Fee for Marine Insurance Certificates

Summary#

These are proposed changes to the Marine Liability and Information Return Regulations to start charging a small fee for certain marine insurance certificates that are now issued free of charge. If adopted, applicants would pay $98 for each certificate; the proposal was published on October 10, 2020 and invites comments for 30 days.

What it does#

• Adds a fixed fee of $98 for each certificate issued under the Marine Liability Act (the two certificates covered by the regulations).
• Creates a similar fee rule for the Wreck Removal Convention certificate under the Wrecked, Abandoned or Hazardous Vessels Act (a separate set of regulations is proposed for that certificate).
• Says the fee is payable when an application for a certificate is submitted.
• States an intended coming-into-force date of April 1, 2021 if the regulations are adopted.
• This is a proposal (Part I notice). Interested parties had 30 days after publication (October 10, 2020) to send comments to Transport Canada.

Who's affected#

• Vessel owners and operators who need one of these state-issued insurance certificates to operate in Canadian waters. That most often means shipping companies and the owners of commercial vessels.
• Most of the certificates go to Canadian-registered vessels. The government estimated about 2,788 certificates a year, of which about 2,147 would be for Canadian-owned vessels and 641 for foreign-owned vessels.
• Many affected organizations are larger companies, but a small owner with one vessel would simply pay $98 per year per certificate.
• The department handling this is Transport Canada (the unit that issues the certificates).

Why it matters#

• The change shifts a small portion of the administrative cost of issuing international liability certificates from taxpayers to the vessel owners who benefit directly.
• The government estimates the fee would cost Canadian vessel owners $1.48 million in present value over 2020–2029 (about $148,000 per year on average).
• Carrying a valid certificate is a legal requirement under international conventions. Vessels without required certificates can be detained and face penalties, including fines (examples in the proposal include up to $250,000 on conviction under the Marine Liability Act and other administrative penalties for moving a detained vessel).
• The fee level (set at $98) is presented as small compared with the cost of operating vessels and similar to fees charged by other countries that issue these certificates.