Decision No. 437-W-2014

December 2, 2014

APPLICATION by McKeil Malaspina Ltd., pursuant to the Coasting Trade Act, S.C., 1992, c. 31, for a licence.

Case number: 
14-05040

INTRODUCTION

Application

[1] On September 24, 2014, McKeil Malaspina Ltd. (McKeil) applied, through its representative, for a licence to use the “TOBIAS”, a Canadian non-duty paid heavy deck self-ballasting cargo barge. The ship will be used as a batch plant to support the construction of the Hebron Gravity Based Structure (GBS), in and around Bull Arm, Newfoundland and Labrador. The activity will commence on January 1 and end on December 31, 2015.

Notice and offer

[2] On September 29, 2014, Canadian Transportation Agency (Agency) staff gave notice of the application to the Canadian marine industry.

[3] On October 7, 2014, CAI Group (CAI) filed an objection to the application and offered the “CHAULK LIFTER”, a Canadian-registered self‑supporting heavy lift barge, to perform the activity. On October 17, 2014, McKeil filed its answer to the offer. CAI did not file a reply.

Conclusion

[4] The Agency determines, pursuant to subsection 8(1) of the Coasting Trade Act, that there is no suitable Canadian ship available to perform the activity.

ISSUE

[5] Is there a suitable Canadian ship available to perform the activity?

LEGISLATIVE CONTEXT

[6] The intent of the Coasting Trade Act is to allow foreign ships to be used in Canadian waters when there is no suitable Canadian ship available for a proposed activity. The Agency must determine whether, on a balance of probabilities, a Canadian ship is suitable and available to perform the activity.

[7] In carrying out its responsibilities, the Agency relies upon an applicant to provide detailed information about all relevant facts and circumstances that are pertinent to a proposed activity and to the foreign ship to be used. The Agency also relies upon Canadian operators to provide detailed information about the offered ship and how a Canadian ship that has been offered would be able to meet the requirements as described by an applicant. These requirements are clearly set out in the Canadian Transportation Agency Guidelines Respecting Coasting Trade Licence Applications (Guidelines).

[8] The Guidelines provide that the onus is on the applicant to demonstrate that a ship that has been offered is not suitable and/or not available for the proposed activity. Further, the Guidelines recognize that the Coasting Trade Act does not state that an offered Canadian-registered ship must be “identical” to the foreign ship proposed in the application. The suitability of a Canadian‑registered ship is not assessed in relation to the foreign ship, but rather in relation to the requirements of the activity and whether the Canadian-registered ship is capable of performing the activity.

POSITIONS OF THE PARTIES

[9] In its application, McKeil states that the required barge will be part of the marine fleet supporting the construction in and around Bull Arm. McKeil adds that the barge will be outfitted with two batch plants that will include storage silos, office and test laboratories, and an access tower to the GBS.

[10] CAI submits that the McKeil has not provided retrofit requirements for the activity, and argues that the application lacks significant details and focuses on the specifications of the barge instead of the details of the activity.

[11] In its answer, McKeil submitted a letter from Kiewit-Kvaerner Contractors (KKC), the contractor responsible for the construction of the GBS, which detailed the reasons why KKC had determined that the “CHAULK LIFTER” would be technically unsuitable.

[12] KKC contends that the deck area on the “CHAULK LIFTER” is grossly insufficient to meet the project requirements. McKeil included a general arrangement drawing of the batch plants superimposed on the “CHAULK LIFTER” to demonstrate that there is insufficient deck area on the “CHAULK LIFTER”.

[13] McKeil submits that the deadweight of the batch plants (and materials) is 7,956 metric tonnes, and the deadweight capacity of the “CHAULK LIFTER” is 4,850 metric tonnes. In this regard, KKC states that the total carrying capacity of the “CHAULK LIFTER” is too small to support all the batch plant and associated equipment required to be installed on the batch plant barge.

[14] KKC states that the “CHAULK LIFTER”, with its narrow beam and shape, does not offer sufficient transverse stability to withstand the overturning loads imposed by the geometry of the batch plant buildings and associated structures. McKeil also submits that the transverse stability cannot be achieved as the deadweight of the batch plants exceeds the carrying capacity of the “CHAULK LIFTER”.

[15] KKC submits that the project requirements are that all barges involved in the activity must be sound, well maintained, suitable for their intended use, less than 15 years old, and classed by a recognized classification society from original commissioning. McKeil asserts that the “CHAULK LIFTER” does not meet the minimum requirements as it is not in class and is over 15 years old.

ANALYSIS AND FINDINGS

Technical suitability

[16] When determining the suitability of the Canadian ship, the Agency does not assess it in relation to the technical specifications of the foreign ship; rather it assesses the suitability in relation to the technical and operational requirements of the proposed activity and whether the Canadian ship is capable of performing the activity.

[17] With respect to the burden of proof, the Agency has been consistent in its opinion that while the offering party has the responsibility to establish, in response to allegations to the contrary made by the applicant, that its ships are suitable and available to perform the activity, the ultimate burden of proof rests, on a balance of probabilities, with the applicant to demonstrate that the offered ships are not suitable and available.

[18] In this case, KKC and McKeil have provided detailed descriptions of the requirements of the activity. KKC argues that, with respect to those requirements, the “CHAULK LIFTER” is not technically suitable due to its insufficient deck area, inadequate carrying capacity, lack of sufficient transverse stability, and inability to meet the age and class requirements.

[19] In contrast, CAI has not provided information on how the “CHAULK LIFTER” would meet the requirements of the activity.

[20] The Agency finds that McKeil has provided sufficient evidence to establish that the “CHAULK LIFTER” is not technically suitable to perform the activity. Considering that CAI has not countered or contradicted McKeil’s evidence regarding the requirements of the activity as well as the suitability of the “CHAULK LIFTER”, the Agency determines that McKeil has met its burden of proof.

[21] The Agency therefore finds that McKeil has demonstrated that the “CHAULK LIFTER” is not suitable to perform the activity.

Availability

[22] Having found that there is no suitable Canadian ship, there is no need for the Agency to address the issue of availability.

DETERMINATION

[23] Based on the above finding, the Agency determines, pursuant to subsection 8(1) of the Coasting Trade Act, that there is no suitable Canadian ship available to perform the activity.

[24] The Agency is providing this determination to the Minister of Public Safety and Emergency Preparedness to consider whether to issue the licence. This Decision is not an authority to operate.

Member(s)

William G. McMurray
Stephen Campbell
Date modified: