Bruce goes off on one – Canada’s proposed drone regulations clobber aeromodellers

Drone Stuff This Week regular Bruce Simpson posted a VLOG this morning, all about Canadas proposed regulations.

He is not delighted! On reading them nor am I. I cannot believe the Model Aeronautics Association of Canada can be impressed.

Put quite simply if you are younger than 16 model aircraft flying may not be for you. The regulations as they stand, create financial and paperwork hurdles for all. On the face of it strict rules for MAACs 13,000 strong membership that have been quietly minding their own since 1949.

This is the meat in the sandwich. The full document is here I expect this will be a bone of contention in tonights DSTW.

The proposed amendment introduces defined operating categories based on the weight of the UA model as well as the physical operating environment. The proposed Regulations intentionally do not distinguish between recreational and non-recreational operations since the risks they pose are considered the same. Recreational operations that would be impacted by this amendment include the recreational operations that are currently required to adhere to the Interim Order and the existing “model aircraft” category operated under the auspices of MAAC. The term non-recreational operations captures operations by academic institutions for research purposes and government entities such as municipal police; both of which are considered non-recreational where a person or organization will use the UAS for a service to others for a fee. The definitions of both “model aircraft” and “unmanned air vehicle” as currently found in the CARs would be replaced with that of “unmanned aircraft systems.”

Three UAS operating categories are proposed to mitigate the risks by requiring increasingly more stringent requirements as the weight of the UA increases, as well as the areas of operation.

UA of more than 250 g but not more than 25 kg

The following requirements, for example, would apply to all UAS pilots/operators irrespective of the weight of the UA and areas of operation:

• Clearly mark the UA with the name, address and telephone number of the operator;
• Notify air traffic control if the UA inadvertently enters or is likely to enter controlled airspace;
• Operate in manner that is not reckless or negligent (that could not endanger life or property);
• Give right of way to manned aircraft;
• Use another person as a visual observer if using a device that generates a streaming video also known as a first-person view (FPV) device;
• Confirm that no radio interference could affect the flight of the UA;
• Do not operate in cloud; and
• Have liability insurance of at least $100,000.

UA of more than 250 g but not more than 1 kg (very small)

It is proposed that a recreational or non-recreational UA pilot who operates a UA that weighs between 250 g and 1 kg and who operates it anywhere must adhere to the following requirements and limits including, but not limited to:

• (1) Pass a written knowledge test (similar to a boating (see footnote 4) test) to demonstrate aeronautical knowledge in specific subject areas, such as airspace classification and structure, the effects of weather and other areas;
• (2) Be at least 14 years of age;
• (3) Operate at the following minimum distance from an aerodrome: 3 nautical miles (NM) [5.56 km] from the centre of the aerodrome. The required distance from heliports and/or aerodromes used exclusively by helicopters would be 1 NM (1.85 km);
• (4) Operate at least 100 feet (30.5 m) from a person. A distance of less than 100 feet laterally would be possible for operations if conditions such as a reduced maximum permitted speed of 10 knots (11.5 mph) and a minimum altitude of 100 feet are respected;
• (5) Operate at a maximum distance of 0.25 NM (0.46 km) from the pilot;
• (6) Operations over or within open-air assemblies of persons (see footnote 5) would not be allowed;
• (7) Operate below 300 feet;
• (8) Operate at less than 25 knots (29 mph); and
• (9) Night operations would not be allowed.

UA of more than 1 kg but not more than 25 kg (small)

If a person intends to operate a UA that weighs more than 1 kg (2.2 lb.) but not more than 25 kg (55.1 lb.), it is proposed that they comply with increasingly stringent requirements depending on where they operate. Operation of a UA this size in a rural location (see footnote 6) would be referred to as a “limited operation,” whereas in a built-up area, near an aerodrome or within controlled airspace, as a “complex operation.”

For the purposes of these proposed Regulations, a definition of the term built-up area (see footnote 7) is proposed and would allow a person to be able to identify if they are in a built-up area. In addition to specific requirements/limitations pertaining to either a limited or complex operation, some common requirements are proposed. A person who wants to operate a small UA, for example, would be required to perform a site survey prior to launch to identify any obstacles and keep maintenance and flight records.

Small UA (limited operations)

If a person wants to operate a UA that weighs more than 1 kg but not more than 25 kg in an environment with a lower population and less air traffic (generally referred to as a “rural area”), it is proposed that they must adhere to the following requirements and limits, including, but not limited to:

• (1) Pass a written knowledge test (similar to a boating test) to demonstrate aeronautical knowledge in specific subject areas, such as airspace classification and structure, the effects of weather and other areas;
• (2) Be at least 16 years of age;
• (3) Operate at the following minimum distance from an aerodrome: 3 NM (5.56 km) or greater, respecting the control zone; or 1 NM (1.85 km) if there is no control zone. The required distance from heliports and/or aerodromes used exclusively by helicopters would be 1 NM (1.85 km);
• (4) Operate at least 250 feet (76.20 m) from a person. A lateral distance of less than 250 feet would be possible for operations if conditions such as a maximum permitted speed of 10 knots (11.5 mph) and a minimum altitude of 250 feet are respected;
• (5) Operate at a minimum distance of 0.5 NM (0.93 km) from a built-up area;
• (6) Operate at a maximum distance of 0.5 NM (0.93 km) from the pilot;
• (7) Operations over or within open-air assemblies of persons (see footnote 8) would not be allowed;
• (8) Operate below 300 feet (91.44 m) or 100 feet (30.48 m) above a building or structure with conditions;
• (9) Operate at less than 87 knots (100 mph); and
• (10) Night operations would not be allowed.

Small UA (complex operations)

Operating a heavier UA near populated areas may pose a greater probability and severity of an incident or accident involving people or property. Operations within 0.5 NM (0.93 km) of a built-up area, near an aerodrome or in controlled airspace would necessarily need preparations and involve more than buying a UAS and reading the operating manual. If a person would want to operate a UA that weighs more than 1 kg but not more than 25 kg in this type of environment, it is proposed that they adhere to the following three unique requirements:

• (1) Have a UAS that is in compliance with a standard published by a standards organization accredited by a national or international standards accrediting body; (see footnote 9) have available the statement from the manufacturer that the UAS meets the standard; and do not modify the UAS. Transport Canada would alleviate the requirement for a pilot/operator to have a UAS that meets the design standards for operation in a complex operating area if that pilot/operator has bought a UAS prior to the coming-into-force date of the new regulations;
• (2) Register the UAS with Transport Canada and ensure that the certificate of registration is readily available by the pilot-in-command; and
• (3) Obtain a pilot permit that would be valid for five years. The pilot permit application to Transport Canada would include, for example, the following:
  • • An attestation of piloting skills by another UA pilot, and
  • • The successful completion of a comprehensive knowledge exam.

The following requirements and limits would also apply:

• (1) Pass a comprehensive written knowledge test (part of the pilot permit requirement above);
• (2) Be at least 16 years of age;
• (3) Request and receive authorization for flight in airspace which is a control zone for an aerodrome from the appropriate air traffic control unit;
• (4) Operate at least 100 feet (30.48 m) from a person. A distance of less than 100 feet would be possible for operations if conditions such as a maximum allowed speed of 10 knots (11.5 mph) and a minimum altitude of 100 feet are respected;
• (5) Operate at a maximum distance of 0.5 NM (0.93 km) from the pilot;
• (6) Operate over or within open-air assemblies of persons if operated at an altitude of greater than 300 feet, but less than 400 feet, and from which, in the event of an emergency necessitating an immediate landing, it would be possible to land the aircraft without creating a hazard to persons or property on the surface;
• (7) Operate at a maximum of 400 feet (121.92 m) or 100 feet above a building or structure with conditions; and
• (8) Night operations would be allowed with conditions.

Transport Canada has conducted a specific analysis in relation to operations of UAs near or within built-up areas, considering risks to people and the proximity and type of UA involved. The following is a summary of minimum lateral distances that pilots/operators of UAS would have to respect depending on their operating category.

NM is nautical mile (1 NM = 6076.12 feet = 1.852 km)

Manufacturer

The manufacturer would have to design a UAS to be used in complex operations to minimum standards, (see footnote 10) send a declaration of compliance to Transport Canada and provide a statement of conformity to any pilot or operator who requires one.

Special flight operations — UAS

Any UAS operated under the following categories would retain the current SFOC process for authorizing operations on a case-by-case basis:

• Beyond visual line-of-sight (BVLOS);
• UA that weighs more than 25 kg;
• UA flown for air races, air demonstrations, or air shows; and
• Any other operation where an operator cannot comply with all of the proposed regulatory provisions for their particular UA weight category or location of operation.

Benefits and costs

The net costs of the proposed amendment are estimated as $61.48 million PV or $8.75 million annualized. The benefits and costs are estimated as the expected increases or decreases in impacts compared to the baseline of current regulatory compliance. The current baseline includes non-recreational UAS operators that are operating per SFOC; non-recreational UAS operators that are operating without having an SFOC, but who should have applied; and recreational UAS pilots that are operating in accordance with the Interim Order.

Benefits

The public security benefits of further regulating the UAS industry are difficult to monetize, since much of it pertains to uncertain forecasts of this emerging industry. However, based on past incident data, Transport Canada foresees the following qualitative public security benefits of the proposed amendment:

• It is assumed that the cost savings from preventing any manned aviation accident would outweigh the net costs of the proposed Regulations.
• Aircraft marking and registration could assist Transport Canada and the police in regulatory enforcement investigations or the Transportation Safety Board of Canada (TSB) in safety investigations into aircraft incidents or accidents involving manned and unmanned aircraft. It could also assist civil authorities to take action for any possible criminal related activities involving UASs.
• Entering small UAs eligible to operate in complex environments into the Canadian Civil Aircraft Register database could provide Transport Canada with current and historical statistical information that would provide perspective in managing accident and incident rates and future regulatory amendments.
• A UAS that has been designed, manufactured and maintained to a minimum standard may reduce the risk of incidents, such as fly-aways, or accidents and the severity of the consequence of an incident or accident.
• Mandating operators who are not already compliant with an SFOC, but should be, to put in place procedures such as a site survey or emergency procedures may reduce the risk of incident or accident.

Qualitative economic benefits for all sectors of the UAS industry, including manufacturers, operators, training units and retail establishments, could include the following:

• The fact that the UAS pilots should have knowledge testing encourages the growth of competent and skilled third party approved exam invigilators (AEI) as well as a growth in education and training providers.
• By mandating minimum safe operating limits and procedures, all of the industry sectors would benefit from a public confidence perspective that would in turn encourage continued growth in businesses.
• The fact that the UAS should be designed, manufactured and maintained to a minimum standard encourages the growth of a specialized sector in Canada comprised of competent and skilled workers.

The total estimated monetized benefits are primarily due to the reduced burden of preparing for SFOCs compliance and administration for each of the businesses or institutional UAS operator (i.e. police or university). It is assumed that all of the businesses are small businesses. The benefit estimate is approximately $111 million PV over 10 years with a 7% discount rate, which equates to an annualized value of approximately $16 million. The estimate is calculated using the historical number of SFOCs issued between the years 2012 and 2016 and then using the average growth rate of 2.0% to obtain 8 703 SFOCs issued in 2017. Year one of the analysis is 2018 and the number of SFOCs assumed to be issued in that year is 11 000. The forecast of SFOCs issued over 10 years, if the proposed Regulations are not made, follows a trend similar to a Japanese study (see footnote 11) regarding large unmanned helicopters for agriculture use. While the study is only for one industry sector, Transport Canada is of the view that this trend for forecasting may be more realistic than comparing it to the trend of consumer smart phones for instance, since SFOC operators are non-recreational.

The time for a business to prepare the SFOC request is estimated at $37 per hour for 2 days or 16 hours. For complex operators, the estimate includes the preparation related to air traffic service provider coordination, i.e. obtaining a call sign (see footnote 12) since this would be replaced by the registration process. The UAS operator would no longer need to establish, in coordination with each applicable local air traffic service provider, a call sign to be used during the particular operation in order to facilitate communication and avoid duplication of call signs. The total cost savings for businesses are estimated to be $82.34 million PV or $11.72 million annualized.

The total estimated monetized benefits for the Government are due to the reduced burden of Transport Canada of issuing SFOCs. The benefit estimate is $28.63 million PV, which equates to an annualized value of approximately $4.08 million. Based on a survey conducted by Transport Canada, the Department’s inspectors spent on average 3.1 hours to process a simple SFOC application and 4.8 hours to process a complex SFOC application at $94 per hour. A simple application is an application that was developed for recognized UAS operators with a previous history of SFOC requests.

Monetized benefits summary

Costs

The cost estimates can be explained for each of the three stakeholder groups: recreational UAS pilots, industry businesses/institutions, and government. As stated in the description, the proposed Regulations intentionally do not distinguish between recreational and non-recreational operations. However, for the purposes of an individual identifying with one or the other, the cost estimates are categorized as such for one year only for illustrative purposes.

Recreational UAS pilots

It is assumed that the majority of the UA units that weigh more than 250 g but less than 1 kg (referred to as very small UAs) would be operated recreationally. The recreational UAS pilot would have to take a basic written knowledge test for a minimum of $35 and mark their UA with contact information at no cost. The liability insurance industry for recreational UAS operators is not yet mature. However, it may be assumed that the cost of $100,000 of liability insurance for a recreational UAS operator is estimated as twice the group insurance premium for a modellers association. Liability insurance could amount to an estimated $15 per year. Therefore, the total cost for a pilot with a very small UAS is estimated to be $50 for the first year.

Recreational pilots operating a UA unit that weighs more than 1 kg but not more than 25 kg (referred to as small UA) in a rural area (limited operation) would also carry the total estimated cost of $50 for licensing and liability insurance per year.

For recreational pilots operating a UA unit that weighs more than 1 kg but not more than 25 kg (small UA) in a built-up area (complex operation), the costs would be as follows:

• $15 or more per year for liability insurance of at least $100,000;
• $110 upfront cost of applying for registration marks for every new UAS acquired;
• $35 upfront cost for invigilation of a comprehensive knowledge exam in order to obtain a pilot permit;
• $35 upfront cost for a pilot permit.

The total cost estimate for a recreational pilot operating a UA unit that weighs more than 1 kg but less than 25 kg in a built-up area is $195 in the first year and $15 or more thereafter.

Cost estimate per recreational pilot in the first year

Industry businesses and institutional operators (non-recreational)

The majority of UAS businesses in Canada have fewer than 100 employees. The exception, for example, would be energy companies that would operate UASs to inspect their oil lines or electricity lines. For the purposes of this analysis, all of the UAS operators are considered small businesses.

The cost estimates for businesses with pilots that would strictly operate UAs that weigh between 250 g and 1 kg (very small) would be similar to that of a recreational pilot, but Transport Canada also includes the time spent for administrative burden and compliance burden, such as time to write a test, in the estimate. It is assumed that the businesses would already have liability insurance. The cost estimate is as follows:

• $35 upfront cost for invigilation of a basic knowledge exam in order to obtain a pilot permit; and
• Written exam time — 1 hour multiplied by the Canadian salary average = $25.20/hour.

The total first-year cost estimate for a business with one pilot operating a UAS that weighs between 250 g and 1 kg would be $60.

The cost estimates for businesses with pilots that would operate UASs that weigh between 1 kg and 25 kg (small) in a rural area would be similar to that of those operating the less heavy UA units. The total first-year cost estimate for a business with one pilot operating a small UA in a rural area would be $60.

Most of the businesses that have been applying for SFOCs operate small UA units or have a combination of very small or small UA units, depending on the business sector applicability. Since cost estimates are calculated as those being related to proposed new requirements and not that of current regulation or voluntarily action, many of the requirements related to operating procedures are not included in this cost analysis. The operators that are already operating pursuant to an SFOC have operating procedures in place. It is assumed that the businesses would also already have liability insurance.

The cost estimates for businesses with pilots that would operate small UA in built-up areas for the new requirements that are not already an SFOC requirement are as follows:

• $110 upfront cost of applying for registration marks for every new UAS acquired;
• Aircraft registration application = 30 minutes × Canadian salary average = 0.5 × 25.20 = $12.60;
• $35 upfront cost for invigilation of a comprehensive knowledge exam in order to obtain a pilot permit;
• Time to take the exam (study not included) = 2 hours × Canadian salary average = 2 × 25.20 = $50.40;
• Pilot permit application = 30 minutes × Canadian salary average = 0.5 × 25.20 = $12.60; and
• $35 upfront cost for a pilot permit.

The total cost estimate for businesses with pilots operating small UA in built-up areas in the first year would be $256.

Based on the total estimate of small UA units in Canada in 2016 in populated areas compared to the volume of SFOC applications that Transport Canada has received in 2016, Transport Canada assumes that up to two thirds of businesses that operate small UA are currently non-compliant and should have applied for an SFOC. It is also assumed that they do not carry liability insurance. Transport Canada inspectors have noted that a few operators that currently have SFOCs were found to have no liability insurance.

The liability insurance market for a business is more established than for the recreational market. For businesses, typical annual liability costs range between $500 and $1,000, as it is assumed they are operating their UAS more frequently than do recreational pilots. The lower estimate is used for the cost estimate.

The cost estimates for businesses with pilots that would operate small UAs in built-up areas and are not already compliant with SFOC conditions are as follows:

• $500 per year for liability insurance;
• $110 upfront cost of applying for registration marks for every new UAS acquired;
• Aircraft registration application = 30 minutes × Canadian salary average = 0.5 × 25.20 = $12.60;
• $35 upfront cost for invigilation of a comprehensive knowledge exam in order to obtain a pilot permit;
• Time to take the exam (study not included) = 2 hours × Canadian salary average = 2 × 25.20 = $50.40;
• Pilot permit application = 30 minutes × Canadian salary average = 0.5 × 25.20 = $12.60;
• $35 upfront cost for a pilot permit;
• Practical training self-taught summary = 2 hours × Canadian salary average = 2 × 25.20 = $50.40; and
• Maintain records of flight operations: the administrative burden of keeping a flight log up to date. It is assumed that each log entry takes one minute multiplied by an average salary, and an average of 100 flights is undertaken per year = 0.0167 × $25.20 × 100 = $42.00.

The total cost in the first year for this population of businesses and institutional UAS operators is $848 per operator.

There is a small number of manufacturers (12 businesses) that build UAS in Canada. Transport Canada assumes that the cost of designing and showing compliance to an industry standard is already done for those whose target market is operation in built-up areas, for movie production, as an example. In addition, future designs for that market already meet or exceed the existing industry design standard. It is estimated that for the 12 manufacturers to complete a required compliance matrix, explaining how all requirements per the industry standard have been met, which is typically done by an engineer, and to produce statement of conformity copies, it would take 5 days or 37.5 hours as an upfront cost = $1,067 in the first year. For any new models developed in subsequent years, the costs would be rolled into typical development cost.

Cost estimate summary for non-recreational stakeholders in the first year

Total cost estimates taking total Canadian UAS units and businesses/institutions into account.

The number of UASs in Canada has been estimated at approximately 337 468 units at the end of 2017. The total UAS population in Canada is calculated as 12% of the U.S. estimate of 2 812 237 UAS units in use at the end of 2017. The underlying assumption is that the ratio between the U.S. manned aircraft pilots and Canadian manned aircraft pilots is equal to the ratio between the U.S. UAV units and Canadian UAV units. The ratio of 12% stems from the assumption that there are more pilots per capita in Canada than in the United States, where the simple population ratio would be closer to 11%. It is assumed that the UAS industry will continue to grow rapidly and then start to level off. The growth rate of SFOCs, although non-recreational only, is a good indication of what may be expected as a continued growth rate in the next few years. The number of SFOC applications has actually had a growth rate of 2.0%. Therefore, the total number of UAS units estimated for the cost analysis is 575 600 at the end of 2018.

The total UAS units are thus broken down into recreational (see footnote 14) and non-recreational (see footnote 15) percentages of 74% and 26%, respectively, based on the Federal Aviation Administration (FAA) aerospace forecast 2016–2026. The assumed breakdown of UAS unit categories is as illustrated in the following chart. Should there be more of a proportion of small UA being operated in rural areas, the cost estimate would prove to be conservative since there would be more requirements for operation of small UA in built-up areas.