In its efforts to regulate drones, the Canadian government must strike the right balance between ensuring public safety and developing a flexible framework that will support use of drones and innovation in the industry.

It has been a challenge. Drones are covered by the Canadian Aviation Regulations. Last year, Transport Canada, introduced rules that made it practically impossible to fly drones in cities by restricting use near airports and lakes. Weeks later, based on public feedback, it decided to relax some of these restrictions.

Then in July it proposed draft “permanent” rules which, following the conclusion of public consultations, are expected to come into force some time in 2018.

Under the current regime, most commercial operators need a Special Flight Operations Certificate – or SFOC – which is required to fly all drones weighing over 35kg, even recreationally. The flight certificate gives details on how and where the drone must be used. Flying a commercial drone without a certificate can incur fines up to $25,000 for corporations.

Transport Canada’s proposed new rules would eliminate the flight certificate for many operators, and instead address safety concerns by introducing new flight rules, aircraft marking and registration requirements, knowledge testing for pilots, minimum age requirements to fly drones, and pilot permits for specific operations.

The new rules were developed with three categories of drones in mind. Each category is based on the size of the drone, and flight conditions.

For very small drones — more than 250g and up to 1 kg — pilots would have to be at least 14-years of age, pass a basic knowledge test and avoid flying their drones near airports, heliports and populated areas.

The same applies to flying a small drone— weighing more than 1 kg and up to 25 kg — in rural areas. The difference is that pilots must be at least 16 years of age, and the rules around flying near people, vehicles and built-up areas are more restrictive.

In urban areas, pilots operating small drones would have to be at least 16, register their device with Transport Canada, ensure the drone meets a specific design standard, and follow a set of flight rules. Also, to fly in urban areas or within controlled airspace or close to airports, pilots will need to pass a written knowledge test to get a pilot permit.

Flight certificates are no longer required, as long as the drone is flown within visual-line-of sight and weighs no more than 25 kg.

There remain concerns, however, about enforceability of the regulations as some consider them still to be too prohibitive in terms of the flight restrictions in cities (no less than 30 metres from a person or a vehicle).

Also, under the new rules, regardless of size and weight above 250g, all drone operators would have to carry minimum liability insurance of $100,000.

This poses a challenge, as the market for drone insurance is still maturing and some companies will only insure those who operate drones commercially as professional pilots. General, home or business liability insurance policies typically exclude aviation activity, though some offer limited coverage.

There are also worries that the prescribed $100,000 limit is insufficient and that drone insurance policies don’t necessarily address risks associated with the use of drones beyond injury and property damage — namely privacy, security and data protection concerns.

Ultimately, as the technology evolves, it’s to be expected that market demand will push both underwriters and possibly regulators to continue responding to changing risk landscape of drone use.