CBAA: Over-regulation in Canada Inviting Gray Market

 - September 27, 2018, 1:41 PM

Over-regulation is threatening the viability of business aviation operators in Canada and opening the door to a gray market, warned the Canadian Business Aviation Association (CBAA). In a report, Creating Modern Regulations and Policies for Business Aviation in the 21st Century, delivered to the Treasury Board of Canada, CBAA stressed that the business aviation segment has been undervalued and is under strain of a one-size-fits-all approach to regulation.

The association pointed to a safety record that makes business aviation the “safest form of flight,” but said, “Despite this record, in recent years business aviation has been required to adhere to regulatory regimes intended for airlines.” These regimes have extended down to the small owner-operator entities, CBAA added.

“We are now facing the unintended consequences of over-regulation: the ‘work around.’ It is becoming more practical for operators to register aircraft in another jurisdiction and fly a flag of convenience or to use a smaller aircraft that falls below the certification threshold than to adhere to the rules as they currently exist,” the association said.

This has created optimum conditions for a gray market in aircraft registration, and as a result, Canada is at risk of losing sovereign oversight, the association contended. CBAA said this is important because the Canadian aviation industry has a footprint that contributes $5.8 billion to the GDP with a total annual output of $12.1 billion, employing more than 47,000 workers with wages approaching $3.5 billion.

Compounding the concern that the government has adopted the one-size-fits-all approach are incomplete regulatory assessments and the lack of reduction in administrative burdens. Feeding into this is critical staff shortages in the government, creating a lack of expertise both at the headquarters and regions, CBAA said.

CBAA reviewed regulatory policies and made a number of recommendations. Chiefly, the association is urging a modern regulatory framework that includes a collaborative approach between government and industry and involves investment in new technologies.

Specific recommended regulatory changes include improvements in flight crew work and rest mandates, safety management system regulations, operator certification and approvals delegation, delegations for minimum equipment lists, flight data recorder regulations, carbon offsetting requirements, and Pan-Canadian price on carbon.