U.S. companies like the online shopping juggernaut Amazon are increasingly choosing Canadian airspace to test new drones after being hamstrung by restrictive laws in their own country that could take up to two years to change, experts say.
Amazon.com Inc. announced this week it had been "rapidly experimenting" with unpiloted aircraft at a rural test site in British Columbia as part of its plan to one day deliver small packages via low-flying drones to customers in the United States, Britain and Israel. However, several other U.S. companies had already moved north of the border to take advantage of Transport Canada's Special Flight Operations Certificates (SFOCs), a system that "gives our regulator a lot of discretion" and "is fantastic compared to the United States," according to Ottawa-based drone expert Diana Cooper.
"It looks like we're starting to become a destination country for huge companies like Amazon, so it's a great strategic advantage," said Ms. Cooper, a lawyer at LaBarge Weinstein.
U.S. companies can get an SFOC through a Canadian subsidiary, as Amazon did, or if they have approval in their own jurisdiction for similar drone operations, Ms. Cooper said.
In Canada, drones are being used to produce films, help search-and-rescue crews and to monitor and inspect mines, pipelines and crops, she added.
In 2010, Transport Canada issued 66 SFOCs to commercial drone operators or recreational pilots using an aircraft heavier than 35 kilograms. That number steadily increased to 1,672 in 2014. The U.S. Federal Aviation Administration (FAA), meanwhile, has granted commercial exemptions to just 24 of 342 applicants.
Amazon had been waiting months for a special experimental exemption from the FAA and, after it was issued a one-year SFOC in December, started testing its drone delivery system in southern B.C., Ms. Cooper said.
"They can't even do appropriate testing in the United States. Even at that basic first stage, they were out of luck in their own jurisdiction," she said. "On the one hand, the FAA wants to see that this technology is safe, but they don't allow companies to test properly to show that the technology is safe."
Once an operator demonstrates to Transport Canada that it has a safe track record, it can apply for a longer-term SFOC that can last up to three years, Ms. Cooper said.
The commercial use of drones is banned in the U.S. unless a company gets an exemption. And then the aircraft must weigh less than 25 kilograms, must be flown at an altitude of less than 500 feet during daylight hours and must be within view at all times.
Brendan Schulman, a New York-based lawyer and drone expert, said the FAA announced new draft rules for commercial drone use last week, but the regulations could take two years to come into effect and could still force pilots to steer their aircraft using their own eyes, not a camera mounted on the drone – something that would be impossible under the delivery system Amazon is proposing.
"Since 2007, the FAA has been saying that commercial operation is not permitted," Mr. Schulman said. "While I think that could be a reasonable position to have for a couple of years to be worked out, it's going to be 10 years before the rules are finally put in place."
In the meantime, Mr. Schulman tells clients who can't get an FAA exemption to look at Canada.
Ms. Cooper said Canadian companies are also benefiting from their government's risk-based approach to commercial drone use and could scale up their operations exponentially after the FAA eventually loosens its rules.
"Once the U.S. system opens up, they could enter that market and they would have the advantage of saying that they've got the experience of operating for several years," she said. "U.S. companies won't be able to say that for the most part."