Viscount724 From Switzerland, joined Oct 2006, 27186 posts, RR: 22
Reply 3, posted (7 years 9 months 2 weeks 5 days 1 hour ago) and read 3118 times:
As far as I know they have to use Canadian sub-contractor carriers for domestic service. FedEx can of course carry cargo between two Canadian cities via a hub in the US, but unless this has changed recently, they can't carry cargo on one of their US-registered aircraft on a direct flight between two points in Canada.
In addition to 5th freedom rights, the Canada-US bilateral gives carriers from both countries 7th freedom rights to operate stand-alone international services between the other country and a 3rd country. e.g. FedEx could base an aircraft in Canada and operate to a 3rd country without the flight having to originate/terminate in the USA. And vice versa for Canadian all-cargo carriers. But they don't have cabotage (domestic) rights.
I stand to be corrected in case any of the above has changed recently.