The “Regulations Amending the Marine Safety Fees Regulations (Vessel Registry Fees) – SOR/2024-29” aims to update the fee structure associated with vessel registration in Canada. These amendments address longstanding issues with the existing vessel registry fee structure that has remained largely unchanged since its introduction in 2002. This lack of update has resulted in existing fees covering only a small fraction of the costs incurred by Transport Canada (TC) in providing these services, leading to a significant burden on Canadian taxpayers who effectively subsidize these services.

The current fee structure, governed by the Vessels Registry Fees Tariff, does not accurately reflect the operational costs of vessel registration services, resulting in a recovery rate of only about 30% of total expenses. This situation arises from the wide array of stakeholders who benefit from vessel registration, including pleasure craft owners, fishing companies, shipping enterprises, ferry operators, and tourism-related businesses. These entities are required to register their vessels to comply with regulations under the Canada Coasting Trade Act, which mandates that domestic trade occurs on Canadian-registered vessels. Additionally, inconsistencies exist between the Large Vessel Register (LVR) and the Small Vessel Register (SVR), creating confusion among stakeholders regarding which fees apply to specific services. For instance, while the LVR charges fees for renewing registration certificates, the SVR does not, leading to an imbalanced fee structure.

The new regulations will repeal the outdated Vessels Registry Fees Tariff and incorporate a revamped fee structure into the Marine Safety Fees Regulations (MSFR). This change will introduce 44 new fees—26 for the general category (LVR) and 18 for the SVR—while eliminating 24 existing fees. Notably, the updated structure will also introduce fees for services that were previously free, such as renewing large vessel registrations. The aim is to ensure that the costs of providing these services are more equitably distributed among those who directly benefit.

The rationale behind these amendments extends beyond mere cost recovery. Vessel registration serves critical functions, such as establishing ownership, approving vessel names, and permitting vessels to fly the Canadian flag, all of which support TC’s broader marine safety and inspection programs. By reforming the fee structure, TC aims to decrease reliance on taxpayer funding and shift more costs to vessel owners who directly benefit from these services.

The primary objectives of the regulations are to ensure that fees accurately reflect the costs of providing services, increase clarity and consistency for clients, and improve the overall fee structure. The introduction of annual adjustments to fees based on the Consumer Price Index will further ensure that these fees remain relevant and reflect current economic conditions. These changes align with TC’s broader initiative, which seeks to improve service delivery and ensure that the costs incurred by TC are fairly shared by those who benefit from its services.

Canada (SOR/2024-29) February 28, 2024