Canadian Coast Guard
Marine Services Fees Information Bulletin

Number Twenty Three
November, 2008

[ PDF: 55Kb ]

This bulletin is provided to inform the greater marine community on developments affecting the Canadian Coast Guard's Marine Services Fees. These bulletins are issued as developments warrant. Comments on information contained in this Bulletin are welcome, along with additions or deletions to the mailing list. This Bulletin is also posted on the Canadian Coast Guard's Marine Services Fees website located at: http://www.ccg-gcc.gc.ca/msf-dsm/main.htm.

Marine Navigation Services Fee (MNSF) Moratorium on Commercial Transits to and from Locations North of Sixty

The Minister of Fisheries and Oceans has established a Moratorium on the application of the Marine Navigation Services Fee (MNSF) on transits made by commercial ships in Canadian waters to and from locations situated north of sixty degrees North latitude (i.e., north of sixty). The Moratorium is for a three-year period starting with this year's Arctic shipping season. This means that commercial ships making transits to and from locations north of sixty will be exempt from paying the MNSF during the Moratorium.

The Canadian Coast Guard (CCG) is now taking steps to adopt administrative procedures for billing and collection to implement the Moratorium. The CCG will be contacting companies that may benefit from these new measures. The Moratorium period will give the CCG the opportunity to study further the impact of the MNSF on the North, and to make recommendations to the Minister on the future application of these fees on transits to and from locations north of sixty.

Background

The CCG levies two Marine Services Fees on commercial shipping operations in Canadian waters. They are the MNSF and the lcebreaking Services Fee (ISF). The three-year Moratorium applies only to the MNSF. The ISF applies only to commercial shipping operating in south of sixty waters between December and April, and does not apply to shipping in the Arctic.

The MNSF currently has a set of exemptions for shipping operations in the Arctic. These exemptions include commercial transits occurring:

1. Between north of sixty ports (i.e., lqaluit to Pangnirtung);
2. Between north of sixty ports and international ports (i.e., lqaluit to Europe);
3. Between ports within "prescribed zones"; and
4. Between ports within "prescribed zones" and north of sixty ports.

Prescribed zones are defined under the Income Tax Act for the purposes of eligibility for the Northern Residents Deduction. Some prescribed zone ports are located south of sixty such as Churchill and all places in Labrador.

Prior to the Moratorium, the MNSF was levied on transits between north of sixty and south of sixty locations, since a portion of thes e transits occur in waters south of sixty where cost recovery currently applies. The application of the MNSF to these transits has been the subject of criticism from the Government of Nunavut and other Arctic stakeholders given current MNSF exemptions already in place for the Arctic, the additional cost this fee adds to the high cost of transportation to Northern locations, as well as many of these transits are for the resupply of northern communities.

To assess these concerns, the CCG conducted a review in 2006. Entitled Review of the Application of the Marine Navigation Services Fee on North of Sixty Commercial Shipping, its findings will be subject to further consultation between the CCG and stakeholders.

The Marine Services Fees Strategy and the Moratorium

In 2006, the Minister of Fisheries and Oceans initiated discussions between the CCG and the marine transportation industry to develop a long term arrangement on the Marine Services Fees. These discussions are intended to address longstanding industry concerns on the fees, while at the same time'respecting the Government's policy on user fees. The application of the MNSF to northern shipping has been part of these discussions.

In advance of the conclusion of these discussions, as a first step, the Moratorium on these northern transits is being applied immediately to eliminate one factor that adds to the cost of transportation to Arctic residents. The Moratorium is also consistent with the Government's Northern Strategy which promotes actions that support economic and social development in Canada's Arctic. The Moratorium will give the CCG adequate time to conduct a definitive appraisal of the impact of these fees on northern communities relying on Arctic resupply, and help inform future recommendations to the Minister on the application of these fees on transits to and from locations north of sixty.

Your Views are Important

During the Moratorium, the CCG will be conducting an analysis on the impact of the MNSF on marine transportation to and from north of sixty locations. A key component of this analysis will be the views of stakeholders. You are encouraged to provide your views on the Moratorium and the impact of the MNSF on northern shipping to:

Mr. Ted Wallace
Manager, Cost Recovery
Maritime Services Directorate
Canadian Coast Guard
5th Floor - 200 Kent Street
Ottawa, ON KIA OE6.

Mr. Wallace can also be reached by e-mail at Ted.Wallace@dfo-mpo.gc.ca, fax at 613-998-0460, or telephone at 613-990-0414.

For further information on the Marine Services Fees and previous Information Bulletins, please visit the CCG website at www.ccg-gcc.gc.ca/eng/CCG/Marine_Services_Fees.

Copies of the CCG's June 2006 Review of the Application of the Marine Navigation Services Fee on North of Sixty Commercial Shipping are also available on request.

For more information on the Marine Services Fees

Sandra Thompson
Cost Recovery, Canadian Coast Guard
Stn. 5S014, 200 Kent Street
Ottawa, Ontario, KIA OE6

Telephone: 613-990-1539
Fax: 613-998-3255
Email: sandra.thompson@dfo-rnpo.gc.ca
Marine Services Fees Toll Free Telephone: 1-800-563-6295