Formation flying is permitted only if such flights
Why this is the answer
CAR 602.24 permits formation flight only by pre-arrangement between the pilots-in-command (and, in a control zone, with ATC). There is no altitude floor, commercial-pilot requirement, or licence endorsement for formation flight — agreement between the PICs is what the rule requires.
Reference
CARs 602.24 – Formation Flight
Question reproduced verbatim from Transport Canada’s PSTAR Study and Reference Guide (TP 11919E). The answer key is Transport Canada’s; the explanation is ours.
A study aid — not a substitute for the official guide, the CARs, or your instructor.