Canadian Coast Guard
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Marine Services Fees
You Asked About... The Icebreaking Services Fee (ISF)
Caution and Disclaimer
Care has been taken to ensure that the information provided in this pamphlet is consistent with the official Icebreaking Services Fee fee schedule. In the event of a discrepancy, the fee schedule shall take precedence.
Background
The Canadian Coast Guard (CCG), a sector of the Department of Fisheries and Oceans, implemented the Icebreaking Services Fee on December 21, 1998 for the 1998-1999 winter ice season. This fee is transit-based, and payable by commercial vessels where icebreaking services are available. The fee structure has remained unchanged since implementation.
Responses to the questions in this pamphlet are based on the Icebreaking Services Fee fee schedule entitled Fees To Be Paid For Icebreaking Services Provided By The Canadian Coast Guard. This fee schedule is available on the Canadian Coast Guard website.
Q. 1. Why am I being asked to pay the Icebreaking Services Fee?
The fee is based on the Government of Canada's cost recovery policy that sets-out that those who benefit directly from publicly funded services should contribute toward the cost of those services.
Q. 2. What icebreaking services am I being asked to pay for?
You are being asked to pay a portion of the Canadian Coast Guard's costs of providing icebreaking route assistance, ice routing and information services, and harbour breakouts.
Q. 3. When and where does the Icebreaking Services Fee apply?
The fee applies to all vessel transits to / from ports located in the three ice zones during the ice season. The ice zones and ice season dates are:
- Northeast coast of Newfoundland and Labrador (Jan.15-May 15);
- Lake Ontario (Dec. 21-24 and Apr. 1-15); and
- All other waters and estuaries of the Great Lakes, St. Lawrence River and Gulf of St. Lawrence (Dec. 21-Apr. 15).
A map of the ice zones is included.
Q. 4. Are there situations where the Icebreaking Services Fee does not apply?
Yes. The fee does not apply:
- To a transit, which occurs between two remote locations, or between a remote location and a port located north of 60° North latitude. Remote locations are defined as those locations listed in the Canada Customs and Revenue Agency Form T4039: Northern Residents Deductions - Places in Prescribed Zones. This form is available at: http://www.cra-arc.gc.ca/E/pub/tg/t4039/README.html
- To a vessel operated by, or on behalf of, the Government of the Province of Newfoundland and Labrador (supporting documentation from the Province of Newfoundland and Labrador is required);
- To any vessel 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;
- If a vessel stops at a Canadian port solely for the following reasons:
- To respond to a medical emergency;
- To undertake emergency repairs;
- To respond to a government department or agency request;
- To make an overnight stop as required due to the seasonal removal of lighted aids to navigation; or
- To take on bunkers that will be used exclusively to continue its voyage.
- To transits made by tugs or pilot boats solely in support of another self-propelled vessel; and
- To intra-port movements, i.e. vessel movements that remain entirely within the boundaries of a port.
Q. 5. Is there a maximum Icebreaking Services Fee payable?
Yes. The fee is payable by a vessel to a maximum of three (3) times per 30-day period, capped at eight (8) charges per ice season. The 30-day periods are specific to each vessel and are determined based on the dates of the billable transits involved.
Q. 6. When does the 30-day period start?
The first 30-day period will commence with the earlier of either the vessel's:
- First departure from a port located in the ice zone during the ice season; or
- The vessel's first entry during the ice season into an ice zone while en route to a Canadian port located in an ice zone.
The first 30-day period cannot commence earlier than December 21st of each ice season.
Q. 7. Are all vessels required to pay the Icebreaking Services Fee?
No. The fee applies to all vessels except fishing vessels, government vessels, or pleasure craft that transit an ice zone. Definitions of these vessels are provided in the fee schedule. All vessels not meeting these definitions are subject to the fee.
Q. 8. If a tug and barge operate in combination, do both vessels pay the Icebreaking Services Fee?
No. In this case, the fee is payable only by the tug.
Q. 9. Is the Icebreaking Services Fee payable if I don't use a Canadian Coast Guard icebreaker?
Yes. The fee is not a fee for service. The fee recovers a portion of the cost of having Canadian Coast Guard icebreaking services available through the ice season. In other words, the fee applies to all transits within the designated ice zones and season, regardless of whether or not an icebreaker provides direct route assistance.
Q. 10. Is the Icebreaking Services Fee payable if ice has not yet formed at the start of the ice season?
Yes. Where there is no ice at the beginning and / or end of the season, the fee applies. Conversely, if there is ice before the start of the ice season, or after the end of the ice season, there is no fee.
Q. 11. Do all vessels pay the same Icebreaking Services Fee?
Yes. All eligible domestic and foreign vessels that transit an ice zone are subject to the same transit-based rate of $3,100.
Q. 12. Are there any discounts for aggregates or gypsum?
Yes. Any vessel that has been charged the Icebreaking Services Fee that has transported aggregates or gypsum during that same ice season is eligible for a rebate. The rebate is applied after the end of that ice season according to the following calculation, and the submission of satisfactory documentation, as follows:
(a) for aggregates, any amount that:
(b) for gypsum, any amount that:
Rebatable tonnes mean the weight in tonnes of all cargo that is gypsum or aggregates, transported by a vessel within the designated ice zone and ice season.
Total tonnes means the weight in tonnes of all cargo that is transported by a vessel within the designated ice zone and ice season.
For further detailed information, please call (800) 563-6295.
Q. 13. Are there any discounts that a vessel might apply for?
Yes. Vessels submitting documentation demonstrating that a vessel is classified as Arctic Class or Canada Type, or that has an international ice class rating, which meets or exceeds the Canadian standards, can benefit from an ice class discount. Depending on the ice class, a vessel can receive either a 15, 25 or 35 per cent reduction from the $3,100 basic Icebreaking Services Fee.
Q. 14. How do I apply for an ice class discount?
To be eligible to receive the ice classification discount, you must submit a:
- Valid Transport Canada Arctic Pollution Prevention Certificate; or
- Valid Ice Class Certificate issued by a recognized classification society (all pages including annexes must be provided) accompanied by evidence of inspection by a society surveyor within the past twelve months.
The classification societies accepted by the Canadian Coast Guard are those recognized by Transport Canada. These societies are:
- American Bureau of Shipping
- Bureau Veritas
- Det Norske Veritas
- Germanischer Lloyd's
- Lloyd's Register of Shipping
- Nippon Kaiji Kyokai
- Polski Registr Statkow
- Register of Shipping of the USSR
- Registro Italiano Navale
- Registrul Navla Roman
Although classification societies often issue class certificates for periods of up to six years, proof of a recent inspection is required to ensure that the class granted at the time of the certificate's issuance remains valid. All documents should be sent to:
Marine Services Fees Billing, Collection & Compliance Division
Department of Fisheries and Oceans
240 Bank Street, Station 3-37
Ottawa, Ontario
K1A 0E6
Toll Free Phone: (800) 563-6295
Fax: (613) 990-4338
Email: msf-dsm@dfo-mpo.gc.ca
Q. 15. Another agent previously submitted ice class documentation. Do I have to resubmit the certificate?
No. If the proper documentation has already been submitted and the vessel has been given an ice class designation in the billing system, there is no need to resubmit the documentation.
However, it is recommended that you ensure that the proper certificates have been submitted to the Department of Fisheries and Oceans prior to the vessel's arrival in a designated ice zone in order to avoid billing problems. To check the ice-class status of a vessel, please call the Marine Services Fees Billing, Collection and Compliance (MSFBCC) office.
Q. 16. What if I can't get a copy of the vessel's latest inspection certificate? Can I still get the discount?
No. Proof that the vessel has been inspected within the past twelve (12) months is necessary to obtain the discount.
Q. 17. Do I have to pay taxes on the Icebreaking Services Fee?
It depends on the status of the owner/operator of a vessel. Generally speaking:
- If the owner/operator of either a Canadian or foreign flag vessel is a Canadian resident, then taxes are payable; and
- If the owner/operator of either a Canadian or foreign flag vessel is not a Canadian resident, then taxes are not payable.
Note: The above information is provided as a guideline only. It is the responsibility of the owner/operator to establish the tax status of a vessel with regard to the Goods and Services Tax (GST), Harmonized Sales Tax (HST), Provincial Sales Tax (PST), and Quebec Sales Tax (QST). If unsure of your obligations regarding this matter, please contact the Canada Customs and Revenue Agency for information and advice.
Q. 18. Why did I receive an invoice for a foreign flag vessel that was taxed?
All shipping agents must submit a Goods and Services Tax declaration form. If this form has not been submitted, then taxes will be applied. For further information concerning the Goods and Services Tax declaration form, please contact Marine Services Fees Billing, Collection & Compliance at (800) 563-6295.
Q. 19. I submitted a Goods and Services Tax declaration, and was still taxed as a foreign flag vessel, why?
In the preparation of Marine Navigation Services Fee invoices, some Canadian agents have listed themselves as the owners of the vessels. This information was incorporated into our billing databank. Since the Icebreaking Services Fee shares this data bank, any vessel identified as Canadian-owned via the Marine Navigation Services Fee would be taxed.
This situation can be easily corrected by providing documentation indicating the vessel is not owned or operated by a Canadian company or resident.
Q. 20. Who invoices the Icebreaking Services Fee and how do I pay?
Fee invoices are generated by the Department of Fisheries and Oceans, and are mailed to agents on a regular basis. Agents should send fee payments, along with a copy of the invoice to:
Department of Fisheries and Oceans
Revenue Accounting Division
200 Kent Street, Station 10S047
Ottawa, Ontario
K1A 0E6
Toll Free Phone: (800) 563-6295
Fax: (613) 990-4338
Q. 21. How long do I have to pay the bill?
Icebreaking Services Fee invoices are to be paid within 30 days of the invoice date. Interest is charged on overdue accounts commencing the 31st day after the invoice date. This charge is compounded monthly, at the average Bank of Canada rate for the preceding month plus three (3) per cent.
Q. 22. Who is responsible for paying the Icebreaking Services Fee?
The fee is applied to the vessel and is normally payable by the entity (e.g. ship-owner/operator or charterer) that has control of the vessel at the time of operations in the ice zones, during the ice season. Industry agreements (e.g. charter parties) may also specify who is responsible for payment of the fee.
Q. 23. I was the agent for some, but not all of the billable trips. How can I avoid receiving Icebreaking Services Fee invoices that should have been sent to other agents?
The Canadian Coast Guard has developed a Pre-Arrival / Pre-Departure notice form that agents may submit. On this form an agent can indicate which vessels and trips they will be responsible for, and if another agent is handling other parts of the same voyage. This form can be obtained by calling (800) 563-6295 or downloaded from the website below. Once completed, it should be either faxed (613-990-4338), or e-mailed (msf-dsm@dfo-mpo.gc.ca) to the MSFBCC office on a biweekly basis.
Q. 24. I received an Icebreaking Services Fee invoice that should have been sent to another agent, what do I do?
Fax a copy of the invoice to (613) 990-4338 and indicate the correct agent on the invoice. You may also send this informatino by e-mail at msf-dsm@dfo-mpo.gc.ca. If you do not know the correct agent, indicate "agent unknown" on the invoice.
Q. 25. Is there a time limit on submitting an Ice Class Certificate or evidence of inspection by a society surveyor in order to obtain the Ice Class discount for a vessel?
Yes. The Ice Class Certificates and Annual Surveys used to determine the eligibility of a vessel for an Ice Class discount must be submitted no later than the commencement of the subsequent icebreaking season. Certificates of Annual Surveys in support of the Ice Class discount received after the start of the following season will not be accepted nor will discounts be applied.
Q. 26. If I am the shipping agent of record for a vessel for which I received an Icebreaking Services Fee invoice, can I deduct the Ice Class discount from the invoiced amount and remit only the difference before submitting the Ice Class Certificate or Annual Survey?
No. Only the MSFBCC office can apply this discount. The Icebreaking Services Fee invoice must be paid and the agent of record is prohibited from deducting an Ice Class discount from the original invoiced amount. The Ice Class Certificate and/or the Annual Survey must be supplied before the discount can be applied.
Contact Information
If you have any questions regarding the contents of this pamphlet, please contact the Marine Services Fees Billing, Collection & Compliance office via a toll-free number at (800) 563-6295 or via e-mail at msf-dsm@dfo-mpo.gc.ca.
Other Pamphlets in the Series include:
No. 2 You Asked About… The Marine Navigation Services Fee as Applied to Tonne-Kilometre Operators
No. 5 You Asked About… The Marine Navigation Services Fee as Applied to Foreign Flag Cruise Ships
