Regulations and You


Flying Farmers—Who Falls Within the Definition of a “Farmer” and When Does the Concept of “Hire or Reward” Apply?

by Beverlie Caminsky, Chief, Advisory and Appeals, Policy and Regulatory Services, Civil Aviation, Transport Canada

In this issue, the Advisory and Appeals Division wishes to share two cases. Case No. 1 discusses the question of determining when a company falls within the definition of a “farmer,” as set out in section 700.01 of the Canadian Aviation Regulations (CARs). Case No. 2 discusses the question of “hire or reward.”

Pursuant to section 700.01 of the CARs:

“Farmer” means a person whose primary source of income is derived from the tillage of the soil, the raising of livestock or poultry, dairy farming, the growing of grain, fruit, vegetables or tobacco, or any other operation of a similar manner.

In Case No. 1, a commercial aerial applicator used an airplane to conduct aerial work for agricultural purposes, which involved the dispersal of products or spraying for various farmers. The Minister of Transport assessed a monetary penalty for the contraventions. More specifically, the company was charged with operating without an air operator certificate (AOC) and with failure to make entries in their journey log for flights over a three-month period. There were 44 counts assessed at $5,000 per count for contraventions of section 700.02 of the CARs and one count for a contravention of section 605.94 of the CARs. The fine assessed for this last contravention was $7,500. The total fine assessed against the company was $227,500.

In Case No. 2, the pilot-in command (PIC)—and sole shareholder of the company from Case No. 1—was assessed a monetary penalty of $5,000 for contravening subsection 401.03(1) of the CARs. Specifically, it was alleged that the PIC acted for “hire or reward” when he did not hold a commercial pilot licence.

The company and the PIC both asked the Transportation Appeal Tribunal of Canada (TATC) to hold a hearing to review the Minister’s decision to assess the penalties.

With respect to Case No. 1, the company would have had a defence to the charges of operating without an AOC if it had met the definition of “farmer” under section 700.01 of the CARs (cited above). The company would have had to have owned the aircraft used for spraying, and the spraying would have had to have taken place within 25 miles of the centre of the company’s farm, as set out in subsection 700.02(3) of the CARs.

Flying Farmer

If the company had met the above requirements, it would not have needed an AOC. The company did not, however, meet the definition of farmer, as its primary source of income was not derived from farming, but rather from crop spraying. In addition, the pilot owned the aircraft and the spraying operations took place outside the 25-mile radius of the farm. The evidence revealed that the pilot’s wife owned the farm.

In addition, the failure to maintain an up-to-date logbook was proved and the TATC review member upheld the Minister’s assessment of $7,500 against the company.

In Case No. 2, against the PIC, evidence was put forward that the PIC held a private pilot licence but did not hold a commercial pilot licence. With respect to the questions of whether the PIC was operating for “hire or reward,” evidence was put forward that he was registered as a flying farmer in the provincial Aerial Applicators’ Association member directory. Evidence was also put on the record that various clients made payments to the company in Case No. 1 for the aerial work ($74,027.25). The PIC was the sole shareholder of that company.

Subsection 3(1) of the Aeronautics Act defines “commercial air service” as “any use of aircraft for hire or reward” and defines “hire or reward” as “any payment, consideration, gratuity or benefit, directly or indirectly charged, demanded, received or collected by any person for use of an aircraft”.

The TATC review member determined that the pilot acted for “hire or reward” in Case No. 2. He cited a TATC appeal decision where the appeal panel determined that Company A, owner and operator of an aircraft used for commercial air service, had contravened the CARs. This determination was made even though Company B, which shared some of the same directors as Company A, demanded and received payments for the commercial flights. No proof was made that any funds flowed from Company B to Company A. The appeal panel held that, although there was no direct benefit to Company A, to suggest that Company A operated its aircraft and received no benefit was not believable. Therefore, it was determined that Company A had received an indirect benefit, bringing it within the purview of the definition of “hire or reward.”

Similar to the appeal panel’s decision discussed in the paragraph above, the TATC review member determined that to suggest that the PIC piloted his own aircraft for the benefit of the company in Case No. 1—a corporation for which he is the sole shareholder—without receiving some type of benefit is simply not believable.

The cases discussed above provide us with useful information on what the definition of “farmer” is and on when a pilot can be found to have operated for “hire or reward.”

Oral Counselling

by Jean-François Mathieu, LL.B, Chief, Aviation Enforcement, Standards, Civil Aviation, Transport Canada

The most important decision in the enforcement process is determining which deterrent action would be most appropriate when evidence indicates that a person has contravened a provision of the Aeronautics Act or the Canadian Aviation Regulations (CARs). This decision may significantly affect the offender’s attitude towards safety and future compliance.

Contraventions of aeronautics legislation can result in a wide range of penalties, including fines, suspensions or cancellations of Canadian aviation documents, and even imprisonment in severe cases.

The major objectives of deterrent action are to:

  1. encourage future compliance by the offender; and,

  2. deter others from contravening aeronautics legislation.

Achieving these objectives will contribute to the advancement of aviation safety, which is the Aviation Enforcement Division’s primary aim.

Another option available to Aviation Enforcement inspectors is “oral counselling.” This option may be used when the contravention is considered minor in nature or inadvertent; is a violation where there is no direct flight safety hazard; or when the imposition of a sanction would not be appropriate. Aviation Enforcement inspectors will assess all aspects of the contravention, including the attitude of the alleged offender, to determine whether oral counselling will promote future compliance.

In the last year, “oral counselling” was assessed in 43 percent of all cases where there was a violation. The Aviation Enforcement Division recognizes that voluntary compliance with Canadian aeronautics legislation is the most progressive and effective approach to aviation safety. Voluntary compliance is based on the idea that members of the aviation community have a shared interest in, commitment to, and responsibility for aviation safety, and will operate on the basis of common sense, personal responsibility, and respect for others. Aviation Enforcement inspectors use oral counselling with this philosophy in mind.

Oral counselling is most appropriate in cases of ignorance or misinterpretation of the law, provided aviation safety was not jeopardized. Examples include situations where a minor contravention is committed and it had little or no impact on safety, and where there was no indication of a wilful act. Oral counselling is not an option when the alleged offender disputes the allegations.

It should be noted that when Aviation Enforcement inspectors conduct comprehensive investigations that are concluded with oral counselling, no Aviation Enforcement record is kept in the offender’s file.

Canada continues to play a leadership role in the international aviation safety community and within our national borders. In supporting this role, the Aviation Enforcement Division is committed to promoting and applying a policy of fairness and firmness when dealing with contraventions of aeronautics legislation.

Have a safe and enjoyable flight!

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