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Canada, EU in trade dispute over fees on aircraft exports

Canadian authorities have been toiling over the past few months to lower what they have deemed “excessive” fees charged on the country’s aerospace exports to Europe.

Progress have not come easy as Canadian officials 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 has its roots from the end of last year, according to a briefing note.

The note, prepared for a meeting between an unidentified official in Global Affairs Canada and European Commission’s Director-General for trade, Jean-Luc Demarty, indicate that Canada was “concerned over the excessive fees” charged by the European Aviation Safety Agency (EASA) to certify Canadian aircraft and parts that had already been verified as safe by Transport Canada.

It also noted that Canadian officials had brought the matter up 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.”

The note also said that officials at Transport Canada had also tried to discuss this matter with their counterparts in EASA, but had been “unable to secure a meeting.”

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

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

Like Transport Canada, EASA is tasked with certifying as safe aircraft that will be used within its jurisdiction, and levies fees to the companies that possess 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,” said spokesperson Pierre Manoni in a 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,” the statement read.

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 talking to “finalize the streamlining of our respective procedures” which could unburden EASA when certifying Canadian products, and in turn drop EASA’s fees, said a statement from Transport Canada.

While the December 2016 briefing note revealed that Transport Canada had failed to get a meeting with EASA on the issue, the statement from 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,” remarked spokesperson Natasha Nystrom in a statement.

Putting the issue to rest is crucial for Canada’s aerospace industry since Canadian products “are at a significant disadvantage” since the EU has consented to slowly reduce fees for products from the United States, according to the briefing document.

When asked whether Trade Minister Francois Philippe Champagne (Saint-Maurice-Champlain, Que.) had a hand in working out the dispute, spokesperson Pierre-Olivier Herbert said that the government was “mindful of industry concerns and continues to engage with EU authorities on this important subject.”

Diodora Bucur, a spokesperson for the EU embassy in Canada, said that the embassy would not issue a statement 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, divulged that EASA levies the same fees to all applicants, with a few exceptions, including a 5% discount to U.S. exporters for the initial safety certification for their product.

Fees charged by EASA also depend on 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.

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