How we work at Industry Regulation and Determinations
Essential Regulation for Canada's Air Carriers
When it comes to regulating air transportation, the Agency is responsible for:
- issuing licences, authorities and charter permits to Canadian and foreign air carriers offering services to the public;
- enforcing all applicable licensing requirements;
- participating in the negotiation and implementation of international air transport agreements as part of the Government of Canada negotiating team; and
- regulating international air tariffs according to bilateral air transport agreements and Canada's Air Transportation Regulations.
The Agency also ensures consistency with Canadian legislation and regulations, including with respect to:
- air fares;
- rates and charges;
- terms and conditions of carriage; and
- code-sharing, wet leasing and charters.
Performance Target
Target Achieved
100% of air carriers' insurance certificate renewals reviewed
For more information on the Agency's air licensing activities, including an air carrier licence search tool, go to www.cta.gc.ca/eng/licensing
For more information on tariffs,
go to www.cta.gc.ca/eng/tariffs
For more information on the regulation of Canada's air transportation sector,
go to www.cta.gc.ca/eng/air-industry
Making air tariffs available
Under Canadian law, air carriers must have a tariff that covers certain topics. An air carrier's tariff is, in effect, the contract between the service provider and the traveller. When Canadians travel by air, their rights and obligations are governed by this contract.
Legislation now requires air carriers to post their tariffs on their Web sites selling their services, as well as have them available to the public at their business offices and post signage to this effect.
The Agency provided sample signage for air carriers, in early 2010, to post in their business areas. The sample signage has been downloaded over 217 times from the Agency's Web site.
Agency follow-up with air carriers has ensured that 100% of Canadian air carriers have now posted their tariff on their Web sites. In addition, 54 foreign carriers have posted signage for tariffs that apply to travel to and from Canada. An additional 15 foreign carriers are currently working with Agency staff to update their tariffs before placing them on their respective Web sites.
Performance Target
Target Achieved
85% of licences issued within 14 days of receipt of completed application
Performance Target
100% of air licence suspension orders issued within 48 hours upon notification of Air Operator Certificate suspension or cancellation, or of invalid insurance
Consultations on updating Canada's Air Transportation Regulations
In 2010-11, the Agency launched a review to update the Air Transportation Regulations that govern the implementation of the Canada Transportation Act. The Regulations cover such Agency responsibilities as the classification of aircraft and air services, domestic and international licensing and conditions governing how aircraft are provided with flight crew.
The Agency invited stakeholders to submit comments and suggestions – both on proposals developed by the Agency and on related topics of interest to stakeholders. The consultations are being held in three phases, each covering a different section of the Regulations. The first phase was completed in summer 2010 and the results are expected to be published in early spring 2011. The second phase of consultations is scheduled to begin in summer 2011.
Licensing
The Agency licenses Canadian applicants to operate air services within Canada, and licenses Canadian and foreign applicants to operate scheduled and non-scheduled international air services to and from Canada.
The Agency processed 1,036 air licensing activities over the course of 2010-11, including applications for new licences, cancellations, suspensions, and reinstatements.
The Agency continues to maintain a licensing regime that ensures that publicly-available air services:
- meet the applicable Canadian air ownership and control requirements;
- have appropriate liability insurance;
- meet certain financial requirements when they start operations, if they are Canadian; and
- hold a Canadian aviation document issued by Transport Canada.
Of the 132 applications for new licences processed in 2010-11:
- 5 were withdrawn; and
- 127 resulted in a licence being issued.
Of these,
- 26 were issued to 5 Canadian applicants for the operation of a scheduled international air service using large aircraft between Canada and a foreign country.
| Canadian Airline | New licences issued for services between Canada and… |
|---|---|
| Air Transat | Jamaica, the Bahamas, Turkey |
| Air Canada | Angola, Cameroon, Guinea, Ivory Coast, Uganda, Morocco, Tunisia, Burkina Faso, Burundi, Ghana, Ethiopia, Rwanda, Turkey, Sudan, Congo, Senegal, Israel |
| Enerjet | Guyana |
| CanJet | Jamaica, the Bahamas, Cuba |
| Sunwing Airlines | Member States of the European Community, Cuba |
Financial fitness
In 2010-11, the Agency completed three reviews of the financial fitness of Canadian applicants seeking to offer domestic or international services using aircraft with more than 39 seats.
The purpose was to ensure they had a reasonable chance of success, which minimizes disruptions in service and protects consumers. All three were approved by the Agency.
Canadian ownership and control
The Agency reviewed 60 Canadian applicants already operating or proposing to operate domestic or international air services in 2010-11.
Four reviews involved major investigations because the companies had complex ownership structures or there were non-Canadian minority shareholders or business associates who might have exercised control over the applicant.
After verifying that the companies were incorporated in Canada, that at least 75% of their voting interests were owned and controlled by Canadians, and that they were controlled in fact by Canadians, the Agency approved all 60 applications.
Bilateral air transportation agreements
In 2010-11, the Agency participated in six successful negotiations, namely with Jamaica, Switzerland, Trinidad and Tobago, Qatar, Egypt and Brazil.
Performance Target
Target Achieved
92% of Charter Permits issued within 30 days
To learn more about charter permits,
go to www.cta.gc.ca/eng/charters
For more information on the Agency's role in bilateral relations,
go to www.cta.gc.ca/eng/bilateral
Essential Regulation for Canada's Rail Carriers
The Agency determines the railway revenue caps for the Canadian Pacific Railway Company (CP) and the Canadian National Railway Company (CN) for the movement of western grain and the regulated railway interswitching rates. It also processes applications for certificates of fitness for the proposed construction and operation of railways, and approvals for railway line construction.
Western grain
The revenue caps are a form of economic regulation that enables CN and CP to set their own rates for services, provided the total amount collected remains below the ceiling set by the Agency.
It is a complex process that sees the Agency annually consult with grain producers, the Canadian Wheat Board, shipper organizations, railway companies, grain companies, other federal departments, and provincial and municipal governments to set revenue caps. At the end of a year, the Agency must then determine whether or not each cap has been exceeded by the railway company and assess financial penalties based on the amount if a railway goes over the cap.
Over the past year, the Agency introduced a new approach to managing the revenue cap program. This approach, which recognizes the long-standing and established nature of this program, will ensure that it is more predictable, efficient and manageable for all parties involved.
Increase in revenue cap inflation factor
In April 2010, the Agency announced a seven percent increase in the Volume-Related Composite Price Index– essentially an inflation factor – for CN and CP revenue caps for the movement of western grain. This Decision set the index at 1.1384 for the 2010-11 crop year beginning August 1, 2010.
Revenue cap for crop year 2009-10
In December 2010, the Agency announced that the revenues of CN and CP for the movement of western grain had not exceeded their respective revenue caps for crop year 2009-10 – the first year since 2002-03 that both railways have been under their respective caps.CN's grain revenue of $463,919,885 was $3,734,477 below its revenue cap of $467,654,362 while CP's grain revenue of $454,043,873 was $1,681,884 below its cap of $455,725,757.
Modernizing the rail regulatory regime through consultation
The Agency encourages a transparent and collaborative approach to its operations and welcomes the views of its stakeholders and interested parties on its practices. In 2010-11, the Agency began consultations on the following rail transportation matters:
Railway cost of capital methodology
In fall 2010, an examination of the existing cost of capital methodologies and principles, the Agency's current cost of capital methodology, as well as those used by other economic regulatory bodies was completed by an independent consultant. The consultant's report was released and the Agency is currently holding consultations with interested parties. The consultations will be completed in spring 2011.
Interswitching rates
The first round of consultations on the Agency's Railway Interswitching Regulations resulted in significant proposed changes to the methodology the Agency uses to determine interswitching costs incurred by the railways. Therefore, in spring 2010, the Agency held a second round of consultations. The Agency has reviewed the submissions and is now moving forward with an amendment to the regulated interswitching rate.
Net salvage value guidelines
When a railway company seeks to discontinue use of a railway line, the Agency can be called upon to assist in the process by determining the net salvage value of the railway assets. Following earlier changes to the Canada Transportation Act, the Agency began work in 2010-11 on guidelines for the determination of net salvage value. Draft guidelines will be distributed to interested parties for consultation in summer 2011.
For a list of federally-regulated railway companies,
go to www.cta.gc.ca/eng/rail-industry
Essential Regulation for Canada's Marine Industry
The Agency is responsible for determining if Canadian ships are suitable and available to operate commercial services in Canadian waters, which may otherwise be provided by foreign or non duty-paid ships upon request by a resident of Canada.
In July 2010, the Agency released an updated version of its Guidelines Respecting Coasting Trade Licence Applications. The Guidelines were developed through extensive consultations with stakeholders and interested parties from across the country's marine sector.
Performance Target
Target Achieved
80% of coasting trade applications processed within 90 days (when an offer is made)
Modifications to the Guidelines clarify:
- The Agency's expectations with respect to the timing of applications and offers;
- The content of submissions to ensure that they contain all relevant facts and circumstances;
- The roles and responsibilities of the applicant, the ship offeror and the Agency throughout the decision-making process;
- The Agency's mandate under the Coasting Trade Act; and
- The Agency's administrative process, under which Canadian owners or operators of suitable and available vessels are provided an opportunity to object to applications for the use of foreign vessels in Canadian waters.
Performance Target
Average of 40 days to complete rulings on coasting trade applications (with offer)
Performance Target
Target Achieved
95% of coasting trade applications processed prior to the commencement date (when no offer is made)
