Importing a Vessel into Canada Governed
by Canada’s Coasting Trade Act

There are many rules and regulations that vessel owners/operators must consider when importing a vessel into Canada. The operation of foreign vessels in Canada is regulated by the Government of Canada’s Coasting Trade Act and enforced by several federal and provincial departments and agencies.

Below we provide an overview of the processes and procedures required when planning to import a boat into Canada. For your convenience, we have included the following Importing a Vessel into Canada Guide with additional details to download.

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Canada’s Coasting Trade Act

The Coasting Trade Act protects Canada’s marine industry by limiting vessel operations within its waters to Canadian-registered, duty paid vessels. While priority is given to these vessels, there are provisions for the temporary entry of foreign or non-duty paid vessels. This is provided there are no Canadian-registered vessels available or capable to perform the required scope of work.

Foreign or non-registered, duty paid vessels must obtain a Coasting Trade Licence prior to beginning 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.

Exemptions Under the Coasting Trade Act

Exemptions 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. These services include:

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

For more information about importing a vessel under CETA visit our dedicated page below, email us at info@pfcollins.com or call us toll-free at 1-800-763-2255

Duty and Tax Considerations When Importing a Vessel

All vessels entering Canada for temporary periods must pay the applicable duty and tax.

Imported vessels are typically subject to a duty rate of 25% of the fair market value, prorated for each month the vessel is operating in Canada. The duty rate is also subject to any free trade agreements that apply (e.g. CETA). 

In addition, imported vessels are subject to the federal Goods and Services Tax (GST), calculated at a rate of 5% of the monthly duty-paid value of the vessel. The GST is fully refundable when the importer is a GST-registered entity with the Government of Canada.

A federal Excise Tax is also applied on marine diesel fuel, added to the normal domestic fuel price.

Other Considerations

Immigration for Foreign Crew and Shore-Based Personnel

Foreign crew 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. When assessing applications, Service Canada expects Canadians to have the 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.

Local petroleum boards may also require local benefits provisions be met for operations related to offshore oil and gas. Petroleum boards in Canada include the Canada-Newfoundland and Labrador Offshore Petroleum Board and 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.

Information & Resources

To further clarify and assist with importing a vessel into Canada, please see the following resources:

• PF Collins Marine Agency
• CEFTA, CETA, and CUKTCA Origin Declaration Form

The post Importing a Vessel into Canada’s Coasting Trade first appeared on PF Collins International Trade Solutions.

The Canada-EU Comprehensive Economic and Trade Agreement (CETA) is a bilateral free trade agreement between Canada and the EU. Entering into force on September 21, 2017, it reduces and eliminates duties across all sectors of the economy. But how is the importation of commercial vessels and ships affected? In this post, we take a look at importing vessels under CETA. 

Understanding CETA

CETA takes a phased approach to removing tariffs. 98% of products and services had duties removed as soon as CETA came into force. An additional 1% of tariffs will be eliminated over the next few years. As a result, 99% of all Canadian goods entering the EU market will be duty-free.

However, not all tariffs will eventually enjoy duty free status. Commodities are categorized into seven Staging Categories, “A” through to “E”, ranging from duty-free to exempt from tariff elimination. For instance:

Importing Vessels and Ships

Most commercial vessels and ships fall under staging categories B & D. For example:

Staging Categories for Importing Vessels under CETA

The following lists CETA staging categories for ships, boats, and floating structures:

Certificate of Origin

The exporter must include an origin declaration on the invoice to enable the importer to claim preferential tariff treatment under CETA. For example, this can be a simple statement indicating the goods meet the rules of origin.

Exporter Obligations

Customs officials in the export country have the authority to validate the claim for CETA tariff treatment. In addition, the exporter must notify the importer of any changes to an origin declaration by the exporter.

Importer Obligations

It is the importer’s responsibility to possess the exporter’s origin declaration at time of clearance. The importer must also correct declarations within 90 days of being notified of changes that affect origin status.

The importer can request a refund of duties in cases where they did not have an origin declaration. However, a request for refund of duties must be completed within a specified time period.

Canada Border Services Agency (CBSA) may also request verification that the goods remained under customs control if transshipped via a non-CETA country.

12 Key Sectors of CETA

The Government of Canada has identified 12 key sectors of interest to Canadian businesses that will benefit from CETA, such as Aerospace, Agriculture and Agri-food, Automotive, Fish and Seafood, and Oil & Gas. Visit Global Affairs for more information on the key sectors.

Finding Your Product’s Tariff Rate Reduction

For more information on CETA or to determine the EU Tariff Rate associated with your product or equipment, please visit the Canada Tariff Finder.

The post Importing Vessels Under CETA first appeared on PF Collins International Trade Solutions.

The Canada-European Free Trade Association Free Trade Agreement (CEFTA) was first signed in Davos, Switzerland on January 26, 2008 and came into effect July 1, 2009. CEFTA includes the countries of Iceland, Liechtenstein, Norway and Switzerland. As a result of this agreement, duty rates applied to the importation of various vessels into Canada were greatly affected.

Canadian customs duties under Chapter 89 – Ships, boats, and floating structures – of the Harmonized Tariff average 25% under the Most Favoured Nation (MFN) Tariff rate. Vessels that qualify under the rules of origin of CEFTA will benefit from a reduction of these duty rates as, under the agreement, the rate of duty is gradually being reduced on an annual basis until it reaches duty free status in July 2023.

Due to the complexity of CEFTA rules of origin, its distinct tariff classification regulations, as well as an increased frequency of auditing by Canada Border Services Agency (CBSA), it is in an importer’s best interest to obtain an advance ruling on Tariff Classification and Origin Status. A written decision from CBSA on tariff change in advance of the importation may affect the origin qualification and eliminate duty exposure.

PF Collins has been assisting vessel owners and operators for over 50 years! Further information on vessel importations and Canada’s coasting trade regulations can be found in our Guide to Importing Vessels into Canada. Please contact us if you require any further information or assistance.

Importing A Vessel Into Canada

Further information on vessel importations and Canada’s Coasting Trade regulations can be found in our Guide to Importing Vessels into Canada. Or contact us if you require any further assistance!

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The post How CEFTA Affects the Importation of Vessels into Canada first appeared on PF Collins International Trade Solutions.