FAQ: Air licensing

  1. What type of air service does a domestic licence issued by the Canadian Transportation Agency authorize?
  2. What is the definition of a small, medium, large and all-cargo aircraft?
  3. What must I do in order to obtain a domestic licence?
  4. What is the Canadian ownership requirement and how is this requirement assessed by the Agency?
  5. Which air carriers need to comply with the financial requirements?
  6. Are the financial requirements ongoing?
  7. What type of air service does a non-scheduled international licence issued by the Canadian Transportation Agency authorize?
  8. What must I do in order to obtain a non-scheduled international licence?
  9. What are the requirements that an air carrier must meet in order to operate charter flights to and from Canada?
  10. What type of air service does a scheduled international licence issued by the Canadian Transportation Agency authorize?
  11. What must I do in order to obtain a scheduled international licence?
  12. (a) Where can I find information on individual bilateral agreements? (b)  Is the information complete?
  13. How do I obtain copies of specific bilateral air agreements?
  14. What is the Agency's role in bilateral air negotiations?
  15. What is the Agency's role as aeronautical authority?
  16. What are the liability insurance requirements?
  17. How long does it take to obtain a licence?
  18. Do I have to maintain separate domestic and international tariffs?
  19. What is "Cabotage"?
  20. What are the regulations regarding Cabotage?
  21. What are "stopover rights"?

Q1. What type of air service does a domestic licence issued by the Canadian Transportation Agency authorize?

A1. A domestic licence authorizes a Canadian air carrier to operate a publicly-available air service within Canada for the transportation of passengers and/or cargo. A domestic licence may be issued to allow the operation of small aircraft, medium aircraft, large aircraft, and/or all-cargo aircraft.

Q2. What is the definition of a small, medium, large and all-cargo aircraft?

A2. A small aircraft is an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of not more than 39 passengers.

A medium aircraft is an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of more than 39 passengers but not more than 89 passengers.

A large aircraft is an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of more than 89 passengers. An all-cargo aircraft is an aircraft equipped for the carriage of goods only.

Q3. What must I do in order to obtain a domestic licence?

A3. An applicant needs to be Canadian owned and controlled, have liability insurance for the proposed air service, and meet financial requirements where it proposes to transport passengers using medium or large aircraft. Additionally, an applicant needs to hold a Canadian aviation document (usually in the form of an air operator certificate) in respect of the applied for air service. Transport Canada (Civil Aviation) issues a Canadian aviation document when all safety requirements are met.

See licences and charter permits for details.

Q4. What is the Canadian ownership requirement and how is this requirement assessed by the Agency?

A4. To be Canadian, a corporation must be incorporated in Canada and at least 75 per cent of its voting interests need to be owned and controlled by Canadians. It must also be controlled in fact by Canadians. While the assessment of the ownership requirement is relatively straightforward, the control in fact determination can be more complex when foreign interests are involved. In such cases, the Agency may need to examine all operational, managerial and financial relationships that the applicant has or proposes to have with foreign entities.

Additional information on the Canadian status requirement:

Q5. Which air carriers need to comply with the financial requirements?

A5. Normally, only Canadian carriers that propose to operate an air service with medium or large aircraft for passenger operations (i.e., that carry more than 39 passengers) need to comply.

Q6. Are the financial requirements ongoing?

A6. No, the financial requirements are market entry requirements and such are meant to ensure that the proposed air service is well financed and has a reasonable chance of success. The capital stock that the applicant issues to effect compliance cannot be redeemed for a period of one year from the date of the issuance of the licence.

Q7. What type of air service does a non-scheduled international licence issued by the Canadian Transportation Agency authorize?

A7. A non-scheduled international licence authorizes an air carrier to operate a publicly-available charter air service for the transportation of passengers and/or cargo between points in Canada and points in the applicant's home country. A non-scheduled international licence does not authorize the transportation of local traffic between points in Canada and contains terms and conditions which require that the air carrier meet the permit requirements of the Agency prior to operating charter flights. A non-scheduled international licence issued to a Canadian air carrier may authorize the operation of small aircraft, medium aircraft, large aircraft, and/or all-cargo aircraft. A non-scheduled international licence issued to a foreign air carrier is not specific to the class of aircraft to be operated pursuant to the licence.

Q8. What must I do in order to obtain a non-scheduled international licence?

A8. A Canadian applicant for a non-scheduled international licence needs to be Canadian owned and controlled, have liability insurance for the proposed air service, and meet financial requirements where the applicant proposes to transport passengers using medium or large aircraft. Additionally, the applicant needs to hold a Canadian aviation document (usually in the form of an air operator certificate) in respect of the applied for air service. Transport Canada (Civil Aviation) issues a Canadian aviation document when all safety requirements are met.

A Canadian applicant for a non-scheduled international licence should obtain the Application Guide for Canadian Applicants for a Licence or for an Amendment to a Licence to Operate a Non-Scheduled International Service. The Guide sets out the information and documentation which needs to be submitted by the applicant to the Agency.

A foreign applicant for a non-scheduled international licence needs to hold a document issued by the government of the applicant's state or an agent of that government that, in respect of the service to be provided under the document, is equivalent to the non-scheduled international licence for which the application is being made; hold a Canadian Aviation Document (usually in the form of a Canadian Foreign Air Operator Certificate) issued by Transport Canada in respect of the applied for air service; and have liability insurance for the proposed air service. Transport Canada (Civil Aviation) issues a Canadian Aviation Document when all safety requirements are met.

A foreign applicant for a non-scheduled international licence should obtain the Application Guide for Foreign Applicants for a Licence to Operate a Non-Scheduled International Service on a Charter Basis between Points in the Applicant's Home Country and Points in Canada or the Application Guide for U.S. Applicants for a Licence to Operate a Non-Scheduled International Service on a Charter Basis. The Guides set out the information and documentation which needs to be submitted by the applicant to the Agency.

Q9. What are the requirements that an air carrier must meet in order to operate charter flights to and from Canada?

A9.

  1. For all flights, an air carrier must hold a valid non-scheduled international licence, a Canadian aviation document issued by Transport Canada and it must have prescribed liability insurance coverage.
  2. For Canadian originating international (but not destined to the U.S.) charter flights utilizing aircraft over 35,000 lbs (15,900 kg) maximum certificated take-off weight (MCTOW), a tariff on file and in effect as well as a program permit are also required.
  3. For Canadian originating resaleable charter flights destined to the United States, utilizing aircraft over 35,000 lbs (15,900 kg) MCTOW, a tariff consisting of general terms and conditions on file and in effect as well as a program permit are also required.
  4. Foreign originating charter flights utilizing aircraft over 35,000 lbs (15,900 kg) MCTOW require prior notification of the flight details and the carrier will receive an acknowledgement of the notification from Agency staff.

Q10. What type of air service does a scheduled international licence issued by the Canadian Transportation Agency authorize?

A10. A scheduled international licence authorizes an air carrier to operate a publicly-available international air service for the transportation of passengers and/or cargo on a scheduled basis pursuant to an agreement or arrangement to which Canada is a party for the provision of that service (see bilateral agreements). A scheduled international licence issued to a Canadian air carrier may authorize the operation of small aircraft, medium aircraft, large aircraft, and/or all-cargo aircraft. A scheduled international licence issued to a foreign air carrier is not specific to the class of aircraft to be operated pursuant to the licence.

Q11. What must I do in order to obtain a scheduled international licence?

A 11. A Canadian applicant for a scheduled international licence needs to be Canadian owned and controlled, have liability insurance for the proposed air service, and meet financial requirements where the applicant proposes to transport passengers using medium or large aircraft. Additionally, the applicant needs to hold a Canadian aviation document (usually in the form of an air operator certificate) in respect of the applied for air service. Transport Canada (Civil Aviation division) issues a Canadian aviation document when all safety requirements are met. Finally, a Canadian applicant for a scheduled international licence must be designated by the Minister of Transport as eligible to hold a scheduled international licence (designation of Canadian air carriers for scheduled international services between Canada and the United States is automatic).

A Canadian applicant for a scheduled international licence should obtain the Application Guide for Canadian Applicants for a Licence or for an Amendment to a Licence to Operate a Scheduled International Service between Canada and Any Other Country. The Guide sets out the information and documentation which needs to be submitted by the applicant to the Agency.

A foreign applicant for a scheduled international licence needs to be designated by the government of the applicant's state or an agent of that government to operate an air service under the terms of an agreement or arrangement between that government and the Government of Canada; hold a document issued by the government of the applicant's state or an agent of that government that, in respect of the service to be provided under the document, is equivalent to the scheduled international licence for which the application is being made; hold a Canadian Aviation Document (usually in the form of a Canadian Foreign Air Operator Certificate) issued by Transport Canada in respect of the applied for air service; and have liability insurance for the proposed air service. Transport Canada (Civil Aviation) issues a Canadian Aviation Document when all safety requirements are met.

A foreign applicant for a scheduled international licence should obtain the Application Guide for Foreign Applicants for a Licence to Operate a Scheduled International Service or the Application Guide for U.S. Applicants for a Licence to Operate a Scheduled International Service. The Guides set out the information and documentation which needs to be submitted by the applicant to the Agency.

Q12. (a) Where can I find information on individual bilateral agreements? (b) Is the information complete?

A12.

  1. Go to the list of individual countries in Table 1 of the report "Bilateral Air Relations between Canada and Other Countries". By clicking on individual countries, you will get a list of bilateral instruments (Agreements, Memoranda of Understanding, Diplomatic Notes and Agreed Minutes) as well as a summary of traffic rights and a snapshot of routes operated.
  2. No. The information presented does not include information designated as CONFIDENTIAL.

Q13. How do I obtain copies of specific bilateral air agreements?

A13. Treaty Division at the Department of Foreign Affairs and International Trade is the official custodian of Canada's treaties. The text of bilateral air agreements are published in Canada's Treaty Series available in Canada through your local bookseller or by mail from Canadian Government Publishing - PWGSC, Ottawa, Canada K1A 0S9. To view the Catalogue, click on http://publications.gc.ca/site/eng/search/search.html and search for the specific country and "air".

Q14. What is the Agency's role in bilateral air negotiations?

A14. As the Canadian aeronautical authority, the Agency participates in bilateral air negotiations to procure additional rights for Canadian air carriers while protecting the interests of Canadians and Canadian air carriers. As members of the Canadian delegation, Agency staff provide advice from the regulatory perspective and draft proposed text focussing especially on capacity, tariffs, charters, code-sharing and commercial matters such as sales, transfer of funds, taxation, publication/customs and ground handling.

Q15. What is the Agency's role as aeronautical authority?

A15. The Agency implements and administers bilateral air agreements and ensures that airlines operate consistent therewith. Typically, a bilateral agreement covers such matters as the number of airlines, frequency of service, access to points in the other country, the ability to pick up and discharge traffic in third countries and cooperative marketing arrangements (i.e., code-sharing). The Agency also ensures that other countries apply their laws and regulations fairly to our airlines, especially in relation to the airline's ability to conduct its business affairs.

Q16. What are the liability insurance requirements?

A16. Sections 7 and 8 of the Air Transportation Regulations set out the liability insurance requirements for licensees. The regulations specify minimum amounts in respect of passenger and public liability insurance coverage. Licensees are required to file, on an annual basis, a certificate of insurance and accompanying endorsement, in a form prescribed by the regulations.

The Agency has published an Information Bulletin, which addresses certain matters concerning liability insurance requirements in respect of arrangements between licensees and other air carriers for the provision of aircraft with flight crew (pursuant to leases, code share agreements, and block space agreements).

Q17. How long does it take to obtain a licence?

A17. Once all required documentation to demonstrate compliance with the licence requirements has been submitted to the Agency, it usually takes 7 business days to obtain a licence.

An applicant is prohibited from selling or offering for sale in Canada an air service prior to obtaining a licence.

Q18. Do I have to maintain separate domestic and international tariffs?

A18. There is no regulatory requirement to have distinct domestic and international tariffs. However, it is highly recommended that carriers maintain separate tariffs to avoid confusion. Such confusion may arise because of the different filing requirements applicable to domestic and international tariffs. Domestic tariffs are not filed with the Agency, whereas international tariffs are. Accordingly, so as to respect the regulatory requirement that page revisions be numbered in sequence, a carrier amalgamating its tariffs would have to file all revisions with the Agency, even though some of these revisions may apply solely to domestic services.

Q19. What is "Cabotage"?

A19. "Cabotage" is the carriage of domestic traffic by a foreign carrier.

Q20. What are the regulations regarding Cabotage?

A20. In general terms, cabotage is prohibited.

The commercial (publicly available) carriage of traffic having both origin and destination at points in Canada is a domestic air service subject to section 57 and section 61 of the Canada Transportation Act. Any flight carrying domestic traffic is classified as a domestic air service and may only be operated in accordance with a domestic licence or equivalent authority issued by the Agency. In addition to the licensing requirements, the use of a foreign registered aircraft to operate a domestic air service is subject to the Aeronautics Act.

While the term "cabotage" is not generally used in bilateral air agreements, such agreements usually contain a provision that excludes the right of the carrier of one Party to take on board in the territory of the other Party, traffic that is destined for another point in the territory of that other Party. This restriction includes traffic carried between domestic points for the purpose of connecting from the international service of one foreign carrier to the international service of another air carrier or mode of transportation; and traffic carried by one foreign carrier on connecting services over a point in another territory, typically a point in the home territory of the foreign air carrier.

There is only one instance of direct authorization of cabotage expressed in licences by the Agency. That is the provision in the licences of foreign air carriers authorized to serve both Montréal and Toronto permitting those carriers to carry international connecting traffic to and from the services of other foreign air carriers on flights operated between Montréal and Toronto.

Q21. What are "stopover rights"?

A21. "Stopover Rights" or "own stopover rights" means the right for a carrier of one Party, when serving an intermediate or beyond point on a route, or more than one point in the territory of the "other" Contracting Party, to deplane traffic at the intermediate or beyond point or a point in the territory of the other Party, and subsequently re-plane that same traffic for onward transportation to or from the other territory or another point within that territory. Not all international routes which include intermediate or beyond points or more than one terminal point in Canada include stopover rights.

For more information on traffic rights which may be exercised by designated airlines under air agreements please refer to the publication entitled: Bilateral Air Relations Between Canada And Other Countries.

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