeted specifically at operators?

In Canada, competition law is regulated by the Competition Act (RSC 1985, c C-34). Mergers can be reviewed by the commissioner of competition in order to assess whether the transaction will, or is likely to, prevent or lessen competition in a substantial manner.

Where a proposed transaction price corresponds to a certain pre-determined amount, notification to the commissioner is required, in accordance with Sections 110 to 114 of the Competition Act. For transactions involving an air transportation undertaking, notification shall also be given to Transport Canada and the Canadian Transportation Agency (CTA) (see Section 53.1 of the Canada Transportation Act). Following an investigation, the authorities may refuse a transaction that would not be in the public interest.

9.2 How are forms of industry cooperation such as pooling, code-sharing, alliances and joint ventures treated from a competition perspective?

Pooling, code sharing, alliances and joint ventures must be notified to Transport Canada. The Competition Act also contains criminal provisions applying to agreements to fix prices, allocate markets or restrict output that are not implemented as part of a legitimate collaboration, strategic alliance or joint venture.

Competitors' collaboration may also be reviewed under the civil provisions of the Competition Act. The Competitor Collaboration Guidelines (reviewed in December 2019) contain guidance on applying the relevant provisions of the Competition Act.

In addition, to respond to the current COVID-19 pandemic, the Competition Bureau issued a special statement to the effect that it will not exercise scrutiny "in circumstances where there is a clear imperative for companies to be collaborating in the short-term to respond to the crisis, where those collaborations are undertaken and executed in good faith and do not go further than what is needed".

9.3 Does the aviation sector in your jurisdiction benefit from state aid? What forms does this typically take and what rules apply in this regard?

Through the Airports Capital Assistance Programme, airports and related infrastructure projects can be supported by state aid. Generally, state aid is not available to carriers, although loans and other funding have been granted in the past.

9.4 Are there any applicable obligations or incentives to ensure service on routes that are socially desirable, but not commercially viable (eg, to remote areas)?

There are various initiatives to ensure service on such routes. For example, in the province of Quebec, the airfare reduction programme subsidises passengers for some destinations operated by carriers holding a domestic licence.

Moreover, the CTA can revise airfares in cases where there is only one licensee providing services between two points in Canada and a complaint is made regarding unreasonable fares or an inadequate range of fares (see question 4.2).

10 Disputes

10.1 In which forums are aviation disputes typically heard in your jurisdiction?

The Canadian Transportation Agency (CTA) has exclusive jurisdiction to hear disputes relating to new or revised charges for air navigation services.

As mentioned in question 4.6, both the CTA and the provincial civil courts can handle consumer complaints. Civil courts also have the jurisdiction to hear any type of commercial litigation between aviation-related companies.

10.2 What issues do such disputes typically involve? How are they typically resolved?

Most aviation disputes are related to passenger complaints. They can be resolved by adjudication or through facilitation, mediation or arbitration.

10.3 Have there been any recent cases of note?

In January 2020 the CTA rendered a decision dismissing an appeal filed by the International Air Transport Association (IATA) regarding Nav Canada's increased charges for air navigation services based on its use of space-based automatic dependent surveillance-broadcast technology in its air traffic control operations. IATA argued that the increased charges were contrary to certain provisions of the Civil Air Navigation Services Commercialization Act (SC 1996, c-20) and, more particularly, that the increased charges were inconsistent with Canada's international obligations.

In its decision, the CTA determined that these obligations include the Chicago Convention, but not the charging principles set out in International Civil Aviation Organization Document 9082. The CTA held that Document 9082 is a collection of policies intended to guide contracting states. However, these policies have not been incorporated into Canadian law and therefore are not binding on Nav Canada.

11 Trends and predictions

11.1 How would you describe the current aviation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

From the regulations that have recently been put in place (ie, the Air Passenger Protection Regulations (APPR) and the Accessible Transportation for Persons with Disabilities Regulations (ATPDR)), the trend has lately been in favour of increased passengers' rights. The Canadian Transportation Agency (CTA) is currently evaluating how to extend the application of the ATPDR. The ATPDR and the Pay Equity Act (SC 2018, c 27, s 416) are set to take effect in the near future.

In addition, the CTA has worked to modernise and simplify certain dispositions of the Air Transportation Regulations, including the rules applicable to programme permits for charter flights (see question 6.1).

Because of the extent of the COVID-19 pandemic and its impact on the aviation sector, the aviation landscape in Canada is likely to be under tremendous pressure in the near future. This has already impacted on the legal context of aviation. For example, the CTA has granted certain exemptions from the application of the APPR in favour of carriers. The CTA has also suspended all its dispute resolution activities involving air carriers, in order to allow them to concentrate on their more urgent operational challenges.

In this context, any legislative reforms expected prior to the pandemic may likely be reconsidered for the near future.

12 Tips and traps

12.1 What are your top tips for operators in your jurisdiction and what potential sticking points would you highlight?

Unsurprisingly, our first tip is always to operate air carriage activities in conformity with the applicable legal framework. As a breach of the applicable legislation could result in the suspension, or worse, cancellation of the carrier's licence, respecting the legal requirements is crucial.

Our second tip is for carriers to be very mindful of the provisions of their tariffs (documents containing all their fares, rates, charges and terms and conditions of carriage applicable to the air service provided). As complaints will be assessed based on the provisions of these tariffs, it is extremely important to have well-drafted, up-to-date tariffs at all times.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.