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Marine Services Fees
You Asked About... The Marine Navigation Services Fee (MNSF) as Applied to Foreign Flag "Other Non-Canadian 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. What is the Marine Navigation Services Fee (MNSF) and why am I paying it?
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 (CCG) 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. Do all "Other Non-Canadian" ships pay the MNSF?
The MNSF Regulations exempt fishing vessels (both domestic and foreign), "government ships" and pleasure craft from payment of the user fee. All other ships operating in Canadian waters are subject to payment of the MNSF.
Q. 4. How does the Coast Guard define "Other Non-Canadian" ships for the purpose of applying the MNSF?
In Eastern Canada, "Other Non-Canadian" ships include, but are not limited to, foreign flag tugs, ferries, water taxis, anchor handling/resupply vessels, private research vessels, specialized vessels and any other vessel generally not exclusively engaged in the transportation of cargo. In the Western Region, the MNSF Fee Schedule does not distinguish between types of foreign flag vessels for purposes of the application of the fee.
Q. 5. If a foreign flag state-owned vessel calls a Canadian port, does it pay the MNSF?
No, state-owned vessels are considered to be "government ships" for the purpose of the MNSF and are not required to pay the fee.
Q. 6. How do "Other Non-Canadian" ships pay the MNSF?
In Eastern Canada, Canadian shipping agents handling these vessels when they call at a Canadian port are responsible for preparing MNSF invoices for these ships on behalf of the Canadian Coast Guard and remitting payment of the fees. In the Western Region shipping agents handling these vessels receive an invoice from Thunder Bay Airport Services Inc., the Coast Guard’s billing agent for the West.
Q. 7. I am the owner/operator of a U.S. registered tug calling Canadian ports but do not use a Canadian agent. How do I pay the MNSF?
Owner/operators of U.S. flag vessels are eligible to become Canadian Coast Guard collecting agents and remit MNSF documentation directly. For more information on becoming a collecting agent, please write to the address provided in the answer to Question 28.
Q. 8. Is the shipping agent handling a foreign flag ship liable for the payment of the fee?
No, the MNSF is applied on the vessel and is normally payable by the entity (e.g. the shipowner/operator/charterer) who has control of the vessel at the time of operations in Canadian waters in which the Coast Guard is providing navaids and VTS services. Industry agreements (e.g. charter parties) may also spell out who is responsible for payment of the fee. From an agent’s perspective, the MNSF should be treated as any of the other port/pilotage costs incurred by a foreign flag vessel calling a Canadian port.
Q. 9. How long does the owner/operator of an "Other Non-Canadian" vessel have to pay the MNSF?
Once the agent of record prepares and presents the MNSF to the owner/operator, it has thirty (30) days to pay the invoice. The agent of record normally remits payment on the owner/operator’s behalf to the Marine Services Fees Billing, Collection and Compliance (MSFBCC) office in Eastern Canada and to Thunder Bay Airport Services Inc. for the Western Region.
Q. 10. What happens if the owner/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 MSFBCC office 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. 11. Are "Other Non-Canadian" vessels "transiting" Canadian waters en route to or from a port in the U.S. subject to payment of the MNSF?
No, vessels that do not arrive at or depart from a Canadian port do not pay the MNSF.
Q. 12. Do "Other Non-Canadian" vessels operating exclusively in Canadian waters North of 60 Degrees North Latitude pay the MNSF?
No, these vessels are exempt from payment of the MNSF.
Q. 13. Who does the vessel’s Canadian shipping agent or U.S. owner/operator send MNSF 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 if an "Other Non-Canadian" ship enters a Canadian port for repairs, to take on bunkers or as a result of bad weather? Is it still required to pay the MNSF?
Yes, if an "Other Non-Canadian" ship operates in Canadian waters and enters a Canadian port for whatever reason, it is required to pay the MNSF.
Q. 15. Are the MNSF rates paid by "Other Non-Canadian" ships the same in Eastern Canada and in the Western Region?
No the MNSF rates paid by these ships differ in Eastern Canada and in the Western Region.
Q. 16. How are Eastern Canada and the Western Region defined for purposes of the application of the MNSF?
Eastern Canada is defined as the waters of the provinces of Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland. The Western Region encompasses the provinces of Saskatchewan, Alberta and British Columbia.
Q. 17. Why are the MNSF fees charged "Other Non-Canadian" vessels different in Eastern and Western Canada?
Fee structures for "Other Non-Canadian" vessels in Eastern and Western Canada have been developed independently to accommodate regional billing requirements and differences in Coast Guard costs incurred in the provision of navaids and VTS services to commercial shipping in Eastern and Western Canada.
Q. 18. Do "Other Non-Canadian" vessels pay the MNSF on each trip into Canadian waters?
In Eastern Canada, "Other Non-Canadian" ships pay an MNSF fee of CDN $0.38 per Gross Tonnage (GT) of the ship only once per calendar month, regardless of the number of trips into a Canadian port(s) during the month.
In the Western Region, all foreign flag ships pay CDN $640 + $0.028 per GT of the vessel, payable 12 times per twelve -month period and, if under 1,000 GT, they pay CDN $300 + CDN $9.50 per GT for a twelve month period.
Q. 19. If an "Other Non-Canadian" vessel makes numerous calls at Canadian ports in different regions of Eastern Canada in the same calendar month, does the same MNSF fee apply?
Yes, the same MNSF fee applies to the vessel although it pays the fee only on its first trip into Canadian waters in the calendar month.
Q. 20. In Eastern Canada, are shipping agents or U.S. owner/operators required to prepare an MNSF invoice for each trip into Canadian waters of an "Other Non-Canadian" ship in a calendar month?
No. but if the shipping agent or U.S. owner/operator prepares and submits a "No Charge" MNSF invoice for the second and all subsequent trips of an "Other Non-Canadian" ship in a calendar month, the Coast Guard will pay the agent a CDN $50 fee for each of these invoices submitted. This provision does not apply in the Western Region.
Q. 21. Why does the Coast Guard pay shipping agents for second and subsequent call invoices of "Other Non-Canadian" ships in Eastern Canada?
The Coast Guard requires this information for monitoring and analytical purposes and for rate setting/adjusting.
Q. 22. How do MNSF rates for "Other Non-Canadian" ships compare with MNSF rates for other ships in Eastern Canada?
MNSF rates for "Other Non-Canadian" ships are identical to those for ships engaged in Canada's Coasting Trade and identical, over the same time period, to the MNSF rates charged domestic vessels.
Q. 23. Are "Other Non-Canadian" ships subject to minimum and maximum fees?
Yes, in Eastern Canada these ships are subject to a minimum fee of CDN. $25 per invoice and a maximum of 50,000 GT or CDN $19,000 per month. In Western Canada, there is no minimum or maximum MNSF fee payable by foreign flag vessels.
Q. 24. Why do I have to pay a minimum fee?
A minimum fee of CDN $25 per vessel per billing quarter/invoice must be paid by all domestic and foreign flag vessels subject to the MNSF that are operating in Canadian waters. The minimum fee covers the cost of mailing and processing associated with the billing of domestic vessels.
Q. 25. If a foreign flag tug (i.e. "Other Non-Canadian" ship) calls at a Canadian port in combination with a barge that is loading/unloading cargo, does the tug pay the MNSF?
Yes, in Eastern Canada the tug pays the MNSF at a rate of CDN. $0.38 per GT once in the calendar month while the barge pays the MNSF regional rate based on the number of tonnes loaded and/or unloaded on each trip. Separate MNSF invoices should be completed for each vessel. In the Western Region only the tug pays the MNSF because barges are exempt from payment of the MNSF.
Q. 26 My vessel is operating off Sable Island or Hibernia. Am I required to pay the MNSF?
No, as long as the vessel remains outside of "Canadian waters". Only vessels operating in, or entering "Canadian waters" are required to pay the MNSF. "Canadian waters" are defined, for purposes of the application of the fee, as the limits of Canada’s Territorial Seas (i.e. 12 miles). In the case of vessels operating beyond the 12-mile limit, they are not subject to payment of the fee; however, when they enter "Canadian waters", the MNSF fee will be charged.
Q. 27. Are "Other Non-Canadian" ships eligible for the 5% discount on the MNSF owed for an on board operating Precision Navigation System (PNS) meeting Coast Guard's 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 "Other Non-Canadian" vessel. The MSFBCC office will notify "Other Non-Canadian" ship owners/operators in writing if their ship(s) qualify for the PNS discount.
Q. 28. Who decided that "Other Non-Canadian vessels" would be billed according to their Gross Tonnage (GT)?
Because of the diversity of vessels included in this category and to facilitate administration of the MNSF fee, the Coast Guard, in consultations with industry prior to the implementation of the MNSF, proposed the GT billing approach that continues to apply today. In the Western Region, the Western Marine Community developed the MNSF Fee Schedule based on regional requirements and this fee schedule was approved by the Coast Guard.
Q. 29. 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, ON K1A 0E6
Fax number: (613) 990-4338
E-mail: msf-dsm@dfo-mpo.gc.ca
Q. 30. 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. 31. Does the Coast Guard audit trips of "Other Non-Canadian" vessels subject to the MNSF?
Yes, on a lagged basis, DFO’s Marine Services Fees Billing, Collection & Compliance Division reconciles paid MNSF invoices for "Other Non-Canadian" vessels with Customs data on vessel movements in Eastern Canada.
This pamphlet is the sixth 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
No. 5 You Asked About… The Marine Navigation Services Fee as Applied to Foreign Flag Cruise Ships
