Vol. 132, No. 25 — December 9, 1998

Registration
SOR/98-576 27 November, 1998

FINANCIAL ADMINISTRATION ACT

Capacity Plates and Conformity Plates Charges Order

The Minister of Transport, pursuant to Order in Council P.C. 1994-642 of April 21, 1994(see footnote a), made pursuant to paragraph 19(1)(b)(see footnote b) of the Financial Administration Act, hereby makes the annexed Capacity Plates and Conformity Plates Charges Order.

November 26, 1998

David Collenette
Minister of Transport

CAPACITY PLATES AND CONFORMITY PLATES CHARGES ORDER

INTERPRETATION

1. The definitions in this section apply in this Order.

"capacity plate" means a plate pertaining to the recommended safe limits of engine power and recommended gross load capacity. (plaque de capacité)

"conformity plate" means a notice in the form of a plate that pertains to compliance with construction standards. (plaque de conformité)

CHARGES

2. The charge to be paid for the issue of a capacity plate is $5.

3. The charge to be paid for the issue of a conformity plate is $5.

COMING INTO FORCE

4. This Order comes into force on April 1, 1999.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Order.)

Description

The Small Vessel Regulations (SVR) which deal with the safe operation of small vessels are being amended to respond to the emergence of new water activities, innovations in lifesaving equipment, and the technological evolution of watercraft. The current regulations have been in place for some 20 years and have undergone only minor changes during this period.

Under these Regulations, small vessels are required to display a capacity, conformity or single vessel plate that attests that they meet established construction standards. The capacity and single vessel plates may also identify safe limits of engine power, load capacity and the number of people allowed on board.

Capacity plates fees were introduced in 1962 while conformity plates were introduced in 1974. Both fees remained at the same level until they were raised under SOR/87-593. In 1994, authority to prescribe fees, by Order in Council, for capacity and conformity plates was delegated to the Minister of Transport by the Governor in Council.

The fees for the issuance of vessel plates no longer reflect the technical evaluation, administration, production and issuing costs. Therefore, this Order will increase the fee for a capacity plate or single vessel plate from $2.50 to $5 and the fee for a conformity plate from $1 to $5.

Capacity plates are required on vessels that are not over 6 m in length and capable of being fitted with a motor or motors of 10 hp (7.5 kW) or more. All vessels that are capable of being fitted with a motor of any power that are not required to have a capacity plate must have a conformity plate or single vessel plate stating that the vessel is constructed in accordance with the construction standards.

Alternatives

No alternative was available that would achieve Treasury Board cost recovery objectives.

Benefits and Costs

Costs

The total fee for a capacity plate which includes a conformity plate will increase from $3.50 to $5, and the fee for a single vessel plate formerly called experimental plate will increase from $2.50 to $5 and the fee for a conformity plate will increase from $1 to $5. The fees were last adjusted in 1987.

Based on 1994-96 data, it is estimated that 118,276 new recreational vessels are sold annually in Canada, with a total retail value of $659 million. The average price varies from a low of $984 for rowboats to a high of $65,341 for power boats over 8 m. Of these 118,276 new vessels, an estimated 30,668 are required to carry capacity plates and 34,450 are required to have conformity plates. The total annual cost of these fee increases is approximately $214,500.

If the increase in the cost of capacity plates and conformity plates is passed on to boat purchasers as a price increase (rather than being absorbed by the manufacturers), the average price of new vessels will increase by 0.03 per cent. The impact on boat sales of this increase in the cost of new vessels is estimated to be negligible.

Benefits

The current fees for vessel plates do not cover the costs incurred by the Canadian Coast Guard to do the technical evaluation, administer, produce and issue them. The new fees are more in line with these costs. Therefore, the fee increase is not a net cost to Canada but rather a transfer of costs from taxpayers in general to boat purchasers. In its policy on external user charges, Treasury Board encourages departments to increase the equity of the tax system by shifting the costs of some activities away from taxpayers to those individuals who benefit most directly from them. Boat purchasers benefit directly from the requirement to attach vessel plates because these plates provide assurance to buyers that new vessels are in compliance with current construction standards.

Consultation

Work on the amendments to the SVR commenced in 1990 and has been conducted through the Small Vessel Regulations and Standards Working Group of the Canadian Marine Advisory Council (CMAC). CMAC is the mechanism that Coast Guard and Transport Canada use to consult the public on regulatory matters. Boating safety and training organizations, cottager associations, enforcement agencies, marine equipment and boat manufacturers, Transport Canada, and the Canadian Coast Guard were represented on the Working Group.

The Working Group completed its final review of the amendments to the SVR in the fall of 1997.

A consultation document outlining the amendments to the SVR was submitted to the national and regional Recreational Boating Advisory Councils (RBACs) for review. The Councils, which are consultation bodies that advise the Commissioner and Regional Directors of the Canadian Coast Guard, represent a broad cross-section of the boating community. The consultation document was also provided for review and comments to other selected boating organizations across the country who have a particular interest in the amendments to the SVR.

Wider consultations with the boating public were carried out coast to coast through information booths at major events such as boat shows. A pamphlet explaining the changes was also designed and distributed to the recreational boating community. This pamphlet also provided an opportunity for interested persons to make written representations to the Canadian Coast Guard concerning the amendments. This opportunity for comment remained until the end of the 45-day period for making representations that was established when the Regulations were pre-published in the Canada Gazette Part I on November 29, 1997.

Two letters were received regarding the proposed increase. Both writers expressed concern that the fee increase represent a significant price increase and that industry can certainly not afford any unnecessary increases in manufacturing costs at this present time.

After careful consideration of all of the comments received and the fact the fee adjustment brings revenue in line to cover the administrative cost of the program, it was decided to proceed with the implementation of the proposals.

Compliance and Enforcement

This area remains unchanged. Charges payable under the Capacity Plates and Conformity Plates Charges Order will be recovered through the Department's current administrative collection procedures. Enforcement will continue to be done by the enforcement community as in the past. Therefore, no new enforcement burden is created.

Contact

Michel Desparois
A/Manager, Regulations
Office of Boating Safety
Department of Fisheries and Oceans
200 Kent Street, 5th Floor
Centennial Towers
Ottawa, Ontario
K1A 0E6
Telephone: (613) 991-4981

Footnote a

SI/94-57

Footnote b

S.C. 1991, c. 24, s. 6

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