By Adam Hunt
Over the past year quite a number of COPA members have called or written COPA to ask about the circumstances under which they can take money for flying. This is a good question as the rules changed considerably when the CARs came into effect in 1996. There are quite a number of times when you can be reimbursed for flying and a much longer list of circumstances when you can’t. In these days when flying costs more, many pilots are looking for ways to spread the costs around and get reimbursed for flying.
The reimbursement rules are contained in CAR 401.28. These rules were worked out with a lot of input from COPA and are much more liberal than the old rules that existed prior to 1996. It is important to protect our rights here by not abusing these rules. Receiving money for flying outside these rules generally requires that you hold an operating certificate, have a commercially registered aircraft, commercial pilots on staff, maintenance by an AMO, a Company Operations Manual, and many more requirements, although there are a few exceptions that we will consider later in this article.
Let’s have a look at CAR 401.28 with some interpretation along the way:
Aeroplanes and Helicopters - Reimbursement of Costs Incurred in Respect of a Flight 401.28(1) No holder of a private pilot licence shall act as the pilot of an aeroplane or helicopter for hire or reward unless the conditions set out in subsection (2), (3) or (4), as applicable, are met.
This section is pretty straightforward – if you are accepting money for doing flying outside this part you are probably running a commercial air service and better have an operating certificate and everything else required to do that!
(2) The holder of a private pilot licence may receive reimbursement for costs incurred in respect of a flight where
(a) the holder is the owner or operator of the aircraft;
(b) the holder conducts the flight for purposes other than hire or reward;
(c) the holder carries passengers only incidentally to the purposes of the flight; and
(d) the reimbursement
(i) is provided only by the passengers referred to in paragraph (c), and
(ii) is for the purpose of sharing costs for fuel, oil and fees charged against the aircraft in respect of the flight, as applicable.
This is the section that allows you to share costs with passengers when you go flying. The provisions are pretty clear – the passengers must be carried only “incidentally” to the flight. In other words you can’t transport people to a place that they want to go specifically, but you can take them along on a flight that you were going on anyway. Only the passengers themselves can provide the reimbursement – not their spouse or parent. Also they can only reimburse you for sharing the costs of fuel oil and fees, such as landing fees.
This means if you are carrying one passenger and sharing costs that they can pay a maximum of half the cost of the gas, oil and landing fees. They are not allowed to give you something towards hangarage, insurance or engine overhaul. This rule is pretty specific right across this CAR.
So what is reasonable to charge someone with whom you are cost sharing? With gas and oil costs where they are today and assuming no landing fees, you could expect that the following shared costs would probably be reasonable, with one passenger (these are shared 50-50 with the pilot):
Cessna 150 $11.45 per hour
Cessna 172, PA-28 $15.27 per hour
Cessna 177, PA-28-180 $22.00 per hour
Cessna 182 $28.35 per hour
So if you “cost share” with one passenger for an hour in your Cessna 150 and you collect $50 from them you are susceptible to being violated under this CAR.
Does this mean that you can’t take your aunt to Toronto if she really wants to go there and you weren’t going there on your own anyway? No - you can take her there, but you can’t share expenses – you will have to pay the whole cost of the trip yourself.
(3) The holder of a private pilot licence may receive reimbursement from the holder's employer for costs incurred in respect of a flight where
(a) the holder is employed on a full-time basis by the employer for purposes other than flying;
(b) the holder accepts remuneration for flying on the employer's business only when the flying is incidental to the execution of the holder's duties; and
(c) the remuneration
(i) in the case of an aircraft owned by the holder, is paid at a rate based on distance travelled or hours flown that does not exceed the total of the holder's direct operating costs and the fees charged against the aircraft in respect of the flight, or
(ii) in the case of a rental aircraft, is a reimbursement that does not exceed the total of the holder's rental costs, direct operating costs and the fees charged against the aircraft in respect of the flight.
This paragraph covers flying your own plane on company business and is pretty straightforward, too. The company can’t employ you as a pilot, but you can be employed as a salesman, engineer, manager or other function. You can’t fly passengers or goods for the company – just yourself and other employees who are going there – you can’t deliver freight for instance. You can’t be reimbursed more than your actual expenses, whether you are renting or using your own plane. You can’t use this section of the CARs to make money. Once again the amount you can be reimbursed for your own plane is limited to gas, oil and landing or other similar fees.
Here are some current rates that would be considered reasonable for 100% reimbursement of your direct operating costs if you own the airplane:
Cessna 150 $22.90 per hour
Cessna 172, PA-28-140 $30.54 per hour
Cessna 177, PA-28-180 $44.00 per hour
Cessna 182 $56.70 per hour
Anything much beyond these numbers would probably put you in violation of this CAR. If Transport Canada questions you about the costs you were reimbursed for, your best defence would be to have the receipts for fuel, oil and landing fees to substantiate the reimbursement you received.
(4) The holder of a private pilot licence may receive remuneration from a charitable, a not-for-profit or a public security organization in respect of a flight conducted by the holder as a volunteer for that organization where the remuneration
(a) in the case of an aircraft owned by the holder, is paid at a rate based on distance travelled or hours flown that does not exceed the total of the holder's direct operating costs and the fees charged against the aircraft in respect of the flight; or
(b) in the case of a rental aircraft, is a reimbursement that does not exceed the total of the holder's rental costs, direct operating costs and the fees charged against the aircraft in respect of the flight.
This paragraph allows you to fly for charities, not-for-profits and public security organizations and be reimbursed expenses. Once again the reimbursement for your own plane must be for direct operating costs only – fuel, oil and landing fees and not for hangarage, engine overhaul or insurance costs.
Who can you fly for under this paragraph? Conversations with several Transport Canada officials confirm the intent and application of this paragraph.
“Charities” must be registered charitable organizations. This means organizations such as Hope Air, which is a registered charity, can reimburse you for expenses while flying for them.
“Not-for-Profits” means incorporated not-for-profit organizations, such as COPA. This doesn’t mean corporations or companies that just happen to not make money!
Governments are not considered charities or not-for-profits in Canada.
“Public Security Organization” was inserted into the original regulation to allow pilots to be reimbursed for flying for CASARA and the Department of National Defence on volunteer SAR missions. According to Transport Canada this also includes volunteer flying for police forces and forest fire fighting. It does not include flying for provincial governments or municipal governments, parks departments, public works departments or other similar government agencies or crown corporations that are not “public security organizations”. Those governments should be hiring commercial operators to do flying for them, as they are not permitted to reimburse you for expenses.
In all cases here, if you cannot be reimbursed because of this CAR, you can always do the flying at your own expense, as a volunteer! This CAR only limits you if you are getting money for your flying.
There are a number of other circumstances where it is permitted for you to be paid in the CARs. One of these is running your own ultralight school. Conventional airplane flying schools require an operating certificate under CAR 406, but glider, balloon, gyroplane or ultra-light schools are exempt from that requirement by CAR 406.05. You just have to notify the minister that you are operating.
Another area where you can make money from airplanes, if not from flying them yourself, is renting. The CARs do not require an operating certificate or any other special requirements to rent out your own airplane.
The rules in CAR 401.28 were designed to let private aircraft operators do volunteer flying, share expenses with passengers carried incidentally to the flight and to be reimbursed for business flying. Taking money for flying outside these rules means that you are running an airline illegally and liable for enforcement action. Furthermore you jeopardize the continued existence of the rules allowing other pilots to be reimbursed for these special types of volunteer flying.