Considering Importing a Vessel into Canada?

pf collins truck in front of vessel - importing a vessel into canada / import a vesselIf you are a vessel owner or operator planning to import a vessel for a project or register a vessel in Canada, there are numerous regulations to consider. The operation of foreign vessels in Canadian waters is regulated by the Government of Canada’s Coasting Trade Act and enforced by several federal and provincial agencies.

Below we provide a brief overview of the regulatory environment, processes and procedures required when planning to import a vessel into Canada. Further details as to how to import a vessel can be found in our Guide to Importing Vessels into Canada.

Coasting Trade Act

Canada’s Coasting Trade Act protects Canadian marine interests by limiting vessel operations within Canada’s waters to Canadian-registered, duty paid vessels. While priority to engage in the coasting trade is given to Canadian-registered, duty paid vessels, the Act includes provisions for the temporary entry of foreign or non-duty paid vessels provided there are no Canadian-registered vessels available or capable to perform the required work.

Foreign or non-registered, duty paid vessels must obtain a Coasting Trade Licence prior to commencement of operations in Canada. Owners or operators (or agent on their behalf, such as PF Collins) must submit an application to the Canada Border Services Agency (CBSA) or the Canadian Transportation Agency (CTA). The success of the application is dependent upon the suitability and availability of any Canadian-registered vessels to complete the work.

Exemption for Seismic Vessels

To improve access to better seismic data for offshore development, Canada’s 2012 Economic Action Plan amended the Coasting Trade Act to remove the requirement for foreign seismic vessels to obtain a Coasting Trade Licence when undertaking oil and gas exploration on the continental shelf of Canada. Seismic vessels must still obtain a Coasting Trade Licence when conducting activities in the Territorial Sea of Canada.

Exemptions for Importing a Vessel under CETA

In 2017, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) introduced provisions to allow European Union entities to provide specific services without the requirement of a Coasting Trade Licence:

  • Feeder service between the Ports of Halifax and Montreal
  • Repositioning of empty containers;
  • Dredging services.

Contact us to learn more about importing a vessel under CETA.

Duty and Tax Considerations

All vessels entering Canada for temporary periods must pay applicable duty and tax. Imported vessels are typically subject to a duty rate of 25% of the fair market value, subject to any free trade agreements that apply (e.g. CETA). Duty is prorated for each month the vessel is operating in Canada. Goods and Services Tax (GST) is applied at a rate of 5% of the monthly duty-paid value of the vessel; GST is fully refundable when the importer is a GST-registered entity. Additionally, a federal Excise Tax is imposed on marine diesel fuel, added to the normal domestic fuel price.

Immigration Considerations for Foreign Onshore and Offshore Personnel

Foreign personnel entering Canada to work onboard the vessel must obtain a work permit prior to employment. Service Canada issues Labour Market Impact Assessments (LMIA) for crew onboard foreign vessels approved by the CBSA. It is expected that, where available, Canadians will have first opportunity to fill the positions. Therefore, the application process requires advertising for onboard positions and the inclusion of a succession plan for Canadian personnel. When vessel operations are related to offshore oil and gas exploration or production, local petroleum boards may also require that local benefits provisions are met (e.g. Canada-Newfoundland and Labrador Offshore Petroleum Board, Canada-Nova Scotia Offshore Petroleum Board).

Safety Inspections

As a pre-requisite for the issuance of a Coasting Trade Licence, the vessel must undergo inspection at its first port of call in Canada to ensure compliance with the safety requirements of Transport Canada, the Canadian Coast Guard, and the local petroleum board.

We Can Help

From drillships and offshore construction vessels in Atlantic Canada to dredgers in British Columbia, PF Collins has assisted vessel owners and operators in navigating the numerous regulatory requirements associated with importing a vessel into Canada’s Coasting Trade. From vessel importation to crew changes and expediting ships spares – our full suite of project logistics services ensure a successful project from start to finish.

For more information or to find out how we can help to import a vessel into Canada, contact your local PF Collins office or our Consulting Group at consulting.group@pfcollins.com.