Marine Services Fees

You Asked About... The Marine Navigation Services Fee (MNSF) as Applied to Canadian Registered Vessels

Caution and Disclaimer

While all possible care was taken to insure consistency with the Marine Navigation Services Fee Schedule in this pamphlet produced by the Canadian Coast Guard (CCG), the Fee Schedule shall take precedence in the event of a discrepancy between the contents of this pamphlet and the Fee Schedule.

Background

The Marine Navigation Services Fee (MNSF) was officially introduced by the Minister of Fisheries and Oceans on June 1, 1996 as a user fee for navigational services provided by the Canadian Coast Guard. Subsequently revised on July 1, 1997, and again on October 1, 1998, the MNSF is assessed on all vessels operating in Canadian waters with the exception of fishing vessels, "government ships" and pleasure craft as defined by the MNSF Fee schedule. It was also decided that, effective October 1, 1998, the existing fee structure would be frozen (i.e. unchanged) for three years. Responses to questions below are based on provisions contained in the "Fee Schedule – Fees to Be Paid For Marine Navigation Services Provided By the Canadian Coast Guard" effective October 1, 1998.

Question 1:

Why am I being asked to pay the Marine Navigation Services Fee?

 

Answer to question 1:

The MNSF is based on the premise that those who benefit directly from publicly funded services should contribute to the cost of those services. The MNSF recovers a portion of the total costs incurred by the CCG in providing marine navigation services to commercial ships.

Question 2:

What aids to navigation and VTS services am I being asked to pay for?

Answer to question 2:

Aids to navigation for which you are being asked to pay a portion of the cost include visual aids such as lightstations, buoys, channel markers and day beacons; radar aids including reflectors, beacons and RACONs; aural aids including fog horns, bell and whistle buoys and Loran-C. Vessel Traffic Services (VTS) include the monitoring of vessel movements via VHF radio communications and shore-based radar surveillance equipment, the issuing of the Notice to Mariners and Notices to Shipping, the establishment of compulsory traffic routes and the provision of weather forecasts.

 

Question 3:

What if I am operating in a geographic area where the Coast Guard does not provide navaids or VTS services?

Answer to question 3:

The CCG only charges the MNSF where it provides aids or services. If you believe you are being billed for services that are not available to you, please write to the CCG at the address provided at the end of this brochure.

 

Question 4:

What if I am operating a vessel exclusively in the Eastern or Western Arctic?

Answer to question 4:

Owners/operators/charterers of domestic vessels, if operating exclusively North of 60º North latitude and between remote ports (see question below) are exempted from payment of the MNSF.

Question 5:

Are vessel operations between certain ports exempted from payment of the MNSF?

Answer to question 5:

Yes, the MNSF does not apply to vessels exclusively operating between locations pursuant to ss. 110.7(1) of the Income Tax Act which are listed in Revenue Canada Form T 4039 "Northern Residents Deductions – Places in Prescribed Zones".

Question 6:

What if my vessel is providing a service for, or on behalf of, the Government of Newfoundland and Labrador. Do I pay the MNSF?

Answer to question 6:

Provided the Newfoundland Provincial Government has officially informed the CCG of your status, your vessel(s) would be exempt from payment of the MNSF.

Question 7:

If I operate a barge in the Western Region, am I exempt from payment of the MNSF?

Answer to question 7:

Yes, barges operating in Canadian waters in the Western Region are exempt from payment of the MNSF; however, barges operating in Eastern Canada must pay the MNSF.

Question 8:

Does the MNSF apply to boom boats operated exclusively in a private booming yard in the Western Region?

Answer to question 8:

No, boom boats operated exclusively within private booming yards in the Western Region do not pay the MNSF.

Question 9:

What if I don’t need or use the Coast Guard’s navaids? Do I still pay the MNSF?

Answer to question 9:

Yes, if there are commercial aids in the geographic area in which your vessel(s) operate(s), you will have to pay.

Question 10:

Is the MNSF fee structure the same across the country?

Answer to question 10:

No, the MNSF fee structure is different in Eastern Canada and the Western Region.

Question 11:

For purposes of the MNSF, how are Eastern Canada and the Western Region defined?

Answer to question 11:

Eastern Canada includes the provinces of Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Ontario and Manitoba. The Western Region consists of British Columbia, Alberta and Saskatchewan.

Question 12:

Why are the MNSF fee structures different in Eastern Canada and the Western Region

Answer to question 12:

The MNSF fee structure is different in Eastern Canada and the Western Region to reflect the unique characteristics of commercial shipping in each of these geographic areas.

Question 13:

Will the Coast Guard send me an invoice for the MNSF fee for my domestic vessel(s)?

Answer to question 13:

Yes, DFO’s Marine Services Fees Billing, Collection and Compliance (MSFBCC) office will mail out the package including an invoice, a worksheet and an adjustment form.

Question 14:

How often will I receive an invoice for the Marine Navigation Services Fee?

Answer to question 14:

In Eastern Canada, the owner, operator, or charterer of a domestic vessel will be invoiced at the end of each billing quarter, based on the government fiscal year, namely:

  • Quarter 1: April, May and June
  • Quarter 2: July, August and September
  • Quarter 3: October, November and December
  • Quarter 4: January, February and March

In the Western Region, domestic vessels are billed on an annual basis once at the beginning of the fiscal year (i.e., in April).

Question 15:

How long do I have to pay the invoice?

Answer to question 15:

MNSF invoices in Eastern Canada and the Western Region are to be paid within 30 days of the invoice date. Interest will be charged on overdue accounts commencing on the 31st day after the invoice date compounded monthly, at the average Bank of Canada rate for the preceding month plus 3%.

Question 16:

What MNSF fee will I have to pay?

Answer to question 16:

For most domestic vessels in Eastern Canada, the current rate is $1.14 per Gross Tonnage (GT) of the vessel to a maximum of 50,000 GT, plus applicable GST/HST/PST unless the vessel is a ferry, bulker, self-unloader or containership.

In the Western Region, all domestic vessels pay the following:

• =>1,000 GT Annual fee of $5,900 + $0.45 per GT
• 15 GT to 1,000 GT Annual fee of $300 + $9.50 per GT
• Tugs of 5 GT but < 1,000 GT Annual fee of $300 + $9.50 per GT
• < 15 GT other than above Annual fee of $200 per vessel
• Fleet Rental Boat Annual fee of $25

Question 17:

What if my vessel is classified as a ferry?

Answer to question 17:

In Eastern Canada, for vessels that are classified as ferries in the Canadian Ship Registry, an MNSF rate of CDN $1.65 per GT to a maximum of 50,000 GT applies.

In the Western Region, the MNSF fee schedule does not make a distinction between ferries and other domestic vessels.

Question 18:

How do I know what I am being invoiced for? How do I know the amount of the invoice is correct?

Answer to question 18:

Included with your MNSF invoice, you will find a worksheet, which provides information for all vessels of the owner/operator/charterer. Included on the worksheet are: the client’s name, invoice number, vessel name(s), status of the vessel(s), Gross Tonnage (GT) of the vessel(s), the rate per GT, Gross MNSF Payable, Precision Navigation System (PNS) discount (if applicable), Net MNSF Payable and the Total Amount Owing for each vessel.

Question 19:

Can you explain why I have to pay a minimum MNSF fee?

Answer to question 19:

A minimum MNSF fee of CDN $25 per vessel per billing quarter must be paid by all domestic and foreign flag vessels operating in Canadian waters in Eastern Canada.

The minimum fee covers the costs related to mailing and processing of documents associated with the billing of domestic vessels.

There is no minimum fee payable in the Western Region.

Question 20:

Who do I send MNSF payments to?

Answer to question 20:

Payment of the MNSF, along with a copy of the invoice, is to be sent to the following address which is also indicated on your invoice and Statement of Account:

Fisheries and Oceans Accounting HUB
301 Bishop Dr.
Frederiction, NB
E3C 2M6

Question 21:

Will I receive a Statement of Account regarding my MNSF payments?

Answer to question 21:

Yes, you will receive a Statement of Account from Fisheries & Oceans’ Accounting HUB on a monthly basis, detailing transactions related to your payment of MNSF, Icebreaking and Dredging fees.

Question 22:

How do I tell the difference between MNSF, Maintenance Dredging Services Tonnage Fees and Icebreaking Fees in Eastern Canada on the Statement of Account issued by DFO Revenue Accounting?

Answer to question 22:

On the Statement of Account, you will notice in the left column, an invoice number consisting of 12 characters. The sixth character will have the letters B, D, C or T.

B corresponds to Icebreaking Fees

D corresponds to the MNSF

T corresponds to Dredging Fees

C indicates a Coasting Trade invoice.

Question 23:

In Eastern Canada, what happens if I don’t operate my vessel in one or more billing quarters? or for the entire year in the Western Region?

Answer to question 23:

You may be eligible for a credit if your vessel was inactive for an entire billing quarter. Included with your Invoice and Worksheet is a "Marine Navigational Services Fee Domestic Fleet Adjustment Form". This form is to be completed every quarter if there has been a change in your vessels’ billing status. You qualify for an MNSF credit for that quarter, provided the form is received within 10 days of the end of the quarter for which you are claiming the credit. If the required information is received before the MNSF invoice has been issued, the MSFBCC office will cancel the invoice for that billing quarter. After the invoice has been issued, the owner/operator will receive a credit note shortly after receipt of the notification of inactivity by the MSFBCC office.

For a domestic vessel to be exempted from payment of the fee in the Western Region, the vessel must be inactive for the entire billing year.

Question 24:

What if a domestic vessel is temporarily inactive, permanently inactive or is stationary?

Answer to question 24:

A temporarily inactive vessel is one that is not in the billing population for an entire billing quarter in Eastern Canada, or billing year in the Western Region. A permanently inactive vessel, on the other hand, is a vessel that will never be operational again as a result of being scrapped, sunk or converted to other uses and therefore does not pay the MNSF. A stationary vessel is one that remains in a fixed position for an entire billing quarter in Eastern Canada, or billing year in the Western Region, and, as such, is not subject to payment of the MNSF while it remains in the fixed position.

Question 25:

What happens if my vessel is laid up permanently or has been sold?

Answer to question 25:

Attached to the Invoice and Worksheet is the Marine Navigation Services Fee Domestic Fleet Adjustment Form. If your vessel is permanently inactive, you can fill in the corresponding code on the form so that the MSFBCC office can take your vessel out of the billing population. The back of the form provides explanations for the corresponding codes. If your vessel was registered in the Canadian Ship Registry, you should also contact Transport Canada regarding the vessel’s change in status at:

Transport Canada
Registry of Ships and Environmental Programs
330 Sparks Street – 9th Floor
Ottawa, Ontario
K1A 0N8
Tel: 1-877-242-8770

Question 26:

What happens if I sell a vessel after the billing quarter has started?

Answer to question 26:

If the owner or operator sells his/her vessel after the start of a billing quarter, the responsibility lies with the buyer to make arrangements with the seller to share the MNSF for the quarter in question, the exception being when the vessel has been temporarily inactive. If the owner/operator has not been using the vessel and then decides to sell the vessel after the beginning of a billing quarter, this situation would leave the buyer responsible for the entire billing quarter’s MNSF payment. The onus is on the buyer or seller of the vessel to inform the CCG of its sale/purchase.

Question 27:

I have a domestic vessel whose operation is limited by a Transport Canada Safety Inspection Certificate from May to October every year. Do I have to pay the MNSF for all three billing quarters in which the vessel was active?

Answer to question 27:

A vessel operating in only part of a quarter in Eastern Canada is still required to pay for the entire billing quarter. MNSF invoices for Canadian registered vessels are not pro-rated over a billing quarter. The exception is if your vessel is operating less than six months in a billing year and a copy of Transport Canada’s Vessel Safety Inspection Certificate (limiting the vessel’s operations to less than six months between May 1-Oct 31) has been provided to the MSFBCC office. In this case, the vessel will only be billed for Quarters 1 and 2.

This approach to billing domestic vessels with S.I.C. Certificates does not apply in the Western Region.

Question 28:

Are Canadian registered vessels eligible for a PNS (Precision Navigation System) discount?

Answer to question 28:

Yes, Canadian registered vessels in Eastern Canada and the Western Region are eligible for the PNS discount based on the same criteria and submission to CCG of the same documents used to determine the eligibility of Coasting Trade and other foreign flag vessels. If the domestic vessel qualifies for the PNS discount on the MNSF fee, this will be automatically applied to the invoice sent to the owner/operator of the vessel by the Coast Guard.

Question 29:

What if my domestic vessel is classified as a "bulker", "self-unloader" or "containership"?

Answer to question 29:

In Eastern Canada, your vessel may qualify to be billed the MNSF according to a cargo tonne-kilometre formula. The tonne-kilometre formula does not apply to vessels in the Western Region. For further details, please read the brochure entitled "You Asked About… The Marine Navigation Services Fee As Applied to Tonne-Kilometer Operators" (No. 2 of 7) or contact the CCG at 1-800-563-6295.

Question 30:

I have registered my yacht in the Canadian Ship Registry and use it exclusively for recreational (non-remunerative) purposes. Am I subject to payment of the MNSF?

Answer to question 30:

A registered yacht that is used exclusively by the owner/operator/charterer for non-remunerative purposes is not subject to payment of the MNSF.

Question 31:

How is the MNSF applied to tug/barge combinations?

Answer to question 31:

In Eastern Canada, tug/barge combinations, regardless of physical configuration or flag of registry, are treated as two separate vessels both of which are subject to payment of the MNSF.

In the Western Region barges are exempt from payment of the MNSF.

Question 32:

What if I use my Canadian registered vessel in international operations?

Answer to question 32:

If your Canadian registered vessel is engaged in commercial trips between Canadian ports and foreign locations, your vessel is still subject to payment of the MNSF fee. The vessel is still billed directly by the CCG on a quarterly basis in Eastern Canada and annually in the Western Region. However, if your Canadian registered vessel is used to provide services between two foreign points for an entire billing quarter, it is not subject to payment of the MNSF.

Question 33:

Why am I being invoiced the MNSF while other vessels performing the same service are not?

Answer to question 33:

The CCG is committed to applying the MNSF fairly and equitably to all vessels required to pay. However, in a marine environment with so many vessels engaged in such a wide variety of commercial marine activities, the CCG may not be fully aware of all of the vessels that should be paying the fee. The CCG is continually improving its ability to identify those vessels that should be paying the fee with the help of clients.

Question 34:

Am I paying more than foreign flag vessels due to the fact that my domestic vessel is being billed on a Gross Tonnage (GT) basis?

Answer to question 34:

Foreign flag and domestic vessels contribute according to their relative shares of the total GT of all vessels operating in Canadian waters. Domestic vessels are billed on vessel Gross Tonnage because of the availability and reliability of this data, and also because of the diversity of use of these vessels in Canadian waters.

Question 35:

What if I want more information on the MNSF or have a problem with my Statement of Account? Invoice? Worksheet?

Answer to question 35:

If you wish more information on the MNSF or if your worksheet is incomplete or incorrect, please contact the MSFBCC office at our toll-free number 1-800-563-6295. If you need help in deciphering your invoice or Statement of Account, please contact the DFO Accounting HUB at 855-859-6271.

This pamphlet is the first in a series prepared by the CCG.

Other pamphlets in the series include: