This study addresses a specific issue, often termed the canopy effect, which relates to our ability to provide accurate conductivity models from AEM coupling ratios. At face value the issue is one of the correct determination of sensor height(s) above the ground surface (terrain clearance). Historically, AEM systems have used barometric, radar and laser altimetry for this purpose. The present study uses the radar and laser systems installed on the JAC fixed-wing AEM-05 system (Leväniemi et al., 2008) to further investigate the effect. The canopy effect can arise due to a variety of elevated features below, and in the vicinity of, the flight line. The most obvious features are well-defined forest and copse zones together with domestic, commercial and agricultural buildings. Such features may cause the terrain clearance to be underestimated and this has the potential to introduce resistive artifacts into conductivity models. Correct determination of terrain clearance is also important for the accurate processing of the other geophysical data sets acquired by our surveys