Canadian Coast Guard Marine
Services Fees Information Bulletin

Number Sixteen
March 3, 1999

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.

Recent changes to Coast Guard's Marine Navigation Services Fees (MNSF), and the introduction of an Icebreaking Services Fee (ISF), have raised a number of application questions which are addressed below.

Marine Navigation Services Fees

Tonne-Kilometre Rate for Trips North of 60: When the MNSF was first introduced in 1996, domestic-flagged vessels were assessed an annual fee, based on the ship's gross tonnage. As the result of discussions with stakeholders, the fee was amended in July 1997 and Canadian-flagged bulk carrier and container ship operators moved to a tonne-kilometre rate; remaining domestic-flagged vessels moved to quarterly billing, again based on vessel gross tonnage.

Vessels operating exclusively in the north during the annual and quarterly fee application periods have been exempt from the MNSF. The application of the tonne-kilometre rate to bulk carriers and container ship operators trading in Canada's north has been less clear.

In keeping with Coast Guard's recognition of the socio-economic characteristics of Canada's north and our current practice regarding other Canadian-flagged vessels operating exclusively in Canadian waters north of 60ºN, the following clarifications are offered to bulk carrier and container ship operators:

• If a transit occurs between a port south of 60ºN and another port north of 60ºN, a tonne-kilometre fee is payable and will be calculated on the entire distance of that transit.
• If a transit occurs between a port north of 60ºN and another port north of 60ºN or between a port north of 60ºN and a point outside of Canadian waters, no fee is payable.

Icebreaking Services Fee 

30-Day Cap: The ISF structure implemented on December 21, 1998 provides for the fee to be payable a maximum of three (3) times per vessel, per 30-day period. The determination of the 30-day periods for each ship differs, depending upon the specifics of the transits involved; generally, it may be summed up as follows:

The first 30-day period will commence with the earlier of either the ship's first departure from a port located in the ice zone during the ice season or the ship's first entry during the ice season into the ice zone while en route to a Canadian port located in the ice zone. The first 30-day period cannot commence any earlier than December 21^st of each ice season.

The second and subsequent 30-day periods will commence with the first chargeable transit that occurs after the previous 30-day period, as explained in the following examples:

• if at the end of the previous 30-day period a ship is not en route to a Canadian port located in the ice zone, the next 30-day period will commence with the earlier of either the ship's first departure from a port located in the ice zone after the end of the previous 30-day period or the ship's first entry after the expiry of the previous 30-day period into the ice zone while en route to a Canadian port located in the ice zone.

• if, however, at the end of the previous 30-day period the ship is travelling between two ports located in the ice zone, the next 30-day period will commence as follows:

1. if the ISF was charged upon the departure, the next 30-day period will commence with the first departure from a Canadian port located in the ice zone after the expiry of the previous 30-day period;
2. if the ISF was not charged to the ship upon the departure, the next 30-day period will commence on the first day following the end of the previous 30-day period;

• if the ship is travelling from a port located outside the ice zone to a Canadian port located in the ice zone, the next 30-day period will commence with the ship's first entry into the ice zone after the expiry of the previous 30-day period or, where the ship has already entered the ice zone prior to the expiry of the previous 30-day period, the next 30-day period will commence on the first day following the end of the previous 30-day period.

Icebreaking Services in Western Lake Ontario: As per ss. 2(4) of the ISF schedule, a transit made exclusively along a route where the only icebreaking services available are ice routing and information services which are not necessary to transit that route, will not be subject to the fee. It has been determined that transits that remain exclusively in the western portion of Lake Ontario will not be subject to the ISF, as per this clause. The western portion of Lake Ontario is that portion of the ice zone area 3 situated west of a line drawn due south from Point Petre, Ontario, to the southern shore of the lake. While any ship transits that remain exclusively in the western portion of the lake (e.g. between Hamilton and Toronto) will not be subject to the ISF, those ship transits which begin or end in the western portion of the lake, but include a port located outside the western portion of Lake Ontario (e.g. between Rotterdam and Toronto) will be subject to the ISF.

Ice Classification Discounts: Under ss. 3(5) of the ISF schedule, ships that have satisfactorily demonstrated that they meet the criteria under Annex II are entitled to a discount in the ISF. Many agents and owners have been proactive and provided Coast Guard with copies of class certificates. Coast Guard has granted discounts where the eligibility for a discount has been satisfactorily demonstrated. We have also received many incomplete and/or expired certificates that do not demonstrate that the ships in question meet the discount criteria. In order to demonstrate a ship's eligibility for the ice classification discount, Coast Guard requires a legible copy of the complete class certificate including the face page and all subsequent pages and annexes. The certificate should include details of the annual endorsements necessary to demonstrate that the ice classification is still valid.

Also, with respect to ice classification discounts, we would like to clarify that those ships classified under Germanischer Lloyd with the prefix "100 A5" before their ice class will be considered equivalent to those with the prefix "100 A4". Finally, you should note that, with the exception of Registrul Naval Roman, the ice class discount will not be granted to ships classified under societies which do not appear in Annex II of the ISF schedule.

The Marine Services Fees Information Sheet provides interpretations of fee schedules imposed under the Oceans Act. These interpretations are not binding and, where a discrepancy between the two documents arises, the fee schedule will always take precedence.