Walk the ramps of any Canadian air field and you will find a significant percentage of aircraft, especially general aviation aircraft, under U.S. Registry. All of these aircraft are in Canada illegally – some more so than others!
Most countries, Canada and the U.S. being included, restrict the registration of aircraft through their Registry to either citizens of their country, or legal entities that are 75% controlled by citizens of their country. Only the U.S. allows an open subterfuge to that FAA rule.
It has long been an accepted practice in the U.S. to have foreigners own U.S. registered aircraft through non-citizen trusts, with the U.S. entity (Wilmington Trust and Wells Fargo Trust being the major players) being the bare Trustee for the foreign owner, who maintain beneficial ownership of the aircraft. These non-citizen trusts are extensively utilized, especially in the business aviation community.
The FAA has instituted a review of this allowance, primarily out of concern as to the oversight of these U.S. registered aircraft being operated and maintained in foreign jurisdictions. Luckily for Canadians utilizing these trusts, it does not appear that the present process will challenge the legality of utilizing the trust as a legitimate ownership device. It would appear that the review and subsequent changes will focus mainly on maintenance standards.
Many of the N registered aircraft in Canada have actually been imported to Canada by payment of the GST. This technically allows that aircraft to be operated on a point to point basis in Canada.
But few, if any, meet the requirements of CAR 202.42 which restricts a foreign registered aircraft from being present in Canada for more than 90 days in any one 12 month period. Fortunately, Transport Canada seldom enforces that particular section of the CAR’s, and appears only to activate upon receipt of a complaint.