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Marine Services Fees
You Asked About... The Marine Navigation Services Fee (MNSF) as Applied to Foreign Flag Cruise Ships
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.
Q. 1. Why am I being asked to pay the Marine Navigation Services Fee?
The Marine Navigation Services Fee (MNSF) is based on the premise that those who benefit directly from publicly funded services should contribute in part to the cost of those services. The MNSF recovers a portion of the total costs incurred by the Canadian Coast Guard in providing navigational aids and Vessel Traffic Services (VTS) to commercial ships.
Q. 2. What aids to navigation and VTS services am I being asked to pay for?
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.
Q. 3. Are cruise ships required to pay the MNSF fee?
Yes, foreign flag cruise ships are subject to payment of the fee.
Q. 4. How are cruise ships defined by the Coast Guard?
A cruise ship is used exclusively for the carriage of passengers and offers overnight accommodation.
Q. 5. Does the Coast Guard distinguish between Canadian registered passenger vessels and foreign flag cruise ships?
Yes, in Eastern Canada, domestic passenger vessels are billed quarterly by DFO’s Marine Services Fees Billing, Collection and Compliance (MSFBCC) office while foreign flag cruise ships are billed on a maximum number of three calls at Canadian ports in a thirty (30) day period. This pamphlet refers to MNSF rules related to the latter only.
Q. 6. Who decided that foreign flag cruise ships would be billed a flat fee according to the range in which the vessel’s Gross Tonnage (GT) falls?
In Coast Guard consultations with the cruise ship industry prior to the implementation of the MNSF, industry proposed the billing approach that continues to apply today.
Q. 7. How is the MNSF billed to foreign flag cruise ships?
In Eastern Canada, cruise ships are subject to payment of the MNSF on their first three calls at Canadian ports within a thirty-day period. In the Western Region, they pay on a maximum of 12 entries into Canadian waters in a twelve-month period.
Q. 8. If a cruise ship calls a Canadian port but does not embark or disembark passengers, does it still pay the MNSF?
Yes, cruise ships pay on their first three calls to Canadian ports in a thirty-day period in Eastern Canada, and on a maximum of twelve entries into Canadian waters in the Western Region, regardless of the nature of the call.
Q. 9. When does the 30-day clock for cruise ships begin in Eastern Canada and is it consecutive days?
The 30-day clock begins on the day of the arrival (i.e. Day 1) of the cruise ship at its first Canadian port of call and the thirty days are counted consecutively from that day.
Q. 10. What happens if a cruise ship calls at a Canadian port, leaves Canadian waters for an extended period and then returns to Canadian waters to call again at a Canadian port, all within a 30-day period?
The 30-day clock begins to tick from the day on which the cruise ship calls at its first Canadian port. The 30-day clock continues to run regardless of whether or not the cruise ship leaves Canadian waters and returns at a later date.
Q. 11. Do cruise ships pay the MNSF on fourth and subsequent calls at a Canadian port in Eastern Canada in a thirty-day period?
No, these additional calls are not subject to payment of the MNSF in Eastern Canada. However, in the Western Region, cruise ships pay the MNSF on a maximum of twelve entries into Canadian waters in a twelve-month period.
Q. 12. Who is responsible for invoicing foreign flag cruise vessels calling Canadian ports?
In Eastern Canada, the Canadian agent(s) for the foreign flag cruise ship during its stay in Canada is responsible for preparing and submitting an MNSF invoice, along with payment of the fee, for each of the vessel’s three calls at Canadian ports. In the Western Region, the Coast Guard has contracted Thunder Bay Airport Services Inc. to invoice foreign flag cruise ships.
Q. 13. Who does the agent of record send payments to?
In Eastern Canada, payment of the fee is to be sent to:
Department of Fisheries and Oceans
Revenue Accounting
200 Kent St., Station 10S047
Ottawa, Ontario
K1A OE6
In the Western Region, payment should be sent to:
Thunder Bay Airport Services Inc.
Att.: Kimberly Otway
Suite 340-100 Princess Street
Thunder Bay, Ontario
P7E 6S2
Q. 14. What happens if the shipowner/operator doesn’t pay the MNSF within thirty (30) days?
In Eastern Canada, the collecting agent sends a reminder to the vessel owner/operator, with a copy to the MSFBCC office, that the fee is overdue on the 31st day of the issuance of the invoice. If the owner/operator has not paid the fee within 60 days of the invoicing, the agent notifies the Coast Guard which then initiates collection action.
In the Western Region, Thunder Bay Airport Services Inc. will initiate follow-up action on non-payment of the MNSF on the 46th day of the issuance of the invoice. Delinquent accounts are turned over to the Coast Guard by Thunder Bay Airport Services Inc. for collection after 120 days.
Q. 15. Do Canadian agents have to report fourth and subsequent calls of cruise ships at Canadian ports in Eastern Canada in a 30-day period?
No, the MSFBCC office does not require that agents submit MNSF invoices for these vessels after they have paid on the maximum number of calls in a thirty-day period.
Q. 16. If a cruise ship makes numerous calls at Canadian ports in different regions of Eastern Canada during a cruise season, is the same MNSF applied?
Yes, the same MNSF applies to a cruise ship regardless of the Eastern Canadian region in which it calls.
Q. 17. Are foreign flag cruise ships charged the same MNSF fee in Eastern Canada and the Western Region?
No, MNSF fees charged foreign flag cruise ships in Eastern Canada vary from fees paid by these vessels in the Western Region.
Q. 18. What MNSF fee do foreign flag cruise ships pay in Eastern Canada and in the Western Region?
In Eastern Canada, foreign flag cruise ships are subject to a three-tiered fee based on the GT of the vessel:
- Ships of 150 GT or less pay CDN $300
- Ships of more than 150 GT but less than 22,500 GT pay CDN $500
- Ships of over 22,500 GT pay CDN $1500
up to a maximum of three calls in a thirty-day period.
In the Western Region,
- Ships of 1,000 GT and over pay an MNSF fee of CDN $640 + $0.028 per GT
- Ships of less than 1,000 GT pay a fee of CDN $300 + $9.50 per GT
up to twelve (12) calls in a twelve-month period.
Q. 19. Why are the MNSF fees charged cruise ships different in Eastern and Western Canada?
Fee structures for cruise ships in Eastern and Western Canada have been developed independently to accommodate regional billing requirements related to the cruise ship industries in Eastern and Western Canada.
Q. 20. What if a cruise ship initially enters Canadian waters on a Coasting Trade licence in one month but also operates as a foreign flag cruise ship during the same month after coming off its Coasting Trade licence? Does it pay the MNSF as a Coasting Trade vessel or as a foreign flag cruise ship?
The cruise ship would pay the higher of the two MNSF fees applicable to the vessel, but not both. This applies both in Eastern Canada and the Western Region.
Q. 21. What happens if a cruise ship operates during its first month in Canadian waters on a Coasting Trade licence and during subsequent months as a foreign flag cruise ship calling Canadian ports? Does it pay the Coasting Trade fee and the fee applicable to cruise ships?
Yes, the cruise ship would pay the MNSF fee applicable to it as a Coasting Trade vessel in the first month and the MNSF fee applicable to it as a foreign flag cruise ship in the subsequent months, to the maximums noted above for this type of vessel in Eastern Canada and the Western Region.
Q. 22. Are cruise ships eligible for the 5% discount for on board operating Precision Navigation Systems (PNS) meeting the Coast Guard interim standard?
Yes. All vessels seeking the 5% PNS discount must first apply and submit the required PNS systems documentation to the MSFBCC office for consideration and determination of the eligibility of the cruise ship. The MSFBCC office will notify cruise ship owners/operators in writing if their ship(s) qualify for the PNS discount.
Q. 23. What if I am operating in an area where the Coast Guard provides no navaids or VTS services?
The Canadian Coast Guard only charges a fee where it provides aids or services. If you believe that you are being billed for services that are not available to you, please write to:
Marine Services Fees Billing, Collection & Compliance Division
Department of Fisheries and Oceans
240 Bank Street, Station 3-37
Ottawa, Ontario
K1A 0E6
Fax number: (613) 990-4338
E-mail: msf-dsm@dfo-mpo.gc.ca
Q. 24. What if I don’t need or use the Coast Guard’s navaids? Do I still pay the MNSF?
Yes, if there are commercial aids in the geographic area in which your vessel(s) operate, you will have to pay regardless of usage.
Q. 25. Does the Coast Guard audit Canadian port calls of foreign flag cruise ships in Eastern Canada?
Yes, at the end of the government fiscal year, DFO’s Marine Services Fees Billing, Collection & Compliance Division reconciles paid MNSF invoices for cruise ships with Customs data on vessel movements in Eastern Canada.
Q. 26. If I want more information on the MNSF, whom do I contact?
For more information, please contact the Marine Services Fees Billing, Collection & Compliance Division of the Department of Fisheries and Oceans at 1-800-563-6295.
This pamphlet is the fifth in a series prepared by the Canadian Coast Guard.
Other Pamphlets in the Series include:
No. 2 You Asked About… The Marine Navigation Services Fee as Applied to Tonne-Kilometre Operators
