Aeronautical Product Approval Fee Increases

Summary#

This is a proposed set of changes, published in the Canada Gazette on June 18, 2022, to update fees for aeronautical product approvals under the Canadian Aviation Regulations (section 104, Schedule V). The changes would raise many fees, add new chargeable activities, and index charges to inflation; Transport Canada planned to bring them into force on April 1, 2023 (this was a proposal and not yet final at publication).

What it does#

• Raises the hourly charge for aeronautical product work from $40 to $105 per hour.
• Introduces a new "hybrid" fee for many certifications: a fixed charge for the first 300 hours, then $105/hour for additional hours (up to yearly maximums).
• Replaces many existing fees (96 repealed, 84 new, 8 amended) and adds new chargeable items, for example:
  • post‑certification activities (changes after initial approval),
  • administrative amendments,
  • issuing alternative means of compliance (AMOC) letters, and
  • validation of foreign supplemental type certificates so foreign designs can be sold in Canada.
• Adds recovery of travel and overtime costs for in‑Canada work in certain exceptional cases; travel outside Canada would continue to be billed directly.
• Sets annual maximum hours (and dollar equivalents) by product type — for example, a large transport airplane shows 16,610 hours (equivalent to $1,744,050) as the annual maximum.
• Indexes most fees to the Consumer Price Index each year, under the Service Fees Act.
• Estimates the changes would raise industry cost recovery and increase the program’s cost recovery from about 4% to 22%.

Key cost estimates included in the proposal:

• Total incremental cost to industry over 2023–2032: $29.17 million.
• Domestic industry share: $19.66 million.
• Foreign industry share (net benefit to Canada): $9.51 million.
• Cost to Canadian small businesses over 10 years: $2.92 million.

Who's affected#

• The biggest group affected is manufacturers — aircraft and aircraft parts makers (estimated to bear about 82% of the total cost).
• Other affected groups include air carriers and charter services, overhaul/design/repair shops, flight training and some non‑aerospace companies that seek approvals.
• About 280 Canadian small businesses were identified as likely to face higher costs from fixed, hybrid, or travel charges.
• Foreign companies that apply to sell products in Canada would also pay new or higher fees when seeking Canadian approval or validation.

Why it matters#

• The proposal shifts more of the cost of certification from Canadian taxpayers to the companies that directly benefit from approvals. That reduces public subsidy for certification work.
• For businesses, especially manufacturers, the changes mean higher direct costs to get designs approved or to change approved designs. That can affect project budgets and pricing.
• The hybrid structure and annual maximums aim to balance predictability for smaller projects and cost recovery for large, time‑intensive projects. Some stakeholders raised concerns about cost predictability during consultation.
• Transport Canada said the fee increase is intended to let it keep up with more complex, software‑heavy designs and to maintain service standards; the department also plans IT upgrades and client notifications to help manage the new system.
• These were proposed regulations; the Canada Gazette notice invited comments within 70 days of publication, and the practical effects depended on whether and how the proposal was finalized.