Expanded Marine Safety Management Rules

Summary#

On June 25, 2022, the government published a proposal called the Marine Safety Management System Regulations to replace the existing Safety Management Regulations. If adopted, it would expand formal safety-management requirements from a few dozen SOLAS ships to about 16,143 Canadian commercial vessels and many foreign vessels that operate in Canadian waters.

What it does#

• Sets a requirement that a ship manager or authorized representative must have a written Safety Management System (SMS) for a vessel. An SMS must cover things like a safety and environmental policy, procedures to follow, lines of authority, incident reporting, emergency response, and internal audits or reviews.
• Divides vessels into five classes (Classes 1–5) and tailors rules by size and use:
  • Classes 1–3 (larger vessels) would largely follow the International Safety Management (ISM) Code.
  • Classes 4–5 (smaller vessels) would follow Canadian SMS requirements based on the ISM Code but with simpler, lower-cost options.
• Introduces Canadian documents that show compliance, such as a Canadian Document of Compliance (CDOC) and a Canadian Safety Management Certificate (CSMC). These would be required for many vessels and inspected or endorsed on schedules set by the Minister.
• Requires most foreign commercial vessels (except foreign-state non‑commercial ships) to keep and use an SMS that provides an equivalent level of safety. Foreign vessels would generally have 12 months to comply.
• Provides transition time after the regulations come into force (the government aimed for 2023); most vessels would have up to 3 years to meet the new rules, with earlier deadlines for many passenger vessels.
• Expands enforcement tools and penalties. The proposal adds many new administrative monetary penalties, with ranges up to $250,000 for the most serious violations.
• Intends to repeal the existing Safety Management Regulations (SOR/98-348) and replace them with the new regulation.

Who's affected#

• Ship managers and Authorized Representatives (owners) of Canadian commercial vessels. The government estimates 6,137 ship managers/ARs would be responsible for the new SMSs.
• Vessel operators across the fleet: about 16,143 vessels would be “in scope.” That includes passenger ferries, towboats, workboats, barges, cargo vessels and others, with some fisheries and small craft excluded.
• Small businesses: Transport Canada estimates about 5,209 small businesses would be affected. The present-value cost for those small businesses is estimated at $53.19 million, or about $10,212 per small business (present value).
• Provincial and municipal governments that operate vessels, plus the Government of Canada, which owns about 1,889 vessels that would need SMSs.
• Foreign commercial vessels that operate in Canadian waters (mainly tugs and small passenger craft from the U.S. and other flags).

Costs and break-even calculations (from the proposal):

• Total estimated present-value cost over the analysis period: $75.28 million.
• After accounting for service fees, the net present-value cost is shown as $73.53 million.
• The analysis says an annual reduction of 49 (18.0%) marine occurrences would offset those costs.

Why it matters#

• Safety: The change aims to spread a formal safety culture across most commercial vessels, not just the international (SOLAS) fleet. The Transportation Safety Board (TSB) has repeatedly recommended wider SMS use, especially for passenger and towing vessels.
• Real-life effects for operators: Businesses will need to write and keep procedures, do internal checks and drills, train staff, and pass inspections — which takes time and money. Smaller operators and tourism passenger-boat owners are likely to feel this most.
• Public and environmental benefit: Better safety systems are intended to reduce accidents, fatalities, serious injuries, and pollution from marine incidents.
• Enforcement and cost: The rules come with inspections and new fines. There is an estimated government cost to run the program, and fees are proposed to recover part of that cost from industry.
• It is a proposal, not law yet. The item published in the Canada Gazette is a consultation and impact analysis. The exact timelines, inspection frequencies, fees and enforcement details would be set in policy and by the Minister if the regulation is finalized.