What we heard: Public consultation on a regulatory charge for the Vessel Remediation Fund

Between August 11, 2021 and January 25, 2022, Transport Canada held a public consultation on a proposed Vessel Remediation Fund regulatory charge. This report summarizes what we heard during this public consultation.

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Our consultation approach

On August 11, 2021, Transport Canada published a document describing the proposed Vessel Remediation Fund and regulatory charge.

Feedback from stakeholders was sought through various channels:

  • The consultation was promoted on social media
  • A link to the online consultation was sent to a broad range of individuals and organizations using existing distribution lists (e.g., the Canadian Marine Advisory Council or CMAC)
  • The proposal was presented at the fall 2021 National CMAC meeting, including to the:
    • Standing Committee on Recreational Boating
    • Standing Committee on Domestic Vessel Regulatory Oversight
    • Standing Committee on Fishing Vessel Safety
    • Standing Committee on the Environment
  • The proposal was presented at a virtual engagement session with Inuit organizations

The department received 130 comments, most of which were provided through our online consultation website. Comments were also received through emails, and those received from the stakeholders and partners who participated in our virtual presentations were recorded.

We heard from:

  • owners of recreational, commercial and non-recreational vessels
  • community associations
  • municipal governments and agencies
  • environmental organizations
  • marinas and boatyards
  • tourism companies
  • Indigenous partners, including an Inuit regional government
  • yacht clubs and charters

Overall, we heard from stakeholders and partners in six provinces and two territories. Most comments received (93) were from stakeholders and partners in British Columbia.

Consultation on a proposal to modernize fees for vessel registry services was undertaken at the same time and would impact many of the same stakeholders. Read the What We Heard report from the vessel registry services consultation.

Feedback grouped by theme

The themes that arose from the comments are listed below.

Creating a regulatory charge

A little more than half of participants agreed with aspects of the proposal. They acknowledged that:

  • wrecked or abandoned vessels create risks that need to be dealt with
  • addressing wrecked or abandoned vessels benefits vessel owners
  • vessel owners should help pay to deal with these vessels

Participants made suggestions, like:

  • hold irresponsible vessel owners responsible for their vessels, including:
    • enforcing the ban on abandoning vessels
    • enforcing vessel licensing and registration requirements (including transfers of ownership) so that irresponsible vessel owners can be identified and held responsible
    • improving vessel owner identification systems, including a streamlined application process, annual renewals, and issuing decals
    • trying to recover costs from irresponsible vessel owners
  • effectively use and account for the funds, including:
    • making sure that the funds from the regulatory charge are only used to address wrecked or abandoned vessels (and not used as general revenue)
    • making sure that the funds support timely action
    • being transparent on the amount of funds collected and how they’re used, including an action plan
  • efficiently administer the funds, including:
    • making sure that the funds are used efficiently and not used to expand the bureaucracy
    • making sure that the cost to administer the funds won’t exceed the amount collected from the charge
    • consider using local municipalities or private contractors to administer the funds
  • fairness to vessel owners, including:
    • making sure that how the funds are allocated isn’t influenced by politics
    • recognizing that most abandoned vessels are on the West Coast (yet many pleasure craft owners are in Ontario)
    • recognizing that the public benefits from addressing wrecked or abandoned vessels, including waterfront property owners and others who enjoy the waterfront and beaches

A little less than half of participants opposed the proposed charge. They:

  • were concerned about the fairness of the charge—in particular, they:
    • didn’t agree with charging all vessel owners for the costs of addressing a problem created by a small number of vessel owners and suggested that the fines and penalties for irresponsible owners be higher
  • didn’t agree with charging vessel owners across the country if most of the costs related to wrecked or abandoned vessels are in British Columbia
  • didn’t agree with charging vessel owners when all Canadians benefit from clean and safe waters
  • were concerned that only responsible vessel owners would pay the charge since irresponsible owners are unlikely to license and register their vessel
  • felt that the charge would constitute another tax, which vessel owners already pay when paying for their vessel, repairs, equipment and parts, fuel, and various marine services
  • felt the charge would have a negative impact on the viability of small- and medium-sized businesses, particularly those in the fishing industry and the north, given the tight margins and the number of fees/costs they already pay
  • were concerned that the proposal could lead some vessel owners to believe that they can abandon their vessel if they have paid the charge
  • felt that the federal government should enforce existing laws before determining if an owner-financed vessel remediation fund is needed
  • were concerned that the regulatory charge would increase over time
  • were concerned that foreign vessels wouldn’t pay the charge as they’re not registered in Canada
  • felt that wrecked or abandoned vessels should be addressed by the provinces through sales tax, not by the federal government

In some instances, participants proposed exemptions from the charge, like for:

  • vessels used for public safety/security and environmental protection (like police, search and rescue, parks)
  • Indigenous peoples

A small number of the comments were neutral about the proposal.

Pricing a regulatory charge

Feedback on the proposed regulatory charge levels was generally divided by vessel type.

With respect to the proposed $10 charge for pleasure craft, most participants felt the proposed charge was either fair or too low. Some participants were concerned that the proposed pleasure craft charge:

  • wouldn’t cover the cost of running the program
  • is unfairly low compared to similar fees for commercial vessels given that pleasure craft account for a significant share of wrecked or abandoned vessels in Canada
  • is unfair as it’s not adjusted based on the size of a vessel (as is the case for the proposed commercial vessel charge)

With respect to the commercial vessel charge levels, participants felt that the charges should be reduced given the financial pressures faced by industry. Participants felt that:

  • owners/operators of small and medium vessels would be more impacted by the proposed charge levels than owners/operators of large vessels
  • a lower charge should be created for commercial vessels of 5 gross tonnage (gt) and less (the proposal has one size category for all vessels below 15gt)
  • the charge for vessels under 15gt should be under $100 (compared to the proposal of $250)
  • the group/fleet discount shouldn’t exceed $250 (compared to the proposal of $450)
  • Transport Canada should consider charging on a per foot basis

Collecting a regulatory charge

Transport Canada wants to collect the charge at the same time we collect service fees for pleasure craft licensing and vessel registration. Some participants suggested other approaches, including:

  • collecting the charge when the vessel is purchased
  • collecting a one-time charge when the vessel is first licensed or registered
  • collecting an annual charge on every insured vessel via insurers
  • delegating this task to the provinces, which could provide other services to boaters (like pump out stations, marine park improvements)

Using a regulatory charge

In general, participants supported the proposed activities. Stakeholders supported a voluntary surrender/amnesty program (such as vessel turn-in program) and activities to make vessel recycling services more accessible and less expensive.

While there was some support for educational activities, there were concerns about their effectiveness and impact. One participant noted that educational campaigns are unlikely to influence the behaviour of someone who would be willing to abandon their vessel.

A specific gap was noted for the North with respect to vessel removal and recycling given the unique context and the lack of existing facilities for storage and disposal/recycling. For the regulatory charge to benefit people living in the North, participants felt that the activities financed by the charge may need to be different in the North than in the rest of Canada.

Some participants felt that municipalities and Indigenous communities should have access to the funds without an extensive application and decision process, potentially through a multi-year grant to support the remediation of vessels that have already been left wrecked or abandoned and activities that seek to prevent vessel abandonment in the future. Participants recommended that opportunities to apply for funding need to be properly communicated when grants are made available.

Other suggestions

Participants offered a range of other suggestions about the proposed regulatory charge, including:

  • Transport Canada should consider alternative (or complementary) funding sources, including:
    • a luxury tax
    • fuel taxes collected at marine fueling stations
    • a special sales tax/fee (percentage of sale price)
    • matching funds from general revenue
    • a deposit when a vessel is purchased (this would be returned when the vessel is transferred or disposed of responsibly)
  • Transport Canada should recognize the role that mooring buoys play with abandoned vessels and look for solutions, like:
    • overseeing and enforcing rules related to private mooring buoys
    • designating mooring buoys as “works” and requiring their approval
    • introducing a fee for mooring buoys so that authorities can identify their owners
  • Transport Canada should clarify jurisdictional authority/legal and operational mandates within Canadian waterways
  • regulating the boat broker industry and requiring insurance/surveys
  • developing a database and map that tracks wrecked or abandoned vessels

Next steps

Comments received through this public consultation have been recorded and will be considered as we develop the regulations.

Comments will also inform how we engage with key stakeholders or partners before drafting the regulations begins, including targeted engagement with those who were underrepresented in the comments.

Further consultation will occur once the proposed regulatory charge is pre-published in Canada Gazette, Part I, if not before.

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