Apply to participate in the regulatory sandbox for minor change approvals used in support of a major modification

On this page

• Project overview
• Description of regulatory exemption
  • Clearly differentiate between a modification to an aeronautical product and a change to a type design
  • An aircraft certification delegate determines the effect of a proposed modification
  • Re-introduce minor change and major change to type design
• Regulatory challenges
  • Drivers for change
  • Potential benefits
  • Innovation
• Seeking participation
  • Conditions for participating
• Application process
  • Step 1
  • Step 2
  • Step 3
• After you apply
• Final report
• Contact us and feedback
  • Opportunity for feedback

Project overview

Transport Canada Civil Aviation has launched a regulatory sandbox for the third-party approval of minor changes to the type design of an aeronautical product. This regulatory sandbox will let us safely experiment with a proposed new method for an appropriately authorized design approval representative (DAR), airworthiness engineering organization (AEO), or design approval organization (DAO) – hereinafter “aircraft certification delegate” to approve engineering technical data in support of an eligible major modification. This new method is a “minor change approval”, issued under the design approval framework of Subpart 521 of the CARs as modified by the regulatory sandbox. The minor change approval may be used as “approved data” in support of an eligible major modification, which is performed under Subpart 571 of the Canadian Aviation Regulations (CARs). For eligible major modifications, a minor change approval could be used instead of needing a supplemental type certificate (STC) for third-party design approvals.

A regulatory sandbox is a regulatory experiment crafted and controlled by a regulator. It is a space designed to test a new product, service, approach, or process under supervision before it fully enters the marketplace. The test gathers evidence or information to help design or administer a regulatory regime. It is carried out in real time in the real live world. The regulatory sandbox helps show how this new process could interact with and impact people, existing markets, and regulation.

Within the sandbox, provisions of Subparts 521 and 571 of the CARs will be modified to allow a trial of the new regulatory processes.

The evidence gathered from this regulatory sandbox will allow us to make better-informed decisions when considering amendments to the CARs and supporting the regulatory framework.

Description of regulatory exemption

The regulatory sandbox is implemented under a regulatory exemption. The regulatory exemption provides relief from the application of certain provisions of the regulations, provided that the conditions of the exemption are followed. The conditions include the required use of three alternate provisions from the current regulations. The alternate provisions allow participants to use a design approval pathway that is not available under the current regulations.

Clearly differentiate between a modification to an aeronautical product and a change to a type design

The current definition of major modification, as set out in subsection 101.01(1) of the CARs, is “an alteration to the type design of an aeronautical product….”. This definition contradicts itself. The terms “alteration” and “type design” are not compatible terms for use in the definition.

A type design is the set of data and information approved under Subpart 521 of the CARs necessary to define an aircraft, aircraft engine, or propeller, together with its approved operating and airworthiness limitations, for the purpose of airworthiness determination. In Canada, a type design also includes data and information necessary to define the environmental characteristics required for aircraft noise and emissions approval or certification. An amended type design is described as a “change” to the type design.

An alteration is a maintenance activity for the performance of work under Subpart 571 of the CARs to alter an aeronautical product approved under a type certificate, typically to affect performance or functionality.

A change to the type design of an aeronautical product under Subpart 521 of the CARs should not be confused with a modification under Subpart 571 of the CARs. The regulatory sandbox addresses the conflicting use of both “alteration” and “type design” in the current definition of a major modification. It introduces a new definition of major modification that refers only to an alteration of an aeronautical product. The new definition does not refer to a type design.

An aircraft certification delegate determines the effect of a proposed modification

The current definition of under Subpart 101 of the CARs of a “major modification” is a modification that “…has other than a negligible effect…” on the airworthiness or environmental characteristics of an aeronautical product. Under the regulatory sandbox, the definition of “major modification” would instead recognize that licensed maintenance personnel are not determining the effect on airworthiness or environmental characteristics in classifying a proposed modification, and that further qualified engineering review is needed to make that determination. The regulatory sandbox definition replaces “has other than a negligible effect” with “might appreciably effect.” Whereas the person intending to perform a major modification classifies the modification, revising the definition in this way clarifies that the effect on airworthiness or environmental characteristics is not confirmed at this stage, but that the possibility of an appreciable effect has been identified. This allows determining the effect of the modification to be deferred to the aircraft certification delegate. Hence, under the regulatory sandbox, the conclusion that every major modification has other than a negligible effect (or has an appreciable effect) is not automatic by virtue of the wording of the new definition of a major modification.

A major modification may correspond either to a major change or to a minor change to the type design. This depends on the result of an engineering review.

Re-introduce minor change and major change to type design

The regulatory sandbox would re-introduce “minor change” and “major change” as separate classifications under Subpart 521 of the CARs. Although both “minor” and “major” modifications were provided for in the former Engineering & Inspection Manual (1952 to 1991), these terms were removed from the design approval functions of Airworthiness Manual Chapter 513, First Edition, effective January 1, 1991, and were removed entirely for the CARs with the coming into force of subparts 511 and 513 of the CARs on December 1, 1998. The purpose of classifying changes as either minor or major would be to determine which changes may require direct Transport Canada Civil Aviation oversight in their approval (the major changes), and those approvals that may be carried out by industry without direct Transport Canada Civil Aviation involvement (the minor changes). The regulatory sandbox would allow a third-party (a person other than the type certificate or STC holder) appropriately authorized aircraft certification delegate to approve minor changes without direct involvement from Transport Canada Civil Aviation. The extent to which an aircraft certification delegate may be authorized to approve minor changes would be in consideration of their individual knowledge, experience, and technical expertise. The third-party appropriately authorized aircraft certification delegate must have processes (as would a type certificate or STC holder) to make sure the changed type design still complies with its existing certification basis.

A minor change would be “approved”, as the ICAO Standards of Annex 8 to the Chicago Convention require that all changes be approved. In the regulatory sandbox, proposed changes meeting the criteria set out in subsection 521.152(1) of the CARs would be considered a “major change.” A major change to a type design requires approval with the use of an amended type certificate procedure (Division IV of Subpart 521 of the CARs), or the issue of a new STC if the design change is proposed by an applicant other than the current type certificate or STC holder.

This regulatory sandbox is not intended for use by a type certificate or STC holder in amending their own type designs; a holder may use the provisions of section 521.154 of the Canadian Aviation Regulations (CARs) to make a change other than a change referred to in subsection 521.152(1) of the CARs.

Regulatory challenges

Drivers for change

The Canadian aeronautical product design industry found several implementation challenges when moving to Subpart 521 of the CARs from its predecessor regulations. Issues were identified with the new regulations, including errors and inconsistencies in these regulations and a lack of explanation of the intended interpretation and application of numerous provisions. We are rewriting Subpart 521 to address these issues.

As part of assessing possible regulatory amendments, we are seeking to address stakeholder concerns with the classification criteria for both the performance of and the design of aeronautical product modifications as “major” or “minor.” Since the early 2000’s, stakeholders have been concerned that the criteria for classifying (major) “changes” to a type design under subsection 521.152(1) of the CARs are not consistent with the criteria for major and minor changes from the Federal Aviation Administration in Title 14 of the United States Code of Federal Regulations (14 CFR) sec. 21.93 or from the European Union Aviation Safety Agency (EASA) under Annex I to Commission Regulation (EU) No 748/2012 point 21.A.91.

We have replied that there is no intended technical difference between the classification criteria even though the specific wording of the regulations is not identical. However, we have continued to receive industry feedback that the difference in wording sometimes causes delays and inconsistent classification between Transport Canada Civil Aviation and other civil aviation authorities.

The Treasury Board of Canada Secretariat has been working to modernize Canada’s regulatory system. Targeted Regulatory Reviews are exploring ways to reduce barriers to innovation, economic development, and investment in the Canadian economy. They are helping to make sure that the Canadian regulatory system can accommodate emerging technologies and businesses.

Budget 2018 announced targeted Regulatory Reviews starting with three initial high growth sectors. One of these was transportation and infrastructure. These targeted Regulatory Reviews focus on identifying and addressing regulatory irritants and bottlenecks to innovation, competitiveness, and economic growth. The Government conducted extensive consultations over the summer and fall of 2018. This included an online public consultation through the Canada Gazette. The results were summarized in a What We Heard Report.

One of the irritants submitted to the Regulatory Review 2018 was a perceived disconnect between Standard 571.06 and Subpart 521 of the CARs. Subpart 521 of the CARs does not provide a way, other than by applying for a supplemental type certificate, for an aircraft certification delegate to approve data in support of a proposed simple major modification.

The commenter was an industry association representing the Canadian aviation service and support sector for maintenance and modifications in consultation with aircraft owners and operators. They said that in the United States, the Federal Aviation Administration has a framework for data approval in support of certain major alterations using a means other than a supplemental type certificate. This results in a much lower cost to the installer than a Canadian installer getting a supplemental type certificate or serialized supplemental type certificate. The commenter said that this puts Canadian aircraft maintenance organizations at a disadvantage. Repair Stations in the United States can offer the same installation at a much lower cost and shorter timeframe.

The commenter strongly recommended that we investigate regulations, standards, or guidance that allows an aircraft certification delegate to approve data without needing a supplemental type certificate. This submission is similar to the commenter’s previous representation made in 2013, which repeated their concern going back to before 1998 about its member’s ability to remain competitive when foreign competitors are not held to the same standard as Canadian industry.

Following regulatory research and analysis, we have determined that both issues above may be related. A common solution for both may reduce administrative burden and improve aviation safety. We are considering whether to codify a new regulatory pathway for the third-party design approval of data to support eligible major modifications in a way other than a supplemental type certificate. We are proposing a regulatory sandbox to further explore and demonstrate this.

Potential benefits

Some potential benefits of introducing a minor change approval under Subpart 521 of the CARs, to be used as “approved data” under Subpart 571 of the CARs, are:

• streamlining the design approval process for eligible major modifications where the installation constitutes no more than a minor change from previously approved data
  • this includes removing certification procedural requirements that are disproportionate to the safety risks
  • this encourages innovation by removing barriers to installation approval for potentially safety-enhancing technologies like moving map GPS/GNSS displays, Class B terrain awareness and warning systems, automatic dependent surveillance broadcast in/out equipment, real-time weather information displays, non-required angle-of-attack indicator systems, and carbon monoxide detectors
• removing regulatory procedures and requirements that add little to overall aviation safety while being costly to Transport Canada and aircraft owners/operators
• reallocate Transport Canada service and surveillance resources away from design approvals for simpler and less complex major modifications towards major changes that will have an appreciable effect on airworthiness or environmental characteristics, especially those involving new concepts and new technology at the leading edge of aeronautical product design

Innovation

Changing processes and practices that have been in place for decades can create challenges for both the regulator and the regulated. There may be uncertainty about factors like the impact of current or proposed regulations, possible harm from the innovation, and shifting public attitudes and values toward the innovation or the behaviour that it enables.

We believe that traditional approaches to regulatory development, such as desk research and stakeholder consultations, are not enough to reduce uncertainty. Information and evidence a regulator needs about innovations can be sparse, fragmented, contested or even missing compared to the more established practices. A new ‘data approval’ process for simple modifications would create regulatory uncertainty. This area has been the subject of conflicting interpretation. One interpretation is that the area is largely unregulated. The other interpretation is that the ‘data approval’ process is not enabled by existing regulation. The regulatory sandbox is meant to gather data and information to understand the real-world implications of the proposed regulatory innovation. It will also aim to better understand how easy it may be to regulate, establish surveillance and oversight methodologies appropriate to the level of risk, and to establish the appropriate administrative supports.

Seeking participation

The success of the regulatory sandbox project depends heavily on the participation and contribution of stakeholders. We are seeking aircraft certification delegates to apply to participate in the regulatory sandbox. We will select applicants to participate across a variety of functional specialties, experience, anticipated projects, and regions of Canada. Participating in the regulatory sandbox is voluntary. Participants will not be compensated.

Aircraft Certification delegates authorized under section 4.3(1) of the Aeronautics Act who offer aeronautical engineering services to secure design approval of “third-party” aeronautical products on behalf of the Minister of Transport are invited to apply to participate in the regulatory sandbox.

Conditions for participating

If we select you to participate, you must:

1. be appropriately authorized to approve a minor change in accordance with your approved temporary supplement to your approved delegate procedures manual
2. remain subject to all regulatory requirements that may apply, subject to any exemptive relief granted
3. provide us with data on your operations for monitoring and data collection to support of the goals of the regulatory sandbox
4. remain subject to our surveillance and oversight of your delegated activities done as part of delegate management activities
5. assume some holder responsibilities under Division VIII of Subpart 521 of the CARs respecting the minor change approvals that you issue, including:
   • record keeping
   • providing instructions for continued airworthiness and any required manuals or supplements
   • continued airworthiness support relating to the data approved

Application process

Aircraft certification delegates are invited to apply by following the application conditions of exemption NCR-028-2023.

Step 1

Contact your responsible Regional Manager, Aircraft Certification. Learn about the eligibility requirements and discuss your interest in participating in the regulatory sandbox, your business model, and how you may contribute to the goals of the regulatory sandbox.

Step 2

Send a formal application by letter to your responsible Regional Manager, Aircraft Certification requesting to be considered as a participant in the regulatory sandbox. Explain how you meet the eligibility requirements of the regulatory sandbox. Include a plan for live environment testing by:

• identifying the anticipated engineering discipline(s) which you would use the terms of the regulatory sandbox
• providing a business model
  • for example, a summary of anticipated projects including aircraft types, modifications, geographic region, customers (private, corporate, single, or fleet owner)
• explaining what you think the impacts of using the minor change approval process might be and how it might benefit the Canadian public or aeronautical product consumer
  • consider cost, time or other factors for the aircraft certification delegate, aircraft maintenance engineer / aircraft maintenance organization performing the work, and for the aircraft owner or operator
• committing to provide us with regular (at least every 6 months) feedback on your experience operating in the regulatory sandbox, including:
  • your comments on possible process improvements and the test advisory and guidance material
  • your assessment of any costs/benefits from using the test procedures as they applied to your project(s), any involved aircraft maintenance engineers / aircraft maintenance organizations, and aircraft owners or operators, as compared to your existing process for similar work.

Step 3

If requested, present your application to your Regional Manager, Aircraft Certification. Applicants will have the opportunity to respond to our questions.

Apply through the NCR-028-2023 exemption

After you apply

We will assess each applicant for the regulatory sandbox on a case-by-case basis.

If we select you to participate in the regulatory sandbox, we will work with you to identify your regulatory requirements and the approval procedures to include in your approved procedures manual. Propose a temporary supplement to your existing delegate’s approved procedures manual with any necessary procedures, including conditions and limitations, to support your participation in the regulatory sandbox.

We will review your proposed temporary supplement and may require revisions. If you agree to the temporary supplement to your approved procedures manual, you will receive authorization to operate for the given period in the regulatory sandbox and to issue minor change approvals. Approvals are subject to the identified scope of authority, to the limitations and conditions imposed, and/or to the exemptive relief granted.

Final report

We will publish a final report on the regulatory sandbox experience. This will include an assessment of the feasibility and effectiveness of introducing a minor change approval as a design approval under Subpart 521 of the CARs and related amendments to Subparts 571 and 101 of the CARs.

Contact us and feedback

Please submit comments or questions about this notice to the Chief, Aircraft Certification Standards (AARTC) by email c/o AARTCPProceduralStandards-NormesDeProcedure@tc.gc.ca.

Opportunity for feedback

Feedback is welcome during this project until October 31, 2030. We seek specific feedback from stakeholders as another way for us to fully understand the issues surrounding the design data needs of the Canadian aviation service and support sector for maintenance and modifications. Your document should be divided into multiple sections and each section should be identified by a heading, as seen above.