Dec. 20, 2013

By William F. Clark, Clark & Company

This NBAA article is intended to provide Members with an introduction to this topic. Readers are cautioned that this publication is not intended to provide more than an illustrative introduction to the subject matter, and since the materials are necessarily general in nature, they are no substitute for the advice of legal and tax advisors addressing a specific set of facts that readers may face. Additionally, this version of the article is dated Dec. 20, 2013, and does not incorporate any statutes, regulations or guidance released after that date.

When foreign private operators, including U.S. Part 91 operators, can continue to operate into, out of and through Canada without obtaining any technical competency authority from Transport Canada (Foreign Air Operators Certificate FAOC), but more importantly, any economic authority from the Canadian Transportation Agency (CTA).

Canada entered the deregulation era, the legislated mandate to the CTA legislation was reduced from a “hire and reward” oversight, to a “publicly available” oversight. For numerous years, Canadian, U.S. Part 91 and foreign private operators operated comfortably utilizing their business aircraft in the same manner as utilized in other countries, by conveying company personnel, joint venture participants, customers and contractors.

Several years ago, the CTA issued a violation against a Part 91 operator, saying that carriage by private business aircraft of any more than officers, directors or employees of the operating company could be deemed by the CTA to be a commercial air service, and could require economic authority.

Such a regulatory approach would be devastating to business aviation, not only from a cost and compliance standpoint, but also because the ruling failed to recognize that companies have long relied on their airplanes as a critical asset for transporting non-company personnel – including business partners, clients, consultants, prospective customers and others – from distant locations to their places of business in support of their companies’ overall business objectives.

NBAA participated in the defense of that Part 91 operator through two levels of the Transportation Appeal Tribunal of Canada (TATC) and on to the Federal Court of Canada.

TATC, in the initial review hearing, agreed with industry’s long held viewpoints on utilization of Part 91 aircraft. Subsequent appeals resulted in the federal court redirecting the matter back to TATC for a redetermination, and supported the test provided by the original review decision.

The CTA, not desiring direction from TATC, issued a reversal decision removing the violation on the Part 91 operator, and setting forth criteria where air services may be deemed publicly available. These are as follows:

  • Offer and made available to the public; (The individual can, on their own initiative, reasonably expect, on contacting the aircraft operator, to have access to the flight; discretion as to the availability to travel is in the discretion of the individual; discretion on the availability to travel is not in the hands of the aircraft operator.)
  • Provided by means of an aircraft.
  • Provided pursuant to a contract or arrangement for the transportation of passengers or goods.
  • Offered for consideration.

CTA addressed business aviation operations specifically, alleviating the industry’s concerns.

“The operation of corporate aircraft by an organization for the use and transportation of its officials, directors, employees, contractors, suppliers, and goods (or those of any parent, affiliated or subsidiary companies) in the conduct of the organization’s business is generally also considered to be private carriage and not a publicly available service and, therefore, an agency licence would not be required to operate this service,” the CTA decision states. “The same would apply to the transportation of the organization’s clients and customers where the travel is not pursuant to a contract or arrangement for consideration.”

We continue in our advice to Part 91 operators that all operations be declared as private without elaboration. There are many allowances to Part 91 operators under 14 CFR §91.501, (time shares, interchange, joint ownership, flight expenses, etc.) which the rest of the aviation world, and specifically Canada, would deem to be commercial operations. As home country allowances prevail in foreign operations, Part 91 operators will reduce their problems on entry to Canada and other countries, by merely confirming the private operation factor, without detailing any of the commercial relationships which may be occurring on that particular operation.

View the CTA decision. (PDF)

About the Author

William F. Clark of Clark & Company, Toronto, Ontario is a member of NBAA’s Regulatory Issues Advisory Group. He can be contacted at (416) 681-9900 or