Regulations Amending the Canadian Aviation Regulations (Part I — 104, Aeronautical Product Approvals): SOR/2023-99

Canada Gazette, Part II, Volume 157, Number 12

Registration
SOR/2023-99 May 19, 2023

AERONAUTICS ACT

P.C. 2023-450 May 18, 2023

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, makes the annexed Regulations Amending the Canadian Aviation Regulations (Part I — 104, Aeronautical Product Approvals) under subsection 4.4(2)^{footnote a} of the Aeronautics Act ^{footnote b}.

Regulations Amending the Canadian Aviation Regulations (Part I — 104, Aeronautical Product Approvals)

Amendments

1 Sections 104.01 to 104.04 of the Canadian Aviation Regulations ^{footnote 1} are replaced by the following:

Preparatory Actions

104.01 The charge imposed for preparatory actions in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Schedules I to VII to this Subpart is payable, whether or not the document is issued, renewed, amended or endorsed, and is fixed in accordance with section 104.02 or calculated in accordance with sections 104.03 and 104.04, as applicable.

Charges — Schedules I to IV, VI and VII

104.02 The charge imposed in respect of the issuance, renewal, amendment or endorsement or, in the case of a medical certificate, the processing of a document referred to in column I of Schedules I to IV, VI and VII to this Subpart is the charge set out in column II.

Charges — Schedule V

104.03 (1) The charge imposed in respect of an action or in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Part I of Schedule V to this Subpart is the charge set out in column II.

(2) The charge imposed in respect of an action or in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Part II of Schedule V to this Subpart is the amount calculated on the basis of $105 for each hour spent by an employee of the Department of Transport on the processing of the application, to a maximum number of hours as set out in column II.

(3) The charge imposed in respect of an action or in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Part III of Schedule V to this Subpart is the amount determined by adding

• (a) the charge set out in column II; and
• (b) if the total duty time spent by the employees of the Department of Transport assigned to the processing of the application exceeds 300 hours, the charge calculated on the basis of $105 for each additional hour spent by an employee of the Department of Transport on the processing of the application, to a maximum number of hours as set out in column III.

(4) For the purposes of subsections (2) and (3), the maximum numbers of hours set out in column II of Part II or in column III of Part III of Schedule V, as applicable, is calculated for the period beginning on April 1 of one year and ending on March 31 of the next year.

Processing of Applications — Additional Charges

104.04 (1) When an employee of the Department of Transport must travel within Canada under any of the circumstances referred to in subsection (2), or outside of Canada, to perform a service related to the processing of an application for the issuance, renewal, amendment or endorsement of a document, the following charges are payable:

• (a) an amount equivalent to overtime expenses, as calculated in accordance with the appropriate collective agreement, for performing the service or travelling to perform the service when the total duty time for the day exceeds the employee’s normal duty time; and
• (b) an amount equivalent to the transportation, lodging, meal and incidental expenses incurred by the employee, as calculated in accordance with the rates set out in the National Joint Council Travel Directive.

(2) For the purposes of subsection (1), a charge is payable when an employee of the Department of Transport must travel within Canada under any of the following circumstances:

• (a) the travel is related to previous travel and is undertaken at the request of the applicant or for any reason that arises exclusively from the applicant; or
• (b) at the request of the applicant, the travel is undertaken by an employee of the Department of Transport who would not otherwise be available under Department of Transport policy.

(3) If travel arrangements are changed at the request of the applicant, the following charges are payable:

• (a) an amount equivalent to any increase in the cost of the travel arrangements, including cancellation or change fees;
• (b) an amount equivalent to overtime expenses incurred by an employee of the Department of Transport as a result of the change in travel arrangements, as calculated in accordance with the appropriate collective agreement, for performing the service or travelling to perform the service when the total duty time for the day exceeds the employee’s normal duty time; and
• (c) an amount equivalent to the transportation, lodging, meal and incidental expenses incurred by the employee as a result of the change in travel arrangements, as calculated in accordance with the rates set out in the National Joint Council Travel Directive.

(4) Hours charged under paragraphs (1)(a) and (3)(b) do not count towards the annual maximum number of hours referred to in subsections 104.03(2) and (3).

(5) The Minister shall provide an estimate of the expenses on request by the applicant.

2 Sections 104.06 and 104.07 of the Regulations are replaced by the following:

Payment — 30 Days

104.06 The following charges are payable in Canadian dollars within 30 days after the date indicated on each invoice presented by the Minister:

• (a) a charge imposed in respect of the processing of medical certificates referred to in item 21 of Schedule IV to this Subpart;
• (b) a charge referred to in subsection 104.03(2) or (3); and
• (c) a charge referred to in section 104.04.

Transitional Provisions

104.07 (1) In the case of a service that was commenced but not completed before June 21, 2023, the charge imposed as of June 21, 2023 is

• (a) in respect of an action or in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Part I of Schedule V to this Subpart, the amount payable under section 104.04;
• (b) in respect of an action or in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Part II of Schedule V to this Subpart, the amount payable under subsection 104.03(2) – where, for the purposes of calculating the total number of hours spent on the processing of the application, the number of hours spent is reset to zero as of June 21, 2023 – in addition to any amount payable under section 104.04; and
• (c) in respect of an action or in respect of the issuance, renewal, amendment or endorsement of a document referred to in column I of Part III of Schedule V to this Subpart, the amount payable under paragraph 104.03(3)(b) – where, for the purposes of calculating the total number of hours spent on the processing of the application, the number of hours spent is reset to zero as of June 21, 2023 – in addition to any amount payable under section 104.04.

(2) For greater certainty, the charge imposed under subsection (1) is in addition to the charges payable under these Regulations as they read immediately before June 21, 2023.

3 Schedule IV to Subpart 4 of Part 1 of the Regulations is amended by replacing the reference after the schedule heading with the following:

(Sections 104.01 and 104.02 and paragraph 104.06(a))

4 Schedule V to Subpart 4 of Part I of the Regulations is replaced by the Schedule V set out in the schedule to these Regulations.

5 The Regulations are amended by replacing the references after the schedule heading in the following Schedules with “(Sections 104.01 and 104.02)”:

• (a) Schedules I to III to Subpart 4 of Part I; and
• (b) Schedules VI and VII to Subpart 4 of Part I.

Coming into Force

6 These Regulations come into force on June 21, 2023.

SCHEDULE

(Section 4)

SCHEDULE V

(Sections 104.01 and 104.03 and subsection 104.07(1))

Aeronautical Product Approvals

PART I

Fixed Charge

Item	Column I Document or Action in Respect of Which a Charge Is Imposed	Column II Charge ($)
1	Initial or amended type certificate following a streamlined type design examination of any aeronautical product listed in item 1 of Part II that is the responsibility of an airworthiness authority other than the Department of Transport	3,544
2	Approval of a change to an existing type design approved under a supplemental type certificate that does not result in the issuance of an amended supplemental type certificate	550
3	One of the following amended design approval documents approved by an employee of the Department of Transport:
	(a) supplemental type certificate;	1,587
	(b) supplemental type certificate (single or several product serial number(s))	1,323
4	Amended design approval document for a supplemental type certificate (single or several product serial number(s)) associated with a modification to a type design approved by a delegate of the Department of Transport	450
5	Validation of a foreign supplemental type certificate intended to secure Canadian acceptance of the foreign supplemental type certificate	573
6	One of the following documents when issued by an employee of the Department of Transport:
	(a) repair design approval (repair design);	955
	(b) repair design approval (repair process);	1,273
	(c) part design approval	2,645
7	Amended repair design approval, approved by an employee of the Department of Transport, to record a repair	573
8	Repair design approval or amended repair design approval, approved by a delegate of the Department of Transport, to record a repair	151
9	Amended part design approval, approved by an employee of the Department of Transport	1,323
10	Administrative change to any document for which a charge is payable under this Schedule	158
11	Ministerial exemption under subsection 605.84(3)	595
12	Approval of an alternative means of compliance under subsection 605.84(4)	595

PART II

Hourly Charge

Item	Column I Document or Action in Respect of Which a Charge Is Imposed	Column II Maximum Number of Hours per Year
1	Initial type certificate for aeronautical products that are the responsibility of the Department of Transport or an airworthiness authority other than the Department of Transport, in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	16,610
	(b) transport category aeroplanes under 150 000 kg;	14,170
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	4,770
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	3,600
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	2,440
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	1,170
	(g) normal category rotorcraft;	3,310
	(h) transport category rotorcraft;	4,300
	(i) airships;	360
	(j) balloons;	70
	(k) engines — turbine;	1,530
	(l) engines — reciprocating;	340
	(m) propellers;	120
	(n) gliders or powered gliders	880
2	Approvals of all additions or changes, in the period beginning on April 1 of one year and ending on March 31 of the next year, to data under the same type certificate for aeronautical products that are the responsibility of the Department of Transport or an airworthiness authority other than the Department of Transport, in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	6,644
	(b) transport category aeroplanes under 150 000 kg;	5,668
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	1,880
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	1,500
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	976
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	468
	(g) normal category rotorcraft;	1,324
	(h) transport category rotorcraft;	1,720
	(i) airships;	190
	(j) balloons;	30
	(k) engines — turbine;	612
	(l) engines — reciprocating;	136
	(m) propellers;	48
	(n) gliders or powered gliders	360
3	Initial type certificate or approvals of all additions or changes to data under the same type certificate in respect of an aeronautical product other than one listed in item 1 of this Part	no maximum
4	Initial or amended Canadian Technical Standard Order (CAN-TSO) design approval for an auxiliary power unit	1,530
5	Assistance provided by an employee of the Department of Transport related to the preparation of an application for certification, whether or not a formal application results	no maximum

PART III

Hybrid Charge

Item	Column I Document or Action in Respect of Which a Charge Is Imposed	Column II Charge ($)	Column III Maximum Number of Additional Hours per Year
1	Supplemental type certificate approved by an employee of the Department of Transport in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	3,174	4,680
	(b) transport category aeroplanes under 150 000 kg;	3,174	2,810
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	3,174	1,880
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	3,174	1,500
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	3,174	710
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	3,174	320
	(g) normal category rotorcraft;	3,174	890
	(h) transport category rotorcraft;	3,174	1,410
	(i) airships;	3,174	190
	(j) balloons;	3,174	30
	(k) engines — turbine;	3,174	612
	(l) engines — reciprocating;	3,174	10
	(m) propellers;	3,174	30
	(n) gliders or powered gliders	3,174	240
2	Supplemental type certificate (single product serial number) approved by an employee of the Department of Transport in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	1,323	4,680
	(b) transport category aeroplanes under 150 000 kg;	1,323	2,810
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	1,323	1,880
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	1,323	1,500
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	1,323	710
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	1,323	320
	(g) normal category rotorcraft;	1,323	890
	(h) transport category rotorcraft;	1,323	1,410
	(i) airships;	1,323	190
	(j) balloons;	1,323	30
	(k) engines — turbine;	1,323	612
	(l) engines — reciprocating;	1,323	10
	(m) propellers;	1,323	30
	(n) gliders or powered gliders	1,323	240
3	Supplemental type certificate (several product serial numbers) approved by an employee of the Department of Transport in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	2,645	4,680
	(b) transport category aeroplanes under 150 000 kg;	2,645	2,810
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	2,645	1,880
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	2,645	1,500
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	2,645	710
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	2,645	320
	(g) normal category rotorcraft;	2,645	890
	(h) transport category rotorcraft;	2,645	1,410
	(i) airships;	2,645	190
	(j) balloons;	2,645	30
	(k) engines — turbine;	2,645	612
	(l) engines — reciprocating;	2,645	10
	(m) propellers;	2,645	30
	(n) gliders or powered gliders	2,645	240
4	Supplemental type certificate (single or several product serial number(s)) approved by a delegate of the Department of Transport in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	550	4,680
	(b) transport category aeroplanes under 150 000 kg;	550	2,810
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	550	1,880
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	550	1,500
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	550	710
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	550	320
	(g) normal category rotorcraft;	550	890
	(h) transport category rotorcraft;	550	1,410
	(i) airships;	550	190
	(j) balloons;	550	30
	(k) engines — turbine;	550	612
	(l) engines — reciprocating;	550	10
	(m) propellers;	550	30
	(n) gliders or powered gliders	550	240
5	Validation of a foreign supplemental type certificate intended to secure the issuance of a Canadian supplemental type certificate in respect of
	(a) transport category aeroplanes of 150 000 kg or more;	2,381	4,680
	(b) transport category aeroplanes under 150 000 kg;	2,381	2,810
	(c) Level 4 normal category aeroplanes with passenger seating configurations of 10 to 19;	2,381	1,880
	(d) Level 3 normal category aeroplanes with passenger seating configurations of seven to nine;	2,381	1,500
	(e) Level 2 normal category aeroplanes with passenger seating configurations of two to six;	2,381	710
	(f) Level 1 normal category aeroplanes with passenger seating configurations of no more than one;	2,381	320
	(g) normal category rotorcraft;	2,381	890
	(h) transport category rotorcraft;	2,381	1,410
	(i) airships;	2,381	190
	(j) balloons;	2,381	30
	(k) engines — turbine;	2,381	612
	(l) engines — reciprocating;	2,381	10
	(m) propellers;	2,381	30
	(n) gliders or powered gliders	2,381	240
6	Initial Canadian Technical Standard Order (CAN-TSO) design approval for an appliance or part other than an auxiliary power unit	2,645	200
7	Amended Canadian Technical Standard Order (CAN-TSO) design approval for an appliance or part other than an auxiliary power unit	1,323	200

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The current charge regime in section 104 of the CARs and in its associated Schedule V, respecting approvals for aeronautical products, has not been revised since 1998 and is no longer reflective of the more complex work required by TC employees and/or TC delegates to approve technologically advanced aeronautical products. Moreover, the current regime has not been adjusted for inflation on a regular basis, failing to reflect the increasing labour costs that these services require. As a result, existing charges recover only a small proportion of the cost of providing reviews and approvals.

New technologies (e.g. integrated systems, advanced pro, increased automation) and increased software complexity are making the approval process for aeronautical products more complex and time-consuming, requiring a wider skillset and greater depth of knowledge to review and often exceeding the number of hours that can be recovered through charges under the current regime. The existing structure requires Canadian taxpayers to pay a greater portion of the costs associated with activities that directly benefit private companies or individuals. Data from fiscal years 2017–2018 to 2019–2020 indicate that, on average, industry paid only about 4% of the costs associated with aeronautical product reviews and approvals.

Background

Aeronautical product approvals

TC, on behalf of the Minister of Transport, is responsible for the approval of aeronautical product designs. Approval of these product designs is one step in the process necessary for an aircraft to receive flight authority. Flight authority confirms that an aircraft is in compliance with the applicable type design^{footnote 5} and that it is fit and safe for flight. To receive flight authority, an aircraft’s overall design and its major aeronautical components must be approved, indicating they meet design standards set by the International Civil Aviation Organization (ICAO). In Canada, these design standards are incorporated by reference in the CARs.

TC issues initial approval documents for aeronautical products to Canadian-based companies and facilitates the issuance of approval documents to Canadian companies in foreign jurisdictions, allowing these companies to sell their products abroad. TC also issues approval documents to foreign companies wishing to sell their products for use in Canada.

As outlined in section 4.4 of the Aeronautics Act, the Governor in Council may make regulations imposing charges in respect of the issuance, renewal, amendment or endorsement of any document issued or to be issued under Part I of the Act. Section 104 of the CARs, and its associated Schedule V, lists the document or preparatory action for which a charge related to aeronautical product approvals can be imposed and the corresponding charge.

Existing charges

The existing charge regime in Schedule V of section 104 of the CARs consists of 104 design approval items, where 66 items are charged at an hourly rate and 38 items are charged at fixed rates. TC also provides approvals for projects that have no charges under the existing charge regime (such as post-certification changes to approved designs). These post-certification activities have been identified as projects that require the most effort (in terms of time resources) among approval projects.

The hourly charge was $40 per hour in fiscal year 2020–2021.^{footnote 6} Items subject to the hourly charge also have a hard charge cap, which is the maximum amount that can be charged over the life of a project. Once an hourly project has reached the imposed charge cap, no further revenue can be collected for that approval project, even if work is ongoing. The existing hard cap varies depending on the product and approval type. For example, balloons or aircraft components, such as propellers, have lower caps, while the highest caps are for large, transport category aeroplanes. The hard cap fees range from a low of $3,662 to a high of $504,680. Charges for items under the fixed structure also vary depending on the products and certification type and range from $180 to $2,455 per project.

Fee modernization

Fee modernization is an emerging priority across the entire Government of Canada, as evidenced by the introduction of the Service Fees Act (SFA) in Budget 2017. The SFA signals that the Government is open to departments and agencies updating the fees they charge for products and services.

The modernization of TC’s fee regime is a key component of the Department’s transformation plan. The Department’s cost recovery initiative will be implemented in consultation with stakeholders with the objective of providing more predictable service to industry, ensuring the sustainability of TC services, and ensuring that those who benefit pay an appropriate share of costs.

The current charges set out in the CARs have not been updated in over 20 years and are no longer reflective of the aeronautical products industry. Over this period, aeronautical product reviews and approvals have become more time consuming, as technological changes have significantly increased the complexity of products. Currently, existing fees recover approximately 4% of the total cost of providing aeronautical product reviews and approvals. The rest of the cost is absorbed by Canadian taxpayers. Meanwhile, the majority of the benefits from these services go directly to the aeronautical products industry.

Amendments

The amendments to section 104 of the CARs and its associated Schedule V will update the aeronautical products charge structure by implementing charges that are more reflective of the resource investment spent by TC on aeronautical product reviews and approvals. The amendments are the first of a number of amendments that will eventually update all the schedules of section 104 of the CARs. The modernization of the aeronautical product approval charge structure is part of a broader plan to modernize the fee/charge regimes throughout TC.

Service Fees Act

A modernized cost recovery regime for aeronautical products will be consistent with the principles underlying the SFA, which represents the Government’s commitment to modernizing its services and delivering value to Canadians by establishing service standards, remitting a portion of fees paid to clients when service standards are not met, adjusting fees annually by the Consumer Price Index, and making the results public through annual reporting. The modernized regime also aligns with the goals of Transportation 2030: A Strategic Plan for the Future of Transportation in Canada, a modernization initiative championed by the Minister of Transport.

Low-materiality Fees Regulations

All fixed fees are $151 or above, and the hybrid and hourly fees are fees set by formula. Therefore, the new and amended fees are not considered low-materiality per the criteria outlined in the Low-materiality Fees Regulations. Remissions and annual Consumer Price Indexation per the SFA will apply to all fees.

Directive on Charging and Special Financial Authorities

The charges also adhere to the requirements of the Directive on Charging and Special Financial Authorities (the Directive), which, among other things, outlines management practices and controls to ensure that charging practices for services are consistent across government and that amounts charged respect legislative limits. In accordance with the Directive, TC developed and published a fee proposal and held public consultations in the fall of 2018.

Objective

The modernization of section 104 of the CARs and its associated Schedule V will better reflect the true cost of aeronautical product reviews and approvals that TC provides. By implementing a modern charge regime that requires the beneficiaries to pay a greater portion of the costs for these activities, TC will promote a more equitable balance between the financial burden borne by service recipients and by Canadians. With a modernized charge regime that adjusts for inflation, TC could address future growth in demand and continue to meet its service standards to keep up with the increasing complexity of aeronautical product reviews and approvals due to technology development.

Description

The amendments will update and modernize the charge structure and the recovery of travel expenses and overtime for the processing of applications under section 104 of the CARs. Under the amendments, the existing hourly and fixed charge structure will be updated, and a new hybrid charge^{footnote 7} structure will be introduced. New items will also be introduced into the structure. Items such as post-certification activities, which have been identified as effort-intensive, will become cost-recoverable. Overall, 96 fees will be repealed and replaced by 84 new fees, and 8 will be amended.

In accordance with the SFA, the charges will be indexed annually, based on the applicable Consumer Price Index published by Statistics Canada. The inflation-adjusted charge levels and the date they come into effect will be published in TC’s Fees Report, which is tabled in Parliament, and will be made available on TC’s website.

The changes will increase the overall cost recovery rate for aeronautical product reviews and approvals from approximately 4% to 22%.

Lastly, these amendments will correct a transcription error in the hybrid charge section which was included at prepublication.

Methodology

TC developed a cost estimating model which follows the principles of activity-based costing to assign costs to Schedule V activities based on their use of resources. Expenditure details and time-tracked data was analyzed to determine the resource consumption and level of effort needed to perform each activity. Multiple years of data were reviewed to ensure the reliability and validity of the cost estimate. In the 2018 fee proposal, data spanning three fiscal years, 2014–2015 to 2016–2017, was reviewed to ensure the reliability and validity of the cost estimate. Another analysis using data spanning three fiscal years pre-COVID pandemic, 2017–2018 to 2019–2020, was reviewed to ensure the initial cost estimates were still reliable and valid. The hourly cost increased from $263 to $271. The increase was mainly due to inflation and a change in the direct full-time employee hours worked.

The overall increase had a minimal impact on the cost recovery rates (a decrease from 40% to 39%); therefore, TC did not adjust any fees. The methodology and rationale were established in the previously consulted fee proposal, and further validated, adjusted, and refined after additional consultation sessions with stakeholders.

Direct costs such as salaries and operating and maintenance costs are the largest contributors to the Schedule V cost estimate. Other elements include program support costs, corporate internal services (e.g. human resources, finance, information technology [IT]), and associated costs such as employee benefit plans and accommodation costs.

Two material assumptions were made during the cost exercise:

1. tracked hours as recorded in the Standardized Cost Recovery and Activity Monitoring System (SCRAM), a time-tracking system, are fairly representative of resource consumption by activity or service; and
2. the average program cost between fiscal years 2017–2018 and 2019–2020 is representative of the future ongoing cost of delivering the program.

The data used in the preparation of the cost estimate were reconcilable, objective, cleansed of outliers and subjected to a sensitivity analysis. The applied methodologies and assumptions, developed through close collaboration between TC Corporate Services costing experts and Civil Aviation subject matter experts, are well documented, and adhere to the Treasury Board of Canada Secretariat (TBS) Guide to Cost Estimating and follow TC’s internal Cost Recovery Costing Policy. The generated cost estimates are considered reasonable.^{footnote 2}

The cost per hour for performing activities under Schedule V of the CARs was calculated to be $271. TC has decided to charge an hourly fee of $105 (39% of the total cost of $271) for aeronautical product reviews and approvals. The $105 hourly fee strikes the right balance between the user-pay principle and the ability of industry to pay. This allows for the continued support of innovation in the Canadian aerospace industry by ensuring that TC can continue providing the level of service that industry expects, while charging reasonable fees that do not discourage the adoption of new technologies. Charges will include any preparatory actions taken to issue, renew, amend, or endorse a document outlined in Schedule V, whether or not the document is actually issued, renewed, amended, or endorsed.

TC is proposing the following changes to section 104 of the CARs and its associated Schedule V.

1. Adjust hourly charges

The hourly rate will increase from $40 to $105, for activities in respect of the issuance, renewal, amendment or endorsement of any document related to an aeronautical product approval. The hourly charges will not exceed the annual maximum, if applicable, specified in either Column A or B of Table 1. Table 1 below represents the annual maximum hours (and dollar equivalent) for approval processes that will be charged at an hourly rate. The annual maximums, which will be listed in hours in the CARs, will be calculated from April 1 in one year to March 31 in the following year. Column A lists annual maximums for service requests related to initial design approvals, and Column B lists annual maximums for the approval of a change to an existing design, based on product type.

Table 1: Annual maximums for hourly activities

Product Type	ANNUAL MAXIMUMS
	COLUMN A (Initial design approvals)		COLUMN B (Approval of a change to an existing design)
	In hours	$ equivalent	In hours	$ equivalent
Transport Category Aeroplane of 150 000 kg or more	16 610	$1,744,050	6 644	$697,620
Transport Category Aeroplane Under 150 000 kg	14 170	$1,487,850	5 668	$595,140
Level 4 Normal Category Aeroplane	4 770	$500,850	1 880	$197,400
Level 3 Normal Category Aeroplane	3 600	$378,000	1 500	$157,500
Level 2 Normal Category Aeroplane	2 440	$256,200	976	$102,480
Level 1 Normal Category Aeroplane	1 170	$122,850	468	$49,140
Transport Category Rotorcraft	4 300	$451,500	1 720	$180,600
Normal Category Rotorcraft	3 310	$347,550	1 324	$139,020
Airships	360	$37,800	190	$19,950
Balloons	70	$7,350	30	$3,150
Engines — Turbine	1 530	$160,650	612	$64,260
Engines — Reciprocating	340	$35,700	136	$14,280
Propellers	120	$12,600	48	$5,040
Gliders or powered gliders	880	$92,400	360	$37,800
CAN-TSO table 1 note a for an APU table 1 note b	1 530	$160,650	1 530	$160,650
Table 1 note(s) Table 1 note a CAN-TSO means a Canadian Technical Standard Order which is a standard of airworthiness for an appliance or part. Return to table 1 note a referrer Table 1 note b APU means an Auxiliary Power Unit (APU). An APU is any power unit that delivers power or compressed air, or both, and that is not intended for direct propulsion of an aircraft. Return to table 1 note b referrer

2. Adjust fixed charge structure

The existing 38 fixed charges, related to the processing of type design changes and design approvals for appliances, parts, and repairs, range from $180 to $2,455. The 15 fixed charges range from $151 to $3,544. Fixed fee activities are most often requested by small business owners, and TC determined that setting a fee with a high cost-recovery rate could be detrimental to these businesses, as many will decrease their profit margins to stay competitive. Considering the economic context, the fees had cost-recovery rates between 5% and 20%. To limit the fee increases and mitigate the impact on stakeholders, TC decided that activities that cost over $50,000 will have lower-cost recovery rates and thus lower fees. Additionally, TC decided that activities that cost less than $10,000 will generally have slightly higher cost-recovery rates, yet still lower fees than those of the high-cost activities. The result of this approach is substantively lower fees for high-cost activities and continued low fees for low-cost activities. This tailored approach allows TC to reduce the impact of fees for both high- and low-cost activities, especially when considering smaller businesses that operate in this sector.

TC does not have enough personnel to meet the demand for all certification activities. The Minister of Transport authorizes individuals and organizations to work on behalf of the Minister, as delegates, to issue certain approvals. Since the delegates support the Minister in performing the certification activities, TC decided to decrease the fixed charge for repair designs and amended repair designs approved by delegates, from the original charge of $180 to a charge of $151. This decrease takes into consideration what TC delegates can reasonably charge their clients to repair their aircraft and addresses small business concerns. TC also proposed a ceiling of two and a half times the current fee for other activities requested by TC delegates, to encourage potential TC clients to consider requesting services from small business owners at a lower price, rather than requesting TC to perform those same activities, as TC does not have the capacity to action all service requests.

3. Introduce hybrid charge structure

The amendments will introduce a hybrid charge structure for the issuance, renewal, amendment or endorsement of a supplemental type certificate^{footnote 8} or Canadian Technical Standard Order. For these items, the applicant will pay a fixed charge for the first 300 hours. If the application requires more than 300 hours to issue the relevant design approval document, the applicant will be charged $105/hour for every hour an employee of the Department of Transport invests in the processing of the application beyond the threshold. However, the hourly charge will not exceed the annual maximum amount. The annual maximum is calculated from April 1 of one year to March 31 of the following year. The maximum amount a client could pay for hybrid charges will be the fixed charge plus the annual maximum amount.

TC determined that a fixed charge for the first 300 hours was the best way to ensure that costs are predictable and reasonable for small businesses, while allowing the Department to recuperate costs for the small number of projects from larger businesses that require more time. According to TC subject matter experts, roughly 95% of projects are expected to remain below the 300-hour threshold. The hybrid approach is necessary because there have been projects that have required thousands of hours, essentially costing TC (and by extension, Canadian taxpayers) millions of dollars to perform these activities.

4. Add new hourly, fixed and hybrid activities to the charge structure

The amendments will also add charges that will enable TC to charge for amending documents due to administrative changes, issuing alternative means of compliance (AMOC) letters, post-certification reviews, assisting clients with formal applications, and the validation of foreign supplemental type certificates so that the aeronautical design approvals by foreign authorities can be sold in Canada. These items are not part of the existing charge regime. Currently, TC absorbs the costs associated with these activities.

5. Travel and overtime related to the processing of applications

Currently, travel and overtime are only charged when an employee must travel outside of Canada. Travel expenses include transportation, lodging, meal, and incidental expenses, as calculated in accordance with the rates set out in the National Joint Council Travel Directive. Overtime is charged in accordance with the rates set out in employees’ collective agreements. Travel outside of Canada will continue to be recovered on a one-for-one basis. Travel and overtime inside Canada will be recovered under specific circumstances, such as unplanned, unexpected or urgent travel requests from the client.^{footnote 9} For example, a client will be expected to pay if they requested a change to the travel arrangements, and the costs of the new travel arrangements were more expensive, or if travel is required for a reason that is substantially similar to a previous travel arrangement (e.g. to redo a test that a client was not sufficiently prepared for during a previous visit).

Additional cost recovery

As per subsection 4.401(1) of the Aeronautics Act, TC can enter into an agreement with an entity “respecting any matter for which a regulation made under subsection 4.4(1) or (2) could impose a charge.” TC is currently using this provision to recover in-Canada travel and overtime costs, on an ad hoc basis, in relation to the processing of an application, under specific circumstances. TC has used this provision to enter into an agreement with an entity to perform an approval for an aeronautical product not listed in the current Regulations. Once the amendments come into force, TC will cease to use the provision for the previously stated purposes, as they will be incorporated into the Regulations. With regards to aeronautical product approvals, TC has not contemplated any other uses for this provision in the short term.

Regulatory development

Consultation

TC has engaged with the aerospace industry many times since 2014 to seek feedback concerning charge modernization.

In 2018, TC engaged with stakeholders to inform them that TC was in the process of developing an Aeronautical Product Approvals Fee Proposal. A general presentation was made to stakeholders at the plenary session of the Canadian Aviation Regulation Advisory Council (CARAC) meeting in February 2018. This presentation outlined the broad goals and timeframes associated with the initiative, and time was allotted following the presentation for stakeholders to ask questions.

Between March 2018 and May 2018, TC held five Preliminary Engagement sessions with different industry stakeholders both large and small, as well as with some of the trade associations representing members of the aerospace sector. These sessions presented some of the concepts TC was considering including in the Fee Proposal.

TC solicited feedback on the following topics:

• Eliminating the hard charge cap;
• Introducing hybrid charges;
• Introducing new charges for activities currently performed free of charge;
• Developing new and amended service standards; and
• Identifying irritants or parts of the aircraft certification process that, if addressed, will positively impact their relationship with TC. The topics discussed under this theme were not limited to areas directly impacted by the charge modernization initiative.

TC received feedback during these sessions and via written comments provided by participants. In general, the Original Equipment Manufacturers (OEM) community accepted the need for TC to raise its service charges, recognizing that the Department has not done so in two decades. Their primary concern was the lack of cost certainty arising from the elimination of the hard charge cap. They recognized that the hard charge cap was negatively impacting TC’s ability to recover costs for activities performed, however, the issue of concern was that without the hard charge cap, industry faced unknown costs for certification projects. Moreover, industry noted that budgeting for an uncapped environment would be extremely difficult, given that the level of involvement on the part of TC can vary significantly from project to project, and from year to year over the lifetime of a single project. The OEMs requested that TC consider some other means of providing cost certainty and predictability.

Feedback received from smaller industry participants focused on the aspects of the charge modernization that were most important to delegates and other companies accessing the current fixed and hybrid charges. These stakeholders were concerned about rising charges in a competitive landscape where many of their direct competitors, located in the United States (U.S.), are not subject to charges, and where several products previously certified in the U.S. were accepted in Canada without the application of charges due to the existence of bilateral agreements between TC and the U.S. Federal Aviation Administration (FAA).

Both groups of stakeholders pointed out the need for more guidance and explanatory materials that would help them understand the application of the new charges (such as the pre-application consultation charges or charges for post-certification modifications), and for more refinement of the 300-hour threshold for hybrid charges.

Stakeholders also expressed a desire to receive notification well before one of the hybrid charge hours reaches the level of effort threshold (i.e. once 80% of the hours below the threshold had been used). TC agreed to pursue this suggestion. While the majority of projects are not expected to reach this threshold, TC is working on options to notify clients once they are approaching the limit of the fixed fee. Once an approach has been finalized, information about this approach will be made available to stakeholders in TC policy.

The Fee Modernization Proposal, which was duly prepared in accordance with the Directive on Charging and Special Financial Authorities, was posted on the TC “Let’s Talk Fee Modernization” web page for a 45-day comment period from September 6 to October 19, 2018. TC received four formal submissions and several direct replies on the Let’s Talk page. These comments were consistent with the feedback received during consultations that took place in spring 2018.

Following the close of the Let’s Talk comment period, TC held a one-day workshop with the largest members of the Canadian industry to discuss their concerns around how the elimination of hard charge caps, and the introduction of hybrid charges, would remove the predictability associated with charges. Industry indicated that they would expect better service levels for the increased charges.

TC has considered the stakeholder comments that have been received to date and has made some adjustments to the Fee Modernization Proposal as a result:

• Annual maximums for hourly fees, by product categories proposed by stakeholders, have been included in the charge structure to provide greater predictability to industry regarding the applicable charges.
• An hourly charge, without an annual maximum, was added for novel aeronautical products that do not fit within one of the items outlined in Schedule V.
• Hybrid charges include a maximum number of additional hours per year that could be charged to provide greater predictability.
• A planned charge for post-certification approval of part designs and repair designs was removed.
• The charge for the approval of a change to an existing type design already approved under a supplemental type certificate was changed from a hybrid charge to a fixed charge and reduced from $1,323 to $550 to incentivize small businesses.
• The charges for part design approval and repair design approval are now fixed charges instead of hybrid charges to ensure greater predictability.
• The repair designs approvals by delegates were changed from hybrid charges to fixed charges and reduced from $550 to $151 to incentivize small businesses.
• The charges for assisting clients seeking foreign validation of previously approved Canadian type certificates and supplemental type certificates were removed to avoid disincentivizing the industry and to support the competitiveness of Canadian businesses.

Furthermore, TC intends to modernize its IT systems to facilitate the administrative steps of service delivery, including creating service requests for activities with or without charges, transferring large files, and generating invoices, to improve the user experience. The system will also incorporate time tracking, and service performance measurement which are currently tracked separately. TC continues to invest in the modernization of its IT systems for aeronautical product approvals. TC began piloting the new system with a limited group in spring 2022. Full deployment, including external components of the system, is planned to occur as soon as possible after the coming into force of the regulatory amendments. TC is also updating and creating web pages to provide applicants with more information to improve the quality of application submissions which could lead to better service levels. The updated web pages will directly link clients to the new platform where they will be able to create an online account to submit service requests.

TC has continued to hold informal discussions with stakeholders since 2018, keeping them up to date on the adjustments to the proposal and seeking additional feedback.

COVID-19 pandemic

In April 2020, TC informed stakeholders that, in light of the COVID-19 pandemic, the implementation of the proposal would be delayed. TC was originally aiming to have the amendments prepublished in 2020. Stakeholders were supportive of delaying the implementation of the proposal. Throughout 2020 and 2021, TC periodically provided updates to stakeholders about its intention to seek prepublication of the amendments in the Canada Gazette, Part I, in the spring of 2022. No concerns were raised.

Prepublication in the Canada Gazette, Part I

The Regulations Amending the Canadian Aviation Regulations (Part I — 104, Aeronautical Product Approvals) were prepublished in the Canada Gazette, Part I, on June 18, 2022. A notice was sent by email to CARAC members informing them of the 10-week public consultation period (June 18–August 27), summarizing the proposed changes, and soliciting feedback to help inform the next step of the regulatory process.

There were eight submissions received by TC during the consultation period. The stakeholders who provided feedback included aeronautical manufacturers, representatives from industry associations, maintenance specialists, and other interested private individuals. The comments received were grouped into themes; each theme is discussed below along with TC’s response.

1. Concerns about increased fees

Stakeholders expressed concerns that the introduction of a fee without a cap for new aeronautical products that are not listed in the Regulations could lead to uncertainty in industry budget planning. In addition, stakeholders cited that uncapped fees for new aeronautical products could have negative impacts on consumers (because fees would likely be passed on to consumers by industry), and could disincentivize innovation and investment in the Canadian aerospace community. When compared with the FAA and the European Aviation Safety Agency (EASA), there are a few cases where TC’s certification fees are higher, such as charges for normal category rotorcraft. In the U.S., some services are provided at no charge (e.g. approvals).

Despite these concerns, TC officials have to deal with the reality that technology is rapidly evolving, and original equipment manufacturers continue to develop new aeronautical products. To meet this growing demand for certification services, TC has introduced a fee that will only partially cover the cost to provide the certification services for these new products. Given the novel nature of these products, TC does not have data or other appropriate proxies to introduce any meaningful annual maximums for novel products. In the absence of novel fee caps, TC will work with clients on a case-by case basis to meet individual client needs while also ensuring that charges are aligned with the level of effort required by TC officials. This approach should not impose any additional effort for clients or TC, as the process to identify the scope of work for novel products is already established and is a standard practice. As noted in the “Additional cost recovery” section, TC has used an existing provision under the Aeronautics Act to enter into an agreement with an entity to perform an approval for an aeronautical product not listed in the current regulations, and in the absence of these amendments, this practice is anticipated to continue. These amendments will simply change the process by which such costs will be recovered.

TC acknowledges that the FAA does not charge fees for similar services, but this is because the organization has a completely different funding model. In the past, this influenced the decisions for some organizations to operate their businesses in the U.S. and then apply for validations in Canada. While TC expects this practice to continue after the Regulations come into force, it should be understood that fees are just one of several factors which lead businesses to make those decisions.

Although TC has proposed an annual maximum number of chargeable hours for normal category rotorcraft that is higher than the EASA’s maximum, in most cases, TC’s fees are below those of the EASA. TC determined the annual maximum based on historical data and, therefore, the annual maximum will not be revised. However, TC will review the annual maximum levels as newer data becomes available and may make adjustments in the future based on that data.

The fee changes will increase the overall cost-recovery rate for aeronautical product reviews and approvals from approximately 4% to 22%. Costs will therefore remain largely subsidized by Canadian taxpayers. TC gave careful consideration to balancing costs between affected stakeholders and taxpayers. Relative to the actual cost of services, the fee increases on stakeholders are small. In addition, and in response to consultations on these fees, TC has removed certain fees (i.e. the fees for providing assistance to clients seeking foreign validation of previously approved Canadian type certificates and providing assistance to clients seeking foreign validation of previously approved supplemental type certificates) and decreased a fee (i.e. the repair design approvals by delegates fee). Given the cost recovery rates and the fact that TC has decreased or removed other fees in response to stakeholders’ input, TC has concluded that the fee increases in the Regulations are reasonable. Therefore, the fees have not been further modified in light of the comments raised during the prepublication.

2. Questions about service delivery

Stakeholders asked if service standards have been reviewed, and if stakeholders can expect enhanced levels of service as a result of the new fees. Stakeholders suggested that TC should provide a detailed report of the costs per individual item to ensure accurate billing of the projects, and that TC should implement an improved IT system to adequately track the fees charged to industry. This type of reporting and tracking would facilitate improved communication between stakeholders and TC regarding charges and service standards. Stakeholders also specifically requested updates on the progress and efficacy of new IT systems to support the administration of the new fees.

TC is working to update administrative systems and processes to support reporting on the revenues and service standard performance for the new or revised fees, including more specific project billing capabilities. TC will share status updates regarding the improvements to IT systems (i.e. more detailed time tracking, more details on charges) with stakeholders, as requested during ongoing consultations. The first status update for stakeholders will be delivered by email to CARAC members, on the day these Regulations come into force, with periodic updates as information becomes available. Updates to guidance materials will be shared on TC’s website as they become available.

Since aeronautical product approvals are a collaborative process, TC does not have significant control over the timelines to complete the approvals. As no granular performance data or metrics are currently available, TC has not updated the associated service standards. As TC is working toward improving internal tracking systems, better quality data will be collected and then used for revising and improving service levels. In accordance with the SFA, TC will remit a portion of the fees paid by a client if the service standard is not met. Details about how and when remittances would be made are outlined in Transport Canada’s Policy on remissions.

3. Requests for clarification

Stakeholders expressed confusion about some of the language used by TC in the new and updated fee descriptions. The confusion can be attributed to new terminology that was not adequately defined in the draft amendments published in the Canada Gazette, Part I. Another source of confusion stemmed from changes to the fee structure, which resulted in the division of some fee items. For example, stakeholders suggested the merging of fees for similar type design approvals.

TC chose not to merge the fees, as the effort required to process design type approvals depends on several factors, including the scope of the requests received. The fee structure was established to reflect this reality.

Stakeholders asked that certain terminology be clearly defined in the CARs. Specifically, stakeholders asked about the billing calendar and fee start dates. This information was already included in CARs subsection 104.03 (4) and section 104.07, respectively, which states that the billing calendar begins on April 1 of one year and ends March 31 of the following year. Stakeholders also had questions about the applicability of the new administrative charge for changes to documents issued under Schedule V of the Regulations.

To further clarify the terminology and the applicability of new charges, TC has updated the fee descriptions in the Regulations, and is developing fee structure guidance, which will be available on TC’s website on the day these Regulations come into force. These changes are clarifications and do not substantively alter the fees.

4. Request for another fee

A stakeholder mentioned that the updated fee structure was missing a fee for changes to the type design after initial approval of an aeronautical product that is not listed in Schedule V of Part I of the CARs.

TC agrees that this was a gap in the fee structure and that a fee is appropriate for this service. The relevant fee description for type certificates for aeronautical products that are not listed has been updated in the Regulations (in response to this question) to include approvals to changes to an existing type design approved under a type certificate. This change did not impact the cost-benefit analysis, as only the description was updated to allow for future technologies (such as emerging products that are currently unknown, and without data that can be analyzed).

5. Additional amendments

After prepublication of the Regulations, TC noticed and corrected a transcription error in the annual maximums that was published in the hybrid charge section of the proposed amendments. Specifically, the annual maximums for turbine engines and reciprocating engines, which were incorrectly prepublished as 1 530 and 100 hours, have been corrected to 612 hours and 10 hours respectively. The correct numbers of hours (612; 10) were developed using historical data and with input from a key industry stakeholder (as were all the annual maximums). This editorial correction had no impact on the cost-benefit analysis as the correct numbers had been used to complete the analysis at prepublication.

TC has amended the fee presentation format in the Regulations in order to align with other modernized service fee regulations, improve clarity for stakeholders, and simplify annual SFA reporting. These changes do not substantively alter the fees.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the amendments are likely to give rise to modern treaty obligations. No modern treaty obligations were identified.

Instrument choice

The Government of Canada promotes a balanced approach to financing Government programs, whereby those who receive and/or benefit from program services should pay a reasonable share of the costs for those services. Currently, nearly all the costs of providing aeronautical product reviews and approvals are borne by Canadian taxpayers. While TC currently charges fees for aeronautical product approvals, the charges have not changed in approximately 20 years and only cover a small fraction of the cost of providing these services.

The charges for aeronautical product approvals need to be increased to ensure that costs for providing such reviews and approvals are rebalanced more equitably divided between Canadian taxpayers and the companies that benefit.

Charges must be set in regulations using the regulatory authorities provided under the Aeronautics Act. Therefore, to amend existing charges and introduce new ones, regulatory amendments are necessary. No other options were considered.

Regulatory analysis

The changes to section 104 of the CARs and its corresponding Schedule V will increase the portion of approval activities costs being paid by the aerospace industry. The total incremental cost to industry will be $22.51 million over a 10-year period from 2023 to 2032. This will be the cost to domestic industries. Foreign industries will also incur a cost; however, for the purpose of the CBA, impacts on foreign entities are not included as the CBA only considers cost to Canadians.

The incremental costs to the aerospace industry will be used to recover the costs incurred by TC to perform approval activities, reducing the burden on Canadian taxpayers.

Benefits and costs

Analytical framework

Benefits and costs associated with the amendments are assessed based on comparing the baseline scenario against the regulatory scenario. The baseline scenario assumes no change to the current cost structure or changes to the fees charged. For example, it forecast the costs with an hourly charge of $40 for hourly rates and a range of $180 to $2,455 for fixed rate with no hybrid fees in place. The baseline scenario focuses on travel and overtime costs outside of Canada, with no provision for inside Canada expenses. Despite the lack of an existing provision, agreements made with clients on an ad hoc basis have allowed some of these in-Canada expenses to be recovered and it is assumed this would continue to occur throughout the baseline scenario. The baseline scenario also includes that TC would enter into an agreement for cost recovery^{footnote 10} to perform any approvals for aeronautical products not listed in the current Regulations. As will be demonstrated, the regulatory scenario provides information on the expected outcomes of the amendments. Note that under the regulatory scenario, the above agreements with respect to cost recovery would no longer be required; however, the cost savings with respect to these agreements are anticipated to be relatively insignificant. In addition, the cost savings are affected by the emerging technologies and approval requests for novel products, which is unknown; therefore, it was not possible to monetize this impact. Therefore, this has been included as a qualitative impact under the CBA statement table.

The amendments will result in a greater portion of the costs for approval activities being borne by the users of approval activities. Both the domestic and foreign aerospace industry stakeholders will be affected, with the domestic industry bearing a greater portion of these costs. Following TBS’s Cost-Benefit Analysis Guide (PDF), the scope of this analysis is at the societal level, analyzing costs and benefits to Canadians.^{footnote 11} Due to the cost recovery nature of this initiative, the incremental costs to domestic stakeholders represent a shift of the cost burden from Canadians (represented by TC) to the Canadian aerospace industry. Incremental cost to foreign stakeholders will represent an increase in the cost recovered by TC.

This analysis estimated the impact of the amendments over a 10-year period from 2023 to 2032. Unless otherwise stated, all costs are in present values, at a 7% discount rate, with 2023 as the base year for discounting and 2021 for the price year. It should be noted that the base year for discounting in this analysis was updated from 2021 to 2023 after the prepublication in the Canada Gazette, Part I, which led to increased costs and benefits. Clarifications to the baseline and regulatory scenario with respect to the use of agreements were also made, but these did not impact the monetized results.

Affected stakeholders

Users of these approval activities include both domestic and foreign stakeholders within the aerospace industry: Canadian companies that apply for product reviews and approvals in Canada, Canadian companies that require TC’s assistance to obtain approvals abroad, and foreign companies that apply for product approval in Canada.

Historical data suggests that users of hourly approvals are large aircraft and engine manufacturing companies, both domestic and foreign-based. Users of fixed approvals represent a variety of domestic and foreign companies, ranging from large air carriers and aircraft manufacturers to small telecommunications and product repair businesses. The impact on different areas of the aerospace industry is discussed in the ’’Distributional analysis’’ and ’’Small business lens’’ sections below.

The amendments will not expand aeronautical product approval activities; therefore, these Regulations will not require an increase in resource investment in terms of hiring or facility expansions for the Government. While there have been some expenditures to modernize the administrative system, these expenditures have occurred before the registration of these amendments and, as such, they are considered sunk costs and excluded from the analysis.

Data and methodology

Activities that fall under Schedule V of section 104 of the CARs are monitored in TC’s SCRAM for time tracking and cost recovery purposes. Technical specialists log their hourly inputs per project and identify whether the tasks performed for the activities are cost recoverable or not. To estimate incremental changes from the amendments, SCRAM data are used to forecast future demand for aeronautical product approval activities. To forecast future expenses, the average value of past SCRAM data was derived and applied to all future years. These values were then multiplied by the respective costs and subsequently discounted. As a result, values such as the number of projects and/or hours are derived from taking the average of historical SCRAM data. The analysis assumed that the fee changes would not affect the demand (i.e. transaction volumes) over the analytical timeframe. Furthermore, in addition to the SCRAM data, to forecast future travel expenses and overtime hours related to section 104 of the CARs, financial activities from TC’s Financial System Database (Oracle Financials) and TC’s Salary Management System are used in similar fashion. The historical mean was derived and applied to the new costs.

The information and methodology pertaining to the model development were shared, refined, and validated in consultation with stakeholders.

A CBA report detailing this analysis has been prepared and is available upon request.

Hourly projects

For hourly charges, the number of hours spent per project was estimated based on a seven-year annual average (from fiscal years 2014 to 2020) using the SCRAM data. Given that there is a hard cap on hours for such projects,^{footnote 12} if the estimated hours for an item exceed the required maximum hours, then the maximum hours are applied to the projects. Industries are responsible for all the costs until reaching the specified cost cap. The cost of any additional expenditure exceeding the cap will be covered by TC.

Fixed projects

For fixed charges, a similar approach was used to forecast the annual number of projects per item. The annual average number from fiscal years 2013 to 2020 in SCRAM was used to forecast future projects. Wherever SCRAM data was not available, projection was derived based on analysis from TC’s aeronautical product approval subject-matter experts.

Hybrid projects

To forecast the future number of projects per hybrid charge, the methodology for fixed charges was used.

To take into account the 300-hour threshold that will apply to hybrid charge items, subject-matter expert analysis was used. The analysis assumed that 95% of the hybrid projects will not reach the set threshold and 5% of projects will pass the threshold. The estimated number of hours that each project will require beyond the threshold was calculated using averages for both hourly and fixed charges.

Overtime and travel expenses

Overtime and travel expenses were estimated using TC’s Financial and Salary Management Systems Databases. To estimate future expenses related to these activities, annual averages from fiscal years 2014 to 2020 were used. The recovery of overtime and travel costs incurred under specific circumstances in Canada (i.e. at the request of the applicant) will be new to the Regulations. Historically, a portion of these expenses have been recovered on an ad hoc basis under contracts between the clients and TC. This process has been inconsistent and has not allowed all overtime and travel expenses to be identified and captured. Those outstanding costs that TC has not been able to recover would now be recoverable, resulting in incremental costs recovered totalling an estimated $1.90 million, as presented in Table 2. Due to these amendments, the minimal effort associated with developing agreements made between TC and stakeholders on domestic travel and overtime costs will be alleviated going forward. These impacts are included qualitatively.

Costs

The costs are presented in two ways: by charge type, and by industry type. The charge type includes the breakdown under section 104 and Schedule V: hourly charges; fixed charges; hybrid charges; and travel and overtime expenses. Table 2 presents the changes and their corresponding incremental costs.

Costs are also presented by industry type. It is important to make the distinction of costs by industry, since they each represent a different outcome for Canadian society. See Table 3 for the total cost for each industry, per charge type.

Costs by charge type

The incremental costs to industry are derived from changes to section 104 of the CARs and its corresponding Schedule V, including service charges for new items, a new hybrid charge structure, and increases to existing service charges. Table 2 presents changes per charge structure.

Table 2: Changes to charge structure under section 104 and Schedule V of the CARs

Charge Type	Changes	Increased Fees Charged
Hourly	Hourly charge will increase from $40 to $105. Hourly charge will be adjusted annually for inflation. The annual maximums will range from $7,350 to $1,744,050 (as listed in Table 1).	$24.83M
Fixed	Baseline charges range from $180 to $2,455. Charges will range from $151 to $3,544. Fixed charges of $151 or more will be adjusted for inflation annually.	$1.30M
Hybrid	Established fixed charges until 300 hours of service per project is reached. Fixed charges will range from $550 to $3,174. If the 300-hour threshold is reached, hourly structure applies to subsequent hours. The annual hours of service after the 300-hour threshold is reached shall not exceed the specified annual maximum.	$5.36M
Travel and Overtime	In-Canada travel and overtime expenses under unexpected or specific circumstances will be cost-recoverable.	$1.90M
TOTAL Fee Increase table c1 note a		$33.40M
Table c1 note(s) Table c1 note a Totals may not add up due to rounding. Return to table c1 note a referrer

As presented in Table 2, the changes to the hourly charges represent the largest portion of the changes in fees, accounting for approximately 74% of total change in fees. This is mainly due to a significant increase to the hourly charge, and the introduction of annual maximums, rather than the current maximum charges for a project. The newly introduced hybrid charges represent 16% of the total change in fees, while fixed, and overtime/travel charges represent 4% and 6% of the change in fees, respectively. It is important to note that while both domestic and foreign industries will be subjected to a new fee structure and, as the result, will lead to an increase in total fees paid, only the charges billed to the domestic industries will be considered as the incremental cost for the purpose of this analysis. As described above, the recovered fees from the foreign industries are considered as an incremental benefit, since they are not incurred by Canadians.

Costs by industry

The domestic aerospace industry will be the most impacted by the amendments, as it represents a greater portion of users of aeronautical product approval activities in Canada.

Costs to domestic aerospace industry

The amendments will result in incremental costs to domestic industry of $22.51 million. As presented in Table 3, domestic stakeholders will be most impacted by the changes to the hourly charge structure.

Costs to foreign aerospace industry

The foreign industry is estimated to bear $10.89 million in costs. Similar to their domestic counterparts, changes to the hourly charge structure represent the majority of incremental costs for foreign stakeholders. For the purposes of the CBA, impacts on foreign entities are not included. Therefore, any charges to foreign entities are considered as a net benefit for Canada.

Table 3: Incremental costs for domestic and foreign industry by charge type (Present value in millions, 2021$)

Stakeholder Type	Hourly Charges	Fixed Charges	Hybrid Charges	Travel and Overtime	TOTAL table c2 note a
Domestic	$16.88M	$0.64M	$3.48M	$1.52M	$22.51M
Foreign	$7.96M	$0.66M	$1.89M	$0.38M	$10.89M
Table c2 note(s) Table c2 note a Totals may not add up due to rounding. Return to table c2 note a referrer

Benefits

As previously stated, the amendments will result in a shift of cost burden from Canadians to the aerospace industry. The incremental cost recovery from the amendments will be $33.40 million.

Costs to the foreign aerospace industry will result in a cost recovery to Canadians of $10.89 million. The cost to foreign industry will be incurred by non-Canadians. Therefore, the transfer of burden from Canadian taxpayers to the foreign industry will be considered a net increase in cost recovery, and a benefit to Canadians at the societal level.

Cost-benefit statement

The amendments will result in a shift of cost burden from Canadians to the aerospace industry. The incremental impact from the changes consists of the total cost recovery by TC minus incremental costs to domestic industry. As a result, the present value net benefit will be $10.89 million in a 10-year analytical period from 2023 to 2032.

• Number of years: 10 (2023 to 2032)
• Base year for costing: 2021
• Present value base year: 2023
• Discount rate: 7%

Table 4: Monetized costs (Present value in millions, 2021$)

Impacted Stakeholder	Description of the Cost	2023	2032	Total (Present Value)	Annualized Value
Domestic air carriers and charter services	Increase in fees	$0.33	$0.18	$2.46	$0.35
Domestic aircraft and aircraft parts manufacturers	Increase in fees	$2.32	$1.26	$17.46	$2.49
Domestic aircraft engineering, design and maintenance services	Increase in fees	$0.24	$0.13	$1.82	$0.26
Government and monitoring entities	Increase in certification, inspection, and monitoring costs	$0.02	$0.01	$0.18	$0.03
Domestic training services	Increase in fees	$0.02	$0.01	$0.13	$0.02
Other (individuals, non-aerospace industry) stakeholders	Increase in fees	$0.06	$0.03	$0.46	$0.07
All stakeholders	Total recovered costs table c3 note a	$2.99	$1.62	$22.51	$3.22
Table c3 note(s) Table c3 note a Totals may not add up due to rounding. Return to table c3 note a referrer

Table 5: Monetized benefits (Present value in millions, 2021$)

Impacted Stakeholder	Description of Benefits	2023	2032	Total (Present Value)	Annualized Value
Government	Cost recovery from the domestic industries	$2.99	$1.62	$22.51	$3.22
Government	Cost recovery from the foreign industries	$1.45	$0.79	$10.89	$1.55
All stakeholders	Total benefits table c4 note a	$4.44	$2.41	$33.40	$4.77
Table c4 note(s) Table c4 note a Totals may not add up due to rounding. Return to table c4 note a referrer

Table 6: Summary of monetized costs and benefits (Present value in millions, 2021$)

Impacts	2023	2032	Total (Present Value)	Annualized Value
Total costs	$2.99	$1.62	$22.51	$3.22
Total benefits	$4.44	$2.41	$33.40	$4.77
Net benefit (Total cost recovery minus cost to domestic industry)	$1.45	$0.79	$10.89	$1.55

Qualitative impacts

Minor reductions in effort for TC and stakeholders associated with no longer requiring the development of agreements for unlisted products, as well as domestic travel and overtime costs.

Sensitivity analysis

As previously described, a number of assumptions have been made to estimate the costs of the amendments. To address the effect of uncertainty and variability on these assumptions, a sensitivity analysis is conducted, where variables are assigned different values, and outcomes are re-evaluated. A sensitivity analysis was performed on the following variables: future demand for aeronautical product approval; analytical timeframe; and discount rates.

Demand for aeronautical products approval

To account for uncertainty in the demand for aeronautical products, three demand scenarios are estimated. The central scenario represents the most probable case, where demand for aeronautical products will continue at the annual average demand, based on historical data. The low scenario represents a case where demand for aeronautical products will be 30% lower than the estimated annual average, and a high scenario represents a case where demand will be 30% higher than the estimated annual average. The results of this sensitivity analysis are presented in Table 7.

Analytical timeframe

In the central scenario, the analytical timeframe is a 10-year planning horizon from 2023 to 2032. Table 7 presents the total costs in 15- and 20-year planning horizons.

Discount rates

The central analysis used a 7% discount rate as recommended by TBS. For the purpose of the sensitivity analysis, Table 7 presents the results should a 3% discount rate have been used, as well as a 10% discount rate.

Table 7: Summary of monetized costs and benefits under different sensitivities (Present value in millions, 2021$)

Demand for Approval Activities
	Monetized Benefits	Monetized Costs	Net Benefits table c6 note a
Low (–30%)	$23.38M	$15.72M	$7.65M
Mid (Central)	$33.40M	$22.51M	$10.89M
High (+30%)	$43.42M	$29.32M	$14.09M
Analytical Timeframe
15 years	$43.31M	$29.19M	$14.12M
20 years	$50.37M	$33.95M	$16.42M
Discount Rates
3%	$39.04M	$26.32M	$12.73M
10%	$30.04M	$20.24M	$9.79M
Table c6 note(s) Table c6 note a Net benefits may not be equal to the difference between monetized benefits and monetized costs due to rounding. Return to table c6 note a referrer

Distributional analysis

The aerospace industry is composed of a broad range of industry sectors. Aircraft manufacturing is a complex and labour-intensive process that involves not only a significant number of large and small aircraft parts, but also extensive design and testing components. Although manufacturers of aircraft and aircraft parts will be the most impacted by the amendments, there are other sectors (inside and outside the aerospace industry) that will be affected by these changes. Table 8 presents cost recovery from the domestic and foreign stakeholders.

Table 8: Recovered costs from the industry sector (Present value in millions, 2021$)

Industry Category	Domestic Industry	Foreign Industry	Recovered Costs	Percentage of Recovered Costs
Air carriers and charter services	$2.46M	$0.20M	$2.66M	7.97%
Manufacturers of aircraft and aircraft parts	$17.46M	$10.07M	$27.53M	82.45%
Aircraft overhaul, design and repair	$1.82M	$0.42M	$2.24M	6.71%
Government entities	$0.18M	$0.01M	$0.19M	0.57%
Flight training services	$0.13M	$0.05M	$0.17M	0.51%
Other (non-aerospace industry)	$0.46M	$0.14M	$0.60M	1.80%
TOTAL table c7 note a	$22.51M	$10.89M	$33.40M	100%
Table c7 note(s) Table c7 note a Totals may not add up due to rounding. Return to table c7 note a referrer

As presented above, when combining the domestic and foreign industries, the aircraft manufacturing sector will bear the highest portion of the recovered costs (82.45%), followed by air carriers and charters (7.97%), and those involved in overhaul, design and repair (6.71%). The rest of the industries combined will incur approximately 2.88% of the recovered costs. Only the recovered costs pertaining to the domestic industries are considered as the total incremental cost in the CBA, as the foreign recovered costs do not impose additional burden on Canadians. As a result, the costs recovered from the foreign industries are considered as the incremental net benefit of the amendment.

Small business lens

Analysis under the small business lens concluded that there will be impacts on domestic small businesses associated with the amendments. The CBA does not include the impact on foreign businesses, as these costs are not incurred by Canadians.

To estimate the cost to domestic small businesses, a comprehensive analysis of recorded company data for each charge type was performed to determine which affected stakeholder will be considered a small business. The analysis estimated that 280 domestic small businesses will be impacted by the changes to fixed, hybrid, and/or travel charges. None of the stakeholders that are expected to use hourly service were determined to be small businesses. Although there may be some minor cost savings to small businesses associated with no longer requiring the development of agreements for unlisted products, as well as domestic travel and overtime costs, it was not possible to monetize this impact. These cost savings are affected by the emerging technologies and approval requests for novel products, which is unknown. Table 9 presents the total anticipated cost per charge type to domestic small businesses.

The changes to the fixed charges and the introduction of hybrid charges will result in an incremental cost to domestic small businesses of $3.34 million over the 10-year analytical period (14.8% of total costs).

It is estimated that $16.88 million (75.0% of the total cost) of the incremental cost from this initiative is attributed to changes to hourly charges, which are incurred by domestic large businesses. Since small businesses represent a significant portion of users of fixed, hybrid, and overtime and travel activities, TC has made an effort to keep the charge increase to these activities at a minimum. As an example, the introduction of the hybrid charge will keep the increases to the fixed charge portion of the projects to a minimum, but will allow TC to charge an hourly rate when a project requires extraordinary time investment on the part of TC. The charges are designed to recover TC costs, which do not change depending on the size of the business making the request. As such, no discounts or other accommodations were provided for small businesses.

Table 9: Small business lens summary (in millions of dollars)

• Number of small businesses impacted: 280
• Number of years: 10 (2023 to 2032)
• Base year for costing: 2021
• Present value base year: 2023
• Discount rate: 7%

Activity	Annualized Value	Present Value
Hourly	$0M	$0M
Fixed	$0.05M	$0.37M
Hybrid	$0.28M	$2.00M
Travel and overtime	$0.14M	$0.98M
Total compliance cost table c8 note a	$0.48M	$3.34M
Compliance cost per business	$0.002M	$0.010M
Table c8 note(s) Table c8 note a Totals may not add up due to rounding. Return to table c8 note a referrer

One-for-one rule

The one-for-one rule does not apply, as there will be no incremental change in administrative burden on businesses. For the purposes of the rule, charges and fees do not meet the definition of administrative burden.

Regulatory cooperation and alignment

These amendments are not related to a work plan or commitment under a formal regulatory cooperation forum. The amendments set out charges based on the Canadian specific regulatory framework.

Alignment with other Civil Aviation Authorities (CAA)

For an organization to sell their aeronautical products, they must obtain approval from the jurisdiction in which they operate. If they’d like to sell their products in another country, they must apply for a foreign validation from the responsible jurisdiction or civil aviation authority of the country. Foreign validations tend to take less time than the initial validation, as it is mostly a verification exercise which mostly involves reviewing the documentation of the jurisdiction that provided the original approval. For this reason, for organizations that sell aeronautical products, the total charges for a foreign validation in comparison to the original validation will be less expensive for the client.

Other jurisdictions have adopted a variety of approaches to cost recovery related to aeronautical product approvals. Like Canada, most of the jurisdictions reviewed have adopted a mixture of fixed and hourly fees for performing certification activities:

• The European Union, represented by the EASA, charges a flat fee which ranges from €1,800 (2,616^{footnote 13} CAD) for an aircraft propeller to €2,055,230 (2,987,482 CAD) for a large aircraft.
• Australia’s Civil Aviation Safety Authority charges an hourly fee of 160 AUD (150 CAD).
• New Zealand’s Civil Aviation Authority charges 284 NZD (246 CAD) per hour.
• The U.S. FAA does not charge for its certification activities.

The most important comparators are the European Union and the U.S. Members of the aerospace industry, particularly large OEMs, also want their products certified in the U.S. and the European Union, as these represent significant markets for aeronautical products. These companies pay the significantly higher fees charged by EASA which indicates that these companies could afford to pay a much higher hourly fee than the current $40 per hour charged by TC. It is important to note that the Canadian marketplace is a fraction of the size of the European Union. Consequently, companies lack the same economic incentives to accept and pay high fees in Canada, as the Canadian marketplace offers fewer opportunities to commercialize their goods.

Moreover, the FAA sometimes has longer wait times to receive approvals than Canada, but the fact that the U.S. does not charge fees for certification activities is a counterbalancing factor that must be taken into consideration when revising Canadian fees. The geographical proximity of the U.S. market means that the lack of U.S. fees carries more weight than the willingness of companies to pay the relatively high fees charged by EASA.

Considering how the aforementioned CAAs provide their services, TC has maintained the mixture of fixed and hourly fees and was cautious to avoid raising fees so much that companies that operate in both Canada and the U.S. will seek certification through the FAA rather than TC.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus (GBA+)

The amendments, which deal entirely with charges for activities performed for businesses in the aviation sector, are not expected to result in any differential impacts on the basis of identity factors, such as gender, race, age, ethnicity, culture, religion, language, etc.

Implementation, compliance and enforcement, and service standards

Implementation

The new and updated fees come into force on June 21, 2023. Any change in the coming-into-force date does not affect the analysis or the anticipated impacts of the amendments.

In the case of a fixed charge service request that is in progress, but not completed before June 21, 2023, the charge that was applicable at the time the service was requested is payable. In the case of hourly charges, the new hourly rate will be payable, and the number of hours spent on the activity is reset to zero as of June 21, 2023. In the case of hybrid charges, the fixed portion of the charge that was applicable at the time the service was requested is payable and the number of hours spent on the activity is reset to zero as of June 21, 2023.

TC considered phasing in fees; however, the Department has delayed the planned implementation of the fees by multiple years, thereby providing stakeholders and industry time to prepare for the increases. TC also believes that the fees are appropriate for the affected stakeholders based on the analyses and consultations performed to determine the fees.

Compliance and enforcement

Applicants will be required to submit payment for fixed charges and the first part of the hybrid charges with their application. Payments can be made by credit card, debit card, wire transfer, or direct deposits, and options exist to submit payments online or by telephone. Hourly charges will be invoiced to the applicant every two months. If invoices are not paid within 30 days, daily interest will be incurred. In cases of non-payment, TC has the option to pursue the debt in any court of competent jurisdiction as per subsection 4.4(4) of the Aeronautics Act.

Service standards

Service standards already exist for aeronautical product approvals. These service standards have been reviewed to ensure that they continue to be accurate and new service standards have been developed and were published in the fee proposal. Table 10 outlines the service standards by item number and description, as listed in the Regulations. The incorrect service standards for Part I, items 5, 6a, 6b, 6c, 7, 9 and Part II, 1b were prepublished in the Canada Gazette, Part I (due to an error made while transcribing data). This error has been corrected. TC has also updated the language in the service standards for Part I, items 10, 11 and 12 to state that the service standard begins when TC receives a complete application rather than when TC accepts an application for greater clarity. TC has updated the table below to reflect the correct service standards. As per the SFA, if a service standard is not met, TC will remit a portion of the fees paid by that client.

Table 10: Service Standards by Charge

Part, Item	Charge	Service Standard
I, 1	Initial or amended type certificate following a streamlined type design examination of any aeronautical product that are the responsibility of an airworthiness authority other than the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 2	Approval of a change to an existing type design approved under a supplemental type certificate, that does not result in the issuance of amended supplemental type certificate.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 3a	Amended design approval document approved by an employee of the Department of Transport: supplemental type certificate.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 3b	Amended design approval document approved by an employee of the Department of Transport: supplemental type certificate (single or several product serial number[s]).	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 4	Amended design approval document for a supplemental type certificate (single or several product serial number[s]) associated with modifications to a type design approved by a delegate of the Department of Transport.	TC will establish the initial certification basis, pursuant to the Canadian Aviation Regulations, within 120 business days of being satisfied that all necessary regulatory and design standard requirements for the product’s type design have been identified.
I, 5	Validation of a foreign supplemental type certificate intended to secure Canadian acceptance of the foreign supplemental type certificate.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 6a	Repair design approval (repair design) issued by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 6b	Repair design approval (repair process) issued by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 6c	Part design approval issued by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 7	Amended repair design approval, approved by an employee of the Department of Transport, to record a repair.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 8	Repair design approval or amended repair design approval, approved by a delegate of the Department of Transport, to record a repair.	TC will establish the initial certification basis, pursuant to the Canadian Aviation Regulations, within 120 business days of being satisfied that all necessary regulatory and design standard requirements for the product’s type design have been identified.
I, 9	Amended part design approval, approved by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
I, 10	Administrative change to any document for which a charge is payable under Schedule V.	TC will issue the document within 30 business days after receipt of a complete application.
I, 11	Approval of a ministerial exemption under subsection 605.84(3).	TC will issue the document within 60 business days after receipt of a complete application.
I, 12	Approval of an alternative means of compliance under subsection 605.84(4).	TC will issue the document within 60 business days after receipt of a complete application.
II, 1	Initial type certificate for aeronautical products that are (a) the responsibility of the Department of Transport; or (b) an airworthiness authority other than the Department of Transport.	(a) TC will issue a design approval document within 60 business days after accepting the applicant’s declaration attesting to the demonstration of conformity made pursuant to sub-paragraph 521.33(b) of the Canadian Aviation Regulations. (b) TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
II, 2	Approvals of all additions or changes in the period beginning on April 1 in one year and ending on March 31 in the next year to data under the same type certificate for aeronautical products that are the responsibility of the Department of Transport or an airworthiness authority other than the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
II, 3	Initial type certificate or approvals of all additions or changes to data under the same type certificate in respect of an aeronautical product other than one listed in item 1 of this Part.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
II, 4	Initial or amended Canadian Technical Standard Order (CAN–TSO) design approval for an Auxiliary Power Unit.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
II, 5	Assistance provided by an employee of the Department of Transport related to a preparation of an application for certification, whether or not a formal application results.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
III, 1	Supplemental type certificate approved by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
III, 2	Supplemental type certificate (single product serial number) approved by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
III, 3	Supplemental type certificate (several product serial numbers) approved by an employee of the Department of Transport.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
III, 4	Supplemental type certificate (single or several product serial number[s]) approved by a delegate of the Department of Transport.	TC will establish the initial certification basis, pursuant to the Canadian Aviation Regulations, within 120 business days of being satisfied that all necessary regulatory and design standard requirements for the product’s type design have been identified.
III, 5	Validation of each foreign supplemental type certificate intended to secure the issuance of a Canadian supplemental type certificate.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
III, 6	Initial Canadian Technical Standard Order (CAN–TSO) design approval for an appliance or part other than an auxiliary power unit.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.
III, 7	Amended Canadian Technical Standard Order (CAN–TSO) design approval for an appliance or part other than auxiliary power unit.	TC will acknowledge receipt of the application and provide the applicant with the name of the responsible designated contact, the project number assigned to the file and the fee information, within 30 business days of receiving an application.

Contact

Chief
Regulatory Development
Civil Aviation
Safety and Security
Transport Canada
Place de Ville, Tower C
Ottawa, Ontario
K1A 0N5
Telephone: 613‑990‑1184 or 1‑800‑305‑2059
Fax: 613‑990‑1198
Email: carrac@tc.gc.ca
Web: www.tc.gc.ca