Feds support BizAV in CTA vs. Borgata case
Aug. 6, 2013, Ottawa - In a major win for business aviation, the Federal Court has overturned a Canadian Transportation Agency (CTA) position, subsequently upheld by the Transportation Appeals Tribunal of Canada (TATC), that determined a business aviation flight to be “publicly available” because a client was on board.
“The TATC ruling would have had disastrous implications for the Canadian and foreign business operators.” said Canadian Business Aviation Association (CBAA) President and CEO Rudy Toering. “Not only would it affect US operators flying to and from Canada, it would impact our own 604 operators flying domestically.”
CBAA member Bill Clark, of Clark and Company, played a key role in identifying the full implications of the CTA stance. “This determination would have triggered the necessity for a CTA license — in other words, subject a Canadian 604 business aviation flight to CTA economic authority requirements, and potentially, the same level of regulatory oversight as scheduled carriers. Business aviation flights would have been narrowly interpreted to be only those that carried officers, directors or direct employees of a company.”
The CTA case was brought against a National Business Aviation Association (NBAA) member company the Borgata Casino after they flew a series of flights in 2008-2009 carrying Canadian clients to the US. The casino decided to fight this ruling and both the CBAA and NBAA supported their efforts: testifying in the case, collaborating on defence strategies, and sharing in the legal expenses.
The Federal Court’s ruling unambiguously supported the position of the Borgata Casino, the CBAA and the NBAA, stating in part, “The panel’s (TATC) decision is a fundamental shift in what the private business aviation sector understood, as the settled meaning of a publicly available air service… As the operator exercises an absolute discretion, the public cannot reasonably expect to access or avail themselves of the flight.”
“This is a critical victory for business aviation” said Rudy. “It is unusual for the Federal Court to overturn a Tribunal ruling, but in this case, the Court found that the facts clearly supported our position over that of the CTA and TATC.”
Mike Nichols, Vice President of Operational Excellence & Professional Development at NBAA said “This is an incredible success. We’re now back to where things historically have been – Part 91 [US non-commercial] operators can fly guests on board their aircraft (with no charge for the flight) and not be subject to CTA economic authority requirements. Given the number of U.S. Part 91 operators who conduct cross border flights – often with a Canadian guest on board – this is a huge win.”
Nichols added, “We owe Bill Clark a huge debt of gratitude for his legal expertise, persistence, and guidance on this important matter.”
While the Federal Court has ruled in favour of business aviation, it does not necessarily have the final word, as the CTA has the right have the case reheard. However, we are hopeful that the CTA will abide by the Federal Court ruling. We will monitor the CTA’s actions in this area, and continue to advocate on behalf of operators.
“This current dispute aside, the CBAA has a strong relationship with the CTA.” Rudy concluded. “We look forward to continuing to work with the Agency on all of the key files to ensure they reflect the needs of the business aviation community.”