Fee for Marine Insurance Certificates

Summary#

The final rule called Regulations Amending the Marine Liability and Information Return Regulations (Certain Fees) adds a user fee for certain marine insurance certificates issued by Transport Canada. It sets a charge of $98 per certificate and came into force on April 1, 2021.

What it does#

• Adds a new Part 4 to the Marine Liability and Information Return Regulations that creates fees for certificates.
• Charges $98 for a Civil Liability Convention certificate (issued under the Marine Liability Act).
• Charges $98 for a Bunkers Convention certificate (also issued under the Marine Liability Act).
• Requires the fee to be paid when the application for the certificate is submitted.
• Notes that a similar set of fees was set up separately for wreck-removal certificates (the Wreck Removal Convention Certificate Fee Regulations).
• Transport Canada planned an online application and payment option to be available as of April 1, 2021.

Who's affected#

• Owners and operators of vessels that need international liability or bunker insurance certificates.
• Shipping companies and ferry operators that request these certificates.
• Some foreign-flagged vessels (mostly from the United States) that get Canadian-issued certificates.
• Insurers and brokers who provide the proof of insurance used to get the certificate.
• The department that issues the certificates: Transport Canada.

Numbers from the department’s analysis:

• About 2,121 certificates are expected to be issued each year.
• Roughly 1,575 of those are for Canadian-owned vessels and 546 for foreign-owned vessels.

Why it matters#

• The fee is small per certificate — $98 — but shifts the cost of issuing certificates from taxpayers to the users who directly benefit.
• Transport Canada estimates the change will cost vessel owners about $1.08 million (present value) between 2021 and 2030, or about $154,350 per year (annualized).
• These certificates are required under international conventions. Without a valid certificate, a vessel may be refused entry, detained, or otherwise prevented from operating in Canadian waters.
• The change aligns Canada's practice with other countries that charge for issuing these state certificates.