Ban on Heavy Fuel Oil in Polar Waters

Summary#

This notice proposes amendments to the Vessel Pollution and Dangerous Chemicals Regulations (Part 2, Division 1 — Oil) and to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations to bring Canadian rules into line with the international ban on using and carrying Heavy Fuel Oil (HFO) as fuel in polar waters. It’s a proposal (not law yet) and the government estimates a total cost to ship operators of $10.4 million and monetized benefits of $4.3 million over 2027–2036. Interested people can comment within 60 days of the Canada Gazette publication on June 20, 2026.

What it does#

• Implements the international HFO ban from MARPOL for:
  • the Antarctic (long-standing international rule) and
  • the Arctic (the international rule came into effect for Arctic waters on July 1, 2024).
• Applies the ban to:
  • Canadian-flagged vessels wherever they operate, and
  • foreign vessels while they are in Canadian Arctic waters.
• Keeps a few specific exceptions:
  • emergency situations (saving lives, securing a vessel);
  • vessels dedicated to oil-spill response;
  • a time-limited exception for vessels with protected fuel tanks until July 1, 2029; and
  • a temporary waiver that Canada used for some resupply vessels until July 1, 2026 (that waiver expires).
• Adds four new enforceable violations to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations, with penalties ranging from $1,250 to $25,000 per violation.
• Removes some outdated technical transitional text from the VPDCR and clarifies that vessels are not required to flush tanks or pipelines after discharging HFO (to avoid extra spills).
• The proposal says the regulations would come into force on the day they are published in the Canada Gazette, Part II.

Who's affected#

• Primarily the authorized representatives (owners/operators) of about 25 Canadian-flagged vessels that could use or carry HFO: roughly 8 tankers, 16 cargo vessels and 1 bulk carrier. (Many of these already use compliant fuels.)
• Northern and Indigenous communities that depend on marine resupply. The analysis estimates about 16,186 affected households, of which 12,895 are Indigenous households. If ship operators passed all added costs to consumers, the analysis estimates an average increase of about $559.6 per household over the analysis period (about $61.1 per year).
• Marine inspectors and Transport Canada’s compliance teams will enforce the rule; small businesses are not expected to be affected, according to the department’s analysis.
• Other parties touched by the change include federal departments and Indigenous organizations consulted in developing the proposal (for example, Transport Canada, Environment and Climate Change Canada, and several Inuit organizations).

Why it matters#

• Heavy Fuel Oil is thick and stays in cold water and ice for a long time. If spilled in the Arctic or Antarctic it is much harder to clean up and causes long-lasting damage to wildlife and the traditional food sources of coastal communities.
• The rule reduces that risk by forcing ships to use cleaner fuels in polar waters. The department estimates the rule would cut greenhouse gas emissions by about 13.9 kt (tonnes) over the analysis period and reduce 716.1 tonnes of SOx emissions from vessel exhaust — benefits monetized at $4.3 million in the analysis.
• The department estimates added fuel costs for affected ship operators of $10.4 million (present value), giving a net monetized cost of $6.1 million over 2027–2036. But a single avoided large HFO spill could save many millions in cleanup and social/environmental damage, according to the same analysis.
• The change brings Canada’s rules into line with its international obligations under the International Maritime Organization (IMO) and MARPOL, and gives Transport Canada clearer enforcement tools (the new monetary penalties).
• If anything above is unclear in the proposal (for example, how costs will be passed to specific communities), the Canada Gazette notice and supporting analysis say more details are available from Transport Canada during the consultation.