It has sometimes been discussed that a potential loophole exists in various UAV regulations around the world, wherein if the aircraft was tethered to the ground it would therefore not be considered a UAV and thus avoid regulation. There are even companies actively selling and promoting such systems for this purpose.
At best this is considered a huge unknown and untested legal issue.
With the new SI 623-001 document however this has been further defined in regards to Canadian UAV regulations:
6.17 Tethered UAVs
(1) Generally, aircraft that do not carry persons (e.g. small balloons/airships and kites) that are connected to the ground by way of a tether, operated as antennas, surveillance aircraft, sampling devices etc. are treated as obstacles to air navigation and are to be marked and lit in accordance with the obstruction marking and lighting standards found in section 621.19 of the CARs. However, since the Minister is responsible for protecting persons and property on the ground and other airspace users, tethered UAVs that are extremely manoeuvrable and which operate over wide vertical/horizontal areas may require an SFOC. In these cases, protecting other airspace users by marking, lighting and issuing a NOTAM may not be sufficient and/or may not address very low level operations in built-up areas.
(2) The type of regulations that apply to tethered UAVs depends on what type of UAV is being considered and the purpose of the aerial work. However, operating an aircraft on a tether simply to avoid SFOC requirements is not a viable solution.
While it is still not spelled out in clear black and white catchall terms, it is stated that tethering is not acceptable if it is merely used to avoid an SFOC.