Marine Safety Fees Update

Summary#

The federal government (through Transport Canada) published a proposal called the Marine Safety Fees Regulations to update and consolidate fees for a range of ship inspection services. If adopted, the rules would introduce 17 new fees (and repeal the old Port Wardens Tariff), phase in increases over three years starting April 1, 2021, and index fees to inflation afterward. The change is intended to shift more of the inspection cost from taxpayers to the users of those services, especially foreign ship owners.

What it does#

• Replaces many scattered fee rules with a single regulation, the Marine Safety Fees Regulations. It also repeals the Port Wardens Tariff and updates references in the Cargo, Fumigation and Tackle Regulations, the Vessel Pollution and Dangerous Chemicals Regulations, and the Board of Steamship Inspection Scale of Fees.
• Introduces 17 fees that cover five kinds of inspections:
  • Marine cargo inspections for grain, timber on deck and concentrates: two consolidated fees — an inspection fee and a document-issuance fee (phased up to $750 and $1,010 by Year 3).
  • Inspections for bulk and packaged dangerous goods: a fixed fee phased to $1,500.
  • Verification of shippers’ procedures (for cargoes that may liquefy): fees phased to $2,500 (initial/modification) and $1,250 (intermediate/renewal).
  • Tank prewash/prewash inspections and exemption reviews: a base fee of $3,075 (covers up to 3.75 hours) plus hourly overtime rates ($105, $307, $336) for extra time or weekend work.
  • Port State Control follow-up inspections: fixed fees of $1,870 (rectifying deficiencies) and $4,200 (lifting a detention).
• Phases in the marine cargo / dangerous-goods / shipper-verification fee increases over three years: starting April 1, 2021, with further increases on April 1, 2022 and April 1, 2023. Annual CPI indexing would begin on April 1, 2024.
• Sets service standards (for example, issuing certain inspection documents within 24 hours or verification letters within 10 business days) and says portions of fees could be remitted if standards are missed.
• States the proposed coming-into-force schedule and invites feedback (the original notice allowed representations within 60 days of the publication date).

Who's affected#

• Primary affected party: ship and cargo operators — in particular the owners/operators of bulk carriers that carry grain, concentrates, timber on deck and similar cargoes. The paper notes most affected vessels are bulk carriers between 20,000 and 45,000 GRT that transport commodities like iron ore, crude oil, wheat and fuel oil.
• Cost distribution (estimated over 2021–2030):
  • Total incremental fees to vessel owners: $8.87 million (present value).
  • Estimated share for foreign vessel owners: $8.43 million (about 95%).
  • Estimated share for Canadian vessel owners: $0.44 million (about 5%).
• Transport Canada would collect the fees to recover inspection costs. The proposal says the changes mostly affect larger companies; it states no small businesses are expected to be impacted.
• Stakeholders consulted included shipping associations and industry groups; the proposal was adjusted in response to some comments (for example, caps and phasing in increases).

Why it matters#

• It reduces the taxpayer subsidy for marine inspection services by shifting more cost onto the users of those services, especially foreign ship owners. The government estimates a net increase in cost recovery of $8.43 million to Canadians over 10 years from fees charged to foreign vessels.
• For ship operators and cargo interests, the rules mean higher, clearer and more consolidated fees for inspections they request or require. That can affect shipping costs and planning around loading, tank washing and compliance steps.
• For the public, better-funded inspections could help Transport Canada keep up with international safety and pollution rules and maintain service standards (for example, faster issuance of certificates and clearer turnaround times).
• The item in the Canada Gazette, Part I, is a proposal. It was published for comment and is not law until finalized and brought into force on the dates listed above.