An incredibly misunderstood subject amongst pilots, is when it is legal for a pilot in Canada to receive compensation (e.g get paid) for acting as a pilot.


Let’s take a look at the different kinds of internationally-recognized (and ICAO-standardized) pilot licences that exist:


Private Pilot Licence

Commercial Pilot Licence

Airline Transport Licence


Note that although Transport Canada may issue pilot “permits”, such as the Student Pilot Permit or the Recreational Pilot Permit, they are only valid inside Canada – you can’t fly a C-registered aircraft outside of Canada, using that pilot qualification.


Private Pilot


The holder of a Private Pilot Licence may act as Pilot-In-Command of any aircraft for which his licence is endorsed, amongst other things.  See CAR 401.26 for all the gory (and fascinating) details.  Did you know that your PPL is also a Student Pilot Permit for other categories of aircraft such as helicopters, gliders and airships?  I digress.


Back on topic.  CAR 401.28 makes it very clear that a Private Pilot may not act as PIC “for hire or reward” unless one of the exemptions (loopholes) in CAR 401.28 is met.


Let’s take at the loopholes.  CAR 401.28(5) says that if you are a farmer and a Private Pilot, you can be a local agricultural spray pilot for hire, under some restrictions.  This probably doesn’t apply to you unless you wear rubber boots and overalls most of the time and don’t swat at flies circling over your head like I do.  I hate mud and flies.


CAR 401.28(4) says that a Private Pilot can be compensated while flying for a charity, and spells out exactly what compensation is allowed when the pilot owns the aircraft, and when the pilot rents the aircraft.


CAR 401.28(3) says that a Private Pilot can be compensated for flying an airplane by his employer while travelling on business, much as he would if he had rented a car.  This sounds cool, but your employer will probably not want you doing this because of the liability exposure for them, if you have an accident.  However, as I tell women in bars, anything is possible with the right insurance underwriter.


Now for the juicy one, that causes so much confusion.  CAR 401.28(2) says that a Private Pilot can be compensated for a flight by his passengers, under particular circumstances only.  The amount of compensation is specified by CAR 401.28(2)(d).  The difficult-to-understand part of CAR 401.28(2) is CAR 401.28(2)(c) – the restriction that passengers are carried only “incidentally”.  99.999% of Private Pilots have no clue what that word means.  Proof by example follows.


Let’s say you are an eager young Private Pilot that wants to build hours, so you put out an advertisement that you are willing to take people for rides in an airplane for so many dollars.  This contravenes CAR 401.28(2) because the passengers are NOT “incidental” to the flight – they are the purpose of the flight, and you’re operating a commercial air service.  You will be contacted by Enforcement, because a PPL cannot do that.


However, let’s say that you put an advertisement in the paper that says that on November 1st you are flying to Las Vegas for the hookers and gambling, and you are looking for people to split the cost with you.  This is legal, because you are going to Vegas whether or not you find anyone to come with you.  The passengers are “incidental” because you are going to do the flight whether or not they come along (and pay).  See the difference?


If you can actually understand the difference between the two paragraphs, you are head and shoulders above the rest of the Private Pilots in Canada when it comes to compensation.


Now for a grey area.  CAR 401.28 specifies “hire or reward” as compensation for a PPL. 


However, a PPL could be considered to be compensated in other ways than just money. 


For example, in Canada, some PPLs tow gliders to build hours for their CPL.  You might think that if you aren’t being paid to tow gliders, you aren’t being compensated, but the FAA would disagree with you.  The FAA has taken the position that private pilots towing gliders are being compensated in the form of hours in their logbook that they aren’t paying for, and won’t allow it.  It’s interesting to think about the different forms of “reward”.  Not all are financial.



Commercial Pilot


Let’s say our eager young pilot above builds his hours and gets his Commercial Pilot Licence.  Finally, after all that hard work, he thinks he can put out an advertisement offering to take people for rides for cash.  WRONG.  Having a Commercial Pilot Licence is only part of the legal requirement to carry passengers for hire.  In addition, he needs to have an Operating Certificate of some kind, because he is operating a Commercial Air Service.


What is a Commercial Air Service?  Well, Transport and the Tribunal and I have had notable disagreements about the exact definition, but I define a Commercial Air Service as the combination of a Pilot and an Aircraft which is offered to the public, for hire.


Transport is all about protecting the public that doesn’t know anything about aviation, and they carefully regulate all Commercial Air Services by requiring them to have an Operating Certificate (OC).  It is non-trivial to acquire an OC.  An immense amount of paperwork and time and money is required to obtain one, and if you haven’t done it before, you almost certainly can’t do it by yourself the first time without the help of a retired Transport Inspector or someone else that has done it before.


There are different kinds of Commercial Air Services and Operating Certificates.  Our young, eager Commercial Pilot is qualified via CAR 401.30(1)(c) to get a paying (snort) flying job at a company which holds an OC.  There are many different kinds of Operating Certificates:


CAR 406 – Flight Training Unit

CAR 702 – Aerial Work (banner tow, jumper dump, etc)

CAR 703 – Charter (single-engine, or non-jet multi-engine up to 19,000 lbs & 9 pax)

CAR 704 – Charter (multi-engine up to 19,000 lbs, jets up to 50,000 lbs & 19 pax)

CAR 705 – Airline (over 19,000 lbs & more than 19 pax)


I haven’t addressed the long, strange story of CAR 604 here – see below.


Anyways, the number of Commercial Pilots in Canada who are completely unaware of the above is staggering.  I have no idea why this isn’t covered in the 80 hours of ground school, or on the flight test for the CPL.  This is truly required knowledge for a new CPL.


You might get the impression from the above that the only way a CPL can be compensated is in the employ of an OC.  Some people would probably like you to believe that to be the case, but it isn’t.  You simply need to figure out how to get compensated without offering a Commercial Air Service to the public, since you don’t have an OC.


One example of this is if someone owns a privately-registered aircraft, and hires you as a CPL to fly it for them.  No Commercial Air Service here, because the combination of an aircraft and a pilot is NOT being offered to the public for hire.  The owner of the aircraft is NOT one of the unwashed masses of the public that Transport is trying to protect.  This is an important concept for a young CPL to understand.


Now, there are variations on the above that cause Transport heartburn.  Let’s say that the owner of the privately-registered aircraft – could be a single, could be a pressurized piston twin – owns a company and hires you to fly his equipment and employees around.  This does not contravene any regulations but can make Transport very unhappy.  They would really like you to get a CAR 604 OC, even if you are legally not required to obtain one.


What is a CAR 604 OC?  Long, painful story here.  CAR 604.02 requires that you obtain a 604 Operating Certificate if you operate a privately-registered aircraft to transport passengers, and that aircraft is turbine & pressurized, over 12,500 lbs.  The intent of this legislation – I know one of guys that worked on it, long retired from Transport now – was to ensure that corporate jets had adequately-trained pilots, and that some records were kept of their training, etc.  It grew into a horrible, expensive monstrosity which is NOT required in the USA.  Some time ago, 604 was delegated by Transport to the CBAA, and John Baird – God, I love that guy – whom was Transport Minister recently, thought the CBAA was doing such a great job of policing itself that Transport took back 604.  The icing on the cake is that the current president of the CBAA is Merlin Preuss, whom I guess is having difficulty making ends meet on his meagre civil service pension. God, you can’t make this stuff up.  Recently Transport admitted that it was over-regulating 604 and listed some smaller turbine types of aircraft that were exempt from 604.  Anyways, enough about 604.


Another (non-604) variation on the above that makes Transport itchy is when a person rents (or leases) a non-604 aircraft (instead of owning it) and hires a CPL to fly it for them privately.  Theoretically there is no Commercial Air Service, but …


Another non-604 variation is when there are multiple owners/renters/leasers of the non-604 aircraft.  You are now in the fractional ownership business which is very popular in the USA but is a big problem for Transport Canada, which provides a fascinating insight into the cultural differences between the two countries.


Word to the wise:  Transport may ask you to do something that is actually not required by the regulations.  What to do?  For most people it’s easy - do it - because they don’t know the regulations.  But if you do know the regulations, think twice before arguing with Transport, especially if you are right.  Nothing will piss them off more than if you are right and they are wrong about their regulations, and pissing off Transport is really not something you ever want to do because of the decades-long pain that it will cause you.  Trust me on that.