Canada Gazette, Part I, Volume 155, Number 24: Regulations Amending the Life Saving Equipment Regulations

June 12, 2021

Statutory authority
Canada Shipping Act, 2001

Sponsoring department
Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Inflatable survival equipment, footnote 1 which includes inflatable life rafts carried on board vessels, is serviced annually in order to ensure its proper deployment in all operating conditions. The annual servicing will verify that the appliance did not suffer degradation due to temperature variations, especially during frost periods, amongst other conditions. In cold weather, the inflatable survival equipment's material can become stiff and brittle. Sudden mechanical action such as inflation while in this state may lead to a puncture of the inflatable survival equipment. Annual servicing of inflatable survival equipment is the norm for all vessels, but the Life Saving Equipment Regulations (hereafter the Regulations) allow an extended servicing period of two years for vessels operating less than seven months per year, which is intended to apply to operators, such as tour operators, that do not operate during the winter. Although they may operate for less than seven months of the year, making them eligible for the two-year servicing period, fishing vessels may start the fishing season in early spring or extend their operating period into the winter months, thus exposing inflatable survival equipment to freeze-thaw cycles.

Background

Transport Canada (TC) is working to address a variety of navigation safety issues in Canadian waters. A review of the Regulations revealed that there is a safety risk associated with operating vessels in freezing temperatures with respect to the service requirements for inflatable survival equipment. The current Regulations require vessels to carry a variety of life saving equipment, including inflatable survival equipment for use in emergency situations. The Regulations also outline requirements to ensure that this equipment is properly maintained.

Schedule IV of the Regulations sets out both the servicing requirements for inflatable survival equipment carried on board vessels subject to the Regulations and the servicing interval requirements for such equipment. The servicing intervals (section 2 of Schedule IV) have been incorporated by reference into the Small Vessel Regulations (SVR) [paragraph 21(b) of the SVR] and the Fishing Vessel Safety Regulations (FVSR) [paragraph 3.29(b) of the FVSR]. Specifically, section 2 of Schedule IV requires annual servicing of inflatable life saving equipment, but allows for a servicing interval of two years if

The extended servicing period was established to accommodate operators of small cruise ships, such as tour vessels that operate their vessels exclusively during the summer period. However, it has since been determined that some vessels that only operate for seven months of the year may be exposed to freezing temperatures. There is a safety risk associated with inflatable survival equipment being exposed to freeze-thaw cycles, as these conditions may compromise the inflatable survival equipment, leading to a possible failure of the equipment in an emergency situation.

The Regulations do not apply to fishing vessels and the requirements they contain were not designed with fishing vessel safety in mind. However, in 2016, section 3.29 of the Fishing Vessel Safety Regulations was introduced to require that every life raft on board a fishing vessel comply with and be maintained in accordance with the provisions of the Life Saving Equipment Regulations. Many fishing vessels operate for only a few months of the year, depending on their fishing season and location of operation, so some operators of these fishing vessels qualify for the two-year servicing period.

Objective

The objective of the proposed amendment is to ensure that inflatable survival equipment is maintained in a safe manner in order to reduce the risk associated with the impact of freeze-thaw cycles on inflatable survival equipment.

Description

The proposed amendment would require that, in order to qualify for the two-year extended servicing period, the vessel must operate only during months in which the monthly historical average daily minimum air temperature is greater than 0° C according to the climate data from the weather station closest to the vessel's area of operation as compiled by the Department of the Environment.

The proposed amendment would apply to all inflatable survival equipment carried on Canadian vessels as covered under the Regulations, the FVSR and the SVR.

Regulatory development

Consultation

TC consulted with stakeholders on this proposed amendment at the national meeting of the Canadian Marine Advisory Council (CMAC), which was held in November 2019 in Ottawa. TC also provided an update to stakeholders on the proposed amendment at the CMAC meeting held in November 2020. Information was given regarding its current status and next steps and participating stakeholders were invited to make comments and ask questions. Stakeholders have not raised concerns or issues with the proposed amendment.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis has been undertaken to determine whether the proposed amendment may give rise to modern treaty obligations. This assessment examined the geographic scope and subject matter of the proposal in relation to modern treaties in effect and no modern treaty obligations were identified.

Instrument choice

The status quo (i.e. the baseline scenario) was not retained, as the unintended consequences of applying the Regulations in certain freeze-thaw circumstances could lead to potential safety issues for inflatable survival equipment on some vessels. In order to eliminate unintended consequences, a regulatory amendment was considered the most effective solution.

Regulatory analysis

The proposed amendment would restrict the extended service interval to vessels operating during months in which the average monthly minimum temperature is above the freezing point. This would mean that vessels operating in freezing temperatures would not be able to benefit from the 24-month extended service interval. The Regulations also apply with respect to some small commercial vessels. However, it is assumed that the small commercial vessels would continue with their current service intervals of two years since they operate in warmer temperatures. This analysis assumes that the majority of vessels impacted by the proposed amendment would be fishing vessels located in the Atlantic and Quebec regions, as fishing vessels located in these regions represent the largest quantity of vessels operating in freezing temperatures. footnote 2 The proposed amendment would result in an estimated incremental present value cost of $74,845 from 2022 to 2031 to fishing vessel operators in the Atlantic and Quebec regions.

Analytical framework

The costs and benefits for the proposed amendment have been assessed in accordance with the Treasury Board of Canada Secretariat (TBS) Canadian Cost-Benefit Analysis Guide, which can be found through the Cabinet Directive on Regulation: Policy on Cost-Benefit Analysis. Where possible, impacts are quantified and monetized, with only the direct costs and benefits for stakeholders being considered in the cost-benefit analysis.

Benefits and costs associated with the proposed amendment are assessed based on comparing the baseline scenario against the regulatory scenario. The baseline scenario depicts what is likely to happen in the future if the Government of Canada does not implement the proposed amendment. The regulatory scenario provides information on the intended outcomes as a result of the proposed amendment.

The analysis estimates the impact of the proposed amendment over a 10-year period from 2022 to 2031. Unless otherwise stated, all costs are expressed in present value 2019 Canadian dollars, discounted to 2021 at a 7% discount rate.

Affected stakeholders

The proposed amendment would primarily impact fishing vessel operators in the Atlantic and Quebec regions who are eligible for the two-year servicing period. There are roughly 15 000 fishing vessels in the Atlantic region and 1 200 fishing vessels in the Quebec region. Based on information gathered by TC, 40% footnote 3 of those fishing vessels could be eligible for the two-year servicing period, roughly 6 000 located in the Atlantic region and 480 located in the Quebec region. The two-year servicing period is not widely adopted by either region, as both regions encourage annual inflatable life saving equipment servicing.

Based on information available to TC, it is assumed that 10% of fishing vessels that could be eligible for the two-year servicing period operate outside of the summer season. From those fishing vessels that operate outside of the summer season, it is assumed that 3% actually have their inflatable survival equipment serviced every two years. Therefore, based on these assumptions, it is expected that the proposed amendment would impact approximately 20 fishing vessel operators in the Atlantic region and 2 fishing vessel operators in the Quebec region.

Baseline and regulatory scenarios

Under the baseline scenario, life saving equipment on vessels subject to the Regulations must be serviced on an annual basis. All vessels are required to keep a record of their servicing, regardless of the periodicity. Vessels that operate for less than seven months per year are eligible to service inflatable life saving equipment once every two years. The vessels that meet the criteria and that chose to have their inflatable life saving equipment serviced every two years must also keep maintenance manuals for that equipment which is serviced once every two years.

Under the regulatory scenario, the two-year servicing period would remain applicable to affected vessels that operate for less than seven months per year, but would be limited to those operating where the average local air temperature does not go below the freezing point. This additional requirement would mean that a portion of vessels previously eligible to opt for the two-year servicing period would no longer be able to benefit from that option.

Benefits and costs

The proposed amendment restricts the extended service interval option to vessels operating during months in which the average monthly temperature is greater than the freezing point. It is important to note that this analysis assumes that the most significantly impacted vessels are fishing vessels located in the Atlantic and Quebec regions. It is possible that the proposed amendment would affect a small portion of other types of vessels located across the country. However, given that the most significantly impacted vessels are only estimated to be 20 vessels in total, it is expected that the impact on vessels in other regions would be negligible.

Some fishing vessel owners in the Quebec region and the Atlantic region could incur costs, as these fishing vessels would no longer benefit from one service every two years and would require annual servicing. The proposed amendment would result in an estimated incremental cost of $74,845 over the 10-year analytical time frame, of which $7,465 would be incurred by fishing vessel owners in the Quebec region, and $67,182 by fishing vessel owners in the Atlantic region. The incremental costs also include $198 in administrative cost for record keeping ($178 for the Atlantic Region and $20 for the Quebec region).

Costs

The proposed amendment could impose costs that are mainly expected to affect fishing vessel owners in the Quebec and Atlantic regions. The total cost of $74,845 is broken down by an incremental compliance cost of $74,647 and an administrative cost of $198.

The affected fishing vessel owners would be required to service their inflatable survival equipment once every year, as opposed to once every two years. Servicing of inflatable survival equipment is done by servicing stations accredited by the manufacturers of the equipment and is estimated to cost an average of $1,100 footnote 4 per service. This would result in an incremental cost to fishing vessel owners in the Atlantic region of $67,182 and $7,465 to fishing vessel owners in the Quebec region. footnote 5 The incremental cost would begin in 2023 footnote 6 and occur every other year. As a result, the total compliance cost of the proposed amendment is estimated to be $74,647 between 2022 and 2031.

Under the baseline scenario, the Regulations have a requirement for vessel owners to keep a record of service certificates. Under the proposed amendment, the frequency of record keeping would increase for the estimated 20 affected stakeholders, from once every two years, to annually. It is assumed that it would take five minutes to file the record and the additional administrative burden would begin in 2023footnote 6 and occur every other year. Using an average salary of a fishing vessel owner, this would result in an incremental administrative cost to the Atlantic region of $178 and $20 for the Quebec region. The total administrative cost is estimated to be $198 between 2022 and 2031.

Benefits

By adding a stakeholder eligibility criterion for servicing every two years, the proposed amendment would mitigate the safety risk associated with the impact of freeze-thaw cycles on inflatable survival equipment. For example, freeze-thaw cycles can increase the risk of inflatable survival equipment not functioning properly. Therefore, by mitigating this risk, the proposed amendment has the potential to prevent injury and lives lost at sea. In addition, the proposed amendment would continue to provide flexibility for vessels operating in areas with mild weather by continuing to allow the two-year servicing period if all of the criteria are met.

Small business lens

The small business lens applies as there are impacts on small businesses associated with the proposal. According to Innovation, Science and Economic Development Canada, the fishing industry is made up of 99% small businesses, where a small business is defined as having 1 to 99 employees. As a result, this analysis assumes that all 20 of the affected stakeholders are small businesses. As previously mentioned, the two-year servicing period is not widely adopted within the fishing vessel industry in either region. This is because many of the fishing vessel owners already receive servicing annually. That being said, TC has not considered more flexible approaches to minimize the cost impacts on small business, as the number of affected stakeholders is already limited. Further, a flexible approach was not considered as the proposed amendment aims to mitigate safety risks arising from the use of life saving equipment that has been subjected to sub-zero temperatures. Over the 10-year analytical time frame, the estimated total cost of the proposed amendment would be approximately $4,000 per business, annualized to $540 per business.

One-for-one rule

The one-for-one rule applies since there is an incremental increase in administrative burden on business. Using the methodology developed in the Red Tape Reduction Regulations, the implementation of the proposed amendment would result in an annualized “IN” of $13, or $0.64 annualized administrative cost per business to the affected stakeholders (present value, using a 7% discount rate, expressed in Can$ 2012).

Regulatory cooperation and alignment

This proposed amendment is not related to a work plan or any formal regulatory cooperation framework. However, the proposal aligns broadly with the Transportation Safety Board of Canada's work to improve safety culture within the commercial fishing industry.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary analysis concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The proposed amendment focuses on improving the safety culture within the marine industry and is not expected to pose any barriers to equal participation, gender equality, diversity and inclusion. However, as noted in the section on costs and benefits, some vessel operators in the Quebec and the Atlantic regions (approximately 20) could be affected differentially by having to service their life rafts annually instead of every two years.

Implementation, compliance and enforcement, and service standards

Implementation

The proposed regulatory amendment would come into effect six months following final publication in the Canada Gazette, Part II, providing regulated entities with sufficient time to comply with the revised servicing requirements. Following publication in the Canada Gazette, stakeholders will be notified through a Ship Safety Bulletin and by the CMAC on the day of the Canada Gazette, Part II, publication.

Compliance and enforcement

Compliance and enforcement are done through regular regulatory or monitoring inspections by TC and inspectors will continue to apply regulations with the tools conferred by the Canada Shipping Act, 2001. The proposal does not constitute a new requirement and therefore does not require any additional measures.

Contact

Heidi Craswell
Manager/Senior Policy Advisor
Legislative, Regulatory and International Affairs
Marine Safety and Security
Transport Canada
Place de Ville, Tower C
330 Sparks Street, 11th floor
Ottawa, Ontario
K1A 0N5
Telephone: 343‑549‑5614
Email: heidi.craswell@tc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Administrator in Council, pursuant to subsection 120(1) footnote a of the Canada Shipping Act, 2001 footnote b, proposes to make the annexed Regulations Amending the Life Saving Equipment Regulations.

Interested persons may make representations concerning the proposed Regulations within 60 days after the date of publication of this notice. All such representations must be submitted online on the Canada Gazette, Part I, or, if submitted by email, post or other format, must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Heidi Craswell, Manager/Senior Policy Advisor, Legislative, Regulatory and International Affairs, Marine Safety and Security, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, 11th Floor, Ottawa, Ontario K1A 0N5 (email: heidi.craswell@tc.gc.ca).

Ottawa, May 27, 2021

Julie Adair
Assistant Clerk of the Privy Council

Regulations Amending the Life Saving Equipment Regulations

Amendment

1 Paragraph 2(1.1)(a) of Schedule IV to the Life Saving Equipment Regulations footnote 7 is amended by striking out “and” at the end of subparagraph (i), by adding “and” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

Coming into Force

2 These Regulations come into force on the day that, in the sixth month after the month in which they are published in the Canada Gazette, Part II, has the same calendar number as the day on which they are published or, if that sixth month has no day with that number, the last day of that sixth month.

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