Backgrounder: Revised Guidelines Respecting Coasting Trade Licence Applications

In July 2010, the Canadian Transportation Agency released its revised Guidelines Respecting Coasting Trade Licence Applications, which replace the former guidelines released in 2003.

The Guidelines serve to clarify, among other things, the Agency's mandate under the Coasting Trade Act, the roles and responsibilities of parties involved in the application process before the Agency, as well as the Agency's administrative process. The Coasting Trade Act is designed to protect the interests of Canadian vessel operators when dealing with applications to use foreign or non-duty paid ships in Canada.

In finalizing the Guidelines, the Agency held two rounds of consultations with interested parties and stakeholders. These consultations took place from November 18, 2009 to January 7, 2010, and again from January 27 to March 8, 2010.

The Agency considered comments received from 25 parties that filed submissions during the 60 days of consultations.

The Guidelines now further clarify issues such as:

  • Advance notice for applications and the time limits for pleadings;
  • Content of applications and offers;
  • Roles and responsibilities of the applicant, the offeror and the Agency;
  • How the Agency deals with the issue of confidentiality and other procedural matters; and
  • The more limited role that objectors may play in the process.

Advance notice for application and time limits for pleadings

The 15 business day advance notice for non-urgent, shorter term services has been eliminated and replaced with a requirement for those applications to follow the minimum advance notice of 30 days. The Agency recognizes that applying the advance notice period of 30 days is more appropriate for activities that are by definition "non-urgent".

Recognizing the need to also process applications requiring faster turnaround to address emergency situations as well as unforeseen short-term commercial opportunities, the existing fast-track route has been divided into two distinct processes: "fast-track" and "urgent".

In response to comments from participants during the consultations, the Agency has further clarified the concept of "fast-track" and "urgent" to more precisely define the circumstances under which an application can be processed accordingly. Each process now has its own set of steps, strict definitions, and an outline of precise information to be included in the applications.

Content of applications and offers

The information that must be filed by parties involved in a coasting trade licence application has been further clarified.

In response to comments from participants during the consultations, the Agency has:

  • Clarified the content of submissions through the accelerated process;
  • Stated that speculative applications would only be accepted in exceptional circumstances; and
  • Reminded applicants, offerors and/or objectors that it is a criminal offence under the Coasting Trade Act for a person to knowingly make a false or misleading statement.

Roles and responsibilities of the applicant, the offeror and the Agency

Explained in greater detail are the roles of all parties involved in a coasting trade application, and in particular the evidentiary burden that the applicant and the offeror must meet. The Guidelines also explain how the Agency considers the material submitted by all parties involved.

Confidentiality and other procedural matters

In an effort to ensure that the Guidelines are both self-contained and complete, and to avoid confusion, the Agency has stated that its General Rules no longer apply to coasting trade licence applications.

Appendix D has been added to cover other procedural matters with provisions drawn from the existing General Rules, but adapted specifically for coasting trade licence applications, including clarification of the status of persons who make comments without filing an offer.

As a result of comments raised by participants during consultations, it also indicates how the Agency would address issues of confidentiality that could arise during the processing of coasting trade licence applications.

Other matters related to the processing of coasting trade applications

Timelines and other Government authorities

The Guidelines clearly remind applicants to take into account the time required for each relevant federal government authority to carry out its obligations for coasting trade applications.

In this respect, to assist applicants in their planning, the Agency has included more information about other key federal agencies and departments involved in the coasting trade licence application process, as well as their approximate timelines required to carry out their respective obligations.

Agency performance targets

In 2007, the Agency adopted a new performance measurement framework. The Guidelines now include the newly adopted performance targets which the Agency strives to achieve for the processing of coasting trade applications. While it is recognized that some cases may require the full statutory period of 120 days for the Agency to issue its determinations where the applications are contentious or complex, the Agency's targets are:

  • 95% of the coasting trade applications without an offer processed prior to the commencement date (the actual result in 2009-10 was 100%).
  • 80% of the coasting trade applications with an offer processed within 90 days (the actual result in 2009-10 was 90%).

Foreign and Canadian ships

The Guidelines reiterate that the Agency can consider economic or commercial criteria in determining whether a Canadian-registered vessel is suitable for a proposed activity.

The threshold for the test in this instance remains high. The applicant must demonstrate both the necessity of using a 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.

Notices of Applications

In regard to Notices of Application, the revised Guidelines have been modified to indicate that parties who wish to receive a copy of the notices for information purposes should contact the Agency to be included in the Agency marine database.

In an effort to modernize the applications process and given the comments made during the consultation process, the Agency is considering the development of an e-mail notification system.

Matters outside of Agency jurisdiction

A number of issues and concerns were raised during the consultations which are not within the Agency's jurisdiction, including:

  • Alleged duplication of mandates between the Canada-Newfoundland and Labrador Offshore Petroleum Board and the Agency.
  • Repetitive requests year after year using the same foreign flagged or Canadian non-duty paid vessels.
  • Removal of the Coasting Trade Act requirements for seismic vessels.
  • Simplified application process for the movement of empty containers.
  • Holding annual or bi-annual meeting between industry stakeholders and the various federal departments and agencies involved in the coasting trade licence process.

Agency staff will bring such proposals and concerns to the attention of the relevant authorities.

For more information

Contact the Agency at:

Canadian Transportation Agency
Ottawa, Ontario  K1A 0N9

Telephone:
1-888-222-2592
TTY:
1-800-669-5575
Facsimile:
819-997-6727
E-mail:
info@otc-cta.gc.ca
Web site:
www.cta.gc.ca

To view the revised Guidelines Respecting Coasting Trade Applications, visit www.otc-cta.gc.ca/eng/coasting-trade.

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