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Air Transportation Regulations (SOR/88-58)

Regulations are current to 2022-09-22 and last amended on 2021-07-01. Previous Versions

PART IGeneral (continued)

Classification of Aircraft

  •  (1) The following classes of aircraft that may be operated by a Canadian air carrier under a domestic licence, under a scheduled international licence or under a non-scheduled international licence are hereby established:

    • (a) small aircraft;

    • (b) medium aircraft;

    • (c) large aircraft; and

    • (d) all-cargo aircraft.

  • (2) Where an air carrier holds a licence that authorizes the operation of an air service using a class of aircraft established by subsection (1), that air carrier and that licence shall be assigned the same designation as that of the class of aircraft.

  • SOR/96-335, s. 2

Classification of Air Services

  •  (1) The following classes of air services that may be operated under a domestic licence are hereby established:

    • (a) domestic service, small aircraft;

    • (b) domestic service, medium aircraft;

    • (c) domestic service, large aircraft; and

    • (d) domestic service, all-cargo aircraft.

  • (2) The following classes of air services that may be operated under a scheduled international licence are hereby established:

    • (a) with respect to services operated by a Canadian air carrier,

      • (i) scheduled international service, small aircraft,

      • (ii) scheduled international service, medium aircraft,

      • (iii) scheduled international service, large aircraft, and

      • (iv) scheduled international service, all-cargo aircraft; and

    • (b) with respect to services operated by a non-Canadian air carrier, scheduled international service.

  • (3) The following classes of air services that may be operated under a non-scheduled international licence are hereby established:

    • (a) with respect to services operated by a Canadian air carrier,

      • (i) non-scheduled international service, small aircraft,

      • (ii) non-scheduled international service, medium aircraft,

      • (iii) non-scheduled international service, large aircraft, and

      • (iv) non-scheduled international service, all-cargo aircraft; and

    • (b) with respect to services operated by a non-Canadian air carrier, non-scheduled international service.

  • (4) Where an air carrier holds a licence that authorizes the operation of an air service of a class established by subsection (1), (2) or (3), that air carrier and that licence shall be assigned the same designation as that of the class of air service.

  • SOR/96-335, s. 2

Liability Insurance

 In section 7 and Schedule I, “passenger seat” means a seat on board an aircraft that may be permanently occupied by a passenger for the period during which the aircraft is being used for a domestic service or an international service.

  •  (1) No air carrier shall operate a domestic service or an international service unless, for every accident or incident related to the operation of that service, it has

    • (a) liability insurance covering injuries sustained by passengers while on board the aircraft engaged in the service or while embarking or disembarking the aircraft or death of passengers in an amount that is not less than the amount determined by multiplying $595,000, adjusted in accordance with section 7.1, by the number of passenger seats on board the aircraft engaged in the service; and

    • (b) third party liability insurance in an amount that is not less than

      • (i) where the MCTOW of the aircraft engaged in the service is not greater than 3 402 kg, $1,985,000, adjusted in accordance with section 7.1,

      • (ii) where the MCTOW of the aircraft engaged in the service is greater than 3 402 kg but not greater than 8 165 kg, $3,970,000, adjusted in accordance with section 7.1, and

      • (iii) where the MCTOW of the aircraft engaged in the service is greater than 8 165 kg, an initial amount of $3,970,000, adjusted in accordance with section 7.1, plus an amount, determined by multiplying $655, adjusted in accordance with section 7.1, by the number of kilograms, rounded to the nearest whole number, by which the MCTOW of the aircraft exceeds 8 165 kg.

  • (2) The insurance coverage required by paragraph (1)(a) need not extend to any passenger who is an employee of an air carrier if workers’ compensation legislation governing a claim for damages against that air carrier by the employee is applicable.

  • (3) No air carrier shall take out liability insurance to comply with subsection (1) that contains an exclusion or waiver provision reducing insurance coverage for any accident or incident below the applicable minima determined pursuant to that subsection, unless that provision

    • (a) consists of standard exclusion clauses adopted by the international aviation insurance industry dealing with

      • (i) war, hijacking and other perils,

      • (ii) noise and pollution and other perils, or

      • (iii) aviation radioactive contamination;

    • (b) [Repealed, SOR/2019-176, s. 3]

    • (c) is to the effect that the insurance does not apply to liability assumed by the air carrier under any contract or agreement unless such liability would have attached to the air carrier even in the absence of such contract or agreement; or

    • (d) is to the effect that the entire policy shall be void if the air carrier has concealed or misrepresented any material fact or circumstance concerning the insurance or the subject thereof or if there has been any fraud, attempted fraud or false statement by the air carrier touching any matter relating to the insurance or the subject thereof, whether before or after a loss.

  • (4) An air carrier may have a comprehensive single limit liability coverage where liability risks are covered by a single policy or a combination of primary and excess policies, but no single limit liability coverage of that air carrier shall be for an amount that is less than the applicable combined insurance minima determined pursuant to paragraphs (1)(a) and (b).

  •  (1) The amount set out in paragraph 7(1)(a) by which the number of passenger seats on board the aircraft is multiplied is adjusted every five years starting on the day on which this section comes into force according to the following formula rounded to the nearest $5,000:

    A (B/C)

    where

    A
    is $595,000;
    B
    is the Consumer Price Index for the calendar year that is two years before the year in which the adjustment is made; and
    C
    is the Consumer Price Index for 2017.
  • (2) The amount of money set out in subparagraph 7(1)(b)(i) is adjusted every five years starting on the day on which this section comes into force according to the following formula rounded to the nearest $5,000:

    A (B/C)

    where

    A
    is $1,985,000;
    B
    is the Consumer Price Index for the calendar year that is two years before the year in which the adjustment is made; and
    C
    is the Consumer Price Index for 2017.
  • (3) The amount of money set out in subparagraph 7(1)(b)(ii) is adjusted every five years starting on the day on which this section comes into force according to the following formula rounded to the nearest $5,000:

    A (B/C)

    where

    A
    is $3,970,000;
    B
    is the Consumer Price Index for the calendar year that is two years before the year in which the adjustment is made; and
    C
    is the Consumer Price Index for 2017.
  • (4) The initial amount of money set out in subparagraph 7(1)(b)(iii) is adjusted every five years starting on the day on which this section comes into force according to the following formula rounded to the nearest $5,000:

    A (B/C)

    where

    A
    is $3,970,000;
    B
    is the Consumer Price Index for the calendar year that is two years before the year in which the adjustment is made; and
    C
    is the Consumer Price Index for 2017.
  • (5) The amount of money set out in subparagraph 7(1)(b)(iii) by which the number of kilograms of the MCTOW of the aircraft that exceeds 8 165 kg is multiplied is adjusted every five years starting on the day on which this section comes into force according to the following formula rounded off to the nearest $5:

    A (B/C)

    where

    A
    is $655;
    B
    is the Consumer Price Index for the calendar year that is two years before the year in which the adjustment is made; and
    C
    is the Consumer Price Index for 2017.

 For the purposes of section 7.1,

  • (a) a reference to the Consumer Price Index for any 12-month period means the average of the Consumer Price Index for Canada, as published by Statistics Canada under the authority of the Statistics Act, for each month in that 12-month period;

  • (b) if at any time the Consumer Price Index for Canada is adjusted to reflect a new time basis, a corresponding adjustment is to be made in the Consumer Price Index for any 12-month period that is used for the purpose of calculating the amounts under section 7.1; and

  • (c) if at any time the Consumer Price Index for Canada is adjusted to reflect a new content basis, that adjustment does not affect the operation of section 7.1.

  •  (1) Every applicant for a licence or for an amendment to or renewal of a licence, and every licensee, shall file with the Agency, in respect of the service to be provided or being provided, as the case may be, a valid certificate of insurance in the form set out in Schedule I.

  • (2) A person referred to in subsection (1) who files a certificate of insurance electronically shall, on the request of the Agency, file forthwith a certified true copy of the certificate.

  • SOR/96-335, s. 4

Financial Requirements

  •  (1) In this section, “applicant” means a Canadian who applies for

    • (a) a domestic licence, non-scheduled international licence or scheduled international licence that authorizes the operation of an air service using medium aircraft, or for the reinstatement of such a licence that has been suspended for 60 days or longer; or

    • (b) a domestic licence, non-scheduled international licence or scheduled international licence that authorizes the operation of an air service using large aircraft, or for the reinstatement of such a licence that has been suspended for 60 days or longer.

  • (2) Subject to subsection (3), an applicant shall

    • (a) in respect of the air service specified in the application, provide the Agency with a current written statement of the start-up costs that the applicant has incurred in the preceding 12 months, with written estimates of start-up costs that the applicant expects to incur and with written estimates of operating and overhead costs for a 90-day period of operation of the air service, and establish that

      • (i) in respect of the start-up costs, the statement is complete and accurate and the estimates are reasonable,

      • (ii) in respect of the operating and overhead costs, the estimates are reasonable and are based on utilization of the aircraft solely on the specified air service under conditions of optimum demand, which utilization shall be no less than that which is necessary for the air service to be profitable,

      • (iii) subject to subparagraph (b)(i), the applicant has acquired or can acquire funds in an amount at least equal to the total costs included in the statement and in the estimates,

      • (iv) the funds are not encumbered and are comprised of liquid assets that have been acquired or that can be acquired by way of a line of credit issued by a financial institution or by way of a similar financial instrument,

      • (v) the terms and conditions under which those funds have been acquired or can be acquired are such that the funds are available and will remain available to finance the air service,

      • (vi) subject to paragraph (b), where the applicant is a corporation, at least 50% of the funds required by subparagraph (iii) have been acquired by way of capital stock that has been issued and paid for and that cannot be redeemed for a period of at least one year after the date of the issuance or reinstatement of the licence, and

      • (vii) subject to paragraph (b), where the applicant is a proprietorship or partnership, at least 50% of the funds required by subparagraph (iii) have been acquired by way of the proprietor’s or partners’ capital that has been injected into the proprietorship or partnership and that cannot be withdrawn for a period of at least one year after the date of the issuance or reinstatement of the licence;

    • (b) where the applicant is or has been in operation,

      • (i) increase the amount of funds required by subparagraph (a)(iii) by the amount of any shareholders’, proprietor’s or partners’ deficit that is disclosed in the applicant’s current audited financial statements which are prepared in accordance with generally accepted accounting principles in Canada, and those additional funds shall be acquired by way of capital stock that has been issued and paid for in the case of a corporation, or by way of the proprietor’s or partners’ invested capital in the case of a proprietorship or partnership, which capital stock or invested capital is to be subject to the condition prescribed in subparagraph (a)(vi) or (vii), and

      • (ii) decrease the amount of the capital stock that is required by subparagraph (a)(vi) to be issued and paid for in the case of a corporation, or the amount of the proprietor’s or partners’ capital that is required by subparagraph (a)(vii) to be invested in the case of a proprietorship or partnership, by the amount of any shareholders’, proprietor’s or partners’ equity that is disclosed in the applicant’s current audited financial statements which are prepared in accordance with generally accepted accounting principles in Canada; and

    • (c) file with the Agency, on request, any information that the Agency requires to determine whether the applicant has complied with the requirements of paragraphs (a) and (b).

  • (3) The financial requirements set out in subsection (2) do not apply to an applicant for a licence to operate an air service using medium aircraft if, at the date of issuance or reinstatement of the licence, the applicant operates one of the following air services:

    • (a) in the case of an application for a domestic licence, a service using medium or large aircraft under a scheduled or a non-scheduled international licence or large aircraft under a domestic licence; or

    • (b) in the case of an application for a scheduled or a non-scheduled international licence, a service using medium or large aircraft under a scheduled or a non-scheduled international licence or medium or large aircraft under a domestic licence.

  • (4) The financial requirements set out in subsection (2) do not apply to an applicant for a licence to operate an air service using large aircraft if, at the date of issuance or reinstatement of the licence, the applicant operates one of the following air services:

    • (a) in the case of an application for a domestic licence, a service using large aircraft under a scheduled or a non-scheduled international licence; or

    • (b) in the case of an application for a scheduled or a non-scheduled international licence, a service using large aircraft under a scheduled or a non-scheduled international licence or large aircraft under a domestic licence.

Provision of Aircraft with Flight Crew

  •  (1) For the purposes of section 60 of the Act and subject to section 8.3, approval of the Agency is required before a person may provide all or part of an aircraft, with a flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee’s licence and before a licensee may provide an air service using all or part of an aircraft, with flight crew, provided by another person.

  • (2) The licensee and the person who provides all or part of an aircraft with flight crew shall apply to the Agency for the approval at least 15 business days before the date of the first proposed flight.

  • (3) The application shall include the following:

    • (a) in respect of the proposed air service, evidence that the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection (4) and, where applicable, subsection (5) are in effect;

    • (b) the name of the licensee;

    • (c) if applicable, the name of the charterer or charterers and the charter permit number;

    • (d) the name of the person providing the aircraft with flight crew;

    • (e) the aircraft type to be provided;

    • (f) the maximum number of seats and the cargo capacity of the aircraft to be provided and, where applicable, the maximum number of seats and the cargo capacity to be provided for use by the licensee;

    • (g) the points to be served;

    • (h) the frequency of service;

    • (i) the period covered by the proposed air service; and

    • (j) an explanation of why the use by the licensee of all or part of an aircraft with a flight crew provided by another person is necessary.

  • (4) The licensee shall maintain liability insurance covering injuries sustained by passengers and the death of passengers and third party liability insurance coverage for an air service for which another person provides all or part of an aircraft with flight crew, at least in the amount as determined under section 7,

    • (a) by means of its own policy; or

    • (b) subject to subsection (5), by being named as an additional insured under the policy of the other person and that policy must be primary and without right of contribution from any other insurance policy held by the licensee.

  • (5) Where the licensee is named as an additional insured under the policy of the person who is providing all or part of an aircraft with flight crew, there must be a written agreement between the licensee and the person to the effect that, for all flights for which the person provides all or part of an aircraft with flight crew, the person will hold the licensee harmless from, and indemnify the licensee for, all passenger and third party liabilities while passengers or cargo transported under contract with the licensee are under the control of the person.

  • (6) The licensee and the person who provides the aircraft with flight crew shall notify the Agency in writing forthwith if the liability insurance coverage referred to in subsection (4) and, where applicable, subsection (5) has been cancelled or altered in any manner that results in failure by the licensee or the person to maintain the coverage.

 
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