Regulatory Sandboxes

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What is a Regulatory Sandbox? A regulatory sandbox is a tool that allows regulators to learn how to best regulate innovation before making permanent regulatory changes. It enables temporary, limited authorizations of new products, services, or processes while under direct regulatory supervision. Evidence gathered helps regulators decide how an innovation should be managed long-term. Learn & Gather Evidence Sandboxes allow regulators to evaluate how a new technology or approach works in a controlled environment, providing valuable insights and data to inform permanent, evidence-based regulatory decisions. Supervise & Protect Regulators actively monitor the sandbox, establishing conditions to ensure that consumer protections are upheld. This direct oversight allows for a safe testing environment for promising innovations. Adapt & Respond If unexpected risks emerge or the situation changes, regulators have the flexibility to adjust the conditions or terminate the sandbox. This adaptability ensures that safety and public interest remain the top priorities. Government Commitment In Budget 2024, the Government of Canada committed to enabling broader use of regulatory sandboxes. To support this, TBS is developing a federal framework informed by discussions with regulators and a public consultation.

Examples of Federal Regulatory Sandboxes

Transport Canada: Remotely Piloted Aircraft Systems (Drones) The Challenge: Existing regulations did not fully cover beyond visual line-of-sight (BVLOS) drone operations, which are crucial for improving efficiency, accessing remote areas, and enhancing safety. Sandbox Action: Transport Canada used its authority to issue exemptions and special licenses for testing currently prohibited BVLOS operations. This allowed them to test drone activities under strict government supervision. Outcome: Evidence gathered from the sandbox supported amendments to the Canadian Aviation Regulations. New rules for lower-risk BVLOS operations will come into force in 2025.

Transport Canada: Electronic Shipping Documents The Challenge: Regulations required a physical paper shipping document for most dangerous goods, an outdated process that created administrative burden. Sandbox Action: A two-year sandbox was initiated to test the use of electronic shipping documents, collaborating with industry to pilot various digital platforms that met high security and accessibility standards. Outcome: The sandbox was successful, saving 21 million sheets of paper and enhancing safety for first responders. The Transportation of Dangerous Goods Regulations have been modernized to allow electronic documents for rail and drone transport.

Transport Canada: Light Sport Aircraft (LSA) The Challenge: Flight Training Units (FTUs) could not use cost-effective and fuel-efficient Light Sport Aircraft because LSAs lacked the required Certificate of Airworthiness. Sandbox Action: Supported by the CRI's REEF, Transport Canada issued regulatory exemptions to allow FTUs to use LSAs for flight training, assessing their reliability, performance, emissions, and noise levels. Status: This sandbox is ongoing. The learnings will be used to inform the development of a permanent regulatory framework to support the safe use of these innovative aircraft in training environments.

Get Involved & Contact Us The Government of Canada is seeking input on the development of its regulatory sandbox framework. You can share your thoughts on the Let’s Talk Federal Regulations platform. If you have any questions, please contact the CRI at: cri-cir@tbs-sct.gc.ca