1 Cape Town Convention and Aircraft Protocol in Canada Jean Surette Senior Policy Advisor, Air Policy Transport Canada April 29, 2013

Strong support, involvement, and participation of various stakeholders including the provinces, territories, airlines, industry associations, and aircraft manufacturers Involved cooperation between numerous Federal departments and agencies – Industry Canada, Department of Justice, Department of Foreign Affairs and International Trade, Finance Canada, Export Development Canada BACKGROUND 2

2000 – The Department of Justice (Canada) sought the assistance of the Uniform Law Conference of Canada (ULCC) to prepare a Uniform Act to implement both the Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment (Uniform Act) –A federal-provincial working group drafted the Uniform Act, which would facilitate implementation of the Convention and Protocol by the provinces and territories 2004 – Canada signed the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (Cape Town Convention and Protocol) 2005 – Federal government passed the International Interests in Mobile Equipment (aircraft equipment) Act (IIME Act), including targeted amendments to the Bankruptcy and Insolvency Act, Companies’ Creditors Arrangement Act, and Winding-up and Restructuring Act, as well as to the Bank Act 2012 – Federal government passed Bill C-45, the Jobs and Growth Act, 2012, which included additional amendments to the IIME Act LEGISLATIVE HISTORY 3

IMPORTANT LEGISLATIVE AMENDMENTS IN BILL C-45 Amend the IIME Act to allow for the implementation of “Alternative A”, a provision in the Protocol that allows a creditor to reclaim property after 60 days, with no judicial discretion, if an insolvent airline has failed to make payments –Corresponding repeal of 2005 provisions in the Bankruptcy and Insolvency Act, Companies’ Creditors Arrangement Act, and Winding-Up and Restructuring Act that sought to reflect the intent of Alternative A Amend the inconsistency clause in the IIME Act stating that the Convention and Protocol prevail over certain other federal statutes in the event of any inconsistency –Specified public security legislation (i.e., Controlled Drugs and Substances Act, Export and Import Permits Act, Special Economic Measures Act, the United Nations Act, and certain provisions of the Criminal Code) would be excluded to ensure their continued application during insolvency proceedings 4

IMPLEMENTATION OF CAPE TOWN IN CANADA Other declarations of note: Transport Canada’s Canadian Civil Aircraft Register to accept Irrevocable De-registration and Export Request Authorization (IDERA) Limited Bank Act exception Protection of non-consensual rights and interests (e.g., mechanics’ liens, unpaid pension contributions, unpaid fees for airport and navigation authorities, etc.) 5

PROVINCIAL / TERRITORIAL IMPLEMENTATION In Canada, treaty-making power rests with the federal government, while treaty implementation is distributed between Parliament and the provincial legislatures depending on the issue –The implementation of the Convention and Protocol in specific provinces and territories also requires provincial and territorial implementing legislation –Alberta, British Columbia, Manitoba, Ontario, Newfoundland, Nova Scotia, Northwest Territories, Nunavut, Quebec and Saskatchewan have adopted implementing legislation –Prince Edward Island and Yukon have introduced legislation; New Brunswick expected to do so at a later date 6

AIRCRAFT SECTOR UNDERSTANDING The Aircraft Sector Understanding (ASU) –Developed under the auspices of the Organisation for Economic Co-operation and Development (OECD) –Sets out rules for financing by official export credit agencies of aircraft and aircraft-related parts and services –Countries that ratify the Convention/Protocol can be placed on the “Cape Town List” under the ASU to be eligible for discounts from official export credit agencies Canada expects to submit an application for inclusion on the ASU Cape Town List imminently –ASU Participants (i.e., Australia, Brazil, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland and the United States) determine eligibility through consensus, guided by analysis of whether Canada’s legislation and declarations meet Qualifying Declarations used in the ASU 7

THANK YOU! Jean Surette Senior Policy Advisor National Air Services Policy Transport Canada 330 Sparks St. Ottawa, ON K1A0N5 (613)