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Regulatory Sandboxes (view source)

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==='''What are Regulatory Sandboxes?'''===

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A regulatory sandbox is a tool that allows regulators to learn how to incorporate or best regulate innovation before making permanent regulatory changes. It allows for temporary limited authorizations of innovation and demonstrates how regulatory regimes could be modernized, while under regulatory supervision. Evidence gathered can help a regulator decide whether to make any permanent changes, including how an innovative product, service, process, regulatory approaches, or non-regulatory approach should be managed. <~~blockquote~~>For example, regulators may want to understand how a regulatory approach would work for a new technology that is not currently permitted under existing regulation. In these cases, regulators could enable regulatory sandboxes by issuing temporary authorization from specific legislative or regulatory requirements. This allows them to evaluate how the new technology could be regulated in a modern or innovative way.

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A regulatory sandbox is a tool that allows regulators to learn how to incorporate or best regulate innovation before making permanent regulatory changes. It allows for temporary limited authorizations of innovation and demonstrates how regulatory regimes could be modernized, while under regulatory supervision. Evidence gathered can help a regulator decide whether to make any permanent changes, including how an innovative product, service, process, regulatory approaches, or non-regulatory approach should be managed.

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For example, regulators may want to understand how a regulatory approach would work for a new technology that is not currently permitted under existing regulation. In these cases, regulators could enable regulatory sandboxes by issuing temporary authorization from specific legislative or regulatory requirements. This allows them to evaluate how the new technology could be regulated in a modern or innovative way.

Regulators can actively monitor the implementation of the new technology and establish conditions to ensure that consumer protections are upheld throughout the process. If any unexpected risks emerge or the situation changes, regulators have the flexibility to adjust the conditions or terminate the regulatory sandbox, as needed.

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The evidence gathered from the regulatory sandbox can provide valuable insights. This data helps regulators make informed decisions about permanently allowing the technology, ensuring that it is safely and effectively integrated into the market. By learning from these regulatory sandboxes, regulators can determine how they should design and manage regulations and create modernized frameworks that are more effective and well-suited to innovation.</~~blockquote~~>

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The evidence gathered from the regulatory sandbox can provide valuable insights. This data helps regulators make informed decisions about permanently allowing the technology, ensuring that it is safely and effectively integrated into the market. By learning from these regulatory sandboxes, regulators can determine how they should design and manage regulations and create modernized frameworks that are more effective and well-suited to innovation.

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==='''Examples of Regulatory Sandboxes'''===

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! style="background-color: #C3D0C9; color: #333333; width: 20%;" | Department/Agency

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! style="background-color: #C3D0C9; color: #333333; width: 20%;" |Department/Agency

! style="background-color: #C3D0C9; color: #333333; width: 25%;" | Regulatory Sandbox Title

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! style="background-color: #C3D0C9; color: #333333; width: 55%;" | Regulatory Sandbox Description

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! style="background-color: #C3D0C9; color: #333333; width: 55%;" |Regulatory Sandbox Description

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|Transport Canada

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|Transport Canada

|[https://tc.canada.ca/en/aviation/publications/aviation-safety-letter/issue-4-2020/remotely-piloted-aircraft-systems-rpas-otherwise-known-drones Remotely Piloted Aircraft Systems] (2019 – ongoing)

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|Remotely Piloted Aircraft Systems, or drones, have become increasingly popular over the last several years. To address the safety risks associated with the growing number of drone operations, Transport Canada introduced Part IX of the ''Canadian Aviation Regulations'' (CARs) in January 2019. These rules outline the regulations for drone flights in Canada. However, the regulation did not fully cover beyond visual line-of-sight (BVLOS) operations and other innovative drone uses, which are crucial for extending operational range, improving efficiency, accessing remote areas, reducing costs, and enhancing safety.

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| Remotely Piloted Aircraft Systems, or drones, have become increasingly popular over the last several years. To address the safety risks associated with the growing number of drone operations, Transport Canada introduced Part IX of the ''Canadian Aviation Regulations'' (CARs) in January 2019. These rules outline the regulations for drone flights in Canada. However, the regulation did not fully cover beyond visual line-of-sight (BVLOS) operations and other innovative drone uses, which are crucial for extending operational range, improving efficiency, accessing remote areas, reducing costs, and enhancing safety.

Transport Canada has used their authority under the ''[https://laws-lois.justice.gc.ca/PDF/A-2.pdf Aeronautics Act]'' to issue [https://tc.canada.ca/en/aviation/reference-centre/exemptions-canadian-aviation-regulations-cars/exemption-sections-60241-60366-paragraphs-90164c-90183c-canadian-aviation-regulations exemptions] and special licences for testing currently prohibited or unregulated drone activities under government supervision. This includes BVLOS operations in sparsely populated areas, below 400 feet, using visual observer detect and avoid (DAA) functions, and, in some cases, testing technological solutions for DAA.

The evidence gathered from this regulatory sandbox has supported Transport Canada’s decision to make [https://canadagazette.gc.ca/rp-pr/p1/2023/2023-06-24/html/reg6-eng.html amendments] to the ''[https://laws-lois.justice.gc.ca/PDF/SOR-96-433.pdf Canadian Aviation Regulations]'' regarding drone use in Canada. These changes, specifically for lower-risk BVLOS operations, will come into force on April 1, 2025.

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|Transport Canada

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|Transport Canada

|[https://tc.canada.ca/en/dangerous-goods/electronic-shipping-documents/study-use-electronic-shipping-documents-transport-dangerous-goods Electronic Shipping Documents] (2020-2022)

|The ''Transportation of Dangerous Goods Regulations'' previously required a physical paper shipping document to accompany most dangerous goods while in transport. To modernize this process, Transport Canada initiated a two-year regulatory sandbox to explore using electronic shipping documents instead of paper ones.

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