57. The Coasting Trade Act does not define the terms ‘suitable,' ‘available,' or ‘identical or similar adequate marine service.' Therefore, the Agency has discretion in making its determination with respect to the merits of each application as there are no unique criteria or standards to determine whether a Canadian-registered ship is suitable and available and, in the case of passenger services, what is an identical or similar adequate marine service.
58. The Agency takes into consideration various factors to determine whether an offered Canadian-registered ship is suitable and available to perform the activity.
59. A summary of examples of Agency determinations applying these factors is included under Appendix E. The complete determinations, as well as other Agency rulings with respect to coasting trade licence applications, are listed on the Agency's Web site at www.cta.gc.ca.
60. It is the responsibility of the offeror to provide evidence that the offered ship is Canadian-registered. Satisfactory evidence of the Canadian-registered status of an offered ship is its name and proof that it is currently registered in the Transport Canada Ship Registry data base.
61. If the offered ship is a foreign ship that is undergoing a process of becoming a registered Canadian ship, an offeror must provide evidence that the offered ship will be registered by the time the proposed activity is to be performed.
62. Failure by the offeror to file evidence to demonstrate that the offered ship is a Canadian-registered ship, or will become a Canadian-registered ship by the time the proposed activity is to take place, will result in the Agency concluding that the ship is not available for the proposed activity.
63. The Coasting Trade Act does not state that an offered Canadian-registered ship must be "identical" to the foreign ship proposed in an application. Furthermore, the suitability of the Canadian-registered ship is not assessed in relation to the technical specifications of the foreign ship. Rather, the Agency assesses the suitability of the Canadian-registered ship in relation to the technical and operational requirements of the activity and whether the Canadian-registered ship is capable of performing the activity. The suitability factors to be assessed may include:
technical and operational suitability – technical characteristics of the ship and equipment required to operationally perform the proposed marine service or activity; and
commercial and economic suitability – the commercial (e.g., financial) and economic implications of using the foreign ship versus the offered Canadian-registered ship.
64. Technical/Operational Suitability: Parties (applicants and offerors) are encouraged to review the Agency Decisions summarized in Appendix E that highlight precedents and issues that have arisen in previous cases.
65. Commercial/Economic Suitability: The Agency recognizes, as a general principle consistent with the overall intent of the Coasting Trade Act, that the operation of Canadian-registered and crewed ships implies costs and operating conditions that are not applicable to (and are usually higher than for) foreign ships. Therefore, allegations or evidence from the applicant that go solely to the "higher cost" of operating a Canadian ship are generally insufficient to establish that an offered Canadian-registered ship is not commercially/economically suitable.
66. Where commercial/economic suitability has been raised by the applicant, the applicant must produce evidence that clearly demonstrates:
the necessity of using the foreign ship for the commercial viability of the proposed activity; and
that the higher costs of using an offered Canadian ship for the activity would render the activity commercially/economically unviable.
67. If the applicant produces this evidence, the offeror must then challenge the applicant's evidence by, for example, producing evidence in its reply to demonstrate that it is more likely than not that the use of the Canadian-registered ship would not render the proposed activity commercially/economically unviable.
68. Third-Party Expertise: The Agency has the authority to require the parties to provide any additional information it deems necessary. For example, the Agency, on occasion, has determined that additional information is necessary from an impartial third-party expert for the applicant or offeror to meet its evidentiary burden. As the "burden of proof" lies with the applicant, responsibility for the costs for third-party expertise usually falls on the applicant. However, there may be circumstances where the responsibility for the costs for third-party expertise may fall on the offeror if the evidence is necessary to discharge its evidentiary burden.
69. The Coasting Trade Act does not state that an offered Canadian-registered ship must be available on the exact dates stipulated in an application. The Agency has determined on a number of occasions that the time period during which a proposed activity could take place could be reasonably flexible without affecting the parties' interests. Therefore, the Agency may use the following factors to determine availability:
the underlying rationale as to why the dates stipulated in the application are crucial and why alternatives could not be considered;
the capability of the offered ship to be at the required site on time;
location of the offered ship and repositioning delay;
the normal, or usual, time-period for conducting a proposed activity (e.g., seismic research off Canada's East Coast); and
the ability of the offered ship to perform the proposed activity by the end of the required period (or relevant shipping/activity season).
3.5.4 Passenger Services – Identical or Similar Adequate Marine Services
70. With respect to passenger services, and in addition to the suitability and availability tests above, the Coasting Trade Act requires the Agency to determine whether an identical or similar adequate marine service is available from any person operating one or more Canadian-registered ships. In determining ‘identical or similar adequate' passenger marine service, the Agency relies on factors such as:
the offered ship's characteristics (e.g., passenger capacity, level of service, vintage, quality of build, appointments, etc.) in relation to the proposed foreign ship for conducting the proposed activity or service; and
the distinctness of the passenger or cruise market targeted (e.g., cost/luxury segment of packages/service, foreign versus domestic marketing) by the proposed activity in relation to the offered packages/services of the offeror.