Air Transportation Regulations (SOR/88-58)

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

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

Financial Requirements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Provision of Aircraft with Flight Crew

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

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

• (3) The application shall include the following:

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

  • (b) the name of the licensee;

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

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

  • (e) the aircraft type to be provided;

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

  • (g) the points to be served;

  • (h) the frequency of service;

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

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

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

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

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

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

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

• 8.3 (1) The approval referred to in section 8.2 is not required if, in respect of the air service to be provided, the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection 8.2(4) and, where applicable, subsection 8.2(5), are in effect and

  • (a) the proposed air service is a service between Canada and the United States and both the licensee and the person who is providing all or part of the aircraft with flight crew hold a licence to operate the proposed service;

  • (b) the proposed air service is an international service and a temporary and unforeseen circumstance has transpired within 72 hours before the planned departure time of a flight or the first flight of a series of flights that has forced the use of all or part of an aircraft, with flight crew, provided by another person for a period of not more than one week, and the licensee has notified the Agency of the flight or the first flight of a series of flights in accordance with subsection (2);

  • (c) the proposed air service is an international service to be provided through a commercial arrangement, including code-sharing, both the licensee and the person providing part or all of the aircraft with flight crew participate in the marketing of the service and the licensee has notified the Agency of the flight or the first flight of a series of flights in accordance with subsection (3); or

  • (d) the proposed air service is a domestic service and the person who is providing all or part of the aircraft with flight crew holds a licence to operate the proposed service.

• (2) The notification referred to in paragraph (1)(b) shall be given before the proposed flight or flights and shall contain

  • (a) a description of the temporary and unforeseen circumstance and an explanation of why it requires the use of all or part of an aircraft with a flight crew provided by another person;

  • (b) in respect of the air service to be provided,

    • (i) a statement that the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection 8.2(4) and, where applicable, subsection 8.2(5) are in effect and that the liability insurance coverage is available for inspection by the Agency on request, or

    • (ii) where use of the aircraft and flight crew does not require an Agency licence, a copy of the Canadian aviation document and the certificate of liability insurance;

  • (c) where the aircraft to be used is larger than that authorized in the charter permit, a statement that the number of seats sold will not be greater than the number authorized in the charter permit;

  • (d) the name of the licensee;

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

  • (f) the aircraft type to be provided;

  • (g) the number of seats and the cargo capacity of the aircraft to be provided;

  • (h) the date of each flight; and

  • (i) the routing of each flight.

• (3) The notification referred to in paragraph (1)(c) shall be given at least five business days before the date of the proposed flight or the first flight of a series of proposed flights and shall contain

  • (a) the name of the licensee;

  • (b) a description of the arrangement;

  • (c) in respect of the proposed air service,

    • (i) a statement that the appropriate licence, Canadian aviation document and the liability insurance coverage referred to in subsection 8.2(4) are in effect and that the liability insurance coverage is available for inspection by the Agency on request, and

    • (ii) the name of the operator of the aircraft;

  • (d) the type of aircraft to be provided;

  • (e) the points to be served;

  • (f) the frequency of the service;

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

  • (h) the reasons why the use of a commercial arrangement is necessary.