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Canada, EU in trade row over fees on aircraft exports

Canada complains of ‘excessive fees,’ but bureaucrats on both sides of the Atlantic are downplaying the dispute.

Trade Minister Francois-Philippe Champagne is steering Canada's trading relationship with the European Union, as industry lobbyists and federal public servants try to prod the EU's aviation safety agency to lower its certification fees for Canadian aerospace exports. The Hill Times file photograph

PUBLISHED :Tuesday, Nov. 28, 2017 11:33 AM

Canadian officials have been working for months to lower what they have called “excessive” fees levied on the country’s aerospace exports to Europe, but have had a hard time getting cooperation from their European counterparts.

The dispute over fees charged by the European Aviation Safety Agency to certify Canadian aircraft and parts goes back to at least the end of last year, according to a briefing note obtained by The Hill Times.

The note, prepared for a meeting between an unidentified official in Global Affairs Canada and Jean-Luc Demarty, the European Commission’s director-general for trade, in December of last year show that Canada was “concerned over the excessive fees” charged by the European Aviation Safety Agency (EASA) to validate Canadian aircraft and parts that had already been approved as safe by Transport Canada. It also said that Canadian officials had raised the matter with their EU counterparts “on a number of occasions,” but “to date, the EU has been unwilling to engage to help us progress on this file.”

Officials at Transport Canada had also reached out to their counterparts in EASA, but as of that time had been “unable to secure a meeting” to discuss setting up a working group to address the issue, the note said.

  

As of earlier this month, the fees levied by EASA “remain higher than those of other regulators, and Transport Canada and Global Affairs are both aware of industry’s concerns,” according to a written statement from Kristen VanderHoek, a spokesperson for the Aerospace Industries Association of Canada.

The association is still working with Canada’s government and “our international partners” to lower EASA fees on Canadian products, said the emailed statement.

Like Transport Canada, EASA is responsible for certifying as safe aircraft that will be used within its jurisdiction, and charges fees to the companies that own the aircraft and parts being certified.

Transport Canada has “conveyed to Europe Canada’s industry’s concerns with ‎the fees they charged, and they have expressed a willingness to discuss this in more details,” wrote spokesperson Pierre Manoni in an emailed statement. “Out of respect to Transport Canada’s counterparts, it would be premature to further discuss the parameters of these discussions.”

  

“Transport Canada respects Europe’s authority to set fees that are commensurate with the services they offer, but does not resist the opportunity to question them when they do not align with our views,” read the statement.

Canada and the EU have a Bilateral Aviation Safety Agreement “that symbolizes reciprocal acceptance of each side’s certification process and competence,” according to the statement. Transport Canada and its EU counterparts have been meeting to “finalize the streamlining of our respective procedures” which could lessen the work for EASA when certifying Canadian products, and in turn lower EASA’s fees, said the statement from Transport Canada.

While the December 2016 briefing note said that Transport Canada had been unable to get a meeting with EASA on the issue, the statement from Mr. Manoni said that “Transport Canada’s European counterparts have never declined a meeting outright on any subject.

Global Affairs Canada said that the government “remains mindful of industry concerns” over the EASA fees for products already certified by Transport Canada, and “continues to engage with European Union authorities on this important subject,” wrote spokesperson Natasha Nystrom in an emailed statement.

  

Resolving the issue is particularly important for Canada’s aerospace industry since Canadian products “are at a significant disadvantage” since the EU has agreed to gradually reduce fees for products from the United States, according to the briefing document from December 2016.

Global Affairs Canada declined to comment on whether that disadvantage continues to be a problem for Canada’s industry, and the Aerospace Industries Association of Canada did not respond to further questions on the subject. 

When asked whether Trade Minister Francois Philippe Champagne (Saint-Maurice-Champlain, Que.) had been personally involved in hashing out the dispute, spokesperson Pierre-Olivier Herbert wrote in an emailed statement that the government was “mindful of industry concerns and continues to engage with EU authorities on this important subject.”

Neither Global Affairs Canada or Mr. Champagne’s office would identify the Canadian official for whom the briefing document was prepared.

Diodora Bucur, a spokesperson for the EU embassy in Canada, said in an emailed statement that the embassy would not comment on international Canadian government documents, and added that Canada-EU relations are “marked by a high level of trust and confidence, including regular, very constructive exchanges on approaches and reducing unnecessary administrative burden for industry, while respecting each other’s domestic regulations and procedures.”

Dominique Fouda, a spokesperson for the European Union Aviation Safety Agency, told The Hill Times via email that EASA charges the same fees to all applicants, with a few exceptions, including a five per cent discount to U.S. exporters for the initial safety certification for their product.

EASA has not changed its fees since December of last year, when the briefing note outlining Canada’s concerns was prepared by Global Affairs.

Fees charged by EASA also vary with the type of product and work being done. Certifying a large aircraft can cost CDN $2,714,868, a smaller aircraft significantly less. Hourly fees are also charged for certain kinds of work.

peter@hilltimes.com

@PJMazereeuw