To help promote operator and stakeholder compliance with Canadian law, this document outlines the requirements for the use of modular barges in Canadian waters.
A modular barge is made up of individual modules that are put together to create a larger unit. Although a modular barge may or may not be self-propelled, and can be arranged in different ways, it’s considered a vessel under the Canada Shipping Act, 2001 and subject to the Coasting Trade Act. Each module of a modular barge requires a coasting trade licence, if they aren’t Canadian-registered and duty paid.
Modular barges are often used for marine construction like: crane operations, dredging services, drilling operations, as floating bridges, and to move equipment, workers or construction material.
On this page
- The Coasting Trade Act
- Using a modular barge in Canadian waters
- Register a modular barge in Canada
- Questions?
The Coasting Trade Act
Coasting trade refers to any commercial marine activity within Canadian waters. Above the continental shelf of Canada, these activities must be related to the transport, exploration or exploitation of the minerals and non-living natural resources of the continental shelf.
The Coasting Trade Act supports Canadian marine interests by reserving the coasting trade of Canada to Canadian registered duty paid vessels. The legislation provides a process to temporarily import a foreign or non-duty paid vessel under a coasting trade licence when a suitable Canadian-registered duty paid vessel isn’t available. A coasting trade licence can be valid for up to one year.
Apply for a coasting trade licence
For a vessel owner or operator to obtain a coasting trade licence, the Canadian Transportation Agency must determine that no duty paid Canadian vessel is suitable and available to provide the service. The vessel is also subject to Transport Canada safety inspection. All certificates and documents relating to the vessel must be valid and in force. Duties and taxes for the vessel must also be paid.
For more information and links to the licence process, forms and key contacts, please visit: Coasting trade in Canada.
Penalty for engaging in a coasting trade activity without a licence
Any vessel that is found in contravention of the Coasting Trade Act is guilty of an offence and is liable on summary conviction to a fine not exceeding fifty thousand dollars. In addition, where a vessel commits an offence on more than one day or an offence is continued by a vessel for more than one day, it shall be deemed to be a separate offence for each day on which the offence is committed or continued.
Using a modular barge in Canadian waters
Each module of a modular barge is subject to the Coasting Trade Act. This means that a coasting trade licence would be required for each module of a foreign-registered or non-duty paid modular barge used for any commercial activity in Canadian waters.
Canadian-registered modular barges
Canadian-registered modules that are duty paid don’t require coasting trade licences when assembled into a modular barge. Coasting trade licences are only required for modules that aren’t duty paid. Each module of a non-duty paid modular barge requires a licence for each activity it’s used for.
Private dredging contracts
Canadian-registered modules that are duty paid don’t require coasting trade licences when assembled into a modular barge used to conduct dredging services in Canada. Coasting trade licences are only required for modules that aren’t duty paid. Each module of a non-duty paid modular barge requires a licence for each activity it’s used for.
Federally procured dredging services
Only Canadian-registered and manufactured vessels or vessels that have been substantially modified in Canada (including modular barges), may provide dredging services for the Government of Canada valued below $5 million SDR (special drawing rights). A vessel that wasn’t built in Canada must get a certificate of qualification from the federal government to be certified. The vessels must be:
- substantially modified in Canada to the point it has mostly Canadian equipment (including add-on value)
- registered in Canada, and,
- Canadian-owned for at least 1 year
Rented from a United States (U.S.) based company
Modules rented from a U.S.-based company are subject to the Coasting Trade Act when assembled into a modular barge. Each module of the modular barge require a licence for each activity it’s used for.
Foreign-registered (non-European Union (EU) member state)
Ownership
Modules under ownership can be foreign-registered, but coasting trade licences are required when assembled into a modular barge. Each module of the modular barge requires a licence for each activity it’s used for.
Renting
If the modules are rented, they can be foreign-registered, but coasting trade licences are required when assembled into a modular barge. Each module of the modular barge requires a licence for each activity it’s used for.
Registered in the European Union (EU)
Private dredging contracts
Eligible EU entities may conduct private dredging services in Canada without a coasting trade licence. Modular barges (made up of individual modules) may be used for these services. To be eligible to provide these services, an entity must be:
- incorporated in an EU member state,
- or be located outside of the U.S. and only use vessels on an EU member state register.
Entities can be non-profit, private and government-owned corporations, trusts, partnerships, sole proprietorships, or joint ventures.
Federally procured dredging services
Under the Comprehensive Economic and Trade Agreement (CETA), EU enterprises using EU-registered vessels are allowed to bid for federal project contracts valued at more than $5 million SDR (special drawing rights). However, a coasting trade licence is still required for each vessel (including each module of a modular barge).
This temporary licence isn’t subject to the condition that no suitable Canadian duty or non-duty paid vessel is available.
Description
The graphic is a flow chart designed to help someone determine what is required to use their modular barge in Canadian waters. (A modular barge is made up of individual modules that are assembled to create a larger unit). At the top of the chart, it asks: What is required to use my modular barge in Canadian waters? There are 5 scenarios.
Scenario 1 – The modules are Canadian-registered. Canadian-registered modules that are duty-paid don’t need coasting trade licences. If they aren’t duty paid, you require a coasting trade licence.
Scenario 2 – I’d like to bid for federal project contracts below the government procurement threshold of $5 million SDR (special drawing rights) and my equipment includes a modular barge. It explains that only Canadian-built and registered vessels, or vessels that have been substantially modified in Canada, may provide federally procured dredging services below the government procurement threshold of $5 million SDR. It then asks if the modules are duty paid. If Canadian-registered modules are duty-paid you don’t need coasting trade licences. If they aren’t duty paid, you require a coasting trade licence.
Scenario 3 – I’m renting the modules from a U.S. based company. You need coasting trade licences.
Scenario 4 - The modules are foreign-registered (non-EU). If you’re the owner you need coasting trade licences. If they are rented, you need coasting trade licences.
Scenario 5 - I’m an eligible EU entity using EU-registered modules to conduct dredging services under CETA. If you were hired by a Canadian company for private dredging services, it explains that you may offer private dredging services in Canada without coasting trade licences. Modular barges can be used as part of the equipment. If you’d like to bid for federal project contracts, it explains that you’re eligible to bid for federal project contracts above the Agreement’s procurement threshold of $5 million SDR, but you still require a coasting trade licence for each vessel (including each module of the modular barge).
Register a modular barge in Canada
Each module of a modular barge needs to be registered as a commercial vessel, provided there is a qualified owner, in either the Canadian Register of Vessels or the Small Vessel Register, depending on their gross tonnage and other factors.
To register a vessel in the Canadian Register of Vessels, the owner must qualify as follows under the Canada Shipping Act, 2001 (CSA):
Under the CSA, a “qualified person” means:
- a Canadian citizen or a permanent resident within the meaning of the Immigration and Refugee Protection Act subsection 2(1), or
- a corporation incorporated under the laws of Canada or a province
Unless they’re registered, listed or otherwise recorded in a foreign state, the following vessels may be registered under CSA Part 2:
47 (b) A vessel that is owned by a corporation incorporated under the laws of a foreign state if it is operated solely by:
- a subsidiary of the corporation that is incorporated under the laws of Canada or a province
- a corporation employee or director of a branch office in Canada that is carrying on business in Canada, or
- a vessel management company incorporated under the laws of Canada or a province
The registered owner of a vessel in the Canadian Register of Vessels must provide proof of ownership. If the vessel was registered in another country, they must also provide proof that the vessel has been deleted from that country’s register. The vessel can’t remain registered, listed or otherwise recorded in a foreign state.
If your vessel doesn’t meet these conditions, then the vessel can’t be registered in Canada.
The modules of a modular barge will require coasting trade licences if they aren’t Canadian-registered and duty paid.
If you have questions about the registration process, please contact Transport Canada’s Vessel Registry Office at: 1-877-242-8770 or VR-IB@tc.gc.ca.
Questions?
If you have questions about the application of the Coasting Trade Act, please contact Transport Canada’s Domestic Marine Policy Group: tc.coastingtrade-cabotage.tc@tc.gc.ca.
Related links
Applying the Coasting Trade Act to modular barges
(PDF, 364 KB)