Exporters Must Report Bulk Oil Exports

Summary#

The final rule Regulations Amending the Marine Liability and Information Return Regulations (Exporters) requires companies that export oil by sea from Canada to file annual reports when their exports pass certain weight thresholds. The rules take effect on the day that subsection 734(2) of the Budget Implementation Act, 2018, No. 2 comes into force (the source expected this to be April 1, 2021).

What it does#

• Requires exporters who ship oil by sea in bulk to file an annual information return with the Administrator of the Ship‑source Oil Pollution Fund (SOPF).
• Sets reporting thresholds:
  • 150,000 metric tons for persistent (contributing) oil.
  • 17,000 metric tons for non‑persistent oil.
• Reporting deadline is February 28 following the calendar year of exports.
• Specifies what must be reported:
  • exporter name and contact details;
  • types of oil and total quantity of each exported that year;
  • names/addresses of associated persons who exported oil;
  • if exports were done by an agent or for a principal in Canada, the agent/principal names and quantities.
• Aggregates exports by associated persons when applying the thresholds.
• Applies only to exports that are actually carried by sea. The rule draws an eastern boundary in the St. Lawrence River; shipments that never cross that sea boundary (for example, by waterway to a U.S. Great Lakes port without carriage by sea) are not covered.
• Reports are expected to be filed electronically via an existing reporting system. Paper or email may be used if the system fails.
• Enforcement: failing to file can lead to criminal fines up to $250,000, and administrative monetary penalties up to $50,000 for individuals and $250,000 for other persons.

Who's affected#

• Companies that export oil by sea from Canada in bulk and whose exports exceed the thresholds. The government estimates about 30 companies would be affected.
• The rule treats agents and principals differently depending on whether the principal is in Canada. If the principal is outside Canada, the agent may be treated as the exporter.
• Receivers and others who already report receipts are not newly covered by this rule, but exporters are now added to the reporting system.
• According to the regulatory analysis, no small businesses are expected to be affected.

Why it matters#

• It fills a gap so that exporters — not just receivers — are recorded in the system that supports the SOPF. That makes it possible to charge a future levy fairly to those whose shipments create oil‑spill risk.
• The levy is not planned at this time because the SOPF is fully capitalized. But the reporting lets the government identify who would be liable if a levy were ever re‑imposed.
• Administrative burden is small. The government estimates affected companies will spend about 1 hour per year reporting (about 30 hours per year across all companies) and put the total present value cost at about $12,406 over 10 years.
• There are real penalties for failing to report, so exporters that meet the thresholds will need to adopt the reporting step into their routine compliance work.