Vol. 136, No. 41 — October 12, 2002

Regulations Amending the Food and Drug Regulations (1335 — Nicosulfuron)

Statutory Authority

Food and Drugs Act

Sponsoring Department

Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

Description

Nicosulfuron is registered under the Pest Control Products Act as a herbicide for the control of a wide variety of weeds in corn as a post-emergent treatment. A Maximum Residue Limit (MRL) has been established under the Food and Drugs Act for residues of nicosulfuron resulting from this use at 0.1 parts per million (p.p.m.) in corn. By virtue of subsection B.15.002(1) of the Food and Drug Regulations, the MRL for other foods is 0.1 p.p.m.

The Pest Management Regulatory Agency (PMRA) of Health Canada has recently approved an application to amend the registration of nicosulfuron in order to allow its use for the control of black bulrush in blueberries as a post-emergent treatment. This proposed regulatory amendment would establish an MRL for residues of nicosulfuron resulting from this use in blueberries in order to permit the sale of food containing these residues.

Before making a registration decision regarding a new use of a pest control product, the PMRA conducts the appropriate assessment of the risks and value of the product specific to its proposed use. The registration of the pest control product will be amended if: the data requirements for assessing value and safety have been adequately addressed; the evaluation indicates that the product has merit and value; and the human health and environmental risks associated with its proposed use are acceptable.

The human health risk assessment includes an assessment of dietary risks posed by expected residues of the pest control product, as determined through extensive toxicological studies. An acceptable daily intake (ADI) and/or acute reference dose (ARD) is calculated by applying a safety factor to a no observable adverse effect level or, in appropriate cases, by applying a risk factor which is calculated based on a linear low-dose extrapolation. The potential daily intake (PDI) is calculated from the amount of residue that remains on each food when the pest control product is used according to the proposed label and the intake of that food from both domestic and imported sources in the diet. PDIs are established for various Canadian subpopulations and age groups, including infants, toddlers, children, adolescents and adults. Provided the PDI does not exceed the ADI or ARD for any subpopulation or age group, and the lifetime risk is acceptable, the expected residue levels are established as MRLs under the Food and Drugs Act to prevent the sale of food with higher residue levels. Since, in most cases, the PDI is well below the ADI and lifetime risks are very low when MRLs are originally established, additional MRLs for the pest control product may be added in the future.

After the review of all available data, the PMRA has determined that an MRL for nicosulfuron of 0.05 p.p.m. in blueberries would not pose an unacceptable health risk to the public. This regulatory amendment will also amend the chemical name of nicosulfuron in order to comply with international nomenclature conventions.

Alternatives

Under the Food and Drugs Act, the sale of food containing residues of pest control products at a level less than or equal to 0.1 p.p.m. is permitted unless a lower MRL has been established in Table II, Division 15, of the Food and Drug Regulations. In the case of nicosulfuron, establishment of an MRL for blueberries is necessary to support the additional use of a pest control product which has been shown to be both safe and effective, while at the same time preventing the sale of food with unacceptable residues.

Benefits and Costs

The use of nicosulfuron on blueberries will provide joint benefits to consumers and to the agricultural industry as a result of improved management of pests. In addition, this proposed regulatory amendment will contribute to a safe, abundant and affordable food supply by allowing the importation and sale of food commodities containing acceptable levels of pesticide residues.

Some costs may be incurred related to the implementation of analytical methods for analysis of nicosulfuron in the food mentioned above. Resources required are not expected to result in significant costs to the Government.

Consultation

Registration decisions, including dietary risk assessments, made by the PMRA are based on internationally recognized risk management principles, which are largely harmonized among member countries of the Organization for Economic Cooperation and Development. Individual safety evaluations conducted by the PMRA include a review of the assessments conducted at the international level as part of the Joint Food and Agriculture Organization of the United Nations/World Health Organization Food Standards Programme in support of the Codex Alimentarius Commission, as well as MRLs adopted by other national health/ regulatory agencies.

Compliance and Enforcement

Compliance will be monitored through ongoing domestic inspection programs conducted by the Canadian Food Inspection Agency when the proposed MRL for nicosulfuron is adopted.

Contact

Geraldine Graham, Alternative Strategies and Regulatory Affairs Division, Pest Management Regulatory Agency, Health Canada, Address Locator 6607D1, 2720 Riverside Drive, Ottawa, Ontario K1A 0K9, (613) 736-3692 (Telephone), (613) 736-3659 (Facsimile), geraldine_graham@hc-sc.gc.ca (Electronic mail).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 30(1) (see footnote a)  of the Food and Drugs Act, proposes to make the annexed Regulations Amending the Food and Drug Regulations (1335 — Nicosulfuron).

Interested persons may make representations with respect to the proposed Regulations within 75 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Geraldine Graham, Alternative Strategies and Regulatory Affairs Division, Pest Management Regulatory Agency, Department of Health, Address Locator 6607D1, 2720 Riverside Drive, Ottawa, Ontario K1A 0K9 (tel.: (613) 736-3692; fax: (613) 736-3659; e-mail: geraldine_graham@hc-sc.gc.ca).

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act.

Ottawa, October 3, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE FOOD AND DRUG REGULATIONS (1335 — NICOSULFURON)

AMENDMENT

1. The portion of item N.1.1 of Table II to Division 15 of Part B of the Food and Drug Regulations (see footnote 1)  in columns II to IV is replaced by the following:

Item No.	II	III	IV
	Chemical Name of Substance	Maximum Residue Limit p.p.m.	Foods
N.1.1	2[[[[(4,6-dimethoxy-2-pyrimidinyl)amino]carbonyl]amino] sulfonyl]-N,N-dimethyl-3-pyridinecarboxamide	0.1	Corn
		0.05	Blueberries

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

[41-1-o]

Assets (Foreign Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT ANALYSIS STATEMENT

Description

Section 609 of the Insurance Companies Act provides that foreign companies (life and property and casualty [P&C]) are required to maintain assets in Canada the total value of which shall be determined in accordance with regulations. The Assets (Foreign Companies) Regulations [the Regulations] address the maintenance of assets in Canada by branches of foreign companies in Canada. The Regulations prescribe a margin of assets in Canada over liabilities in Canada that foreign P&C insurance companies are required to maintain.

The Regulations are being revised to replace the prescribed margin with a new margin requirement outlined in the risk-based Branch Adequacy of Assets Test (BAAT) guideline for foreign P&C insurance companies in accordance with section 608 of the Act. Bill C-8, the Financial Consumer Agency of Canada Act, amended section 608 of the Insurance Companies Act to provide that foreign P&C companies are required to maintain an adequate margin of assets in Canada over liabilities in Canada and adequate and appropriate forms of liquidity.

The BAAT is consistent with the risk-based tests applicable to banks and life insurance companies as well as the test being implemented for Canadian P&C insurance companies, and like these tests, it is implemented through a guideline developed by the Superintendent. The new margin applies risk-sensitive factors to assets and liabilities.

Foreign companies that carry on both life and property and casualty insurance classes will also be subject to this new test with respect to risks that fall within a class of insurance other than life insurance, accident and sickness insurance and loss of employment insurance. In addition, the Regulations are amended to clarify that foreign life companies must comply with the risk-based test that applies to foreign life companies, with respect to risks that fall within the classes of life insurance, accident and sickness insurance and loss of employment insurance.

The Regulations will not apply to associations since an association is subject to specific requirements governing the assets it must maintain in Canada. Finally, minor technical amendments are made to the Regulations to combine the provisions dealing with reductions where the foreign company is reinsured and to delete an obsolete section dealing with claims ratios.

Alternatives

Amendments to the Regulations are needed in order to bring the test for foreign P&C insurance companies in line with the risk-based approaches that apply to banks and life insurance companies as well as the test being implemented for Canadian P&C insurance companies. As a result, no other alternatives were considered.

Benefits and Costs

The implementation of the amendments to the Assets (Foreign Companies) Regulations facilitates a risk-based test for foreign P&C companies that will assign requirements to various lines of business and investments based on their riskiness. The changes will initially generate nominal additional costs to the Office of the Superintendent of Financial Institutions (OSFI) and to branches of foreign P&C insurance companies to adjust administrative and reporting requirements. However, the resulting simplification of reporting requirements (e.g. fewer reporting forms) will more than offset these initial costs.

Consultation

Branches of foreign P&C insurance companies in Canada as well as Canadian P&C insurance companies were consulted in the development and on the impact of the test and support its introduction. No further consultations with P&C insurance companies are necessary with respect to amendments to the Regulations.

Compliance and Enforcement

These changes will not have a material impact on OSFI's resources, but will enhance OSFI's ability to supervise federally regulated financial institutions on a more risk-sensitive basis.

Contact

Monique Champagne, Senior Precedents Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, (613) 990-6943 (Telephone), (613) 998-6716 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 610 (see footnote b)  of the Insurance Companies Act (see footnote c)  proposes to make the annexed Assets (Foreign Companies) Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publications of this notice, and be addressed to Monique Champagne, Senior Precedents Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.

Ottawa, October 3, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

ASSETS (FOREIGN COMPANIES) REGULATIONS

DEFINITION AND APPLICATION

1. In these Regulations "Act" means the Insurance Companies Act.

2. These Regulations do not apply to associations.

VALUE OF ASSETS IN CANADA

3. Subject to sections 6 and 7, every foreign life company shall, in relation to its insurance risks in Canada that fall within the classes of life insurance, accident and sickness insurance and loss of employment insurance, maintain assets in Canada the total value of which, when determined in accordance with the accounting principles referred to in subsection 331(4) of the Act or when determined on the basis of the market value of those assets, whichever way produces the greater total value, is at least equal to the aggregate of

(a) the amount of the reserve for actuarial and other policy liabilities of the foreign life company in respect of those classes, determined on the same basis as the reserve included in the annual return of the foreign life company, minus the amount of all advances made by the foreign life company on the security or against the cash surrender value of its life policies in Canada,
(b) the amount of the provision for claims incurred by the foreign life company in respect of those classes that are unpaid,
(c) the total amount of the other liabilities of the foreign life company in respect of those classes, and
(d) the margin of assets in Canada over liabilities in Canada that the foreign life company is required, pursuant to section 608 of the Act, to maintain in respect of the insuring of those risks.

4. Subject to sections 6 to 8, every foreign life company shall, in relation to its insurance risks in Canada that fall within a class of insurance other than life insurance, accident and sickness insurance and loss of employment insurance, maintain assets in Canada the total value of which, when determined in accordance with the accounting principles referred to in subsection 331(4) of the Act, is at least equal to the aggregate of

(a) the amount of the reserve for actuarial and other policy liabilities of the foreign life company in respect of that class, determined on the same basis as the reserve included in the annual return of the foreign life company,
(b) the total amount of the other liabilities of the foreign life company in respect of that class, and
(c) the margin of assets in Canada over liabilities in Canada that the foreign life company is required, pursuant to section 608 of the Act, to maintain in respect of the insuring of those risks.

5. Subject to sections 6 to 8, a foreign property and casualty company, in respect of the insuring in Canada of risks that fall within a class of insurance, shall maintain assets in Canada the total value of which, when determined in accordance with the accounting principles referred to in subsection 331(4) of the Act, is at least equal to the aggregate of

(a) the amount of the reserve for actuarial and other policy liabilities of the foreign property and casualty company in respect of that class, determined on the same basis as the reserve included in the annual return of the foreign property and casualty company,
(b) the total amount of the other liabilities of the foreign property and casualty company in respect of that class, and
(c) the margin of assets in Canada over liabilities in Canada that the foreign property and casualty company is required, pursuant to section 608 of the Act, to maintain in respect of the insuring of those risks.

REDUCTION WHERE AMOUNTS RECIEVABLE BY INSURANCE AGENTS, INSURANCE BROKERS AND POLICYHOLDERS

6. The total value of assets required under sections 3, 4 and 5 to be maintained may be reduced by any amounts that are receivable from insurance agents, insurance brokers and policyholders of the foreign company in respect of policies in force as may be determined by the Superintendent.

REDUCTION OF TOTAL VALUE WHERE FOREIGN COMPANY REINSURED

7. (1) Where a foreign company is reinsured in whole or in part against risks undertaken or claims payable in respect of a policy in Canada or group of policies in Canada, the aggregate of the amounts referred to in paragraphs 3(a) to (c) or 4(a) and (b) or 5(a) and (b) may be reduced by subtracting from that amount an amount not exceeding the aggregate of the portions of that amount that apply to the portion of the risks or claims that is reinsured.

(2) Where a reinsurer is incorporated by or under an Act of the legislature of a province and is not a provincial company, a reduction under subsection (1) may only be made where the Superintendent has, by order, determined that the financial condition of the reinsurer is satisfactory and that its operations are conducted in accordance with sound business and financial practices.

(3) Where a reinsurer is not authorized under the Act to insure risks and is incorporated elsewhere than in Canada, a reduction under subsection (1) may be made only to the extent that security is maintained in Canada, in respect of the potential liabilities of the reinsurer, in an amount, of a nature and under arrangements that are determined by the Superintendent to be satisfactory.

LETTER OF CREDIT IN LIEU OF ASSETS

8. The Superintendent may, by order, allow a foreign company to reduce the total value of assets required to be maintained pursuant to sections 4 and 5 by the amount of a letter of credit drawn on a bank, up to a maximum reduction of 15 per cent of the total value.

REPEAL

9. The Assets (Foreign Companies) Regulations (see footnote 2)  are repealed.

COMING INTO FORCE

10. These Regulations come into force on January 1, 2003.

[41-1-o]

Regulations Repealing the Assets (Property and Casualty Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT ANALYSIS STATEMENT

Description

Canadian property and casualty (P&C) insurance companies are currently subject to an asset adequacy test pursuant to section 516 of the Insurance Companies Act (the "Act"). Section 516 of the Act requires that a Canadian P&C insurance company maintain assets at least equal to policy and other liabilities of the company and a margin of assets over liabilities in accordance with a prescribed formula pursuant to paragraph 516(1)(c). The Assets (Property and Casualty Companies) Regulations (the "Regulations") prescribe that formula.

The revocation of the Regulations facilitates the implementation of the margin requirement outlined in the new Minimum Capital Test (MCT) guideline for Canadian property and casualty companies in accordance with section 515 of the Act. Bill C-8, the Financial Consumer Agency of Canada Act, amended section 515 to provide that P&C insurance companies are required to maintain adequate capital and adequate and appropriate forms of liquidity.

The MCT capital adequacy test is consistent with the risk-based tests applicable to banks and life insurance companies as well as the test being implemented for foreign P&C insurance companies, and like these tests, it is implemented through a guideline developed by the Superintendent. The new capital adequacy test applies risk sensitive factors to assets and liabilities.

The MCT guideline under section 515 of the Act replaces the current margin requirement under paragraph 516(1)(c) of the Act. As the current margin requirement will become obsolete the Assets (Property & Casualty Companies) Regulation must be repealed.

Alternatives

The Regulations Repealing the Assets (Property and Casualty Companies) Regulations are needed in order to bring the test for Canadian P&C insurance companies in line with the risk-based approaches that apply to banks and life insurance companies as well as the test being implemented for foreign P&C companies. As the current margin requirement will become obsolete no other alternatives were considered.

Benefits and Costs

The revocation of the Assets (Property and Casualty) Regulations facilitates a risk-based test for Canadian P&C companies that will assign capital to various lines of business and investments based on their riskiness. The changes will initially generate nominal additional costs to the Office of the Superintendent of Financial Institutions (OSFI) and to Canadian P&C companies to adjust administrative and reporting requirements. However, the resulting simplification of reporting requirements (e.g. fewer reporting forms) and adoption of the test by provincial regulators will more than offset these initial costs.

Consultation

Canadian P&C companies as well as branches of foreign P&C companies operating in Canada were consulted in the development and on the impact of the test and support its introduction. No further consultations with Canadian P&C companies are necessary with respect to amendments to the Regulations.

Compliance and Enforcement

These changes will not have a material impact on OSFI's resources but will enhance OSFI's ability to supervise federally regulated financial institutions on a more risk-sensitive basis.

Contact

Monique Champagne, Senior Precedents Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, (613) 990-6943 (Telephone), (613) 998-6716 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 516(2) (see footnote d)  of the Insurance Companies Act (see footnote e)  proposes to make the annexed Regulations Repealing the Assets (Property and Casualty Companies) Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Monique Champagne, Senior Precedents Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.

Ottawa, October 3, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

REGULATIONS REPEALING THE ASSETS (PROPERTY AND CASUALTY COMPANIES) REGULATIONS

REPEAL

1. The Assets (Property and Casualty Companies) Regulations (see footnote 3)  are repealed.

COMING INTO FORCE

2. These Regulations come into force January 1, 2003.

[41-1-o]

Regulations Amending the Canadian Aviation Regulations (Parts I and IV)

Statutory Authority

Aeronautics Act

Sponsoring Department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

Description

General

These proposed Regulations Amending the Canadian Aviation Regulations (Part I — General Provisions and Part IV — Personnel Licensing and Training) will add definitions of "basic ultra-light aeroplane", "dual instruction flight time" and "solo flight time" to the Canadian Aviation Regulations (CARs) and will revise the definition of "ultra-light aeroplane" currently in the CARs. They will also amend Subpart 401 (Flight Crew Permits, Licences and Ratings) to remove ambiguities and correct inadvertent omissions; amend Subpart 404 (Medical Requirements) to allow Canadian Aviation Medical Examiners (CAMEs) to validate the licence of a "fit" licence holder for longer than 90 days; and amend Subpart 406 (Flight Training Units) to require a freelance provider of flight training to inform the Minister in writing prior to beginning flight training operations.

In response to the request of counsel for the Standing Joint Committee for the Scrutiny of Regulations, a proposed revision to the English version of section 401.90 (Renewal of Flight Instructor Rating — Ultra-light Aeroplane) to correct a typographical error is included with these proposed amendments. This revision will replace "personal" with "personnel" in the phrase "in accordance with the personal (sic) licensing standards."

These Regulations were prepublished in the Canada Gazette, Part I, on February 5, 2000. Delays in processing have delayed their presentation for final publication in the Canada Gazette, Part II, beyond the 18-month deadline. Therefore, they are being prepublished again. One comment received after initial prepublication addressed the proposed definition of "basic ultralight aeroplane". That definition has been revised, in line with the comment, to state that a basic ultralight aeroplane is allowed a maximum take-off weight not exceeding 544 kg. There is no change to the intent of the definition as a result of this revision.

The proposed amendment to CAR 404.11 (Minister's Assessment), which would have eliminated the requirement for 30 days' notice before action can be taken by the Minister to suspend or cancel a medical certificate which validates a permit or licence on medical grounds, has been removed from these Regulations Amending the Canadian Aviation Regulations (Part I — General Provisions and Part IV — Personnel Licensing and Training). It will be reintroduced with a set of proposed amendments, at present under development, which will address other issues relating to medical validity periods.

Specific

Definitions

CAR 101.01 (Interpretation)

The proposed change to Canadian Aviation Regulation (CAR) Part I (General Provisions) will add the definition of "basic ultra-light aeroplane" in terms of the maximum take-off weight and permitted stall speed in the landing configuration to CAR 101.01 (Interpretation). As well, the definition of "ultra-light aeroplane" will be revised to accommodate the addition of "basic ultra-light aeroplane". At present, there are definitions of "advanced ultra-light aeroplane" and "ultra-light aeroplane" in CAR 101.01 (Interpretation). The current definition of "ultra-light aeroplane" includes, by implication, those aeroplanes which will fall under the new definition for basic ultra-light aeroplanes upon promulgation of this proposed amendment, as well as explicitly including advanced ultra-light aeroplanes. The proposed new definition for "ultra-light aeroplane" will state that both advanced and basic ultra-light aeroplanes are included under this definition. The definition of "basic ultra-light aeroplane" to be added will define a basic ultra-light aeroplane in terms of maximum number of seats permitted, maximum take-off weight and maximum stall speed in the landing configuration. Although there is, at present, no official definition for a basic ultra-light aeroplane, that definition which is implied by exclusion, i.e. not an advanced ultra-light, under the definition for an ultra-light aeroplane, is in terms of maximum number of seats, maximum launch weight and maximum wing loading. The revised terminology does not represent a change of criteria defining ultra-light aeroplanes, but rather a presentation of the current criteria in commonly used and understood aviation terms. As well, the maximum take-off weight permitted for basic ultra-light aeroplanes will increase to 1 200 lb (544 kg) from the previous launch weight maximum limit of 429.9 lb (195 kg) for a two-seat instructional aeroplane. The proposed changes to "basic ultra-light aeroplane" have been Departmental policy since the publication of the Ultra-light Aeroplane Transition Strategy dated October 10, 1996.

CAR 400.01(1) (Interpretation)

The proposed amendment to CAR 400.01(1) (Interpretation) will add "dual instruction flight time", defined as "flight time during which a person is receiving flight instruction from a person qualified in accordance with section 425.21 of the Personnel Licensing and Training Standards respecting Flight Training," and "solo flight time," defined as flight time during which the pilot is the sole flight crew member and, if a student pilot permit holder, is the sole occupant of an aircraft while under the direction and supervision of the holder of an instructor rating for the appropriate category of aircraft.

Subpart 401 (Flight Crew Permits, Licences and Ratings)

CAR 401.03 (Requirement to Hold a Flight Crew Permit, Licence or Rating)

The current text of CAR 401.03 (Requirement to Hold a Flight Crew Permit, Licence or Rating) details the documents which allow a holder to act as a flight crew member or to exercise the privileges of the permit, licence or rating in a Canadian registered aircraft. At present, this regulation does not include Canadian validations of foreign licences among these documents. This is an inadvertent oversight in CAR 401.03. CAR 401.07 (Validation of Foreign Licences) sets forth the conditions under which such validations are issued, and the associated standard (421.07) lists the purposes for which such validations of foreign licences may be required. The proposed amendment to CAR 401.03 will allow the holder of a valid and appropriate foreign licence validation certificate to act as a flight crew member on a Canadian registered aircraft for the purposes listed under 421.07. As part of the provisions for use of a foreign licence validation certificate, the heading currently preceding 401.03 will be revised to include reference to this document.

CAR 401.04 (Flight Crew Members of Aircraft Registered in Contracting States Other than Canada)

The proposed amendment to CAR 401.04 (Flight Crew Members of Aircraft Registered in Contracting States Other than Canada) will enable a holder of a Canadian pilot permit to act as a flight crew member or to exercise the privileges of the permit in Canada in an aircraft registered in a contracting state other than Canada. At present, holders of Canadian pilot permits are not allowed to exercise the privileges of the permit in Canada in any non-Canadian registered aircraft. This was an inadvertent omission from the CARs. An amendment to the French version of 401.04 (b) will remove extraneous information not present in the English version, and ensure that the same information is conveyed in both languages.

CAR 401.06 (Issuance and Endorsement of Flight Crew Permits, Licences and Ratings)

The proposed amendment to CAR 401.06 (Issuance and Endorsement of Flight Crew Permits, Licences and Ratings) will add a provision regulating the expiry of a certification of additional privileges. At present, when the holder of a flight crew permit, licence or rating earns additional qualifications, the examiner customarily provides the licence holder with an endorsement to the licence which certifies the entitlement to exercise the additional privileges conferred by the additional qualification. The licensing document states when this certificate of additional privileges will expire, but there is no regulatory provision covering such an expiration. The proposed amendment to CAR 401.06 will remove the potential ambiguity inherent in this situation by stating the circumstances under which a certificate of additional privileges will expire.

CAR 401.30 (Aeroplanes — Privileges)

At present, CAR 401.30 (Aeroplanes — Privileges), while detailing the privileges to which the holder of a Commercial Pilot Licence — Aeroplanes is entitled, states that, when the licence is endorsed for daylight flying only, the licence holder is not allowed to exercise the privileges of a VFR OTT rating by night. Since a VFR OTT rating limits such operations to daylight flight, this prohibition is unnecessary. The proposed amendment to CAR 401.30 will remove the unnecessary duplication with CAR 602.116 (VFR Over-the-Top).

Subpart 404 (Medical Requirements)

CAR 404.18 (Permission to Continue to Exercise the Privileges of a Permit, Licence or Rating)

The proposed amendment to CAR 404.18 (Permission to Continue to Exercise the Privileges of a Permit, Licence or Rating) will allow a Civil Aviation Medical Examiner (CAME) to endorse the medical certificate validating a permit/licence for an extension longer than the 90 days to which such an endorsement is currently limited. The proposed change will allow the CAME to endorse the medical certificate as validating the licence/permit until the date of the next required medical examination.

Subpart 406 (Flight Training Units)

CAR 406.03 (Requirement to Hold a Flight Training Unit Operator Certificate)

The proposed addition to CAR 406.03 (Requirement to Hold a Flight Training Unit Operator Certificate) will introduce a requirement for the provider of flight training who does not hold a flight training unit operator certificate to notify the Minister and to keep the Minister informed, in writing, of basic information related to the flight training being provided. There are limitations in place as to the relationship between the flight instructor and the trainee, and as to the types of training which may be provided under these circumstances. Also, as with any other flight training, the training must conform to the requirements of CAR 405 (Flight Training) and its associated standard. At present, there is no requirement that the Minister be notified when such freelance flight training commences or be provided with information as to the individuals involved and their qualifications, the type of flight training, the location of the training operations or the registration of the aircraft to be used. The absence of such a notification requirement hinders the monitoring of freelance training. The proposed amendment will rectify this situation.

Alternatives

No alternatives to regulatory action were considered, since none are available to achieve the results intended by these proposed amendments.

Benefits and Costs

Throughout the development of the aviation regulations and standards, Transport Canada applies risk management concepts. Where there were risk implications, the analysis of these proposed amendments concluded that the imputed risk was acceptable in light of the expected benefits.

Definitions

CAR 101.01 (Interpretation)

The proposed changes in the definition of a basic ultra-light aeroplane from the use of "launch weight" to "maximum take-off weight" and from "maximum wing loading" to "maximum stall speed in the landing configuration" as well as the proposed increase in permitted maximum take-off weight, will enhance the safety of that segment of recreational aviation which builds and uses ultra-light aeroplanes, without imposing any new costs.

The change from "launch weight" to "maximum take-off weight" applies terminology commonly used for all aeroplanes to ultra-light aeroplanes and reflects the transition for ultra-light owners and operators from membership in a limited, exclusive enclave to full participants and partners in recreational aviation. The maximum take-off weight permitted for basic ultra-light aeroplanes will increase to 1 200 lb (544 kg) from the previous launch weight maximum limit of 429.9 lb (195 kg) for a two-seat instructional aeroplane. This weight increase will allow builders of ultra-lights to use stronger materials and improved safety-related equipment in their construction.

The substitution of the term "maximum stall speed in the landing configuration" for "maximum wing loading" in the definition of basic ultra-light aeroplane is also proposed in this amendment. The wing loading of an aeroplane is a design parameter calculated as weight per area of wing. When all other variables (including length, width and curvature of the wing) are held constant, a low wing loading implies a lower minimum speed in the landing configuration than a higher wing loading. Thus, the stall speed in the landing configuration will also be lower. The proposed amendment implicitly incorporates the design parameter "wing loading" while directly and understandably addressing the implied target of wing loading restrictions, i.e. the safety and maneuverability requirements of a low stall speed in the landing configuration. The proposed change will clarify the requirement and directly regulate the intention of the regulation, i.e. to regulate the safety and maneuverability of the aeroplane, rather than doing so indirectly via a regulation addressed to the associated design parameter.

None of the definitional changes related to ultra-light aeroplanes will impose additional costs. They may engender benefits from the use of commonly understood terminology and from the potential for construction improvements for this type of aircraft. The net benefit-cost effect to this segment of the industry is expected to be positive.

CAR 400.01 (Interpretation)

The proposed inclusion of the definitions for "dual instruction flight time" and "solo flight time" in CAR 400.01 (Interpretation) will correct the omission of these two definitions when the CARs were originally promulgated. Both definitions previously existed in the Personnel Licensing Handbook and have been commonly accepted within the aviation community for many years. There will be no change to long-standing procedures from their introduction to the CARs. No benefit-cost impact is anticipated from this proposed amendment.

Subpart 401 (Flight Crew Permits, Licences and Ratings)

The proposed amendments to CAR 401.03 (Requirement to Hold a Flight Crew Permit, Licence or Rating), CAR 401.04 (Flight Crew Members of Aircraft Registered in Contracting States Other than Canada), CAR 401.06 (Issuance and Endorsement of Flight Crew Permits, Licences and Ratings) and CAR 401.30 (Aeroplanes — Privileges) will correct unintentional oversights, clarify ambiguities and remove unnecessary duplication. They will have no benefit-cost impact upon existing procedures or entitlements.

There will be no impact from the proposed correction of the typographical error in CAR 401.90 (Renewal of Flight Instructor Rating — Ultra-light Aeroplane).

Subpart 404 (Medical Requirements)

CAR 404.18 (Permission to Continue to Exercise the Privileges of a Permit, Licence or Rating)

The proposed amendment to CAR 404.18 (Permission to Continue to Exercise the Privileges of a Permit, Licence or Rating) enabling a Canadian Aviation Medical Examiner (CAME) to endorse a medical certificate validating a permit/licence for longer than 90 days is necessary to implement improvements to the efficiency of the process for validating Canadian aviation documents.

At present, a Canadian aviation document is validated by a medical certificate, issued by Transport Canada, which indicates that the holder meets the applicable medical standards. This medical certificate expires at the end of a predetermined period. The predetermined period is contingent upon the type of document and upon personal characteristics (such as age) of the holder. Thus, to keep a Canadian aviation document valid, the document holder must undergo recurring medical examinations by a Canadian Aviation Medical Examiner. If the applicant meets the standards of fitness to continue to exercise the privileges of the document, the CAME, on completion of the examination, will stamp "fit" on the document.

The stamped validation expires 90 days after the date of the examination. The CAME forwards the medical assessment to Transport Canada's Regional Aviation Medical Office (RAMO) for review. Upon satisfactory review of the medical assessment, Transport Canada issues a new medical certificate to the document holder, which validates the document until the next examination is required. If the new medical certificate is not received by the holder before the 90-day expiry date, the document which is validated by the certificate automatically expires on that date.

If the review of the medical assessment contradicts the CAME's evaluation and reveals the document holder to be medically unfit, Transport Canada notifies the document holder of the reassessment and of the consequent withdrawal of privileges. This notice may be received prior to the expiry of the 90 days, at which time the document becomes invalid with no further delay.

The proposed change to CAR 404.18 will enable a CAME to validate a "fit" holder's document until the next medical examination is normally required. The medical assessment will still be forwarded from the CAME to the RAMO for review and the RAMO may still, after reevaluation, reverse the CAME's decision and notify the holder of the withdrawal of privileges for medical reasons. If the withdrawal of privileges becomes necessary, the notification is expected to reach the document holder within 90 days after the original examination, under the proposed new procedures as under existing procedures.

The risk and, hence, the source of potential costs introduced by this revision to certificating procedures is that persons holding aviation documents (pilots or air traffic controllers) who are not, in fact, medically fit to do so may continue to exercise the privileges bestowed by those documents beyond the current 90-day expiry period after a medical examination which was incorrectly assessed as showing them fit. These holders would be those who either did not receive a notice of suspension within 90 days of the medical examination, or who chose to ignore or to refuse delivery of such a notice.

Approximately 55,000 aviation documents are issued annually following the current process which requires a new certification document 90 days after the medical examination. The RAMO review of current medical assessments identifying document holders as "fit" finds that, on average, over 98 percent of these assessments are accurate. Thus, the risk of continued operation beyond the existing 90-day extension period as a result of inaccurate medical assessments will exist for fewer than 1,100 document holders. This risk is somewhat mitigated, since many of these document holders will be using their privileges for their personal recreation and will be exposing solely themselves, their passengers and any aircraft upon whose airspace they may encroach when airborne to whatever risk the lack of medical fitness may entail. Also, not all of the 1,100 will continue to operate after receiving a notice of suspension for medical reasons.

A trial implementation of the procedure envisioned in this proposal has been underway since January 1, 1999, with no apparent increase in medically related operational problems. Previously, for a three and a half-year period from June 1988 to November 1991, the period for which a CAME could certify a pilot as medically fit was allowed to be as long as 180 days. No significant problems were experienced with the process and no associated degradation of aviation safety was identified from that extension.

The cost of degradation of aviation safety associated with the increased potential for incorrectly assessed document holders continuing to exercise the privileges of their documents beyond the current 90-day expiry period appears to be minimal, on the basis of prior and current experience with extensions of this expiry period. The relatively few document holders who may be incorrectly assessed and the even fewer who, after reversal of their medical assessment by Transport Canada, would not receive a notice of suspension within the 90-day period or who would choose to continue exercising their privileges despite their knowledge of the suspension for medical reasons of their document reinforces the expectation that the potential reduction of aviation safety would be minimal.

The benefit conferred by this proposal will lie mainly in the elimination of the burden of annually reissuing some 55,000 documents, most of which simply confirm the CAME's original assessment. Some inconvenience to those document holders whose renewal is delayed for a cause not related to the medical assessment process but whose document expires or who must take extraordinary measures to prevent its expiry will be avoided following the implementation of this proposal. The introduction of the more efficient process of validating medical certificates will eliminate these costs.

It is expected that the benefits from a more efficient medical recertification process will exceed the potential costs to the safety of the aviation system from the extension of the CAME's ability to certify document holders as meeting the medical standards of their documents beyond the current 90-day period.

Subpart 406 (Flight Training Units)

CAR 406.03 (Requirement to Hold a Flight Training Unit Operator Certificate)

The requirement for a freelance instructor to notify the Minister in writing when flight training commences and to include certain basic information regarding the individuals involved and the circumstances under which the training will take place, which will be introduced with the proposed amendment to CAR 406.03 (Requirement to Hold a Flight Training Unit Operator Certificate), will improve the monitoring of such freelance instruction. Although less onerous, the monitoring of freelance instruction will be similar to the oversight in place for instruction conducted under a flight training unit operator certificate in ensuring that the principles of safe operation incorporated in departmental training standards are respected during the instructional process. Since freelance instructors may not conduct courses for candidates for Private Pilot Licences or for Recreational Pilot Permits, i.e. they may not instruct non-pilot applicants with no prior experience in aviation, the monitoring need not be as stringent as that for those who are providing such instruction. The cost associated with this proposal will be a minor increase in paperwork for the providers of freelance instruction. The benefit-cost impact of this proposal is expected to be marginally positive.

Benefit-Cost Summary

The net benefit-cost impact of the proposed amendments to the Canadian Aviation Regulations for the aviation industry and the Canadian economy is expected to be neutral or marginally positive. The proposed amendments to introduce changes which are expected to have operational consequences, such as the definitional changes affecting ultra-light aeroplanes, the changes to procedures affecting the medical certification of aviation documents in Subpart 404 (Medical Requirements), and the changes to the notification requirements for freelance instructors in Subpart 406 (Flight Training Units), are expected, in total, to result in benefits greater than costs.

Consultation

These Regulations were prepublished in the Canada Gazette, Part I, on February 5, 2000. One comment was received and has been addressed as noted above. Delays in processing have delayed their presentation for final publication in the Canada Gazette, Part II, beyond the 18-month deadline. Therefore, they are being prepublished again.

The proposed amendments to the Regulations have been consulted with members of the Canadian Aviation Regulation Advisory Council (CARAC). The actively participating members of the Personnel Licensing and Training Committee of CARAC include the Aero Club of Canada, Air Canada, the Air Operations Group Association, AOPA Canada, the Air Transport Association of Canada, the Association québécoise des transporteurs aériens inc., CAE Electronics Ltd., the Canadian Air Line Pilots Association, the Canadian Association of Aviation Colleges, Canadian Airlines International Ltd., the Canadian Balloon Association, the Canadian Business Aircraft Association, the Canadian Owners and Pilots Association, the Canadian Air Traffic Control Association, the Experimental Aircraft Association — Canadian Council, the Recreational Aircraft Association of Canada, the Soaring Association of Canada, the Teamsters and the Ultralight Pilots Association of Canada. The Personnel Licensing and Training Committee has reviewed these proposed amendments to Parts I and IV of the CARs at meetings in April, June and October of 1998. The Committee accepted the proposed amendments without dissent and recommended their adoption.

The proposed amendments were presented in two packages at the Civil Aviation Regulatory Committee (CARC), which is composed of senior managers in the Civil Aviation Directorate of the Department of Transport, on June 24 and December 11, 1998, and approved by the members of CARC.

Compliance and Enforcement

These Regulations will generally be enforced through the assessment of monetary penalties imposed under sections 7.6 to 8.2 of the Aeronautics Act, through suspension or cancellation of a Canadian aviation document or through judicial action introduced by way of summary conviction as per section 7.3 of the Aeronautics Act.

Contact

Chief, Regulatory Affairs, AARBH, Transport Canada, Safety and Security, Place de Ville, Tower C, Ottawa, Ontario K1A 0N8; General inquiries: (613) 993-7284 or 1-800-305-2059 (Telephone), (613) 990-1198 (Facsimile), www.tc.gc.ca (Internet address).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 4.9 (see footnote f)  of the Aeronautics Act, proposes to make the annexed Regulations Amending the Canadian Aviation Regulations (Parts I and IV).

Interested persons may make representations with respect to the proposed Regulations to the Minister of Transport within 30 days after the date of publication of this notice. All such representations should cite the Canada Gazette, Part I, and the date of publication of this notice. Each representation must be in writing and be sent to the Chief, Regulatory Affairs (AARBH), Civil Aviation, Safety and Security Group, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, Ottawa, Ontario K1A 0N8. (General inquiries — tel.: (613) 993-7284 or 1-800-305-2059; fax: (613) 990-1198; Internet address: http://www.tc.gc.ca)

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act.

Ottawa, October 3, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE CANADIAN AVIATION REGULATIONS (PARTS I AND IV)

AMENDMENTS

1. (1) The definition "ultra-light aeroplane" in subsection 101.01(1) of the Canadian Aviation Regulations (see footnote 4)  is replaced by the following:

"ultra-light aeroplane" means an advanced ultra-light aeroplane or a basic ultra-light aeroplane; (avion ultra-léger)

(2) Subsection 101.01(1) of the Regulations is amended by adding the following in alphabetical order:

"basic ultra-light aeroplane" means an aeroplane having no more than two seats, designed and manufactured to have

(a) a maximum take-off weight not exceeding 544 kg, and
(b) a stall speed in the landing configuration (V_so) of 39 knots (45 mph) indicated airspeed, or less, at the maximum take-off weight; (avion ultra-léger de base)

2. Subsection 400.01(1) of the Regulations is amended by adding the following in alphabetical order:

"dual instruction flight time" means the flight time during which a person is receiving flight instruction from a person qualified in accordance with section 425.21 of the Personnel Licensing and Training Standards respecting Flight Training; (temps d'instruction de vol en double commande)

"solo flight time" means, with respect to the flight time necessary to acquire a permit, licence or rating,

(a) in the case of a pilot, the flight time during which the pilot is the sole flight crew member, and
(b) in the case of a student pilot permit holder, the flight time during which the holder is the sole occupant of an aircraft while under the direction and supervision of the holder of an instructor rating for the appropriate category of aircraft; (temps de vol en solo)

3. The heading before section 401.03 of the Regulations is replaced by the following:

Requirement to Hold a Flight Crew Permit, Licence or Rating or a Foreign Licence Validation Certificate

4. Subsection 401.03(1) of the Regulations is replaced by the following:

401.03 (1) No person shall act as a flight crew member or exercise the privileges of a flight crew permit, licence or rating or a foreign licence validation certificate unless

(a) subject to subsection (2) and sections 401.19 to 401.27, the person is the holder of, and can produce while so acting and while exercising those privileges, the appropriate permit, licence or rating and a valid and appropriate medical certificate; or
(b) the person is the holder of, and can produce while so acting and while exercising those privileges, an appropriate foreign licence validation certificate.

5. (1) Paragraph 401.04(a) of the Regulations is replaced by the following:

(a) a flight crew permit or licence issued under this Subpart; or

(2) Paragraph 401.04(b) of the French version of the Regulations is replaced by the following:

b) la personne ne soit titulaire d'une licence de membre d'équipage de conduite ou d'un document équivalent à un certificat de validation de licence étrangère délivrés sous le régime des lois de l'État contractant.

6. Section 401.06 of the Regulations is renumbered as 401.06(1) and is amended by adding the following:

(2) The certification of additional privileges on a permit or licence expires at the end of the period specified on the licence or permit or on receipt of a new permit or licence granting those privileges, whichever is earlier.

7. Subsection 401.30(3) of the Regulations is replaced by the following:

(3) No holder of a commercial pilot licence--aeroplane whose licence is endorsed with a daylight-flying-only restriction shall exercise the privileges set out in paragraphs (1)(a) and (c) by night.

8. Section 401.90 of the English version of the Regulations is replaced by the following:

401.90 The Minister shall renew a flight instructor rating— ultra-light aeroplane in accordance with the personnel licensing standards where the holder of the rating continues to meet the requirements referred to in section 401.06 for the endorsement of the rating.

9. Section 404.18 of the Regulations is replaced by the following:

404.18 (1) When the holder of a medical certificate undergoes a medical examination by a physician referred to in paragraph 404.16(a) or (b) for the purpose of obtaining permission to continue to exercise the privileges of the holder's permit, licence or rating, the medical examiner shall

(a) sign and date the medical certificate and stamp it with the medical examiner's official stamp indicating that the applicant is "fit", subject to any restrictions already endorsed on the medical certificate, including any restriction to a shorter than normal validity period;
(b) return the medical certificate to the applicant; or
(c) advise the applicant that he or she is "unfit".

(2) When the applicant's medical certificate has been marked with an endorsement referred to in paragraph (1)(a), the certificate validates the permit or licence for the period specified on the medical certificate.

10. (1) Subsection 406.03(1) of the Regulations is replaced by the following:

406.03 (1) Subject to subsections (2) and (3), no person shall operate a flight training service in Canada using an aeroplane or helicopter in Canada unless the person holds a flight training unit operator certificate that authorizes the person to operate the service and complies with the conditions and operations specifications set out in the certificate.

(2) Subparagraph 406.03(2)(b)(iii) of the Regulations is replaced by the following:

(iii) using an aircraft that has been obtained from a person who is at arm's length from the flight instructor, and the training is other than toward obtaining a pilot permit--recreational or a private pilot licence.

(3) Section 406.03 of the Regulations is amended by adding the following after subsection (2):

(3) In the case of flight training conducted under subparagraph (2)(b)(iii), the flight instructor shall

(a) notify the Minister in writing of

(i) the name and address of the person to receive the training,
(ii) the registration of the aircraft to be used,
(iii) the type of training to be conducted,
(iv) the location of the training operations, and
(v) the name and licence number of the flight instructor; and (b) provide the information to the Minister

(i) prior to commencing training operations,
(ii) within 10 working days after any change to the information, and
(iii) when the training is discontinued.

COMING INTO FORCE

11. These Regulations come into force on the day on which they are registered.

[41-1-o]

Regulations Amending the Motor Vehicle Safety Regulations (Transmission Control Functions)

Statutory Authority

Motor Vehicle Safety Act

Sponsoring Department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

Description

The Department of Transport is proposing to amend Canadian Motor Vehicle Safety Standard (CMVSS) 102, which is part of the Motor Vehicle Safety Regulations (MVSR). (see footnote 5)  The purposes of the proposed amendments are to:

— Modify vehicle starting requirements to accommodate new technologies;

— Introduce mandatory requirements for a brake shift interlock (BSI) for vehicles equipped with a transmission control sequence that includes a park position; and

— Introduce mandatory requirements for a clutch ignition interlock (CII) for vehicles equipped with a manual transmission.

These proposed new requirements are expected to improve road safety while remaining cost-effective for the consumers. In addition, these requirements would allow manufacturers more flexibility to use innovative technology.

Starter Operability

In recent years, new technologies used in hybrid vehicles have made inroads into the Canadian market. Hybrid vehicles utilize more than one propulsion source, and can automatically switch from one propulsion source to another or utilize more than one at the same time. When doing so, the propulsion sources can automatically start and stop when needed, even when in a forward or reverse drive position. Such models have been excluded from sale in Canada because they do not comply with the starter operability requirement of CMVSS 102(2). This current requirement specifies that on vehicles equipped with an automatic transmission, the engine starter must be inoperative when the transmission control is in forward or reverse drive position. The proposed amendment would limit the starter operability requirement, in CMVSS 102, to apply only at the time of the initial start-up of the vehicle.

The intent of this proposed amendment is to facilitate the introduction of new technology, such as these hybrid vehicles, to the Canadian market. Yet, in addition to hybrid vehicles, other types of vehicles would also be addressed by this proposed amendment. Some vehicles, which use "start and stop" technology, allow the combustion engine to stop when the vehicle is in a stationary position and to start-up again when needed by the driver. For instance, when at a red light, the vehicle's engine shuts off until the driver depresses the accelerator. At that time the vehicle's engine starts-up once again, even if in a forward or reverse drive position.

This proposed amendment would also align with the Department's policy to promote the introduction of innovative technologies, as well as the use of fuel-efficient, environmentally sound and economical means of transportation.

Brake Shift Interlock and Clutch Ignition Interlock

A large proportion of today's automobiles are already equipped with a BSI or CII: 99.3 percent of vehicles which have a transmission control sequence that includes a park position have a BSI, and 99.9 percent of manual transmission vehicles have a CII. (see footnote 6)  Nevertheless, the Department is still receiving complaints about cases in which the lack of a BSI or CII has resulted in fatalities, injuries or property damage.

One of the cases logged by the Department involved a vehicle not equipped with a BSI, where two children were left unattended inside a vehicle with the engine running. One of the children moved the transmission control out of the park position and into the reverse driving position, causing the vehicle to back up. In such a scenario, the vehicle might begin to move and if uncontrolled, eventually collide with another object or pedestrian, causing property damage, injuries or even fatalities.

This proposed BSI requirement is also intended to reduce the occurrence of "sudden accelerations". This condition can occur when the vehicle's engine is running and the transmission is shifted from a park position to the forward or reverse drive position. In this event the vehicle may accelerate rapidly, without the driver realizing that the accelerator control is being depressed. Collision investigations have demonstrated that this problem is not the result of a mechanical failure or a defective component, but is rather the result of driver error, where the driver believes that he or she has depressed the brake pedal, when in fact the accelerator has been depressed. Requiring the driver to apply the brakes before moving the transmission control out of the park position would mitigate this problem.

On average, the Department receives 17 complaints annually pertaining to these types of problems, among which 2.5 percent result in fatalities and 29 percent result in injuries (see footnote 7)  despite the low number of vehicles without a BSI.

To remedy these occurrences, the Department is proposing to mandate a BSI on all vehicles with a gross weight rating (GVWR) of 4 536 kg or less that have a transmission control sequence that includes a park position. This proposed amendment to CMVSS 102 would require that the service brakes of a vehicle be engaged in order for the transmission control to be shifted from the park position to a forward or reverse drive position, when the engine is running. This proposed amendment would significantly reduce these types of problems, thereby reducing the number of injuries and fatalities, and increasing occupant safety.

The proposed BSI requirement would require the operator of the vehicle to be positioned in the driver's seat in order to depress the brake pedal and shift the transmission control from the park position. This will reduce the risk of an unattended child inadvertently shifting the transmission control out of the park position.

Similarly, the Department is proposing to mandate a CII on all vehicles with a GVWR of 4 536 kg or less equipped with a manual transmission. The requirement for a CII would mitigate events such as "runaways", which are caused by drivers who do not press down the clutch pedal to disengage the drive train when attempting to start the vehicle. This requirement would prevent the starting sequence from operating unless the drive train is disengaged by way of the clutch pedal or device.

The Department is aware of injuries and fatalities resulting from the lack of a CII. In one case, the operator of a vehicle leaned in through the passenger door to start the engine without depressing the clutch. While the transmission control was in gear, the vehicle moved forward. As a result, the operator of the vehicle was pinned between the car and a house; sustaining major injuries and dying before help arrived. In a similar incident, a driver started the engine of his vehicle with the transmission control in gear without depressing the clutch. This resulted in a "runaway" and two children standing nearby were struck and killed by the vehicle. On another occasion, a vehicle was left in gear and was started using a remote auto-starter. The vehicle did not have a CII, moved forward and pushed a bicycle rack through a window. In this case no one was injured, but the runaway vehicle caused a substantial amount of property damage.

Thus, the proposed requirements of a BSI for vehicles with a transmission control sequence that includes a park position and a CII for vehicles equipped with a manual transmission are intended to alleviate safety problems associated with vehicle "sudden accelerations" and "runaways" as described in this section.

Effective Date

The proposed amendment relating to starter operability would come into force on the date of its registration by the Clerk of the Privy Council.

The proposed amendments relating to the BSI and CII requirements would come into force one year after the date of their registration by the Clerk of the Privy Council.

Alternatives

The Department has considered several alternatives to the proposed amendments, including retaining the status quo or adopting a non-regulatory or voluntary approach. Furthermore, the Department researched foreign legislations and found no foreign applicable regulatory solutions to the Canadian situation.

The status quo was not considered an option for the proposed amendment on starter operability, because the existing regulation does not include provisions for "start and stop" technology vehicles. The Department believes that the regulatory approach would not only clarify the intent of the starter operability requirement, but also maintain the current road and operator safety. Furthermore, by allowing "start and stop" technology vehicles such as hybrid vehicles to be sold in the Canadian market, the proposed amendment would promote cleaner, more environmentally friendly automotive technology in Canada.

The Department evaluated the possibility of maintaining the status quo regarding BSI and CII requirements. However, due to the number of injury and fatality cases reported to and documented by the Department, it is clear that implementing the suggested amendment would further enhance the safety of Canadians.

The Department also considered allowing the industry to continue installing the BSI and CII systems on a voluntary basis. This alternative was rejected despite the fact that the majority of vehicle models currently sold in Canada have a BSI and a CII, because some manufacturers have not agreed to install these features voluntarily. Moreover, while the incidence of "sudden accelerations" and "runaways" has been reduced by the voluntary installation of these systems, injuries and fatalities are still being reported. The Department does not consider that voluntary compliance has created a sufficient level of safety, and a regulated approach is therefore necessary.

In summary, the Department has determined that it is important to require an interlock feature to engage the transmission control function of all vehicles to minimize confusion and the risk of misuse among drivers who operate different vehicles. Therefore, the department believes that the only appropriate action was to propose an amendment to the regulation.

Benefits and Costs

The proposed amendment to subsection CMVSS 102(2) would clarify its intent and would allow the sale of new technology vehicles. The proposed starter operability requirement is intended for vehicles equipped with an automatic transmission and would be limited to the initial start-up of the vehicle's propulsion source. Considering that this proposed amendment to the starter operability requirement would not affect any of the existing vehicle designs, the Department believes that this proposed change would be cost-beneficial, as it would allow innovative technologies to be introduced in Canada at no additional cost to manufacturers.

Following consultations with various manufacturers, the Department has concluded that the safety benefits associated with the mandatory installation of a BSI or a CII heavily outweigh the costs. In addition, the mandatory requirement for the installation of a BCI or CII should not raise significant concerns for manufacturers, since most have voluntarily installed these devices in their vehicles for many years, and are quite aware of the problems associated with "sudden accelerations" and "runaways."

The Department surveyed all vehicle manufacturers to determine which do not equip their vehicles with a BSI or a CII. Three manufacturers responded that some of their models were not so equipped. In 1999, these models represented less than 1 percent of all the vehicles sold in Canada. (see footnote 8)  Therefore, the overall cost impact of this part of the proposed amendment should be minimal.

The installation of a BSI in light-duty vehicles should eliminate the problem of "sudden acceleration". Over the years (1972 to 2001), the Department has received over 650 complaints on this issue, which resulted in over 170 reported injuries (see Figure 1) and over 10 reported fatalities. (see footnote 9)  As mentioned, most vehicles manufactured for the Canadian market already have a BSI or a CII. In addition to mitigating the potential for "sudden accelerations" and "runaways", the proposed amendment would promote common starting and shifting procedures among all vehicles, which should provide consistency in driving operations, eliminate confusion among drivers and in turn increase safety. Installation costs are estimated at less than $6 per vehicle for a BSI system and less than $2 per vehicle for a CII system. (see footnote 10) 

Figure 1: Injuries from "Sudden Accelerations"

The Department receives complaints from the public on a daily basis related to the absence of a BSI or CII. From those complaints, the department has found that an average of 29 percent of those incidents resulted in injuries and 2.5 percent in fatalities annually. (see footnote 11)  If a conventional formula is used for calculating the social cost of these incidents (based on current actuarial figures used by the Department's Road Safety Directorate), the dollar value is calculated to be $1.967 million per life and $15,476 per injury. (see footnote 12)  (All dollar values are in year-2000 Canadian dollars.) The total annual benefit figure for prevention of the annual injuries would therefore be $74,285. The total annual benefit figure for preventing the annual fatalities would be $786,800. Together, the total annual benefit figure for preventing injuries and fatalities is $861,085.

Assuming the 2001 sales data is similar to the sales data gathered from 1999, it would be reasonable to consider that fewer than 12,900 vehicles would be affected by this proposed amendment. More precisely, of the 12,900 vehicles, the BSI requirement would affect fewer than 12,000 vehicles and the CII requirement would affect fewer than 900 (see footnote 13) . Using the estimated installation cost of $6 for a BSI and $2 for a CII, (see footnote 14)  the estimated total cost would be $73,800. The benefit to cost ratio is then calculated to be 11.67/1 indicating that benefits of the proposed amendment would significantly outweigh the associated cost.

This proposed amendment is also expected to have a positive impact on the environment, as the new starter operability requirement would permit the use of a more environmentally friendly means of transportation.

Consultation

The Department has instituted a systematic and extensive consultation process that is intended to keep the automotive industry, public safety organizations, and the general public informed of planned and recently made changes to the regulatory requirements governing motor vehicle safety in Canada and that provides a mechanism to comment on these initiatives. Three times a year, departmental representatives meet with the Canadian Vehicle Manufacturers' Association, whose members include DaimlerChrysler Canada Inc.; Ford Motor Company of Canada, Limited; and General Motors of Canada Limited. The Department also meets three times a year with the Association of International Automobile Manufacturers of Canada (AIAMC), which represents international manufacturers and importers of motor vehicles.(see footnote 15)  In addition, once a year, the members of the Alliance of Automobile Manufacturers (AAM) join the AIAMC meeting. The AAM is a trade association of 13 car and light-truck manufacturers whose members account for more than 90 percent of U.S. vehicle sales.(see footnote 16)  Semi-annual meetings are also held with the Motorcycle and Moped Industry Council, the Rubber Association of Canada, and the Juvenile Product Manufacturers Association. (see footnote 17) 

These automotive industry meetings allow manufacturers and importers to respond to proposed changes to the regulations for which the Road Safety and Motor Vehicle Regulation Directorate is responsible, to raise problems with the existing requirements, and to discuss any matters of concern to the member companies. On a quarterly basis, these associations receive a copy of the Directorate's Regulatory Plan, which outlines all contemplated changes to the governing safety requirements and tracks initiatives as they are developed, published in the Canada Gazette, and as the new regulations come into force.

The Department also consults with the federal authorities of other countries and with Canada's provinces and territories. Since the harmonization of regulatory requirements between Canada and the U.S. is pivotal to trade between the two countries and to the competitiveness of Canada's automotive industry, semi-annual meetings are held with the U.S. National Highway Traffic Safety Administration. These meetings provide a valuable opportunity to discuss future regulatory initiatives and problems of mutual interest.

The Department is also committed to the development of global regulations, which is being carried out under the auspices of the United Nations World Forum for the Harmonization of Vehicle Regulations. Along with members of other world regulatory bodies and public interest groups, Departmental representatives participate in 11 or more meetings a year as part of the initiative to develop Global Technical Regulations in order to simplify the regulatory process for automotive manufacturers who market their products internationally.

Consultation with the provinces and territories takes place mainly through the Department's membership in the Canadian Council of Motor Transport Administrators (CCMTA). Its Board of Directors meets a minimum of twice a year, as do the three standing committees of the CCMTA, which are comprised of officials from each member jurisdiction who deal with a broad range of short- and long-term issues.

In addition to the foregoing consultation mechanisms, which involve the automotive industry and other government agencies, the Department also holds meetings twice a year with national public safety organizations to consult with them on future regulatory changes and to discuss emerging safety problems. Thirty or more such organizations are invited to each of these meetings: organizations that include drivers' and automobile associations, bus operators, the insurance industry, consumer associations, health and police organizations, the Canada Safety Council, the Traffic Injury Research Foundation, the Canadian Automobile Association, MADD Canada, and the Federation of Canadian Municipalities. These organizations also receive copies of the Directorate's Regulatory Plan on a quarterly basis.

In order to monitor public opinion and concerns, as well as to keep the public informed on road safety-related issues, the Department offers a free telephone information service that Canadians may call from across the country, and it publishes specific safety-related information on its Web site. The public may also make inquiries using the Department's Web site and by regular mail. In addition, a dedicated toll-free telephone line allows the public to notify the Department of safety-related defects, which are subsequently investigated by the Public Complaints, Recalls and Investigations Division. As part of its research program, the Department has established several teams of collision investigators that are affiliated with major universities, part of whose work is to monitor road safety issues. A system for training instructors on the proper installation of infant and child restraint systems has also been implemented, and the instructors advise the Department of the safety issues that arise.

This consultation process enables the Department to identify and respond to safety-related problems in a timely fashion. More importantly, it keeps the public, the automotive industry, and public safety organizations abreast of the Department's many regulatory initiatives and provides opportunities for all concerned to participate in the development of new motor vehicle safety measures.

A consultation period of 75 days will follow the publication of this proposal in the Canada Gazette, Part I. Comments may be made by writing to one of the addresses given below or at any government-industry meeting. All responses will be taken into consideration in the development of the final amendment.

Compliance and Enforcement

Motor vehicle manufacturers and importers are responsible for ensuring that their products comply with the requirements of the Motor Vehicle Safety Regulations. The Department of Transport monitors the self-certification programs of manufacturers and importers by reviewing their test documentation, inspecting vehicles, and testing vehicles obtained in the open market. When a defect is found, the manufacturer or importer must issue a notice of defect to owners and to the Minister of Transport. If a vehicle does not comply with a safety standard, the manufacturer or importer may be subject to prosecution and, if found guilty, may be fined as prescribed in the Motor Vehicle Safety Act.

Contact

Jay Rieger, Road Safety and Motor Vehicle Regulation Directorate, Department of Transport, 330 Sparks Street, Ottawa, Ontario K1A 0N5, (613) 998-1962 (Telephone), (613) 990-2913 (Facsimile), riegerj@tc.gc.ca (Electronic mail).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 11(3) of the Motor Vehicle Safety Act (see footnote g) , that the Governor in Council, pursuant to section 5 (see footnote h)  and subsection 11(1) of that Act, proposes to make the annexed Regulations Amending the Motor Vehicle Safety Regulations (Transmission Control Functions).

Interested persons may make representations with respect to the proposed Regulations to the Minister of Transport within 75 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Jay Rieger, Road Safety and Motor Vehicle Regulation Directorate, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, Ottawa, Ontario K1A 0N5. (Tel: (613) 998-1962; fax: (613) 990-2913; e-mail: riegerj@tc.gc.ca)

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act.

Ottawa, October 3, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE MOTOR VEHICLE SAFETY REGULATIONS (TRANSMISSION CONTROL FUNCTIONS)

AMENDMENTS

1. (1) Subsection 102(2) of Schedule IV to the Motor Vehicle Safety Regulations (see footnote 18)  is replaced by the following:

(2) On any vehicle equipped with an automatic transmission, a motor used for the vehicle's propulsion must not start — while the ignition switch is being set to the position used to start the motor — if the transmission control is in a forward or reverse drive position.

(2) Section 102 of Schedule IV to the Regulations is amended by adding the following after subsection (2):

(2.1) If a passenger car, multipurpose passenger vehicle or truck has a GVWR of 4 536 kg or less and a transmission control sequence that includes a park position, the transmission control must not be capable of shifting from a park position to a forward or reverse drive position — while a motor used for the vehicle's propulsion is in use — unless the service brakes are engaged.

(3) Section 102 of Schedule IV to the Regulations is amended by adding the following after subsection (6):

(7) If a passenger car, multipurpose passenger vehicle or truck has a GVWR of 4 536 kg or less and is equipped with a manual transmission, a motor used for the vehicle's propulsion must not start — while the ignition switch is being set to the position used to start the motor — unless the clutch pedal is depressed or the drive train is otherwise disengaged.

(8) In this section, "drive train" means the components that transfer motive power from the motor to the drive wheels.

COMING INTO FORCE

2. (1) These Regulations, except subsections 1(2) and (3), come into force on the day on which they are registered.

(2) Subsections 1(2) and (3) come into force one year after the day on which these Regulations are registered.

[41-1-o]

Footnote a 

S.C. 1999, c. 33, s. 347

Footnote 1 

C.R.C., c. 870

Footnote b 

S.C. 2001, c. 9, s. 447

Footnote c 

S.C. 1991, c. 47

Footnote 2 

SOR/92-525

Footnote d 

S.C. 1996, c. 6, s. 82(1)

Footnote e 

S.C. 1991, c. 47

Footnote 3 

SOR/92-524

Footnote f 

S.C. 1992, c. 4, s. 7

Footnote 4 

SOR/96-433

Footnote 5 

C.R.C., ch. 1038

Footnote 6 

Canadian Vehicle Manufacturers' Association (CVMA) sales data and provincial registrations for 1999.

Footnote 7 

Last five-year average of the Department's logged cases on "sudden accelerations".

Footnote 8 

CMVA sales data and provincial registrations for 1999.

Footnote 9 

Data from public complaints logged by the Department.

Footnote 10 

Based on industry-supplied dealer net cost of factory BSI and CII assemblies (2001).

Footnote 11 

Last five-year average of the Department's logged cases of "sudden accelerations".

Footnote 12 

The 2000 figures for cost of life and cost of injury have been developed by applying the gross domestic product (GDP) factor cost percentage change for the years 1991 to 2000. The GDP factor cost figures were obtained from Statistics Canada, Gross Domestic Product (All Industries), Cat. No. 15-001, 1994; and Transport Canada, Guide to Benefit-Cost Analysis in Transport Canada, TP 11875E, September 1995.

Footnote 13 

CMVA sales data and provincial registrations for 1999.

Footnote 14 

Based on industry-supplied dealer net cost of factory BSI and CII assemblies (2001).

Footnote 15 

The AIAMC represents the following automotive manufacturers and importers: BMW Canada Inc., Daewoo Auto Canada Inc., Honda Canada Inc., Hyundai Auto Canada, K1A Canada Inc., Mazda Canada Inc., Mercedes-Benz Canada Inc., Mitsubishi Motor Sales of Canada, Inc., Nissan Canada Inc., Porsche Cars Canada Ltd., Subaru Canada Inc., Suzuki Canada Inc., Toyota Canada Inc., and Volkswagen Canada Inc.

Footnote 16 

The Alliance of Automobile Manufacturers represents BMW Group; DaimlerChrysler; Fiat Auto R&D USA; Ford Motor Company; General Motors; Isuzu Motors America, Inc.; Mazda North American Operations; Mitsubishi Motor Sales of America, Inc.; Nissan; Porsche Cars North America, Inc.; Toyota; Volkswagen of America, Inc.; and Volvo Car Corporation.

Footnote 17 

The Juvenile Product Manufacturers Association represents the manufacturers and importers of infant and child restraint systems.

Footnote g 

S.C. 1993, c. 16

Footnote h 

S.C. 1999, c. 33, s. 351

Footnote 18 

C.R.C., c. 1038

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with extensible hypertext markup language (XHTML 1.0 Strict).