The answer really hinges on whether the work in question is considered by TC to be “Specialized Maintenance” or not. If it is then an AMO needs to sign for it and if not then an AME can sign.
CAR 571.04 explains the requirements for Specialized Maintenance:
571.04 No person shall perform the specialized maintenance set out in Schedule II to this Subpart on an aeronautical product other than an aircraft operated under a special certificate of airworthiness in the owner-maintenance or amateur-built classification, except in accordance with
(a) a maintenance policy manual (MPM) established by the holder of an approved maintenance organization (AMO) certificate issued pursuant to Section 573.02 with a rating of a category appropriate to the work to be performed; or
(b) a foreign document equivalent to an MPM established by a maintenance organization approved under the laws of a state that is party to an agreement with Canada, and the agreement provides for recognition of the work to be performed.
That means of course that you have to go and look in Schedule II to find the list of what is Specialized Maintenance. Anything not on that list isn’t.
CAR 571 Schedule II - Specialized Maintenance, on the subject of engine maintenance says:
The following tasks constitute the specialized maintenance referred to in section 571.04 of these Regulations…
Any of the following types of tasks is engine specialized maintenance:
(a) the reassembly of a multi-part engine crankshaft or a crankshaft equipped with a dynamic counterweight system; (b) the reassembly of the crankcase of a reciprocating engine that is equipped with an integral supercharger or a propeller reduction gear; (c) the overhaul of a reciprocating engine that is equipped with an integral or turbo supercharger; and (d) the overhaul of a turbine engine or turbine engine module.
So as long as the engine you want to have overhauled isn’t described on that list then it isn’t Specialized Maintenance and therefore can be signed out by an AME and doesn’t require an AMO sign-out.
Does this mean that any freelance AME can or should conduct an overhaul on an aircraft engine? No - some freelance AMEs have the expertise, publications, parts and the tools to do the job but many don’t. Some owners believe that an AME overhaul may be cheaper than one at an AMO, but that often isn’t the case as AMO overhaulers are
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