Canadian Coast Guard Marine
Services Fees Information Bulletin

Number Fourteen
December 4, 1998

This bulletin is provided to inform the greater marine community on developments affecting the Canadian Coast Guard's Marine Services Fee (MSF) initiative. It is our intention that the bulletin will be issued as progress and developments warrant. Additions (or deletions) to the mailing list are invited.

With this issue of the Information Sheet, Coast Guard is announcing an amended proposal for the introduction of Coast Guard's Icebreaking Services Fee (ISF).

Readers will recall the original proposal was circulated with Issue #11 on June 12; that proposal called for a uniform, transit-based fee of $5,700 for commercial ships, to annually generate $13.3 million plus administration costs. The rate was to be capped for three years. Features such as a maximum of twelve chargeable transits per season for frequent traders and rate discounts for ice-capable ships rounded out the original package.

In response to concerns raised by stakeholders, the proposal has been amended and will now annually generate $6.65 million plus administration costs. Highlights of the revised transit fee structure proposal follow:

• A transit-based uniform icebreaking services fee will be implemented 21 Dec. 1998.
• This fee will apply to all ships except fishing vessels, government ships, or pleasure craft.
• This fee will apply to all transits to and/or from ports located in the ice zone during the ice season. A transit is defined as any ship movement that includes one departure port, one arrival port, and no intermediate port calls in between. Ship movements that remain entirely within the boundaries of a port will not be subject to the fee.
• The ice zone and ice season dates are: northeast coast of Nfld. (Jan. 15 - May 15); Lake Ontario (Dec. 21-24 and Apr. 1-15); all other waters and estuaries of the Great Lakes, St. Lawrence River and Gulf of St. Lawrence (Dec. 21 - Apr. 15)
• The annual cap on chargeable transits will be 8 per ship. As well, a cap of 3 chargeable transits per 30-day period, starting on December 21 and every 30-day period thereafter, will be introduced.
• Ships which provide documentation of ice-strengthening may be eligible for rate discounts as follows: discounts of 15% for Canada Type D, 25% for Canada Type C, and 35% for Canada Types A and B, and Arctic Class. Ships demonstrating internationally recognized ice-strengthening equivalents will also be eligible for the discounts.
• Port stops made solely for the purpose of bunkering, responding to a medical emergency, undertaking emergency ship repairs, responding to a government department or agency request to stop, or making an overnight stop required due to the seasonal removal of lighted aids to navigation will not be subject to the fee.
• Transits between two remote locations as listed in Revenue Canada's Form T4039 Northern Residents Deductions - Places in Prescribed Zones will not be subject to the fee.
• Tug and pilot boats providing support to a self-propelled ship will not be subject to the fee.
• A portion of the fees paid by ships transporting gypsum and aggregates may be subject to a partial rebate at year-end.

The revised per-transit base rate, which reflects both the reduced revenue level and the modifications to the original proposal as outlined above, will be set at $3,100.

Discussions with industry on the implementation of this user fee have been under way for some three years, with the latest efforts to address unresolved issues taking place during the month of October with an industry working group.

This dialogue and other consultation have resulted in the revised proposal.

Because the ice season is fast approaching, stakeholders are encouraged to review the amended proposal and provide any comments by December 15 to Tim Meisner, Director of Service Delivery Renewal, at the address below. Comments will be assessed before the fee is approved and implemented by the Minister of Fisheries and Oceans.

The full proposal and an assessment of comments received since June can be viewed on the Internet at the Web address provided below. Clients with a touch-tone telephone and a fax machine may obtain copies of these documents via an automated Fax-on Demand service at 1-416-362-1447. Clients can otherwise request information or clarification by calling the 1-800 number listed below.

In light of the 50% reduction in the revenue generated from the ISF, any cost savings arising over the next three years will not be reflected in reduced rates during this period. The fee will be reviewed after this period.

In the meantime, the Coast Guard will work in partnership with industry to address cost and service delivery issues.