What We Heard Report — Public Consultation on Modernizing Fees for Aeronautical Product Approvals

Preliminary feedback sessions

Between March 2018 and May 2018, Transport Canada (TC) held engagement sessions with stakeholders to communicate our plan to modernize fees. These engagement sessions included discussions on aeronautical product approvals and their associated fees. We asked for feedback on broad fee structure changes, including:

  • taking away the hard fee cap
  • introducing hybrid fees
  • introducing new fees for services that are currently free
  • setting service standards

Our discussions went beyond the realm of fees. We discussed the topic of Transformation in general. Participants identified parts of the aircraft certification process that they think TC could improve.

Here’s what we heard:

  • In general, the Original Equipment Manufacturer (OEM) community accepts the need to raise fees, as this has not been done in two decades
  • The OEM community’s primary concern is with the lack of cost certainty if the hard fee cap is eliminated
  • Smaller industry members are extremely concerned about the impact of higher fees on their international competitiveness, because:
    • The U.S. doesn’t charge fees, and
    • Several products certified in the U.S. are accepted in Canada without fees, due to a bilateral agreement between TC and the U.S. Federal Aviation Administration.

These comments were considered during the development of the comprehensive Fee Proposal. This proposal contains detailed information supporting the proposed changes to the existing fee structure. It includes a section on engagement, summarizing comments from these preliminary consultation sessions.

Consultation on Fee Proposal

Between September 5, 2018 and October 19, 2018, TC held a public consultation on the Fee Proposal for Aeronautical Product Approvals and published this Fee Proposal on the TC Let’s Talk Fee Modernization webpage.

To invite comments and input, we emailed the Fee Proposal to 680 aviation stakeholders on the Canadian Aviation Regulation Advisory Council (CARAC) distribution list. We also:

  • held a face-to face meeting with aviation stakeholders
  • leveraged existing venues to encourage stakeholders to review the proposal and send comments.

At the close of consultations on October 19, 2018, we had received 11 comments and 4 submissions from stakeholders and the general public.

Here are the emerging themes from the comments and submissions, in no particular order:

  • Recognized need for fee modernization

Participants agreed to the principle that those who directly benefit from a service should pay a greater share of the costs. They also saw the need to modernize our fees. They advocated for enough allocation of resources to do certification work.

Participants were concerned about displacing design approval services from Canada to elsewhere. They recommended that the fee increase be phased in over 5 years.

  • Elimination of hard fee caps

Participants were concerned about the lack of cost certainty if the hard fee caps are eliminated. They saw the need for a way to give applicants a level of predictability and accountability for these fees. They requested that TC share more information/data on billable hours with stakeholders.

They suggested creating a threshold based on the expected level of effort for a “routine” certification project. They also urged TC to review the principles originally used to determine the hard fee caps and to uphold these principles in the future. They called for more face-to-face consultation on this topic.

  • Hybrid fees

Participants requested a better explanation of the concept of hybrid fees. For example, they asked us to clarify whether the fixed fee includes 300 hours of Transport Canada effort for each service item.

Participants were concerned about the lack of cost certainty if we introduce hybrid fees for the industry.

They asked that the total fee for complex items be predictable. They also opposed a new fee for TC surveillance of Ministerial delegate design change approvals. They suggested that we reassess the set level of effort and threshold hours for hybrid fees every few years.

  • Service standards

Participants mentioned that the number of days in the service standards are too long, and recommended reducing the time to provide services by half. They mentioned that the current service standards are focused on administrative aspects, as they only refer to response times to acknowledge the listed submissions and assign personnel to a project. They called for more granular service standards, with time limits for specific actions in a given certification process.

Furthermore, participants asked for service standards and performance indicators that could measure areas to improve. For example, they expect TC to quantify the hours spent to-date on a given project to the applicant and identify the key issues remain to close a project.

Participants were also concerned with our ability to meet our service standards. They expect that increased fees will lead to the hire of more resources, which should help us meet or exceed the service standards more often.

Next Steps

Comments received through this process have been recorded and will be considered during the development of the regulations.

The next round of consultation will occur when the proposed regulatory changes are pre-published in Canada Gazette Part I. TC will notify stakeholders when this proposal appears in the Canada Gazette.