Regulations Amending the Marine Safety Fees Regulations (Vessel Registry Fees): SOR/2024-29

Canada Gazette, Part II, Volume 158, Number 5

Registration
SOR/2024-29 February 19, 2024

CANADA SHIPPING ACT, 2001

P.C. 2024-147 February 19, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, makes the annexed Regulations Amending the Marine Safety Fees Regulations (Vessel Registry Fees) under paragraph 35(1)(g)^{footnote a} of the Canada Shipping Act, 2001 ^{footnote b}.

Regulations Amending the Marine Safety Fees Regulations (Vessel Registry Fees)

Amendments

1 Section 1 of the Marine Safety Fees Regulations ^{footnote 1} and the heading before it are replaced by the following:

Interpretation

Definition of Minister

1 In these Regulations, Minister means the Minister of Transport.

Annual adjustment

1.1 (1) The fees set out in these Regulations are to be adjusted in each fiscal year on April 1 by the percentage change over 12 months in the April All-items Consumer Price Index for Canada, as published by Statistics Canada under the Statistics Act, for the previous fiscal year.

Exception

(2) A fee referred to in subsection (1) is not adjusted in a fiscal year if the percentage change for that fiscal year is less than 1%.

Adjustment — subsequent fiscal year

(3) If subsection (2) applies with respect to a fiscal year, the percentage change is carried forward to the subsequent fiscal year. If the combined percentage change is less than 1%, the fee is not adjusted for that subsequent fiscal year and the combined percentage change is carried forward to the next subsequent fiscal year.

PART 1
Marine Cargo Inspection Fees

Definitions

Definitions

1.2 The following definitions apply in this Part.

Certificate of Readiness to Load

means a certificate referred to in subsection 119(3), 128(2) or 140(3) of the Cargo, Fumigation and Tackle Regulations. (certificat de navire prêt à charger)

Fitness to Proceed Certificate

means a certificate referred to in subsection 120(2), 129(2) or 141(2) of the Cargo, Fumigation and Tackle Regulations. (certificat d’aptitude au transport)

2 The heading “Fees” before section 2 of the Regulations is repealed.

3 The heading before section 9 of the Regulations is replaced by the following:

PART 2
Environmental Protection Inspection Fees

4 The heading before section 11 of the Regulations is replaced by the following:

PART 3
Foreign Vessel Inspection Fees

5 The heading before section 13 and sections 13 to 16 of the Regulations are replaced by the following:

PART 4
Vessel Registry Fees

Payment of fee

13 A fee for a service referred to in this Part is payable on application for that service.

Canadian Register of Vessels

14 The Canadian Register of Vessels consists of a general part and another part entitled the Small Vessel Register. The applicable fees for processing an application or request for a service related to the general part or Small Vessel Register of the Canadian Register of Vessels are set out in sections 15 and 16, respectively.

Canadian Register of Vessels — general part

15 (1) The following vessels must be registered, listed or recorded in the general part of the Canadian Register of Vessels:

• (a) a vessel of more than 15 gross tonnage;
• (b) a vessel that is about to be built or that is under construction in Canada;
• (c) a vessel in respect of which a mortgage is registered;
• (d) a vessel that has an approved name; and
• (e) a pleasure craft.

Fees

(2) The fee payable for processing an application or request for a service related to the general part of the Canadian Register of Vessels set out in column 1 of the table to this subsection is the fee set out in column 2.

TABLE

Fees — General Part of the Canadian Register of Vessels

Item	Column 1 Service	Column 2 Fee ($)
1	Process an application for the initial registration of a vessel	310
2	Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	310
3	Process an application to renew a certificate of registry	90
4	Process an application to issue a provisional certificate of registry	190
5	Process an application to record a vessel that is about to be built or is under construction in Canada	80
6	Process a request to extend the reservation of an approved name of a vessel	65
7	Process a request to replace a certificate of registry or a provisional certificate of registry	50
8	Process a request to issue a certificate of deletion	30
9	Process an application to transfer the ownership of a registered or recorded vessel, other than by special sale	200
10	Process an application to transfer the ownership of a registered or recorded vessel via special sale	200
11	Process an application to transmit a mortgage in case of bankruptcy of the mortgagee or assignee	200
12	Process an application to transmit the ownership of a vessel in case of bankruptcy of the owner	200
13	Process an application to transmit a mortgage in case of death of the mortgagee or assignee	200
14	Process an application to transmit the ownership of a vessel in case of death of the owner	200
15	Process an application to change the name of a registered vessel	130
16	Process an application to change the port of registry of a registered vessel	80
17	Process an application to register a mortgage, including its discharge	180
18	Process an application to transfer a mortgage	120
19	Process an application to change the order of priority of registered mortgages	120
20	Process a request for a certified transcript	75
21	Process a request for an uncertified transcript	20
22	Process a request to conduct a historical search for a vessel	120
23	Process an application to issue a certificate of bare-boat registry	470
24	Process an application to extend a certificate of bare-boat registry	190
25	Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	470
26	Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	190

Registration or listing in only one part

(3) Vessels that are to be registered or listed under this section must not be registered or listed in the Small Vessel Register.

Services with no fees

(4) No fee is payable for the processing of an application or request for the following services related to the general part of the Canadian Register of Vessels:

• (a) reporting alterations to a registered vessel;
• (b) updating the name or address of an owner;
• (c) appointing an authorized representative;
• (d) updating the name or address of an authorized representative, mortgagee or assignee; and
• (e) transmitting to a surviving joint owner in case of death of another owner.

Small Vessel Register

16 (1) A vessel of 15 gross tonnage or less, other than a pleasure craft referred to in paragraph 15(1)(e) or a vessel referred to in paragraphs 15(1)(b) to (d), must be registered or listed in the Small Vessel Register.

Applications or requests

(2) An application or request for a service related to the Small Vessel Register must be presented in respect of

• (a) a single vessel;
• (b) a fleet of two or more identical vessels, including government vessels, that are owned by the same owner and
  • (i) are human-powered,
  • (ii) are 8.5 m in length or less and are propelled by sail alone, or
  • (iii) are equipped with one or more primary engines that have an aggregate propulsion power of less than 7.5 kW; or
• (c) a group of two or more vessels, other than government vessels, of 5 gross tonnage or less that are owned by the same owner and that are registered at the same time under different certificates of registry.

Fees

(3) The fee payable for processing an application or request for a service related to the Small Vessel Register set out in column 1 of the table to this subsection is the fee set out in column 2.

TABLE

Fees — Small Vessel Register

Item	Column 1 Service	Column 2 Fee ($)
1	Process an application for the initial registration of a vessel	110
2	Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	110
3	Process an application for the initial registration of a group of vessels or a fleet	190
4	Process an application to issue a certificate of registry for a group of vessels or a fleet that was previously registered in Canada	190
5	Process an application to renew a certificate of registry for a vessel, group of vessels or fleet	90
6	Process an application to issue a provisional certificate of registry	190
7	Process a request to replace a certificate of registry or a provisional certificate of registry	50
8	Process a request to issue a certificate of deletion	30
9	Process an application to transfer the ownership of a registered vessel, group of vessels or fleet	120
10	Process an application to transmit the ownership of a registered vessel, group of vessels or fleet in case of bankruptcy by the owner	120
11	Process an application to transmit the ownership of a registered vessel, group of vessels or fleet in case of death of the owner	120
12	Process a request for a certified transcript	75
13	Process a request for an uncertified transcript	20
14	Process a request to conduct a historical search for a vessel	120
15	Process an application to issue a certificate of bare-boat registry	470
16	Process an application to extend a certificate of bare-boat registry	190
17	Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	470
18	Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	190

Services with no fees

(4) No fee is payable for the processing of an application or request for the following services related to the Small Vessel Register:

• (a) reporting alterations to a registered vessel;
• (b) updating the name or address of an owner;
• (c) appointing an authorized representative;
• (d) updating the name or address of an authorized representative; and
• (e) transmitting to a surviving joint owner in case of death of another owner.

Transitional Provision

Pending application for service or request

6 (1) An application or request for a service sent before the day on which these Regulations come into force is subject to the fees that were in force on that day.

Sending date

(2) For the purpose of subsection (1), the application or request for a service is considered to be sent on the day on which it is delivered or, if it is sent by mail, the day on which it is mailed, with the date of the postmark being evidence of that day.

Repeal

7 The Vessels Registry Fees Tariff ^{footnote 2} is repealed.

Coming into Force

8 These Regulations come into force on April 1, 2024, but if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

Transport Canada’s vessel registry fees do not reflect the current cost to TC of providing vessel registry services, because the Vessels Registry Fees Tariff has not been significantly modified since it came into force in 2002. As a result, existing fees recover only a small proportion of the cost of providing these services, and Canadian taxpayers are funding the majority of the costs for services that provide many direct benefits to vessel owners. For example, a variety of stakeholders benefit from having their vessels registered, including pleasure craft owners who travel internationally or want an official name for their vessel; fishing companies; shipping companies; passenger vessel companies; ferry operators; tourism companies (whale watching, sport fishing, outfitters, diving, outdoor camps, river rafting, sailing); and companies providing other commercial marine services, such as dredging, tug and barge services, and offshore support. Such stakeholders must register their vessels. In addition, the Canadian Coasting Trade Act requires that domestic trade be carried on board Canadian registered vessels. Vessel registry services provide evidence of such registration. Additionally, vessel registry provides evidence of nationality (i.e. through a certificate of registry), protection of the flag state, and permits owners to use their vessel as collateral.

Many of these vessel registry services (e.g. vessel registration, updates to owner and vessel information, transfers of ownership, etc.) apply to both the LVR and SVR; however, there are inconsistencies between the LVR and SVR in terms of which services TC charges for. For example, in the LVR, there are fees charged for issuing provisional certificates, issuing replacement certificates, and issuing transcripts, while in the SVR, there are no fees charged for these same services. With regard to renewing certificates of registry in the LVR, no fees are charged, while in the SVR, fees are charged to clients when renewing their certificates of registry.

Currently, TC’s marine safety fees are spread across several regulations, which creates a burden for stakeholders who must refer to multiple regulations to determine the fees payable.

Background

TC operates a vessel registry program that administers the registration of vessels in Canada. Program services include registering new vessels, updating owner and vessel information, registering and discharging marine mortgages, transferring ownership of vessels, issuing vessel transcripts,^{footnote 3} conducting historical research on vessels, and listing bare-boat chartered vessels.^{footnote 4} As Canada’s national ship registry, TC’s vessel registry contains information on all vessels registered in Canada, as well as information on foreign vessels that are being temporarily listed in Canada. Through TC’s vessel registry program, Canada fulfills its obligations as a party to the United Nations Convention on the Law of the Sea, which requires that every member state establish the conditions for granting nationality to vessels, for registering vessels in its territory, and for the right of these vessels to fly its flag.

Vessel registration requirements are included in Part 2 of the Canada Shipping Act, 2001. Unless it is exempted under the Vessel Registration and Tonnage Regulations, a vessel must be registered if it is not a pleasure craft, is wholly owned by qualified persons, and is not registered, listed, or recorded in a foreign state. Data collected during the registration process is the foundation for other marine safety and security programs and departments including inspection and certification, enforcement, investigation, search and rescue, and research.

As of May 1, 2022, there were over 71 000 registered vessels in Canada. Vessels are registered in either the LVR or the SVR, depending on their size (gross tonnage) and other factors. The LVR contained 47 155 vessels. Of these, fishing vessels and pleasure crafts made up 83% of registered vessels. Large vessel registrations are concentrated in the Atlantic and Pacific regions. Some pleasure craft are also registered, namely those that have a marine mortgage, want an approved name, or that intend on travelling outside Canadian waters. The SVR contained 23 985 vessels. Of these, approximately 94% are workboats, passenger vessels or fishing vessels. Of note, 84% of small registered vessels are especially small (i.e. less than five gross tons). Small vessel registrations are spread across the country.

Many vessel registrations in the LVR and SVR contain out-of-date information, making it challenging for TC and other enforcement officials to identify a vessel’s current owner (especially in an emergency) and to deal with issues arising from wrecked, abandoned or hazardous vessels. The prevalence of this out-of-date information is due in large part to TC’s process of automatically renewing large vessel registrations. TC does not require clients to provide updated owner and vessel information, but rather simply prints and mails certificates of registry to clients every three years.

TC is extending renewal periods for certificates from three to five years in the LVR and a fee will be charged for this service. These changes will ensure consistency in the renewal process for both the LVR and SVR. While the renewal process and validity period are non-regulatory in nature, the fee charged for this service will be added through these amendments to the Marine Safety Fees Regulations.

With vessel registration, vessels 15 gross tonnage or less have access to the Small Vessel Compliance Program as well as monitoring inspections by TC. Both these programs help vessel owners to understand all the regulatory requirements that apply to them. For vessels more than 15 gross tonnage, vessel registration gives automatic access to the Canadian inspection regime, which helps ensure that vessels participate in the statutory inspection program that is conducted by TC. The purpose of this program is to confirm that a vessel meets all the requirements related to safety, safety equipment, and vessel construction, which helps ensure the overall safety of vessels on the water in Canada.

Marine Safety Fees Regulations

The Regulations are part of a broader initiative by TC to update many marine safety fees and consolidate them into the Marine Safety Fees Regulations, which will allow stakeholders to find many marine safety fees in one place. The MSFR came into force on April 1, 2021, and contains fees related to marine cargo, foreign vessel inspections, and prewash services. The introduction of fees in the MSFR was considered the first phase of introducing and consolidating fees in the MSFR. Adding the vessel registry fees to the MSFR represents the second phase.

Fee modernization

The modernization of TC’s fee regime is a key component of the Department’s transformation plan. TC’s service and fee regime is being updated in consultation with stakeholders to provide more predictable service to industry, ensure the sustainability of TC services, and ensure that those who benefit from services pay an appropriate share of the costs of the services.

The fees set out in the Vessels Registry Fees Tariff have not been updated in 20 years and do not reflect the time or the cost to TC of providing these services to the industry. Existing fees recover approximately 30% of the total cost of providing vessel registry services. The remaining program costs are absorbed by TC and, by extension, Canadian taxpayers. However, the majority of the benefits from these services accrue directly to the requesters of the vessel registry services.

Service Fees Act

A modernized cost recovery regime for vessel registry will be consistent with the principles underlying the Service Fees Act, which represents the Government’s commitment to modernizing its services and delivering value to Canadians by establishing service standards, remitting a portion of fees paid to clients when service standards are not met, adjusting fees annually by the consumer price index, and making the results public through annual reporting. The modernized regime will also align with the goals of Transportation 2030: A Strategic Plan for the Future of Transportation in Canada, a modernization initiative championed by the Minister of Transport.

Low-materiality Fees Regulations

Currently, the Low-materiality Fees Regulations (LMFR) specify that certain fees (i.e. the ones that would be deemed material based on their values) in the Vessels Registry Fees Tariff are deemed “low-material.” The Regulations will repeal the entire Vessels Registry Fees Tariff, which will make the reference to the Tariff in the LMFR defunct. The criteria for low-materiality set out in the LMFR apply to all updated vessel registry fees in the MSFR. However, the Regulations will add an annual adjustor to the MSFR so that all vessel registry fees, regardless of their materiality, will be adjusted on April 1 every year by the percentage change over 12 months in the April All-items Consumer Price Index for Canada, published by Statistics Canada, for the previous fiscal year. This will enable all TC’s marine fees to keep pace with inflation, thereby remaining current and relevant from a financial point of view. An adjustor in the MSFR that applies to all fees will also ensure that all fees are adjusted in a consistent manner, not just the material fees, making it easier for clients to understand annual fee adjustments, and for TC to track and report on its fees.

Objective

The objectives of the Regulations are to

• ensure fees more closely reflect the cost to TC of providing vessel registry services;
• ensure that those who benefit directly from such services pay a greater share of the costs; and
• improve clarity, consistency, and ease of reference for clients.

Description

The Regulations will repeal the Vessels Registry Fees Tariff and incorporate the fees into the Marine Safety Fees Regulations. The Regulations will also adjust the MSFR structure slightly to allow for the future inclusion of additional TC marine safety fees, allowing fees to be found more easily by TC’s clients. The fees for vessel registry services are presented in tables 1 and 2 below, listing the previous and new fees to show which fees will increase, decrease, be added or removed, or remain unchanged.

The fees are not expected to impose a heavy burden on companies, communities, or individuals, as the fee increases are modest in comparison to the costs of owning and operating a vessel. Furthermore, the fees to renew vessel registrations (the vessel registry service delivered most often) will be payable only every five years. While demand for client-desired services may or may not be impacted by the fee increases, they represent a smaller subset of the overall requests for vessel registry services.

Specifically, TC will modernize its vessel registry fees by

• charging new fees for some services that were previously provided for free, including a new fee for clients to renew their large vessel registrations;
• increasing fees for some services;
• in some cases, lowering or removing fees; and
• adjusting fees annually based on the Consumer Price Index.

The Regulations will repeal the 24 fees in the Vessels Registry Fees Tariff (23 fees under the general part, also called the Large Vessel Register, and one fee under the Small Vessel Register) and introduce 44 fees in the Marine Safety Fees Regulations (26 fees under the general part, and 18 fees under the Small Vessel Register). Therefore, there will be 20 additional vessel registry fees added to the Regulations.

These changes will ensure that TC’s fees more accurately reflect the cost to TC of providing the services and aim to have those who benefit directly from services pay a greater share of the costs.

In addition to the cost to TC of providing vessel registry services, TC also conducted the following analyses to determine the new fees:

• Public-private benefit assessment: TC considered the level of benefit that clients receive from vessel registry services, beyond the benefit received by the Canadian public generally.
• International comparisons: TC examined how much other countries charge, if anything, for the same or similar vessel registry services.
• Stakeholder impact considerations: TC examined the economic context in which the Canadian marine industry and individuals operate, as well as their unique circumstances and ability to pay fees.

These analyses and methodology informed the prices that were proposed in the Vessel Registry Program fee proposal, which was consulted upon with external clients in the summer and fall of 2021.

Since the prepublication of the proposed fees in the Canada Gazette, Part I, TC has updated how the fees are presented in the Regulations. In the Canada Gazette, Part I, prepublication, similar services that have the same fee (for example services #9 to #14 in the large vessel register relate to transfers of ownership and transmissions and all have a fee of $200) were listed in the same row and counted as one fee. To improve the readability of the fees in the Regulations and provide consistency in fee presentation and regulatory format across its regulations, TC has now put these fees into separate rows and counts each as an individual fee. The net financial impact to TC’s clients remains unchanged as a result of this update.

Table 1: Service fees for the general part (i.e. Large Vessel Register)
Note: “No fee” indicates that TC provides the service at no charge to the client.

Vessel registry services — LVR	Fee prior to the amendments	Fee after the amendments	Cost recovery rate after the amendments
1. Process an application for the initial registration of a vessel	$250	$310	55%
2. Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	$250	$310	55%
3. Process an application to renew a certificate of registry	No fee	$90	32%
4. Process an application to issue a provisional certificate of registry	$150	$190	68%
5. Process an application to record a vessel that is about to be built or is under construction in Canada	$25	$80	43%
6. Process a request to extend the reservation of an approved name of a vessel	$125	$65	70%
7. Process a request to replace a certificate of registry or a provisional certificate of registry	$50	$50	72%
8. Process a request to issue a certificate of deletion	$50	$30	64%
9. Process an application to transfer the ownership of a registered or recorded vessel, other than by special sale	$150	$200	72%
10. Process an application to transfer the ownership of a registered or recorded vessel via special sale	$150	$200	72%
11. Process an application to transmit a mortgage in case of bankruptcy of the mortgagee or assignee	$150	$200	61%
12. Process an application to transmit the ownership of a vessel in case of bankruptcy of the owner	$150	$200	61%
13. Process an application to transmit a mortgage in case of death of the mortgagee or assignee	$150	$200	61%
14. Process an application to transmit the ownership of a vessel in case of death of the owner	$150	$200	61%
15. Process an application to change the name of a registered vessel	$250	$130	70%
16. Process an application to change the port of registry of a registered vessel	$150	$80	69%
17. Process an application to register a mortgage, including its discharge	$150	$180	55%
18. Process an application to transfer a mortgage	$150	$120	74%
19. Process an application to change the order of priority of registered mortgages	$150	$120	74%
20. Process a request for a certified transcript	$50	$75	64%
21. Process a request for an uncertified transcript	$20	$20	59%
22. Process a request to conduct a historical search for a vessel	$10	$120	64%
23. Process an application to issue a certificate of bare-boat registry	$200	$470	56%
24. Process an application to extend a certificate of bare-boat registry	$200	$190	68%
25. Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	$150	$470	56%
26. Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	No fee	$190	68%

The following services will be provided at no charge:

• Process a request to report alterations to a registered vessel;
• Process a request to update the name or address of an owner;
• Process an application to appoint an authorized representative;
• Process a request to update the name or address of an authorized representative, a mortgagee or assignee; and
• Process an application for transmission to a surviving joint owner in case of death of another owner.

Table 2: Service fees for the Small Vessel Register (SVR)
Note: “No fee” indicates that TC provides the service at no charge to the client.

Vessel registry services — SVR	Fee prior to the amendments	Fee after the amendments	Cost recovery rate after the amendments
1. Process an application for the initial registration of a vessel	$50	$110	20%
2. Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	$50	$110	20%
3. Process an application for the initial registration of a group of vessels table a4 note a or a fleet table a4 note b	$50	$190	17%
4. Process an application to issue a certificate of registry for a group of vessels or a fleet that was previously registered in Canada	$50	$190	34%
5. Process an application to renew a certificate of registry for a vessel, a group of vessels or a fleet	$50	$90	32%
6. Process an application to issue a provisional certificate of registry	No fee	$190	68%
7. Process a request to replace a certificate of registry or a provisional certificate of registry	No fee	$50	72%
8. Process a request to issue a certificate of deletion	No fee	$30	64%
9. Process an application to transfer the ownership of a registered vessel, group of vessels or fleet	$50	$120	43%
10. Process an application to transmit the ownership of a registered vessel, group of vessels or fleet in case of bankruptcy by the owner	$50	$120	43%
11. Process an application to transmit the ownership of a registered vessel, group of vessels or fleet in case of death of the owner	$50	$120	43%
12. Process a request for a certified transcript	No fee	$75	64%
13. Process a request for an uncertified transcript	No fee	$20	59%
14. Process a request to conduct a historical search for a vessel	No fee	$120	21%
15. Process an application to issue a certificate of bare-boat registry	No fee	$470	56%
16. Process an application to extend a certificate of bare-boat registry	No fee	$190	68%
17. Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	No fee	$470	56%
18. Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	No fee	$190	68%
Table a4 note(s) Table a4 note a A group of vessels consists of two or more vessels of five gross tonnage or less that are owned by the same person and that are registered at the same time under different certificates. Return to table a4 note a referrer Table a4 note b A fleet consists of two or more identical vessels that have the same owner and that are registered under the same certificate. Return to table a4 note b referrer

The following services will be provided at no charge:

• Process a request to report alterations to a registered vessel;
• Process a request to update the name or address of an owner;
• Process an application to appoint an authorized representative;
• Process a request to update the name or address of an authorized representative; and
• Process an application for transmission to a surviving joint owner in case of death of another owner.

Annual adjustment to fees

The Regulations will adjust all fees contained in the MSFR each fiscal year on April 1 by the percentage change over 12 months in the April All-items Consumer Price Index for Canada, published by Statistics Canada, for the previous fiscal year. This will enable all TC’s marine fees to keep pace with inflation, thereby remaining current and relevant from a financial point of view. This will also ensure all fees are adjusted in a consistent manner; make it easier for clients to understand annual fee adjustments; and make it easier for TC to track and report on its fees.

Directive on Charging and Special Financial Authorities

The fee changes were developed in accordance with the requirements of the Directive on Charging and Special Financial Authorities, which, among other things, outlines management practices and controls to ensure that external and internal charging practices for services are consistent across government and that the amounts charged respect legislative limits. In accordance with the Directive, TC developed and published a fee proposal and held public consultations in the summer and fall of 2021.

Regulatory development

Consultation

Fee proposal

TC conducted a variety of activities to engage with stakeholders and the public about the amendments.

From August 13, 2021, to January 25, 2022, TC published its Fee proposal for Vessel Registry Program on the Department’s Let’s Talk Transportation consultation webpage. The fee proposal described the proposed amendments to fees, and the context, rationale, costing and pricing analyses that were considered in developing the proposal. The Let’s Talk Transportation consultation webpage included a discussion forum for stakeholders to comment and submit feedback to TC. In August 2021, TC emailed members of the Canadian Marine Advisory Council, National Recreational Boating Advisory Council, and its established network of Indigenous communities, to promote the consultations. TC also promoted the consultations on social media. As well, TC shared the proposal with Fisheries and Oceans Canada and the Canadian Coast Guard, as these departments share some clients with TC (e.g. fishing vessel owners). At the November 2021 national meeting of the Canadian Marine Advisory Council, TC presented to four standing committees and stakeholders were invited to submit their views on the consultation webpage. TC also shared the fee proposal with its established network of Indigenous communities and presented on the changes at a meeting with the Inuit Tapiriit Kanatami (ITK) on January 25, 2022.

Feedback received on the fee proposal and TC responses

During the fee proposal consultation period from August 13, 2021, to January 25, 2022, TC received 17 comments from stakeholders, including the public, a ferry operator, an Inuit regional government and a Métis group. TC summarized this feedback in a What we heard report, which was posted on TC’s “Let’s Talk Transportation” webpage on April 20, 2022.

Feedback on the fee proposal focused on:

• reducing the impact of the proposed fees on small businesses (e.g. lower fees or exemptions, phasing in the fees);
• ensuring the renewal process for certificates of registry is aligned for large and small vessels and that changes are better communicated to stakeholders;
• requesting that same day service be available for registering a vessel; and
• ensuring that consideration be given to the higher cost of living in Northern communities and how to better communicate vessel registration requirements there.

TC took these considerations into account, and, where appropriate, incorporated them into the development and design of the Regulations.

Coordination with other government departments

The Department of Fisheries and Oceans and the Canadian Coast Guard are affected by the regulatory changes because they and their stakeholders must register their vessels. As well, vessel registry data is used to identify vessels in an emergency, as well as wrecked, abandoned, and hazardous vessels, which are a safety hazard. TC consulted with both organizations on the regulatory changes, and they did not raise concerns.

Prepublication in the Canada Gazette, Part I

The Regulations were prepublished in the Canada Gazette, Part I, for comment between April 8 and June 7, 2023. TC promoted the consultations by emailing the members of the Canadian Marine Advisory Council as well as Indigenous communities through TC’s regular newsletter to its Indigenous network.

During this 60-day consultation period, TC received 15 comments from eight stakeholders. This feedback was published on the Government of Canada’s Online Regulatory Consultation System on June 24, 2023.

Overall, the feedback was varied, with some stakeholders expressing concerns about potential additional costs to clients of the new and increased fees, while others recommended that service delivery be improved. It is important to note that during the consultation process, TC maintained key fee design measures with the specific objective of mitigating the impact of increased fees on clients (i.e. group and fleet discounts). TC has also implemented a periodic review of its fees and service performance to help improve its service delivery. As part of this initiative, TC will review both service standards and fees on a periodic basis (i.e. every 5 years) and consult with stakeholders on any changes or updates being considered. No specific changes were made to the Regulations themselves as a direct result of the feedback summarized below, as the feedback had previously been addressed (e.g. mitigating fee impacts by maintaining discounts), or it wasn’t practical to incorporate (e.g. delegation of the program to different jurisdictions). The table below provides additional details, responses, and rationales for why no additional changes were warranted.

Table 3: Feedback on the prepublication in the Canada Gazette, Part I

Feedback category	Feedback	TC responses
Fees and large vessel renewal process	One stakeholder expressed agreement with the proposed increases in fees.	No action was deemed necessary in response to this feedback.
	One stakeholder suggested that the fees would be well supported if the additional revenues were invested in Vessel Registry, but that it was unclear where the revenues would be directed.	TC’s intention is to invest the additional revenues into the program to improve service delivery.
	One stakeholder questioned how the large vessel renewal process can be implemented without a regulatory amendment.	A regulatory amendment is not needed to implement the large vessel renewal process, as the Canada Shipping Act, 2001 (subsection 54(3)) gives the Chief Registrar the authority to specify the validity period for every certificate of registry. The new renewal process for large vessel registrations will include a five-year validity period, which will provide TC with updated information about vessels and owners.
Costs to clients	A few stakeholders expressed concerns with the fee increases and the five-year renewal process, considering them to be additional costs, taxes or burden on TC clients and Canadian taxpayers.	The new fees will result in a rebalancing of costs from Canadian taxpayers to users of vessel registry services. The new fees better reflect what it costs TC to provide the services and will help ensure that those who benefit directly from the services pay a greater share of the costs. TC recognizes that increasing some fees and introducing a large vessel renewal fee will impact clients financially, but also notes that, for some services, vessel owners will pay less in fees, as six fees are decreasing, and one is being eliminated. Overall, the new fees will reduce the burden on Canadian taxpayers.
Service delivery and standards	One stakeholder suggested that fees and service standards be set after TC has digitized its service delivery, to reflect the future cost recovery and service delivery model.	TC has developed an electronic vessel registry system, which is expected to be fully accessible and operational when the Regulations come into force. TC has also committed to a periodic review of its fees, to ensure that fees and services standards continue to remain aligned with the service delivery processes.
	One stakeholder suggested there should be no fee for uncertified transcripts, as they are produced digitally without involvement of a vessel registrar.	Issuing uncertified transcripts does not, in every case, automatically require the direct involvement of or intervention by the registrar. However, there are costs to TC to issue the transcripts and maintain the systems that support the vessel registry information. The fee for this service helps TC recover some of these costs. As such, TC did not agree that this fee should be eliminated.
	One stakeholder considered the service standard window (up to 30 days) to be too long, as banks and other parties involved in business transactions rely on timely proof of title and other documentation from the Vessel Registry. The stakeholder also suggested that service standards in Canada should be comparable with those in other countries.	Service standards represent a public commitment on behalf of TC to deliver a consistent, predictable, and measurable level of performance to clients. As part of this proposal and TC’s public commitment to delivery timely service to clients, TC is shortening several service standards (from 30 to 5 business days and from 45 to 30 business days). As a result, all service standards will be either 2, 5, or 30 business days, depending upon the service requested. TC’s service standards reflect the Department’s ability to deliver services based on its clients’ needs, its available resources and existing service delivery processes. TC has also implemented a periodic review of its fees and service standards to ensure that they continue to remain up to date, as service delivery continues to improve.
	One stakeholder suggested that expedited service be available for a fee.	TC assessed the feasibility of offering expedited services and concluded that it does not currently have the resources or capacity to support this type of service delivery. As part of the periodic review of fees and service standards in the future, the feasibility of this option will be re-evaluated.
	One stakeholder suggested that the Vessel Registry be fully searchable by the Canadian public.	Vessel Registry information is publicly available online through the Vessel Registration Query System.
	One stakeholder suggested giving the authority for vessel registration to the provinces, which process car registrations effectively.	The suggested approach would not be practical or desirable. The Canada Shipping Act, 2001 gives the authority for the registration of vessels in Canada to the Government of Canada. This aligns with Canada’s obligations as a party to the United Nations Convention on the Law of the Sea, which states that every member sets the conditions for granting nationality to vessels, for registering vessels in its territory, and for the right of these vessels to fly its flag. As such, the suggestion is not something that TC would consider.
Consultation methods	One stakeholder questioned whether the prepublication in the Canada Gazette, Part I, of the proposed Regulations had been sent to a particular organization for comment.	TC sent notice of the prepublication in the Canada Gazette, Part I, to the organization in question and to the Canadian Marine Advisory Council (CMAC) and, through its regular newsletter, to Indigenous communities. The CMAC is comprised of approximately 2 000–2 500 regional and national organizations and industry representatives, as well as government, unions, and members of the public who have an interest in marine safety and security. In addition, a link to the prepublication was included in the signature block of all Vessel Registry staff so anyone interacting with Vessel Registry during the comment period received the link. Approximately 3 600 emails were sent to clients with the link during the consultation period. TC also raised the prepublication in its regular meetings with stakeholders, including with the organization referred to in the stakeholder’s comment.
Other	One stakeholder disagreed with the description of the Canadian inspection regime in the "Background" section of this Regulatory Impact Analysis Statement. The stakeholder did not agree with the statement that registration fees give automatic access to the Canadian inspection regime.	Adjustments have been made to the relevant text in that section to clarify that it is registration, and not registration fees, that gives automatic access to the Canadian inspection regime.
	One stakeholder identified challenges they faced in transferring ownership of their vessel.	This comment did not relate to the Regulations directly, but rather to the stakeholder’s particular situation, which coincided with the prepublication consultation period for the Regulations. The individual used the comment feature to explain their situation, regarding the transfer of their vessel to a new owner. In this case, TC reviewed the specific circumstances and then reached out directly to the stakeholder to resolve the issue.

Changes made to the Regulations after the prepublication

Although no changes were required to the regulatory text in response to comments received during the prepublication, the Regulations were updated to improve the structure of the services and fees (i.e. how they are presented). Individual services now have an individual fee distinctly listed, instead of several services sharing the same fee, which has resulted in a list of 44 fees instead of 33. This approach improves the clarity of the Regulations and provides consistency in presentation and format across TC’s fee regulations. It should be noted that these updates were made only for clarity and precision; the net impact to TC’s clients remains unchanged as a result of these updates, as the fees were not adjusted.

In addition, the coming-into-force date was changed from the day of publication in the Canada Gazette, Part II, to April 1, 2024. This new coming-into-force date aligns with a new fiscal year, making it simpler for TC and clients to plan for the implementation of the new fees. Also, as the fees will be adjusted by inflation every year on April 1, a coming-into-force date of April 1, 2024, means that the first inflation adjustment will occur one full year after the new fees are implemented, which will be in 2025. This change lowered the estimated costs and benefits in the first period of the analysis (see “Regulatory analysis” section below).

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the Regulations give rise to modern treaty implications. The assessment examined the geographic scope and subject matter of the Regulations in relation to modern treaties in effect. After examination, treaty obligations were identified in relation to ensuring minimum impacts on harvesting activities by treaty groups while making regulations. Initial engagement with Indigenous and Inuit communities was undertaken in 2021–2022. Engagement efforts, including email communications and updates in relevant newsletters which also targeted potentially impacted treaty groups, were undertaken by TC in alignment with the prepublication of this regulatory proposal in the Canada Gazette, Part I, to ensure that these groups had the opportunity to comment, and that TC remains in compliance with its treaty obligations in advance of the Regulations coming into force in 2024. No additional comments or questions were received as a result of these engagement efforts.

Instrument choice

The Government of Canada promotes a balanced approach to financing Government programs, whereby those who receive and benefit from program services should pay a reasonable share of the costs for those services. TC’s existing vessel registry fees do not reflect the current cost to TC of providing vessel registry services because the Vessels Registry Fees Tariff came into force in 2002 and has not been significantly modified since. Therefore, taxpayers are currently funding a majority of the costs for services which provide many direct benefits to vessel owners.

Regulations were chosen as the instrument to address this issue to ensure a more equitable balance of the financial burden of service delivery costs between service recipients and taxpayers. Fees must be set in regulations using the regulatory authorities provided under the Canada Shipping Act, 2001. Therefore, to amend existing fees and introduce new ones, regulatory amendments are necessary. No non-regulatory options were considered.

Regulatory analysis

The Regulations will reduce some existing vessel registry fees, which would save vessel owners $0.53 million in total (present value expressed in 2024 Canadian dollars, discounted to the year 2024 at a 7% discount rate) between 2024 and 2033. However, the Regulations will also increase other vessel registry fees, which would impose an additional cost of $7.50 million in total (present value expressed in 2024 Canadian dollars, discounted to the year 2024 at a 7% discount rate) on vessel owners during the same period. As a result, the total net cost to vessel owners would be $6.97 million from 2024 to 2033. Increased fees will be used to recover some of the costs incurred by TC to provide the vessel registry services and, therefore, reduce the burden on Canadian taxpayers. For this reason, the cost to vessel owners would be equivalent to the cost recovered by TC.

To facilitate the implementation of the Regulations, TC will inform stakeholders of the changes via various communication channels. However, since such communications are expected to take place prior to the Regulations being registered, their associated costs are not included in this analysis, as per analytical requirement prescribed in the Treasury Board of Canada Secretariat (TBS)’s Policy on Cost-Benefit Analysis. It is also worth noting that the development of a new electronic vessel registry application is underway. The application aims to modernize the vessel registry database to improve usability for various levels of government stakeholders. However, the development of this new application is not directed by the Regulations. Rather, it was a policy decision, and the system would be implemented irrespective of the Regulations. Therefore, the costs associated with the application, development, and maintenance of this application, as well as the associated benefits, are not included in the analysis. However, the system will be used to support the implementation and charging of fees.

Data used in this analysis (i.e. the number of annual transactions per service type) were also used to develop the analysis to inform the service fees proposed in the Fee proposal for Vessel Registry Program, which was shared for consultations with external stakeholders in the summer and fall of 2021. In addition, the Regulations will not impose additional operational costs on other federal departments and agencies other than to help ensure that their vessel registration information remains accurate and up to date.

While no comments were received that affected the cost-benefit analysis during the prepublication of the proposed Regulations in the Canada Gazette, Part I, the analysis has been revised because the coming-into-force date of the Regulations has been changed to April 1, 2024, which lowered the estimated costs and benefits in the first year of the analysis. As a result, the net cost to vessel owners was reduced from $7.46 million to $6.97 million.

A detailed cost-benefit analysis report is available upon request.

Analytical framework

Benefits and costs associated with the Regulations are assessed by 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 Regulations. The regulatory scenario provides information on the intended outcomes as a result of the Regulations.

The Regulations will ensure that a greater portion of the total costs for vessel registry services are covered by the recipients of those services.

Following TBS’s Policy on Cost-Benefit Analysis, the scope of this analysis is at the societal level, analyzing costs and benefits attributed to Canadians. Therefore, costs and benefits associated with changes in fees on Canadian vessel owners would have a neutral impact on Canadian society.

Unless otherwise stated, benefits and costs are in present values expressed in 2024 Canadian dollars, discounted to the year 2024 at a 7% discount rate, for a 10-year analytical period between 2024 and 2033, with the year 2024 being when the Regulations are expected to be registered.

Affected stakeholders

The Regulations will affect Canadian vessel owners or operators who use vessel registry services. As of May 1, 2022, there were 71 140 registered vessels in Canada.

The LVR, which contained 47 155 of those vessels, is primarily used to register

• commercial vessels and government-owned vessels of 15 gross tonnage or more;
• vessels of any size which have marine mortgages registered with TC or an approved vessel name;
• pleasure crafts for which the owner wishes to have an approved vessel name, official number and port of registry, or on which the owner wishes to take on international voyages; and
• vessels under construction that owners wish to temporarily record in the LVR.

The SVR, which contained 23 985 vessels, is for all non-pleasure craft under 15 gross tonnage that do not have a mortgage or an approved name, and commercial and government-owned vessels, barges, and commercial river rafts. It is worth noting that foreign vessels leased for operation in Canada need to be listed as bare-boat chartered vessels in either the LVR or SVR. Operators of these vessels, however, are normally Canadians who pay related fees and, therefore, such bare-boat chartered vessels are considered Canadian vessels in this analysis.

Baseline and regulatory scenarios

Under the baseline scenario, vessel owners would pay the existing fees associated with vessel registry services, whereas under the regulatory scenario, they would be required to pay for the vessel registry services in accordance with the new fees when the Regulations come into force. The new electronic vessel registry application would exist under both the baseline and regulatory scenarios, since it would have been implemented irrespective of the Regulations.

Tables 4 and 5 below show the expected number of annual transactions per service type in the LVR and SVR, within the time frame of this analysis. The numbers were estimated based on the average number of transactions according to the most recent historical data from 2017 to 2020.^{footnote 5}

Table 4: Annual transactions per service type — Large Vessel Register

Vessel registry services — LVR	Average number of annual transactions
1. Process an application for the initial registration of a vessel	1 090
2. Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	71
3. Process an application to renew a certificate of registry	6 908
4. Process an application to issue a provisional certificate of registry	20
5. Process an application to record a vessel that is about to be built or is under construction in Canada	129
6. Process a request to extend the reservation of an approved name of a vessel	81
7. Process a request to replace a certificate of registry or a provisional certificate of registry	127
8. Process a request to issue a certificate of deletion	394
9. Process an application to transfer the ownership of a registered or recorded vessel, other than by special sale	2 209
10. Process an application to transfer the ownership of a registered or recorded vessel via special sale	61
11. Process an application to transmit a mortgage in case of bankruptcy of the mortgagee or assignee	0
12. Process an application to the transmit ownership of a vessel in case of bankruptcy of the owner	3
13. Process an application to transmit a mortgage in case of death of the mortgagee or assignee	2
14. Process an application to transmit the ownership of a vessel in case of death of the owner	108
15. Process an application to change the name of a registered vessel	423
16. Process an application to change the port of registry of a registered vessel	125
17. Process an application to register a mortgage, including its discharge	1 161
18. Process an application to transfer a mortgage	11
19. Process an application to change the order of priority of registered mortgages	9
20. Process a request for a certified transcript	1 090
21. Process a request for an uncertified transcript	1 539
22. Process a request to conduct a historical search for a vessel	23
23. Process an application to issue a certificate of bare-boat registry	12
24. Process an application to extend a certificate of bare-boat registry	5
25. Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	33
26. Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	1

Source: Transport Canada

Table 5: Annual transactions per service type — Small Vessel Register

Vessel registry services — SVR	Average number of annual transactions
1. Process an application for the initial registration of a vessel	446
2. Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	24
3. Process an application for the initial registration of a group of vessels or a fleet	364
4. Process an application to issue a certificate of registry for a group of vessels or a fleet that was previously registered in Canada	0
5. Process an application to renew a certificate of registry for a vessel, group of vessels or fleet	905
6. Process an application to issue a provisional certificate of registry	0
7. Process a request to replace a certificate of registry or provisional certificate of registry	500
8. Process a request to issue a certificate of deletion	2
9. Process an application to transfer the ownership of a registered vessel, group of vessels or fleet	310
10. Process an application to transmit the ownership of a registered vessel, group of vessels or fleet in case of bankruptcy by the owner	0
11. Process an application to transmit the ownership of a registered vessel, group of vessels or fleet in case of death of the owner	0
12. Process a request for a certified transcript	93
13. Process a request for an uncertified transcript	0
14. Process a request to conduct a historical search for a vessel	0
15. Process an application to issue a certificate of bare-boat registry	0
16. Process an application to extend a certificate of bare-boat registry	0
17. Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	0
18. Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	0

Source: Transport Canada

Costs and benefits

Costs

Cost to Canadian vessel owners

Canadian vessel owners (including operators of bare-boat chartered vessels) will assume additional costs as fees for some vessel registry services will be increased, as presented in Tables 1 and 2 above. By multiplying the increase in the service fees by the annual transactions of these services listed in Tables 4 and 5, it was estimated that the total cost to Canadian vessel owners would be $7.50 million^{footnote 6} from 2024 to 2033. Of this total, 84% ($6.29 million) would be borne by LVR service users and 16% ($1.21 million) by SVR service users.^{footnote 7}

Cost to Canadians (represented by TC)

Vessel owners will pay less in fees for some services, as seven fees would decrease. Such cost savings to vessel owners will therefore be an additional cost to Canadian taxpayers (represented by TC). This additional cost is estimated to be $0.53 million in total.

Benefits

Benefits to Canadian vessel owners

As listed in Tables 1 and 2, seven fees will decrease. As a result, Canadian vessel owners (including operators of bare-boat chartered vessels) would see a cost saving of $0.53 million in total, all of which would be assumed by LVR service users.

Benefits to Canadians (represented by TC)

As previously stated, the Regulations will result in a rebalancing of costs from Canadian taxpayers (represented by TC) to users of vessel registry services. Therefore, additional fees paid by Canadian vessel owners (i.e. $7.50 million in total) will reduce the financial burden on Canadians.

The Fee proposal for Vessel Registry Program indicates that approximately 80% of the benefits from TC’s Vessel Registry services accrue to clients. It also concludes that while approximately 30% of TC’s cost is recovered by existing fees, the new fees would recover, in aggregate, 44% of TC’s cost (the cost recovery rates for the individual service types range from 16% to 74%).

Qualitative benefits

Increasing consistency between the Large and Small Vessel Registers and other programs

The Regulations will improve consistency in the regulations governing the LVR and the SVR, as there will be more consistency between the services and fees offered under the LVR and the SVR.

Improving client experience

To make it easier for TC clients to find the fees that apply to their vessels, the Vessels Registry Fees Tariff will be repealed and the modernized fees will be incorporated into the MSFR, which will eventually encompass most marine safety fees. With this approach, TC’s marine safety clients will be able to refer to one regulation for most of their marine safety fees. The Regulations will also separate the MSFR into parts to make it easier for clients to find relevant fees.

Cost-benefit statement

• Number of years: 10 (2024 to 2033)
• Price year: 2024
• Present value base year: 2024
• Discount rate: 7%

Table 6: Monetized costs (present values in millions) ^{table b4 note *}

Impacted stakeholders	Costs description	Base year (2024)	Year 2025	Annual average (2026–2032)	Final year (2033)	Total present value	Annualized value
Canadian vessel owners (including operators of bare-boat chartered vessels)	Increase in services fees	$0.55	$1.00	$0.77	$0.58	$7.50	$1.07
Canadians (represented by TC)	Reduction of service fees	$0.05	$0.07	$0.05	$0.04	$0.53	$0.08
All stakeholders	Total costs	$0.61	$1.06	$0.82	$0.62	$8.03	$1.14
Table b4 note(s) Table b4 note * Numbers may not add up due to rounding. Return to table b4 note * referrer

Table 7: Monetized benefits (present values in millions) ^{table b5 note *}

Impacted stakeholders	Benefit description	Base year (2024)	Year 2025	Annual average (2026–2032)	Final year (2033)	Total present value	Annualized value
Canadian vessel owners (including operators of bare-boat chartered vessels)	Reduction of service fees	$0.05	$0.07	$0.05	$0.04	$0.53	$0.08
Canadians (represented by TC)	Recovered costs from fees paid by Canadian vessel owners	$0.55	$1.00	$0.77	$0.58	$7.50	$1.07
All stakeholders	Total benefits	$0.61	$1.06	$0.82	$0.62	$8.03	$1.14
Table b5 note(s) Table b5 note * Numbers may not add up due to rounding. Return to table b5 note * referrer

Table 8: Summary of monetized costs and benefits (present values in millions) ^{table b6 note *}

Impacts	Base year (2024)	Year 2025	Annual average (2026–2032)	Final year (2033)	Total present value	Annualized value
Total costs	$0.61	$1.06	$0.82	$0.62	$8.03	$1.14
Total benefits	$0.61	$1.06	$0.82	$0.62	$8.03	$1.14
NET IMPACT	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
Table b6 note(s) Table b6 note * Numbers may not add up due to rounding. Return to table b6 note * referrer

Qualitative benefits

• Increase consistency between the Large and Small Vessel Registers and other programs.
• Improve client experience.

Distributional analysis

Impacts on LVR service users versus SVR services users

Users of LVR services will be impacted more significantly than those of SVR services. More specifically, 83% of the net cost ($5.76 million) would be borne by LVR services users, while SVR service users would bear the remaining 17% of the net cost ($1.21 million). Table 9 below shows the impacts on vessel registry service users by vessel register.

Table 9: Impacts on vessel registry service users by vessel register ^{table b7 note *}

Vessel register	Total cost	% of total cost	Total benefit	% of total benefit	Net cost	% net cost
LVR	$6.29	84%	$0.53	100%	$5.76	83%
SVR	$1.21	16%	$0.00	0%	$1.21	17%
Total	$7.50	100%	$0.53	100%	$6.97	100%
Table b7 note(s) Table b7 note * Numbers may not add up due to rounding. Return to table b7 note * referrer

Impacts on vessel registry service users by region

The Regulations will impact vessel registry service users across Canada. Large vessels are mostly registered in the Atlantic and the Pacific regions, followed by Quebec, Ontario, and the Prairie and Northern regions; small vessels are mainly registered in the Pacific region, followed by Ontario, Atlantic, Quebec, and the Prairie and Northern regions. Tables 10.1 and 10.2 below show the impact distribution by region for both the LVR and SVR service users.

Table 10.1: Impacts on vessel registry service users by region — LVR ^{table b8 note *}

Region	Total cost	% of total cost	Total benefit	% of total benefit	Net cost	% of net cost
Atlantic table b8 note a	$2.20	35%	$0.19	35%	$2.02	35%
Pacific table b8 note b	$1.89	30%	$0.16	30%	$1.73	30%
Quebec	$1.20	19%	$0.10	19%	$1.10	19%
Ontario	$0.94	15%	$0.08	15%	$0.86	15%
Prairie and Northern table b8 note c	$0.06	1%	$0.01	1%	$0.06	1%
Total	$6.29	100%	$0.53	100%	$5.76	100%
Table b8 note(s) Table b8 note a Including New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. Return to table b8 note a referrer Table b8 note b Including British Columbia. Return to table b8 note b referrer Table b8 note c Including Yukon, Nunavut and Northwest Territories. Return to table b8 note c referrer Table b8 note * Numbers may not add up due to rounding. Return to table b8 note * referrer

Table 10.2: Impacts on vessel registry service users by region — SVR ^{table b9 note *}

Region	Total cost	% of total cost	Total benefit	% of total benefit	Net cost	% of net cost
Pacific	$0.36	30%	$0.00	0%	$0.36	30%
Ontario	$0.24	20%	$0.00	0%	$0.24	20%
Atlantic	$0.23	19%	$0.00	0%	$0.23	19%
Quebec	$0.22	18%	$0.00	0%	$0.22	18%
Prairie and Northern	$0.16	13%	$0.00	0%	$0.16	13%
Total	$1.21	100%	$0.00	0%	$1.21	100%
Table b9 note(s) Table b9 note * Numbers may not add up due to rounding. Return to table b9 note * referrer

Sensitivity analysis

As previously described, a number of assumptions have been made to estimate the costs of the Regulations. To address the effect of uncertainty and variability on these assumptions, a sensitivity analysis was conducted, where variables are assigned different values, and outcomes are re-evaluated. A sensitivity analysis was performed on the following variables: analytical time frame and discount rates.

Analytical time frame

A 10-year analytical time frame was used for the central analysis, whereas the sensitivity analysis presents the results should a 15-year or 20-year analytical time frame have been used.

Discount rate

The central analysis used a 7% discount rate as recommended by TBS. The sensitivity analysis presents the results should a 3% discount rate have been used, as well as if there were no discounting.

Table 11.1: Sensitivity analysis results — Analytical time frame

Parameter	Total net cost
10 years table b10 note a	$6.97M
15 years	$9.19M
20 years	$10.77M
Table b10 note(s) Table b10 note a Central scenario used in the main analysis. Return to table b10 note a referrer

Table 11.2: Sensitivity analysis results — Discount rates

Parameter	Total net cost
Undiscounted	$9.44M
3%	$8.23M
7% table b11 note a	$6.97M
Table b11 note(s) Table b11 note a Central scenario used in main analysis. Return to table b11 note a referrer

Small business lens

The small business lens applies, as there are impacts on small businesses^{footnote 8} associated with the Regulations. Most companies affected, which are vessel owners, will be small businesses. The main sectors whose businesses own vessels and use the vessel registry services are the fishing industry, the aquaculture industry, and the water transportation industry. Ninety-nine percent of the three sectors (North American Industry Classification System code 1141, 1125 and 483) are firms that have fewer than 100 employees.^{footnote 9} As a result, it was estimated that the Regulations would impose a net cost of $6.93 million in total on small businesses over the 10-year analytical period.

To mitigate impacts on small businesses, TC will maintain a discount for clients who register groups or fleets of small vessels. Clients will pay one fee for registering their group or fleet, instead of a fee for registering each vessel within the group or fleet. As well, for several of the services for small vessels (e.g. initial registration, transfer of ownership), fees are lower than those for large vessels, giving consideration to the application of the small business lens as set out in TBS’s Policy on Limiting Regulatory Burden on Business. TC is also making improvements to better align the SVR and the LVR, as there are inconsistencies in terms of which services TC charges for (e.g. there is a fee to renew registration in the SVR but not the LVR, there are fees for bare-boat certificates in the LVR but not the SVR) to make it clearer and fairer for clients.

Small business lens summary

• Estimated number of small businesses impacted: 18 070
• Number of years: 10 (2024 to 2033)
• Price year: 2024
• Present value base year: 2024
• Discount rate: 7%

Table 12: Compliance costs

Activity	Annualized value	Present Value table c1 note *
Total compliance cost (vessel registry services fees for all impacted small business)	$1.06M	$7.45M
Total benefit (reduction of existing service fees)	$0.07M	$0.53M
Net cost	$0.99M	$6.93M
Net cost per impacted small business	$55	$383
Table c1 note(s) Table c1 note * Numbers may not add up due to rounding. Return to table c1 note * referrer

One-for-one rule

The one-for-one rule applies since a regulatory title is repealed, and this initiative is considered a title out: the Regulations will repeal the Vessels Registry Fees Tariff and amend the Marine Safety Fees Regulations.

The Regulations are not expected to result in an incremental change in administrative burden on businesses.

Regulatory cooperation and alignment

The Regulations are not being introduced in relation to an international agreement or obligation, nor do they have any impact related to a work plan or commitment under a formal regulatory cooperation forum.

TC has an international obligation under article 94 of the United Nations Convention on the Law of the Sea to establish and maintain a register of vessels to improve maritime safety and security. Each member state is responsible for setting its own fees.

In terms of setting the fees, TC compared Canada’s vessel registry fees to those of countries with similar levels of economic development to Canada; specifically, the United Kingdom (U.K.), the United States (U.S.), Australia and New Zealand.

Canada’s fees for large vessel registration are generally in the range of fees in the U.K. (Can$265–Can$339) and the U.S. (starting at Can$180), whereas Australia (Can$1,522–Can$2,609) and New Zealand (Can$1,571–Can$3,693) have much higher registration fees for large vessels than Canada. For small vessel registrations, Canada’s fees are generally in the range of fees in the U.K. (Can$61) and New Zealand (Can$337) which, like Canada, have a separate fee for registering small vessels. Overall, the fees TC is introducing through this amendment for vessel registry services are largely in line with or below those of the comparable countries noted above.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, and the TC Policy Statement on Strategic Environmental Assessment (2013), the strategic environmental assessment (SEA) process was followed for this initiative and a sustainable transportation assessment was completed. No important environmental effects are anticipated as a result of this initiative. The assessment took into account potential effects to the environmental goals and targets of the Federal Sustainable Development Strategy (FSDS).

Gender-based analysis plus

The Regulations are not expected to have any differential impacts based on identity factors such as gender, race, sexuality, ethnicity, and/or religion. The data captured as part of TC’s vessel registry process does not record gender or other identity information. The primary requirement to register a vessel is predicated upon the applicant being a “Qualified Person” defined as being a Canadian citizen or a permanent resident without referring to the applicant’s gender. In addition, the definition also includes a corporation incorporated under the laws of Canada or a province.

Implementation, compliance and enforcement, and service standards

Implementation

Implementation of the Regulations

The Regulations will come into force on April 1, 2024. This coming-into-force date aligns with the beginning of a new fiscal year.

Stakeholders will be informed of the Regulations through regular communication tools, such as Ship Safety Bulletins, updates on the TC website and updates at both the regional and national CMACs. In addition, TC will use its internal communications to update marine safety inspectors and other internal stakeholders.

An application for a service or request sent before the entry into force of the Regulations will be subject to the fees that were in force on that day. An application is considered sent on the day on which it is delivered or, if it is sent by mail, the day on which it is mailed, with the date of the postmark being evidence of that day.

The information technology (IT) systems that TC currently uses to manage vessel registries are outdated and have limited capabilities (e.g. no reporting functionality). As such, TC is working to digitize service delivery by developing a modernized IT system that will

• allow for time tracking activity, performance management and better workload management capabilities;
• support the implementation and charging of fees for requested services;
• automate reporting to meet legislative and regulatory requirements;
• offer online submission of applications to improve stakeholders’ experience;
• improve data quality, reduce duplication, and increase information reliability;
• improve data access and sharing of information with internal and external stakeholders, while continuing to protect the data in a secure system; and
• reduce the number of paper-based processes.

TC is modernizing the services it provides by developing digital service delivery (i.e. a platform to request services online and pay via credit card, Interac), to first supplement and then mostly replace the existing legacy application methods (i.e. paper-based applications with manual payment methods, such as cheques and money orders). The overall objective is to offer streamlined services to better serve clients. However, clients would not be obliged to use the new system; clients may continue to submit paper-based applications if they wish.

The new vessel registry system will be deployed through various releases, as applications are built. Development and implementation are expected to be completed before the coming into force of the new and updated fees. However, if any challenges or delays occur, existing processes would be leveraged to ensure continued service.

Compliance and enforcement

By introducing a new fee-supported requirement for the renewal of vessel registration certificates, TC is working towards improving the integral quality of the owner and vessel information required by federal government agencies, including the Canadian Coast Guard, the Joint Rescue Coordination Center, the Transportation Safety Board of Canada, the Royal Canadian Mounted Police, and the Canada Border Services Agency. These federal agencies use vessel registry information to confirm ownership in marine emergency situations, when crossing Canadian borders, and during marine-related investigations involving the safety of life, property, and the environment. These federal agencies were consulted about the Regulations and did not raise any concerns. It is not expected that the amendments will have any operational impacts for these organizations other than to help ensure that vessel registration information remains accurate and up to date.

As noted above, TC’s approach is to work with and educate clients on the requirement surrounding vessel registration. To that end, education, outreach, and communications (i.e. plenary sessions at the Canadian Marine Advisory Council, public consultation sessions) are the primary tools that TC will employ to help support compliance with the amendments. When clients submit their vessel registration applications, they must also pay at the same time. The application is not processed until the fee for the service is received. Enforcement of vessel registration requirements is conducted by TC marine safety inspectors. Administrative monetary penalties (AMP) may be imposed to further reinforce compliance with these regulations. If a vessel is required to be registered but it is not, the owner of the vessel is in violation of the Canada Shipping Act, 2001 and may be subject to an AMP. This hybrid compliance and enforcement approach is continually revisited and revised, as circumstances warrant.

With the introduction of a new electronic vessel registry application, TC is working to avoid duplication and confusion of data caused by legacy databases relied upon by federal government agencies, as well as with other levels of government. This new application will include the capacity to flag issues or alert vessel registrars on matters, such as incomplete or questionable vessel ownership records, misinterpretations of registry requirements, or cases of deliberate misrepresentation of vessel specifications, which are often provided by errant vessel owners, appointed officials, or by domestic businesses supporting the fishing industry.

Service standards

TC is required to meet the service standards that are published for each fee. TC will apply the remission policy to all material fees based on the criteria in the Low-materiality Fees Regulations.

Table 13: Large Vessel Register service standards

Vessel registry services — LVR table c2 note a	Service standards prior to the amendments	Service standards after the amendments
1. Process an application for the initial registration of a vessel	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
2. Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
3. Process an application to renew a certificate of registry	Not applicable because renewals are currently automatic.	Issue the certificate of registry within 30 business days of receiving a complete application.
4. Process an application to issue a provisional certificate of registry	Within 2 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the provisional certificate of registry within 2 business days of receiving a complete application.
5. Process an application to record a vessel that is about to be built or is under construction in Canada	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client that the vessel has been recorded within 5 business days of receiving a complete application.
6. Process a request to extend the reservation of an approved name of a vessel	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client of the reservation extension within 5 business days of receiving a complete application.
7. Process a request to replace a certificate of registry or a provisional certificate of registry	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry or provisional certificate of registry within 5 business days of receiving a complete application.
8. Process a request to issue a certificate of deletion	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the deletion certificate within 5 business days of receiving a complete application.
9. Process an application to transfer the ownership of a registered or recorded vessel, other than by a special sale	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
10. Process an application to transfer the ownership of a registered or recorded vessel via special sale	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
11. Process an application to transmit a mortgage in case of bankruptcy of the mortgagee or assignee	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client that the application has been processed within 5 business days of receiving the complete application.
12. Process an application to transmit the ownership of a vessel in case of bankruptcy of the owner	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
13. Process an application to transmit a mortgage in case of death of the mortgagee or assignee	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client that the application has been processed within 5 business days of receiving the complete application.
14. Process an application to transmit the ownership of a vessel in case of death of the owner	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
15. Process an application to change the name of a registered vessel	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
16. Process an application to change the port of registry of a registered vessel	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
17. Process an application to register a mortgage, including its discharge	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client of the mortgage registration within 5 business days of receiving a complete application.
18. Process an application to transfer a mortgage	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client of the mortgage transfer within 5 business days of receiving a complete application.
19. Process an application to change the order of priority of registered mortgages	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client of the change to order of priority of registered mortgages within 5 business days of receiving a complete application.
20. Process a request for a certified transcript	Within 2 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certified transcript within 2 business days of receiving a complete application.
21. Process a request for an uncertified transcript	Within 2 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the uncertified transcript within 2 business days of receiving a complete application.
22. Process a request to conduct a historical search for a vessel	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Provide the results of the historical research within 30 business days of receiving a complete application.
23. Process an application to issue a certificate of bare-boat registry	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of bare-boat registry within 5 business days of receiving a complete application.
24. Process an application to extend a certificate of bare-boat registry	Within 5 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of bare-boat registry within 5 business days of receiving a complete application.
25. Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	Suspend: Within 30 working days excluding any delays incurred to obtain missing information and/or documentation. Reinstate: Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Notify the client that the Canadian certificate of registry has been suspended within 5 business days of receiving a complete application. Issue the certificate of registry within 5 business days of receiving a complete application.
26. Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	No service standard	Notify the client that suspension of the Canadian certificate of registry has been extended within 5 business days of receiving a complete application.
Services provided at no charge:
Process a request to report alterations to a registered vessel	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a request.
Process a request to update the name or address of an owner	Within 30 working days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a request.
Process an application to appoint an authorized representative	No service standard	Notify the authorized representative of the appointment within 30 business days of receiving a complete application.
Process a request to update the name or address of an authorized representative, a mortgagee or assignee	No service standard	Notify the client of the updated name or address of authorized representative or mortgagee/assignee within 30 business days of receiving a request.
Process an application for transmission to a surviving joint owner in case of death of another owner	No service standard	Issue the certificate of registry within 30 business days of receiving a complete application.
Table c2 note(s) Table c2 note a Service standards are the same for electronic applications and non-electronic applications; they would count from the day that an application or request was received. Return to table c2 note a referrer

Table 14: Small Vessel Register service standards
Number of days = business days Completed applications must be received

Vessel Registry Services — SVR table c3 note a	Service standards prior to the amendments	Service standards after the amendments
1. Process an application for the initial registration of a vessel	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
2. Process an application to issue a certificate of registry for a vessel that was previously registered in Canada	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
3. Process an application for the initial registration of a group of vessels or a fleet	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
4. Process an application to issue a certificate of registry for a group of vessels or a fleet that was previously registered in Canada	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
5. Process an application to renew a certificate of registry for a vessel, group of vessels or fleet	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
6. Process an application to issue a provisional certificate of registry	No service standard	Issue the provisional certificate of registry within 2 business days of receiving a complete application.
7. Process a request to replace a certificate of registry or a provisional certificate of registry	No service standard	Issue the certificate of registry or provisional certificate of registry within 5 business days of receiving a complete application.
8. Process a request to issue a certificate of deletion	No service standard	Issue the deletion certificate within 5 business days of receiving a complete application.
9. Process an application to transfer the ownership of a registered vessel, group of vessels or fleet	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
10. Process an application to transmit the ownership of a vessel, group of vessels or fleet in case of bankruptcy by the owner	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
11. Process an application to transmit the ownership of a vessel, group of vessels or fleet in case of death of the owner	Within 45 days excluding any delays incurred to obtain missing information and/or documentation.	Issue the certificate of registry within 30 business days of receiving a complete application.
12. Process a request for a certified transcript	No service standard	Issue the certified transcript within 2 business days of receiving a complete application.
13. Process a request for an uncertified transcript	No service standard	Issue the uncertified transcript within 2 business days of receiving a complete application.
14. Process a request to conduct a historical search for a vessel	No service standard	Provide the results of the historical research within 30 business days of receiving a complete application.
15. Process an application to issue a certificate of bare-boat registry	No service standard	Issue the certificate of bareboat registry within 5 business days of receiving a complete application.
16. Process an application to extend a certificate of bare-boat registry	No service standard	Issue the certificate of bareboat registry within 5 business days of receiving a complete application.
17. Process an application to suspend the registration of a Canadian vessel to allow the vessel to be listed in a foreign state, including the reinstatement of the registration after the vessel is delisted from that state	No service standard	Notify the client that the Canadian certificate of registry has been suspended within 5 business days of receiving a complete application. Issue the certificate of registry within 5 business days of receiving a complete application.
18. Process an application to extend the suspension of the registration of a Canadian vessel while the vessel is listed in a foreign state	No service standard	Notify the client that suspension of the Canadian certificate of registry has been extended within 5 business days of receiving a complete application.
Services provided at no charge:
Process a request to report alterations to a registered vessel	No service standard	Issue the certificate of registry within 30 business days of receiving a request.
Process a request to update the name or address of an owner	No service standard	Issue the certificate of registry within 30 business days of receiving a request.
Process an application to appoint an authorized representative	No service standard	Notify the authorized representative of the appointment within 30 business days of receiving a complete application.
Process a request to update the name or address of an authorized representative	No service standard	Issue the certificate of registry within 30 business days of receiving a request.
Process an application for transmission to a surviving joint owner in case of death of another owner	No service standard	Issue the certificate of registry within 30 business days of receiving a complete application.
Table c3 note(s) Table c3 note a Service standards are the same for electronic applications and non-electronic applications; they would count from the day that an application or request was received. Return to table c3 note a referrer

Contact

Krista Kendall
Chief Registrar
Navigation Safety and Environmental Programs
Transport Canada
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Email: VRConsultationsIB@tc.gc.ca