Canadian Coast Guard Marine
Services Fees Information Bulletin

Number Twenty One
March, 2006

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.

Review of the Application of Marine Navigation Services Fee on Vessels Trading to the Arctic

In 2005, the former Minister of Fisheries and Oceans agreed to a request from the Nunavut Minister of Economic Development to review the application of the Marine Navigation Services Fee on Arctic shipping. The position of the Government of Nunavut is that there should be no fees on Arctic shipping because of the already high cost of transportation to its communities. This view is supported by the Arctic Marine Advisory Board, comprised of stakeholders with an interest in maritime transportation issues concerning the Arctic.

Currently, the Canadian Coast Guard levies fees for navigation services it provides to commercial shipping in Canadian waters. These services include aids to navigation and Vessel Traffic Services. With specific regard to the Arctic, the Marine Navigation Services Fee does not apply to vessels operating exclusively in Canadian waters north of 60° North latitude, or between locations defined as remote ports via the Income Tax Act (i.e.: Places in Prescribed Zones). However, the Marine Navigation Services Fee does apply to ships trading between non-remote ports south of 60° North latitude and those defined as remote or those northern ports located north of 60° North latitude. For example, the fee would not apply to vessels transiting from Iqaluit to Pangnirtung but would apply to transits from Montreal to Iqaluit. It is this south of sixty to north of sixty trade that is at the centre of the review. At this time, the Coast Guard estimates that the total Marine Navigation Services Fees applied to all cargo conveyed by marine transportation destined for Nunavut to be approximately $170,000 annually.

We have been asked to consider the views of the Government of Nunavut and other stakeholders. Further, work has commenced on reviewing the transportation re-supply services available in both the Western and Eastern Arctic, and on determining the nature of the impact of these fees on transportation costs. The Canadian Coast Guard is interested in hearing from you.

We would encourage those interests that rely on, or are involved in marine transportation in the Arctic or elsewhere in Canada to submit their views and concerns regarding this matter. Should you wish to provide comments they should be directed to Ms. Sandra Thompson at the address provided at the end of this Bulletin. Comments would be appreciated by no later than April 24, 2006.

Amendment to the Marine Navigation Services Fee Tonne Kilometre Rate

On March 24, 2005, after consultation with stakeholders, the former Minister of Fisheries and Oceans approved an amendment to the Fee Schedule for the Marine Navigation Services Fee regarding the application of the tonne-kilometre rate to foreign-flag vessels. This amendment, which came into force on April 1, 2005, was necessary to resolve an unintended rate disparity between domestic and foreign-flag ships operating in the Great Lakes. More specifically, the amendment was required to ensure that the tonne-kilometre rate would apply to all eligible ships, regardless of flag. The main beneficiaries of this amendment are American-flag vessels. The full text of this amendment is reprinted below. Should you have questions regarding the amendment, please contact Ms. Sandra Thompson whose contact information is indicated below.

Text of Amended Provisions Regarding Tonne-Kilometre Rate

1. Subsection 6(1) of the Fee Schedule is replaced by the following:

6. (1) Subject to subsections (2), (3), (4) and section 10, the fee payable, for marine navigation services, by a non-Canadian ship whose principal purpose is the transportation of goods or merchandise, that is loading or unloading cargo at a Canadian port is, for cargo that is loaded, the amount obtained by multiplying the weight in tonnes of the cargo that is loaded, to a maximum of 50 000 tonnes, and for cargo that is unloaded, the amount obtained by multiplying the weight in tonnes of the cargo that is unloaded, to a maximum of 50 000 tonnes, by

(a) $0.152, in the Laurentian and Central Region;

(b) $0.089, in the Bay of Fundy ports in the Maritimes Region;

(c) $0.216, in the Northumberland Strait and PEI ports in the Maritimes Region;

(d) $0.107, in all other Nova Scotia ports in the Maritimes Region;

(e) $0.160, in the Chaleur Bay ports in the Maritimes Region;

(f) $0.216, in the Miramichi River ports in the Maritimes Region; and

(g) $0.152, in the Newfoundland Region.

2. Section 6 of the Fee Schedule is amended by adding the following after subsection (3):

(4) Subject to subsections (2) and (3) and subsections 8(4), (5) and (6), the fee payable, for marine navigation services, by a non-Canadian ship that is a bulk carrier or container ship that is operating between U.S. and Canadian ports in the Great Lakes is the amount obtained by the application of the formula prescribed in subsection 8(3).

3. Subsections 8(4) and (5) of the Fee Schedule are replaced by the following:

(4) All ships subject to fees under subsection (3) are required to submit documentation as to vessel type to the Minister within the first quarter in which the fee is payable; otherwise, the fees payable by the ship will be those prescribed in subsection 6(1).

(5) Notwithstanding the calculation of the fee in subsection (3), the fee payable by a bulk carrier or container ship shall not exceed $0.05 per tonne for aggregates and $0.15 per tonne for gypsum to a maximum of 50 000 tonnes and $0.16 per tonne for all other commodities.

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.

For more information please contact Sandra Thompson, Cost Recovery Officer, Cost Recovery Program, Canadian Coast Guard, Stn. 5S014, 200 Kent Street, Ottawa, Ontario, K1A 0E6. Telephone: (613) 990-1539; Fax: (613) 998-0460, Email: thompsons@dfo-mpo.gc.ca.

Phone: 1-800-563-6295

Fax: (613)-998-0460