Regulations Amending the Canadian Aviation Security Regulations, 2012 (Air Cargo): SOR/2024-203

Canada Gazette, Part II, Volume 158, Number 22

Registration
SOR/2024-203 October 11, 2024

AERONAUTICS ACT

P.C. 2024-1110 October 11, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, makes the annexed Regulations Amending the Canadian Aviation Security Regulations, 2012 (Air Cargo) under section 4.71footnote a and paragraphs 7.6(1)(a)footnote b and (b)footnote c of the Aeronautics Act footnote d.

Regulations Amending the Canadian Aviation Security Regulations, 2012 (Air Cargo)

Amendments

1 Paragraphs 2(k) and (l) of the Canadian Aviation Security Regulations, 2012 footnote 1 are replaced by the following:

2 The headings “Air Cargo and Mail” and “Overview” before section 668 and sections 668 to 669 of the Regulations are replaced by the following:

Cargo and Mail — Flights from Canada

DIVISION 1
Cargo

Application

Application

668 (1) Section 669 applies to air carriers who transport cargo on a flight departing from an aerodrome located in Canada.

(2) Sections 670 to 686 apply to the following members of the air cargo security program who screen cargo or store, tender or transport secure cargo:

Transporting and Tendering

Requirement to screen cargo

669 (1) Cargo that is to be transported by an air carrier on a flight must be screened by the air carrier for threat items in accordance with a security measure unless the cargo was tendered to the air carrier for transportation by air as secure cargo.

Prohibition

(2) An air carrier must not transport cargo on a flight if the cargo contains a threat item.

3 Section 673 of the Regulations is repealed.

4 Section 720 of the Regulations and the reference “[721 to 738 reserved]” after section 720 are replaced by the following:

Requirement to screen mail

720 (1) Mail that is to be transported by an air carrier on a flight departing from an aerodrome located in Canada must be screened by the air carrier for threat items in accordance with a security measure.

Prohibition

(2) An air carrier must not transport mail on a flight departing from an aerodrome located in Canada if the mail contains a threat item.

[721 to 739 reserved]

5 Part 12 of the Regulations is replaced by the following:

PART 12
Cargo — Flights from Outside Canada

Application

740 This Part applies to air carriers who transport cargo on a flight departing from a place outside Canada to an aerodrome located in Canada. This Part does not apply in respect of diplomatic or consular bags.

Cargo information

741 (1) An air carrier must provide to the Minister, before cargo is loaded on board the aircraft, the following information:

Change in cargo information

(2) If there are any changes to the information, the air carrier must, as soon as feasible, provide the updated information to the Minister.

Additional information

(3) The air carrier must provide to the Minister, on request, any additional information respecting the cargo so that the aviation security risk may be assessed.

Cargo screening request

742 (1) At the request of the Minister, an air carrier must screen the cargo for threat items in accordance with a security measure.

Threat item

(2) If the cargo contains a threat item, the air carrier must immediately establish control of the cargo and must remove any threat to aviation security.

Screening information

(3) After any screening carried out under subsection (1), the air carrier must provide the Minister with the following information before the flight’s departure from the last point of departure:

Prohibition

743 An air carrier must not transport cargo on a flight unless

Information to Minister

744 An air carrier must provide the following information to the Minister as soon as feasible after a flight’s departure from the last point of departure and before its arrival in Canada:

Contact person

745 An air carrier must provide to the Minister the name and contact information of the person who is acting as the principal contact between the air carrier and the Minister. The air carrier must ensure that the person is available at all times.

[746 to 764 reserved]

6 The heading “PART 11 — AIR CARGO” in Schedule 4 to the Regulations is replaced by the following:

Column 1

Designated Provision

Column 2

Maximum Amount Payable ($)

Individual

Column 3

Maximum Amount Payable ($)

Corporation
PART 11 — CARGO AND MAIL — FLIGHTS FROM CANADA
Subsection 669(1)   25,000
Subsection 669(2)   25,000

7 The reference “Section 673” in column 1 of Schedule 4 to the Regulations and the corresponding amounts in columns 2 and 3 are repealed.

8 Schedule 4 to the Regulations is amended by adding the following after the reference “Section 686”:

Column 1

Designated Provision

Column 2

Maximum Amount Payable ($)

Individual

Column 3

Maximum Amount Payable ($)

Corporation
Subsection 720(1)   25,000
Subsection 720(2)   25,000
PART 12 — CARGO — FLIGHTS FROM OUTSIDE CANADA
Subsection 741(1)   10,000
Subsection 741(2)   10,000
Subsection 741(3)   10,000
Subsection 742(1)   25,000
Subsection 742(2)   25,000
Subsection 742(3)   10,000
Section 743   25,000
Section 744   10,000
Section 745   10,000

Coming into Force

9 These Regulations come into force on April 1, 2025.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The air cargo industry remains vulnerable to extremist elements aspiring to commit acts of unlawful interference, including terrorist attacks. Information on inbound air cargo has not been consistently reviewed and assessed for such security risks. To bolster the security of airports, aircraft and the travelling public, the Government of Canada must be empowered to identify high-risk cargo before it is loaded on Canada-bound aircraft. The Regulations Amending the Canadian Aviation Security Regulations, 2012 (Air Cargo) [the amendments] establish requirements for a Pre-load Air Cargo Targeting (PACT) program. Ensuring all air carriers transporting cargo to Canada submit pre-loading advance cargo information (PLACI) and comply with mitigation measures as directed by Transport Canada (TC), the PACT program will enhance the security of inbound air cargo in a way that is consistent with key international trading partners.

Background

The Canadian air cargo industry transports over one billion tonnes of goods every year. According to Deloitte, the value of the Canadian air cargo industry is projected to reach $2.9 billion by 2025. Approximately half of all cargo that is transported by air travels on passenger flights.

Civil aviation remains a target of terrorist attacks, offering the kinds of high-profile targets that terrorists seek, such as airports, aircraft, and the travelling public. The vulnerability of air cargo in particular was highlighted by the events of October 29, 2010, when explosive devices were found in air cargo packages bound for the United States from Yemen. According to post-incident analysis, if the shipments had not been intercepted as a result of intelligence, one of the devices could have detonated in Canadian airspace while en route to Chicago. The incident led governments and industry stakeholders to take action. Around the world, countries began enhancing their domestic and outbound air cargo security regimes, while exploring ways of addressing air cargo threats from abroad.

Following the events of 2010, several countries proposed supplementing traditional screening with the analysis of advance cargo information, which enables early identification of high-risk cargo and the application of mitigation measures, as appropriate, before cargo can be transported on an inbound flight. Canada began implementing this approach with the launch of the PACT pilot project, a joint initiative between TC and the Canada Border Services Agency (CBSA), on October 1, 2012. Under the PACT pilot project, participating air carriers began submitting basic cargo information (e.g. shipper and consignee information and details about the commodities being shipped) to the Government of Canada for assessment before cargo was loaded on board the aircraft destined to Canada. Initial pilot project volunteers included several air carriers and two freight forwarders that could submit advance cargo information on behalf of air carriers. These participants represented 10% to 15% of the total volume of Canada-bound cargo. While originally conceived as an 18-month project, the pilot project was repeatedly extended as independent reviews found the PACT pilot project’s methodology an effective way to reduce aviation security risks, complementing other countries’ national level programs to address potential threats early in the supply chain.

In 2015, TC began working toward the implementation of a codified program, as the PACT pilot project continued to demonstrate its security value. At the same time, TC and the CBSA agreed to transition the management and operation of the pilot project to the sole responsibility of TC. Consequently, the CBSA’s involvement in the project was gradually reduced until 2018, when the CBSA completely ceased to be involved. Since its inception, the pilot project has risk assessed over 2.74 million shipments, leading to 921 requests for additional information and 8 requests for additional screening. By identifying high-risk shipments in advance, the PACT pilot project has added a layer of security to air cargo destined for Canada, reducing the risk that the Canadian public will suffer the consequences of a successful terrorist plot, including loss of life and economic damage.

Before implementing a mandatory program, TC had to figure out a way to scale up, as the processes used by TC for the pilot project were not designed to deal with large volumes of cargo data. Air carriers submitted cargo data via email and risk assessment was completed manually by a TC analyst. During the 2018–2019 fiscal year, TC completed a proof of concept, which demonstrated that a system based on automation and advanced analytics powered by artificial intelligence (AI) could understand advance cargo information and apply categorization and risk assessment rules to the data. Based on the proof of concept, the Department has built the information technology (IT) infrastructure for the PACT program, replacing email submissions with automated submissions (“digital ingestion”), which are then processed through a risk-assessment algorithm.

As part of the 2021 Digitalization and Technology-Neutral Regulations Roadmap under the second round of the Treasury Board Secretariat’s (TBS) Regulatory Reviews, TC proposed to finalize the development of an IT system to risk assess incoming air cargo (Digitalization of the Pre-load Air Cargo Targeting program). TC also proposed to develop regulatory amendments to the Canadian Aviation Security Regulations, 2012 (CASR 2012) by 2023 to support the implementation of a codified PACT program.

Objective

The objective of the amendments is to enhance the security of commercial aviation by ensuring information about air cargo destined for Canada is consistently submitted to the Government of Canada and assessed for security risks, so that mitigation measures can be applied where necessary before cargo is loaded on an aircraft bound for Canada.

Description

The amendments will transition the PACT pilot project into a mandatory program, requiring all air carriers transporting cargo on flights from outside Canada to an aerodrome in Canada to submit information to TC prior to the cargo being loaded. The PACT program does not apply to mail, or a passenger’s checked or carry-on baggage.

The amendments will not apply to flights departing from Canadian aerodromes (i.e. flights departing Canada or domestic flights within Canada).

In accordance with the amendments, air carriers will be required to submit to TC, at any time prior to loading cargo onto the aircraft, eight pieces of information for each shipment that will be transported on a flight destined for Canada, namely the name and address of the original shipper, the consignee name and address, a description of each piece of cargo, total weight, piece count, and the air waybill number. If there are any changes to the information, air carriers must provide updated information to TC as soon as feasible.

In addition to the eight pieces of cargo information, air carriers will be required to submit flight information to TC as soon as feasible following a flight’s departure and before its arrival in Canada.

Upon receipt of the cargo information, TC will complete an initial assessment. Air carriers will be prohibited from transporting the cargo until receiving a message from TC confirming receipt of this information. Unless further action is required, confirmation of receipt should be sent within five minutes.

TC will use an algorithm to conduct a risk assessment of the cargo data, with the goal of identifying potential threats. Depending on the results of the risk assessment, an air carrier may be asked to provide additional information respecting the cargo in order to assess security risks. Depending on the results of TC’s risk assessment, an air carrier may be asked to screen the cargo for threat items in accordance with a security measure made under the authority of the Aeronautics Act.

If, as a result of screening, the cargo is found to contain a threat item, the air carrier will be required to immediately establish control of the cargo and remove any threat to aviation security. Whether or not a threat item is found, air carriers will need to submit information regarding the screening to TC before the cargo can be transported.

In a worst-case scenario, TC will issue a “Do Not Load” (DNL) notice in respect of the cargo. An air carrier must not transport cargo on a flight when a DNL notice has been issued.

If a threat is addressed and resolved, the cargo may be retendered for transportation. If a shipment is retendered for transportation, the eight pieces of cargo information will be reassessed by TC.

The amendments will also require all air carriers that transport cargo to Canada to provide TC with the name and contact information of the principal point of contact for the purposes of the PACT program.

The amendments will also designate violations of the PACT program requirements as enforceable via administrative monetary penalties (AMPs). For example, the amendments include AMPs of up to $25,000 for failure to screen the cargo when directed by TC, failure to establish control of the cargo and remove any threat to aviation security, if detected, and transporting cargo that must not be transported according to section 743 of the amendments. In addition, AMPs of up to $10,000 could be issued for failing to provide cargo information, cargo information updates, requests for additional information, screening information, flight information or the name and contact information of a designated contact person.

In addition to the PACT-related provisions, Part 11 of the CASR 2012 has been amended for clarity. Specifically, the general application sections for cargo (section 668) and mail (section 720) clarify that mail and cargo provisions in Part 11 apply only to flights that depart from Canada. The clarifications in Part 11 were necessary because, with the creation of PACT-related provisions, the CASR 2012 now contain provisions, in Part 12, that apply to flights departing from abroad. In substance, the approach to cargo and mail in Part 11 has not changed. Additional changes to Part 11 remove redundant language. The terms “all-cargo flights,” “all-cargo flight,” “passenger flights,” and “flight that is carrying passengers” have been removed from sections 668 and 669, as the term “flight” captures both flights with cargo only and flights with cargo and passengers. Finally, section 673, which states that cargo information must be complete and accurate, has been repealed, as it is implicit in the requirement to provide the information and therefore unnecessary.

Regulatory development

Consultation

The PACT pilot project was designed to seek continuous feedback and buy-in from affected stakeholders. Between fall 2012 and summer 2022, the PACT pilot project team carried out more than 50 consultative sessions and working group meetings. This included engagement through international working groups, such as the International Civil Aviation Organization (ICAO) Working Group on Air Cargo Security, the World Customs Organization (WCO) Technical Experts Group on Air Cargo Security and the WCO-ICAO Joint Working Group on Advance Cargo Information, whose Joint WCO-ICAO Guiding Principles for Pre-Loading Advance Cargo Information Canada helped to develop. Consultations included discussion on pilot project procedures, risk assessment methodology, mitigation processes and supporting technology.

Early discussions focused on specific pieces of information that would be mandatory and the timing of information submission. TC initially considered requiring three additional pieces of information, which would help reduce the number of follow-up requests that TC makes to air carriers for additional information. However, during consultation, concerns were raised that these pieces of information, in addition to the original eight, would render the eventual program unnecessarily burdensome relative to the added benefit, given the relative infrequency of requests for additional information. In response to stakeholder concerns, TC elected to move forward with the original eight pieces of information, as reflected in the amendments.

Some stakeholders expressed concerns about prescribing specific time frames within which the cargo information would need to be reported to TC. While TC had initially proposed an amount of time prior to departure when cargo information would have to be submitted, such proposals were considered infeasible for air carriers with faster delivery services (e.g. express couriers, just-in-time delivery). As a result, the PACT program includes only the stipulation that information be submitted prior to loading the cargo.

Stakeholders also raised concerns that risk assessments were being delayed because they were conducted one at a time by TC officials. In response, TC began working toward the automation of the assessment process. Based on feedback from air carriers, and to reduce the burden to affected stakeholders, TC has transitioned the means of submitting cargo information from an email, which stakeholders have to compose specifically for PACT, to a portal that accepts standard industry data and messaging formats. Air carriers have tested data submission through the portal, and have contributed significantly to its upgrades over the course of the period leading up to the coming-into-force date of the amendments.

On May 18, 2022, TC hosted an additional consultation on the PACT program, which included representatives of air carriers, freight forwarders, and a data aggregator representing more than 200 supply chain entities. Stakeholders asked many questions pertaining to the scope of the program and operational scenarios. No objections were raised regarding any of the PACT program elements. A copy of the presentation was posted immediately after the consultation session on TC’s primary information repository for stakeholders, the Secure Supply Chain Information Management System (SSCIMS).

Prepublication in the Canada Gazette, Part I

The amendments were prepublished in the Canada Gazette, Part I, on March 18, 2023, followed by a consultation period of 75 days. Comments were received from nine stakeholders during this time. The stakeholders included industry (air carriers, freight forwarders, and software providers), industry trade associations and members of the public.

Comments received related to the following themes:

Harmonization with CBSA’s eManifest program

Given some overlap in the information required for TC’s PACT program and CBSA’s eManifest program, 10 comments from 3 companies and 3 stakeholder associations encouraged the creation of a system that would allow air carriers to submit cargo information to both TC and CBSA at the same time in order to increase efficiency and reduce administrative burden. One stakeholder association and one company pointed out that, as part of other countries’ PLACI programs, including the United States’ ACAS program, customs authorities work together to avoid submitting the same information twice. Additionally, a stakeholder association questioned whether the PACT program was needed, given that air cargo was already being assessed for security risks via CBSA’s eManifest program.

One stakeholder association and one company also raised concerns about the potential for supply chain entities to charge air carriers increased transmission fees for pre-arrival filings, as a result of TC’s PACT program requirements, as well as the potential for regulators to penalize them twice for non-compliance related to the same shipment (once based on eManifest requirements, the second based on PACT requirements). These stakeholders urged harmonization with the CBSA program to avoid additional costs to industry.

The PACT program has a distinct but complementary mandate to CBSA’s eManifest program. The PACT program uses advanced analytics to assess the risk that an improvised explosive device or other threat item could be concealed in air cargo. Given that the TC and CBSA programs have distinct purposes and operate on different time frames (e.g. CBSA’s eManifest requires information pre-arrival, rather than pre-load), this affected how the systems were developed. No changes were made to the regulations in response to concerns about overlapping information requirements from the CBSA and TC, given the distinct mandates and purposes of the eManifest and PACT programs. Nonetheless, TC has engaged with the CBSA to work towards a “single window” approach, which would create a single point of data submission to reduce redundancies for affected stakeholders, while allowing each program to operate according to its own mandate and regulations. It is not anticipated that regulatory changes would be required to enable the “single window.”

It is possible that separate AMPs could be applied against an air carrier based on non-compliance with eManifest and PACT in relation to the same shipment. TC and the CBSA have regular touchpoints to ensure coordinated communications with common stakeholders on issues related to both programs, including issues related to AMPs. With regard to TC-generated AMPs, TC’s goal is to create a fair and gradual compliance and enforcement environment. Therefore, TC would first employ compliance tools intended to promote voluntary compliance (e.g. verbal counselling, warning letter). Where compliance is not achieved, TC will respond in ways that are proportionate given the nature of the infraction.

Harmonization with the United States’ ACAS program

One company called for TC to adopt the approach to PLACI used by the United States’ ACAS program, to help ensure supply chain efficiency and cross-border harmonization. The PACT program’s requirements are consistent with international principles for PLACI, including the Joint WCO-ICAO Guiding Principles. As the United States was an early adopter of using PLACI to mitigate air cargo security threats, Canada was able to learn from ACAS and has incorporated many of its messaging standards and formats into the PACT system to provide familiarity and predictability for stakeholders. For example, PACT’s messaging format compatibility was designed to accommodate both standards of ACAS and the International Air Transport Association (IATA). As messaging formats are not prescribed by the regulations, no changes were made to the regulations based on these comments.

Assessment complete messaging and other system modifications

Three stakeholder associations and one company called for TC to send air carriers a confirmation message that a risk assessment has been completed and that cargo is allowed to be transported. One stakeholder association indicated that they want assurance that the risk assessment has been completed before the air carrier loads the shipment. However, no stakeholders indicated that an assessment complete message should be mandatory prior to loading the shipment, with some clearly stating it should not be mandatory.

Although stakeholders expressed support for the move from email data submissions to automated submissions through the new IT system, a number of system capability modifications were recommended during the comment period, including establishing a filing option for freight forwarders and other supply chain entities, so submissions for risk analysis can be made earlier in the process.

Under the amendments, air carriers will be permitted to transport the cargo once they have received confirmation of receipt, as long as a request for information (RFI), a request for screening (RFS) or a DNL notice are not issued and outstanding. Though unlikely, updates to information may still affect the risk assessment status. The status of the risk assessment will be communicated to air carriers through PACT’s two-way messaging system. Air carriers will be sent a confirmation of receipt message within seconds of having submitted the required data elements. The confirmation of receipt does not mean that the risk assessment has been completed. Air carriers will also be provided with an “assessment complete” message once the risk assessment is done, but they are not obliged to wait for the message before loading the cargo. The assessment complete feature was added to ensure operational flexibility and aligns with the Joint WCO-ICAO Guiding Principles for PLACI. Additional details about the IT system, including messaging, are described in the Technical Implementation Guide that has been made available to affected stakeholders.

While the CASR 2012 place ultimate responsibility on the air carrier for the submission and updating of information, supply chain partners, such as freight forwarders, may supply information on behalf of carriers. These parties must be identified by the respective air carrier before they are granted independent access to the PACT system.

Considering the view among some stakeholders that an assessment complete message should not be mandatory and given the incorporation of an assessment complete message in the PACT system, the CASR 2012 were not amended to include a requirement that stakeholders wait to receive such a message before loading the cargo.

Operational, technical and systems queries

Stakeholders submitted several technical and systems-related questions, including queries on the DNL messaging, the types of messaging permitted for information submissions, requests for technical specifications, the scope of data submissions, as well as business continuity plans (BCPs) in the event of IT systems issues (e.g. a planned or unplanned systems outage). One stakeholder association inquired whether, in a scenario in which an air carrier receives an RFS, the air carrier is required to have alternative contingency plans in place where screening equipment is not readily available, such as contracting a third party to conduct the screening on its behalf. One company requested more details on the system messaging protocols, such as types, formats and whether they would be prescribed in the regulations. One company asked for details regarding additional information that will be required further to an RFI. One stakeholder asked whether air carriers should proactively prevent mail shipment information reporting to PACT and whether an error message would be sent if an air carrier reports mail shipments.

Stakeholders also submitted operational questions related to when air cargo could be loaded or transported and the availability of TC support for air carriers in the event of time-sensitive operational issues, such as errors (e.g. in the event that a data submission is not recognized by the PACT system) or delays to system messages that confirm the status of the risk assessment. One company requested clarification on whether air carriers will be permitted to load their cargo if they do not receive a response from TC within five minutes and whether they may transport air cargo following confirmation of receipt of information from TC and then submit any changes to the information following departure. One company and one stakeholder association indicated that a 24/7 response desk should be established to help operationalize the PACT program and support industry stakeholders.

As outlined in the amendments, if an air carrier receives a DNL notice from TC, the air carrier must not transport cargo on a flight and would be required to immediately establish control of the cargo. If the threat is addressed and resolved, the cargo may be retendered for transportation. If a shipment were retendered for transportation, the eight pieces of cargo information would be reassessed by TC.

The amendments do not specify the type of message air carriers are required to send. Communication protocols related to the PACT program, including technical specifications and detailed guidance on message types/formats are included in the Technical Implementation Guide. Mail and passenger baggage are not included in the amendments. Further details on how TC will manage mail and passenger baggage information is outlined in the Technical Implementation Guide. With respect to a BCP, TC has designed the IT system with multiple layers and built-in redundancies (e.g. three local copies and three regional copies of the system data will be available) so that it will be able to continuously function as intended. However, in the event of a planned or unplanned system outage, guidance will be provided to affected air carriers on message queuing procedures and expected time frames for resumption of activities after the outage is over. The BCP will also set expectations for communications from and to TC — for both planned and unplanned system outages — before, during, and after the outages occur.

As outlined in the amendments, depending on the results of TC’s risk assessment, an air carrier may be issued an RFS, which asks the air carrier to screen cargo for threat items in accordance with a security measure. In such an instance, the air carrier would be prohibited from transporting the identified cargo before receiving confirmation from TC that the RFS has been resolved. It will be the air carrier’s responsibility to ensure that the required screening methods are readily available as required. As air carriers already have equipment and procedures in place to screen for threat items, no incremental costs are expected to be incurred due to RFSs. RFIs will depend on PACT’s assessment of the shipment and will be identified after the initial submission of information is received. RFIs could include requests for information from a Consignment Security Declaration, a packing list, or any other information that could contribute to assessing the risk level of the shipment or mitigating a perceived threat.

With regard to information on mail shipments, air carriers should prevent this information from being submitted to PACT. Commodity descriptions such as “mail” and “parcel” are invalid and would generate an error message from TC to air carriers. In the case of mail, an error message would not need to be addressed (through resubmission) by the air carrier, since mail information is not required to be submitted. Please note that the full list of commodity descriptions that will generate an error message is listed in PACT’s Technical Implementation Guide.

Regarding whether shipments can be loaded if no response is received from TC within five minutes, the amendments specifically prohibit the transportation of cargo unless TC has confirmed receipt. Any available updates to the initial information must be submitted to TC as soon as feasible. The air carrier is permitted to transport the cargo if confirmation of receipt from TC is not pending and there are no further actions to be taken. TC has established a 24/7 operations centre, which will support the PACT program when it comes into force.

No changes were made to the regulations as a result of these comments. Operational, technical, and systems-related issues are best addressed through guidance, given the evolving nature of IT systems and operational procedures. As of the publication of these amendments, this guidance can be found in PACT’s Technical Implementation Guide.

Costs to industry

One stakeholder association raised a concern that, in the Regulatory Impact Analysis Statement (RIAS) prepublished in the Canada Gazette, Part I, TC may have underestimated the costs that air carriers would incur initially to come into compliance. In light of the comment, TC has engaged further with stakeholders to determine how to better reflect the costs and has updated its analysis (see the “Regulatory analysis” section). The updates include new or amended costs related to evaluation and testing effort for carriers during initial setup, as well as costs paid that may be paid to third-party service providers for initial onboarding and individual transmissions.

One company asked if there will be registration costs associated with connecting to the PACT system. TC will not be charging any fees to connect to the PACT system.

Definitions and scope of application

One company and one stakeholder association sought clarification on whether the PACT program will include transit and transfer cargo if the final destination is not Canada. To be clear, the PACT program will apply to all inbound flights to Canada, irrespective of the final destination of the cargo. Therefore, the amendments will apply to transit and transfer cargo. Even cargo that is not offloaded in Canada will have to be reported if it has been flown inbound to Canada from another country.

One company asked if cargo trucked into Canada from the United States, after being flown to the United States from a third country, would have to be reported to PACT. As such cargo is not transported by air into Canada, the shipment would be considered out of the scope of the PACT program, and the information would not have to be reported to TC.

One company and one stakeholder association sought clarification on the meaning of a “piece of cargo.” A piece of cargo is the smallest external packing unit in a shipment. If the object cannot be divided without first undoing the packing, it is considered a piece of cargo. This aligns with definitions contained in the Joint WCO-ICAO Guiding Principles for PLACI. In order to accommodate the nuanced understanding of the term “piece of cargo” by diverse industry stakeholders (e.g. freight forwarders, air carriers, express air carriers, ground handlers), this term is not defined in the regulations; however, TC has provided additional guidance on the term in the Technical Implementation Guide.

Two companies and one stakeholder association asked about the responsibilities of freight forwarders in the PACT program, with one arguing that since freight forwarders are often loading aircraft pallets, they should be responsible for the initial submission of information and for information updates. While the regulations place ultimate responsibility on the air carrier for the submission and updating of information, supply chain partners such as freight forwarders may supply information on behalf of carriers. These parties must be identified by the respective air carrier before they are granted independent access to the PACT system. Nonetheless, it is the air carrier transporting the cargo from the last point of departure into Canada that will remain responsible for compliance with the regulations and will be subject to any applicable enforcement actions (e.g. AMPs) taken in response to occurrences of non-compliance.

One company asked for clarification about the requirement for air carriers to provide TC with the name and contact information of the principal point of contact for the purposes of the PACT program. The stakeholder wanted to know if the contact person could be located in another country. A contact person may be located in another country but, per the regulations, must be available at all times and must be able to respond to mitigation measure requests as applicable.

Implementation date

Three stakeholder associations and one company highlighted the need to provide industry with lead time before the requirements come into force. These stakeholders highlighted that lead time would be needed for staff training, IT system upgrades, and testing. Two of these associations suggested an implementation period of six to nine months between the time they receive technical specifications for implementation and the time at which requirements come into force.

To ensure industry is prepared to comply with the PACT regulatory requirements on day one, efforts to onboard affected stakeholders commenced in January 2024. Between January 30 and February 1, 2024, PACT held virtual information sessions with 436 stakeholders to provide an overview of the PACT program’s technical requirements. In February 2024, TC released a first version of its Technical Implementation Guide to assist participants with the necessary technical specifications, including connecting to the PACT Web Application Programming Interface (API) and submitting PLACI data. Since that time, TC has continued to work with air carriers one-on-one to help them connect to the interface and test the submission of information.

Since prepublication, TC has gained additional insight from both stakeholder feedback and the European Union’s experience implementing its own PLACI program, which revealed unanticipated issues affecting the onboarding process. The European Union’s program implementation has also strained participants’ capacity for engaging with TC to onboard with the PACT program. In light of the pace of onboarding, additional time to connect to the PACT system and test the submission of information will be required for some affected stakeholders. Given the delays experienced to date, and in response to feedback from industry stakeholders, the coming-into-force date of the amendments has been extended until April 1, 2025, which will provide the industry-requested six months post-publication in the Canada Gazette, Part II. TC determined that this amount of time will be sufficient to onboard any remaining stakeholders based on its experience with its stakeholders since January 2024 and with similar onboarding efforts in recent years, such as for the Passenger Protect Program. TC and its stakeholders have also taken lessons learned from the European Union’s implementation of its PLACI program, which has allowed TC to address potential issues proactively (e.g. addressing data quality issues through standardized error messages). As stakeholders specifically requested a time frame of six months, and based on TC’s assessment of its feasibility, TC did not reconsult stakeholders regarding the new April 1, 2025, coming-into-force date.

Further consultations

One stakeholder association called for regular engagement and consultation with the industry to gain insights into the practical implications and hurdles associated with implementation. TC actively consulted and sought feedback from affected stakeholders throughout the process of developing the program. TC has further engaged with air carriers between prepublication and final publication, which has included virtual onboarding information sessions, outreach to individual air carriers, and outreach to individual industry stakeholders during the development of PACT’s Technical Implementation Guide.

Changes to the regulations

Further to the comments received, no changes were deemed necessary to the regulations as proposed and they remain unchanged from prepublication, other than with respect to the change to the coming-into-force date, which is now April 1, 2025.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, analysis was undertaken to determine whether the amendments are likely to give rise to modern treaty obligations. The assessment examined the geographical scope and subject matter of the amendments in relation to modern treaties in effect and no implications or impacts on modern treaties were identified.

Instrument choice

While the likelihood of a terrorist attack involving air cargo destined for Canada remains low, the potential economic, political, and human consequences of such an attack could be catastrophic. For this reason, TC launched the PACT pilot project in 2012, among other efforts to enhance air cargo security. The objective of the pilot project was to test the feasibility of identifying and applying risk mitigation measures to high-risk cargo before it could be transported to Canada. The pilot project was intended to form the basis of a mandatory program that would further enhance the security of air cargo destined for Canada.

Given the success of the pilot project, TC has built the procedural and technical foundation for a mandatory PACT program. The amendments constitute the final step in making the PACT program a reality, providing TC with the legal authority to compel all air carriers to provide air cargo information and comply with instructions to implement mitigation measures once the amendments are in force on April 1, 2025. In the absence of regulations, TC would not receive advance cargo information from all air carriers, leaving the air cargo sector more vulnerable from a security perspective. In addition, without a PACT program established in regulations, Canada would not be consistent with its main trading partners in its approach to air cargo security, which could damage Canada’s international reputation. Already, the Department of Homeland Security in the United States has codified its ACAS program under Title 19 of the Code of Federal Regulations.

No non-regulatory options were considered.

Regulatory analysis

Benefits and costs

As a result of the amendments, both the Government and industry will incur costs. The benefits of the amendments are the added layer of security to the air transportation sector, by ensuring that air cargo has been risk assessed prior to entering Canadian airspace. These impacts are described in further detail in the following text.

Changes made to the cost-benefit analysis presented in the Canada Gazette, Part I

Between the prepublication in the Canada Gazette, Part I, and this final publication in the Canada Gazette, Part II, the total estimated costs have been adjusted from $6.3 million to $5.4 million. This is as a result of the following changes that have been made to the analysis:

Analytical framework

The costs and benefits for the amendments have been assessed in accordance with the TBS Policy on Cost-Benefit Analysis by comparing the baseline scenario against the regulatory scenario. These impacts are analyzed over a 10-year analytical time frame, beginning in the year of final publication in the Canada Gazette, Part II (2024), and ending in 2033. Years of the analytical time frame denoted throughout this analysis are 12-month periods starting on the month and day that the amendments are registered. Values provided throughout the “Benefits and costs” section, unless otherwise noted, are in 2023 dollars and expressed in present value using a 2024 base year and a 7% discount rate. Values within the text and tables may occasionally not add up due to rounding.

Baseline and regulatory scenarios

The baseline scenario represents what is projected to occur throughout the analytical time frame without the amendments. In this scenario, it is anticipated that the current PACT pilot project would cease to continue if TC does not formalize it through regulations. Without the amendments, air carriers have indicated that they would not continue their participation.

The regulatory scenario represents the scenario in which the amendments are made, and affected stakeholders must comply with them. For the purpose of the cost-benefit analysis, the primary aspect of this scenario is that all air carriers transporting cargo into Canada will be required to submit the necessary information to TC prior to loading beginning on April 1, 2025. This will apply to any Canadian or foreign air carriers transporting cargo into Canada and will be fulfilled either by the air carrier directly or by a third-party service provider. For the Government, full-time employees will be required to fulfill the administration and analysis functions. In addition, administration and maintenance of the IT system will occur in the regulatory scenario.

In order to implement the amendments, TC will need to put in place an upgraded IT system prior to the final publication of the amendments in the Canada Gazette, Part II. These resources and their associated costs will be incurred prior to the start of the analytical time frame and, therefore, for the purpose of this analysis, the costs associated with the IT system are considered sunk. This is described in more detail in the “Government costs” section below.

Affected industry stakeholders

All air carriers transporting cargo into Canadian airspace will be required to abide by the amendments and will need to provide the requested data to TC prior to the cargo being loaded on the aircraft. Based on historical data, there have been 141 air carriers transporting cargo into Canada since 2010, of which approximately 25 air carriers are based in Canada and the remaining 116 are foreign air carriers. While it is anticipated that foreign air carriers will incur costs, for the purposes of the cost-benefit analysis, they do not have standing within Canada and, therefore, the costs to such air carriers are not counted in the analysis. The air carriers are made up of scheduled passenger service providers, cargo-only service providers, as well as charter service providers. Historically, approximately half of all cargo that has been transported by air travelled on passenger flights.

It is not anticipated that there will be any impact on competitiveness for any affected air carriers, as the minor cost impacts incurred will be relative to the air operator’s quantity of cargo transported. Further, all air carriers offering cargo transportation into Canada will be impacted so no imbalance will be created, and the costs will not be significant enough to push consumers to other forms of cargo transportation.

Freight forwarders or other third-party service providers will also be impacted by the amendments on occasion, as they will be permitted to submit cargo information on behalf of air carriers. Fees paid by air carriers to third-party service providers are detailed throughout the industry costs section.

Costs

The total incremental costs associated with the amendments are estimated to be $5.4 million, with $4.5 million that will be carried by TC, and the remaining $0.9 million carried by air carriers. The costs are outlined in more detail below.

Government costs

Labour costs

Within the analytical time frame, the Government will carry ongoing incremental costs associated with the administration of the PACT program and analysis of the data received. In total, the amendments will result in estimated present value labour costs of $3.77 million over the 10-year period of analysis.

While there is currently a team working on the PACT program within TC, the amendments will require continued funding for these full-time employees (FTEs) throughout the analytical time frame. Four of the employees (those under the Programme Administration [PM] group classification) will be responsible for the analysis of the associated data received, including the live targeting function. While TC will be receiving a higher volume of data in comparison to the pilot project, it is anticipated that these four employees will be able to continue fulfilling these duties due to the introduction of the upgraded IT system and the increase in automation as part of the data screening process. When the data is transmitted to TC, these employees will be reviewing the output to determine if any cargo needs to be flagged for additional information or re-screening. There will be an employee (EC-05) required in the first two years of the analytical time frame to provide public outreach, manage the administration of the data program, and provide any additional support where required. The numbers of FTEs and their respective classification by year are provided in the following table.

Table 1: Number of full-time employees and their job classification by year
Job classification 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
PM-04 3 3 3 3 3 3 3 3 3 3
PM-05 1 1 1 1 1 1 1 1 1 1
EC-05 1 1 0 0 0 0 0 0 0 0

The compensation by job classification is provided in the following table.

Table 2: Compensation by job classification
Job classification Annual salary table a4 note a Salary and overhead (30%)
PM-04 $85,187 $110,743
PM-05 $101,750 $132,275
EC-05 $110,646 $143,840

Table a4 note(s)

Table a4 note a

Highest current step used, adjusted to 2023 dollars.

Return to table a4 note a referrer

IT setup and maintenance

The Government will also incur estimated costs of $2.52 million prior to the final publication of the amendments in the Canada Gazette, Part II, associated with the setup of the necessary data infrastructure. These are capital costs to develop the system and accompanying technology that will enhance the ability of TC to identify risks. Given that they occur prior to the analytical time frame, these costs are considered sunk and are not included in the analysis.

It is anticipated that, throughout the analytical time frame, TC will also carry ongoing costs to do with maintenance of the IT system as well as cloud services. While there remains some uncertainty about the cloud capacity and maintenance required, it is estimated based on internal current spending and potential growth that these incremental costs will be roughly $100,000 on average per year. Therefore, over the analytical time frame, the total cost to TC associated with maintenance of the IT systems and cloud services will be $0.75 million.

Other government costs

Minimal incremental enforcement costs are anticipated as a result of the amendments as the implementation will provide valuable real-time data to TC about potential non-compliance. This efficient gathering of information will allow existing security resources, including the renewed FTEs described above, to review and enforce the amendments. There will be some incremental costs to deliver training to these existing security resources on the new AMPs; however, these are expected to be minimal and were not monetized.

TC will also assume some costs associated with the publication of additional resources and stakeholder outreach. However, these activities would be taking place prior to the final publication of the amendments in the Canada Gazette, Part II, and, therefore, their costs are excluded from the analysis.

Industry costs

As all the air carriers impacted by the amendments are already collecting and storing the data being requested, the incremental costs for the Canadian-based air carriers will be associated with setting up the process with which to share this data either directly or through the use of a third-party service provider, transmitting the data to TC, and the effort associated with responding to requests for additional information or re-screening. The total cost to the industry is expected to be $0.89 million over the analytical time frame.

As noted at the beginning of this section in the summary of changes since prepublication, in the absence of data regarding the total numbers of shipments, the total weight (in kilograms [kg]) shipped by Canadian air carriers was used as a proxy for that input in that analysis. This value is now based on the total weight of shipments from the Electronic Collection of Air Transportation Statistics (ECATS) and divided by a 2023 sample of the average weight per shipment from TC’s PACT program (716.4 kg per shipment). This has led to a substantial decrease in the estimated number of shipments (initially 1.2 billion, now 4.4 million) over the analytical time frame. Over 10 years of historical data and using the described methodology, Canadian-based air carriers are estimated to have transported an annual average of 360 000 cargo shipments into Canada.footnote 2 Historically, an increasing trend was observed in the weight of cargo being transported, with an average annual growth rate of 3.22%. This figure was used to forecast the cargo shipments by air carrier, which are estimated to rise from roughly 395 000 annually to 526 000 annually over the analytical time frame.

Initial internal setup costs

Internal setup costs are assumed to occur within the six months following the final publication of the amendments in the Canada Gazette, Part II. A meeting between representatives from TC and both an air manager and a senior IT employee from the air operator will take place to establish the process required to transmit data to TC, and the steps that will have to be undertaken by the air operator to set up the web-based system. It is estimated that this meeting will be 30 minutes in duration. Four hours will then be required for an IT employee to develop a way to transmit the in-scope data either to the PACT program or to get set up with their third-party service provider. When this process has been followed in the past, there has been a varying level of additional back and forth following this four-hour setup, ranging from less than one hour to six hours over the following days. An additional 10 hours of IT employee time is estimated relating to evaluation and testing within the six months following the final publication of the amendments in the Canada Gazette, Part II. Given this varying level of engagement, and to ensure that the costs are not underestimated, the analysis assumes 20 total hours of IT employee time.

With estimated hourly wages, including 25% overhead of $73.94 for the air manager, $71.34 for the senior IT employee, and $58.01 for the IT employee, it is estimated that this time would result in costs of $1,233 per air carrier. It is assumed that the air carriers that are currently compliant under the pilot project would not incur initial setup costs, as they will already have their systems set up for automatic transmission. There are 15 Canadian air carriers that are not part of the pilot project and that TC projects to transport cargo into Canada during the analytical time frame. The total estimated internal setup costs to air carriers will therefore be $18,491.

Fees paid to third-party service providers

The web-based system was designed in a flexible fashion to use the data in the form it is already in and does not require a specific paid software. However, it is understood that some air carriers may opt to employ a third-party service provider who will send the information on their behalf. To ensure industry costs are not underestimated, it is assumed for the purpose of the analysis that all Canadian air carriers in-scope will opt for this method. As a result, it is assumed that all Canadian air carriers that did not participate in the PACT pilot would incur some initial onboarding costs. Additionally, all Canadian air carriers are assumed to incur a minor cost for each transmission sent to TC.

It is anticipated that air carriers who opt to use a third-party service provider will incur a one-time initial onboarding cost of $15,000. This estimate is based on stakeholder input and feedback and is estimated to be incurred by the 15 Canadian air carriers that were not part of the PACT pilot project. It is assumed that air carriers who participated in the PACT pilot are already set up and therefore, will not incur this initial cost. Given that this cost will be incurred during the first year of the analytical time frame, the total present value cost to air carriers for this onboarding cost is estimated to be $0.23 million.

While initial setup costs are only estimated for air carriers who were not part of the PACT pilot program, individual transmission costs are included for all Canadian air carriers in the scope of the amendments. Drawing on consultation with TC subject matter experts, stakeholder feedback, and past regulations,footnote 3 it is estimated that each transmission will result in a cost of 10 cents to the air carrier. Air carriers will need to send one to two transmissions per shipment on average. The analysis assumes two transmissions per shipment. Given this information and the forecasted cargo detailed above, the total present value cost to air carriers associated with individual data transmission charges is expected to be $0.64 million over the analytical time frame.

Requests for information or screening

Air carriers will also assume costs associated with responding to TC’s RFIs and/or RFSs. While the air carriers that took part in the pilot project already completed these requests, because the baseline scenario assumes the dissolution of the pilot project, incremental costs are included for those air carriers.

The historical rates of RFIs are roughly one in every 2 971 shipments, while roughly one in every 342 000 shipments results in an RFS from TC. Should these rates remain consistent into the analytical time frame with the upgraded IT system in place, it is projected that TC would submit roughly 147 RFIs and 1.3 RFSs to Canadian-based air carriers on average per year. Depending on the complexity of the request, the industry effort to respond would commonly range between 3 and 15 minutes, and likely be fulfilled by an airport security manager or air cargo specialist employed by the air operator. For the purpose of the analysis, average fulfillment times of 6.5 minutes for RFIs and 10 minutes for RFSs are used. These times were estimated in consultation with TC subject matter experts. Further, the estimated hourly wage of the fulfilling employee is $55.73. There could also be times when a third party that is using the cargo transportation services of an impacted air operator, such as a freight forwarder, would be contacted to provide further information upon receipt of an RFI and/or RFS; however, based on TC subject matter expertise, these indirect impacts are expected to be minimal. It should also be noted that no incremental training costs are anticipated for the air carriers’ security employees who are already familiar with these processes, as other jurisdictions (the United States, the European Union, etc.) have implemented similar requirements in recent years. Therefore, the total cost associated with RFIs or RFSs is estimated to be $6,551 over the 10-year period of analysis.

Should TC use the data to identify a risk and issue a DNL notice for the identified piece of cargo, it would need to be set aside and not loaded onto the aircraft. This would result in impacts to the air carrier as well as the cargo shippers and/or receivers. However, historical data shows TC has never issued a DNL notice upon receiving cargo information from air carriers. Therefore, while a DNL notice would result in incremental costs, the number of future DNL notices and their associated costs cannot reasonably be forecasted.

Benefits

The amendments will add another valuable layer of security to the air transportation sector, ensuring that all air cargo has been risk-assessed prior to entering Canadian airspace, in comparison to the baseline scenario, absent the amendments, where cargo would not be assessed by Canadian authorities until it lands on Canadian soil.

There exists a baseline level of security risk to the air transportation sector, absent the amendments, with the detonation of explosive devices hidden inside cargo shipments representing the most catastrophic of potential incidents. To provide context, an example of these types of incidents is Pan Am Flight 103 from London to New York in 1988, on which a bomb hidden inside a cassette player, located in the cargo area of the aircraft, detonated. This resulted in a total of 270 fatalities. If an incident of similar magnitude were to occur in the Canadian context, when considering the value of statistical life, it could represent monetized human consequences totalling $2.47 billion.footnote 4 In addition to the societal cost of the human lives lost, such an incident and those like it can carry significant costs related to non-fatal injuries, search and rescue services, other emergency services, property damage, disruption of air traffic, accident investigations, the long-term pain and suffering of family and friends of the victims, and damage to the reputation of the air operator.

By introducing these requirements, TC will be able to screen all cargo on incoming aircraft earlier in the transportation process, allowing for the removal of any potentially high-risk shipments before the aircraft takes off. This added layer of security will help to reduce that baseline level of security risk and, in turn, decrease the likelihood that a catastrophic event, such as the one described above, could occur in the future.

As there is a lack of historical incidents, the baseline risk level cannot be quantified and projected over the analytical time frame. Further, the potential effectiveness of the amendments in incrementally reducing that risk is also uncertain. These data would be needed to perform the calculations required to report concrete monetized expected benefits. These data would also be needed to perform a breakeven analysis that examines the level of risk reduction required for the amendments to have benefits that are equal to or greater than the costs.

Given the data scarcity issues, and the great variability and uncertainty around the likelihood and the potential consequences of an avoided incident in the future, the benefits associated with the amendments have mostly been described qualitatively. The amendments nonetheless represent a meaningful step to making the air sector more secure. Given the potentially very high costs that would be avoided by preventing a single incident, TC believes that the benefits of the amendments will outweigh the costs.

Cost-benefit statement
Table 3: Monetized costs table b1 note *
Impacted stakeholders Description of costs 2024 2026 2033 Total (present value) Annualized value
Government Administration and analysis $608,344 $405,716 $252,660 $3,769,127 $536,639
IT maintenance $100,000 $87,344 $54,393 $751,523 $107,000
Total government costs $708,344 $493,060 $307,053 $4,520,650 $643,639
Industry Initial setup $18,491 0 0 $18,491 $2,633
Third-party onboarding $225,000 0 0 $225,000 $32,035
Third-party transmission $39,507 $73,529 $57,164 $636,149 $90,573
Requests for information and/or screening $406 $757 $589 $6,551 $933
Total industry costs $283,405 $74,286 $57,752 $886,191 $126,174
All stakeholders Total costs $991,749 $567,346 $364,805 $5,406,840 $769,813

Table b1 note(s)

Table b1 note *

Columns represent 12-month periods beginning in the identifying year. Totals may not add up due to rounding.

Return to table b1 note * referrer
Qualitative benefits
Qualitative costs

Small business lens

Analysis under the small business lens concluded that the amendments will impact small businesses. Of the Canadian air carriers that will be expected to carry costs associated with the amendments, six are likely considered small businesses under the lens. These six air carriers will only account for 0.013% of the cargo expected to be impacted; the other air carriers are considered medium or large businesses, accounting for the remaining 99.987%. The total estimated present value costs to small businesses over the 10-year period of analysis will be $86,704, which translates to $14,451 per small business. This will be equivalent to an annualized per business cost of $2,057.

These cost estimates represent a substantial increase in comparison to the analysis that was completed for the prepublication of these amendments in the Canada Gazette, Part I, from $3,079 to $86,704. Primarily, this increase is due to the setup costs ($15,000 per business) that may be incurred by air carriers who opt to use a third-party service provider. Small businesses with lower levels of cargo transported may opt not to employ a third-party service provider and instead send their data directly to TC, which would decrease most of their total costs incurred. Additionally, among other smaller changes, an additional stakeholder has been deemed a small business and the price year of the analysis has been updated from 2021 to 2023.

No flexible options were explored for small businesses, as the amendments concern the security of aircraft and small air carriers are considered just as vulnerable as larger carriers.

One-for-one rule

The one-for-one rule does not apply, as no incremental changes in administrative burden on business are anticipated and no regulatory titles are being repealed or introduced.

The information provided to TC by stakeholders is not used for compliance and enforcement, but rather to assess risks and take appropriate actions directly supporting the safety and security of Canadians. Therefore, these activities do not meet the definition of administrative burden as defined in the Red Tape Reduction Act.

Regulatory cooperation and alignment

The amendments are not related to a work plan or commitment under a formal regulatory cooperation forum. However, the amendments are consistent with the PLACI initiatives of Canada’s international partners. In developing the amendments, Canada worked alongside partner countries, including the United States, the United Kingdom and the European Union, to harmonize its PLACI initiative. The United States’ ACAS program came into force in 2018; the United Kingdom Predict pilot project was implemented in 2023; and the European Union’s Import Control System 2 was implemented in three releases between 2021 and 2023.

TC helped to establish the Joint WCO-ICAO Guiding Principles for PLACI under the auspices of the ICAO and WCO Joint Working Group on Advance Cargo Information, comprising international organizations, like-minded nations and industry partners. These principles are reflected in the PACT program and have influenced the development of PLACI regimes in other countries. Canada has already begun to seek opportunities to coordinate PLACI assessments with its international partners. Under Agile Nations, Canada began a joint targeting pilot project with the United Kingdom, which was meant to determine how the two countries could share risk assessments of cargo transiting between them to eliminate mitigation measures. While this work was paused in August 2023, Canada continues to engage its international counterparts at PLACI events, namely, the PLACI Compliance Requirements Sessions hosted by the IATA.

TC does not see any major gaps in alignment with any of Canada’s key trading partners. Canada is aligned with its partners on the eight pieces of cargo information, the departure information, and the approach to mitigation (RFIs, RFSs, DNL notices). Canada is also aligned with its partners on the requirement for air carriers to receive a message confirming receipt of the cargo information.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, and the TC Policy Statement on Strategic Environmental Assessment (2013), the strategic environmental assessment (SEA) process was followed for the regulatory proposal and a Sustainable Transportation Assessment was completed. No important environmental effects are anticipated as a result of the amendments. The assessment took into account potential effects to the environmental goals and targets of the Federal Sustainable Development Strategy (FSDS).

Gender-based analysis plus

The amendments are not expected to have different impacts on the basis of identity factors such as gender, race, ethnicity, religion, age, and ability status. The air cargo data captured as part of the PACT program does not record gender or other intersectional identity data. The goal of the PACT program is to ensure that air cargo data is reported by all air carriers transporting cargo on flights to Canada irrespective of their place of origin. All Canadians are expected to benefit from enhanced security in the aviation transportation system and the supply chain.

Implementation, compliance and enforcement, and service standards

Implementation

The amendments will come into force on April 1, 2025. Stakeholders, particularly air carriers, are already familiar with PLACI programs and with existing data reporting requirements under the PACT pilot project.

To support the implementation of the amendments, TC has published additional resources and conducted outreach activities with stakeholders, as follows:

The PACT program will be supported by several complementary and overlapping IT systems, designed to enable program continuity in the event of one or multiple outages. Alerts for system errors and outages will be constantly monitored and addressed as they emerge. TC has developed a business continuity plan that details applicable processes in the event of a systems outage or other technical issues. Air carriers will be notified via email of any technical issues that affect TC’s ability to meet its service standards as soon as the impact is confirmed. In addition, air carriers will be expected to notify TC of outages that affect their ability to meet the regulatory requirements.

Access to any data submitted by carriers will require a TC device and login credentials, with access determined by one’s role and group, which will be monitored to maintain security. Three local copies and three regional copies of the system data will be made to ensure information in the system is backed up. The PACT program will continue to follow strict Government of Canada procedures and guidelines related to digital policy. The PACT program will control, manage, and monitor data access while ensuring the confidentiality and availability of the information where needed.

Records of information submitted in accordance with the PACT program will be retained for no more than a two-year period, unless a risk mitigation action results in the positive identification of a threat item within the cargo shipment. In that instance, the record and information will be stored and retained in accordance with departmental policies and regulations regarding protected and classified materials. With regard to air carriers, the amendments do not introduce any records retention period requirements.

The IT system will make use of advanced analytics, powered by AI, in order to conduct an initial risk assessment of the cargo information. If the system detects something of concern, a TC official will receive a notification of the issue. The TC official will then need to decide whether it is appropriate to issue an RFI, RFS or, in a worst-case scenario, a DNL notice. All such decisions will be taken by a human operator. Given the use of AI, TC will adhere to the requirements of the Directive on Automated Decision-Making, which aims to ensure automated decisions made by federal government departments comply with procedural fairness and due process requirements. Further to the Directive, TC has completed an Algorithmic Impact Assessment, with the final results published on the Open Government Portal in February 2024, in accordance with the Directive on Automated Decision-Making.

Though the CBSA uses many of the same data elements as part of its eManifest program, this information is not required to be submitted prior to the cargo being loaded. TC and the CBSA continue to work together on identifying areas of overlap and opportunities to reduce redundancies. The feasibility of a single window approach to data submission across all modes is being discussed and is one area of focus of TC’s National Supply Chain Office. Stakeholders will be provided updates on the progress of these discussions at existing consultative committees (e.g. the CBSA’s Border Commercial Consultative Committee and TC’s Advisory Group on Aviation Security) and via a TC-PACT bulletin to those identified as Primary Cargo Security Contacts upon registration. Relevant updates will be provided on the PACT website.

Compliance and enforcement

TC’s goal is to create a fair and equitable compliance and enforcement environment that allows the regulated community to take corrective actions. The enforcement of the amendments will be achieved through the compliance and enforcement regime set out in the Aeronautics Act and the Canada Transportation Act, including the addition of corresponding designated provisions in Schedule 4 to the CASR 2012 in order to have the authority to issue AMPs.

The enforcement response by TC would be tailored to achieve both compliance and deterrence. AMPs would generally be imposed only where less drastic enforcement tools (e.g. verbal counselling, warning letters) cannot achieve that objective. In accordance with TC departmental enforcement standards, the amount of the AMP is determined using several factors, such as whether the violation was carried out by an individual or a corporation, the seriousness of the violation, and the circumstances of the violation.

Failure to screen the cargo when directed by TC, failure to establish control of the cargo and remove any threat to aviation security if detected, and transporting cargo that must not be transported according to the CASR 2012 are provisions punishable by an AMP of up to $25,000. Failure to provide advance cargo information, advance cargo information updates, additional information following requests, screening information, flight information, or the name and contact information of a designated contact person are provisions punishable by an AMP of up to $10,000. Repeated or significant non-compliance may lead to the suspension or revocation of an air carrier’s Canadian aviation document, which would restrict their ability to operate flights in Canadian airspace.

Payment of AMPs must be made within 30 days of receiving the notice of violation by means of credit card, certified cheque or money order made payable to the Receiver General for Canada. If the penalty associated with the violation is not paid, it becomes a debt due to His Majesty.

Parties subject to an AMP who believe that the AMP was issued incorrectly can apply to the Transportation Appeal Tribunal of Canada (TATC) to have the penalty reviewed. The TATC is an independent, administrative, quasi-judicial body, established in 2003 pursuant to the Transportation Appeal Tribunal of Canada Act, which provides a recourse mechanism for administrative actions by the Minister of Transport. This body is less formal than a judicial court and cases can be presented without legal representation. Often, the TATC is able to accommodate a case proceeding more quickly than a judicial court, and usually at significantly less cost to the applicant. Parties can request an appeal of a TATC decision before the Federal Court of Canada.

Service standards

The PACT program has aligned itself with the service standards set out in the internationally accepted Joint WCO-ICAO Guiding Principles for PLACI. Based on the results from the PACT pilot project, approximately 99% of cargo shipments are assessed as low risk, for which a confirmation of receipt would be generated by the system within seconds. For shipments that require further scrutiny, the carrier will receive an RFI or an RFS. RFIs are sent as soon as possible to allow the air carrier to respond as early as feasible before loading. As part of an RFI, TC will seek information that is relevant to assessing the security risk of the shipment, such as a Consignment Security Declaration and/or a packing list; whereas an RFS will request a screening record in accordance with a security measure. Additional information about the process for RFI, RFS, and DNL processes can be found in TC’s Technical Implementation Guide, which has been shared with stakeholders.

Service standards related to the timing of RFIs and RFSs will be set in relation to the systems’ development and communicated to industry through the Technical Implementation Guide posted on the PACT website in advance of the coming into force of the amendments.

Stakeholders who have questions or concerns related to a decision to request additional information, to request a screening, or to issue a DNL notice are encouraged to communicate those questions or concerns to the TC official who issued the request or notice.

Contact

Executive Director
Program Development
Aviation Security
Transport Canada
330 Sparks Street, Place de Ville, Tower C, 13th Floor
Ottawa, Ontario
K1A 0W8
Email: aircargosecurity-suretedufretaerien.tc@tc.gc.ca