Vol. 150, No. 52 — December 24, 2016

Regulations Respecting Compulsory Insurance for Ships Carrying Passengers

Statutory authority

Marine Liability Act

Sponsoring department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: The Marine Liability Act (the Act) introduced a liability regime for all commercial and public purpose ships engaged in the carriage of passengers. However, carriers are not currently required to maintain insurance towards their liability to passengers.

Description: The proposed Regulations Respecting Compulsory Insurance for Ships Carrying Passengers (the proposed Regulations) would require commercial and public purpose ships engaged in the domestic carriage of passengers to maintain liability insurance in an amount of $250,000 multiplied by the passenger capacity of the ship. They would require that a Certificate of Insurance be kept on board the vessel where feasible or be produced within 24 hours after a designated officer boards the ship.

Cost-benefit statement: Insurance exists to allow the transfer of financial risk from an individual to a pooled group of risks. Such a transfer of risk does not provide a net benefit or cost to society as a whole but can impose a real cost (insurance premiums) on some individuals. The proposed Regulations are estimated to result in total costs to approximately 1 756 ship operators of $24.18 million over a 10-year period, which corresponds to an annualized cost of $3.44 million. The benefits of the provision of financial security to the passengers and their families in the event of an incident and the reduction in the number and severity of accidents brought about by insurance are unquantifiable.

“One-for-One” Rule and small business lens: The “One-for-One” Rule does not apply, as there would not be any additional administrative burden associated with this regulatory proposal.

The small business lens applies, as it is estimated that the majority of the population impacted by this new regulatory proposal will be small businesses. However, it is expected that the cost would be proportionate to the size of a given operation — small businesses with fewer vessels and fewer passengers are expected to carry lower costs. The cost impact on small business is further reduced by limiting the amount of insurance required, providing flexibility in the type of insurance required and delaying the application of the Regulations to those operators already carrying some form of passenger insurance.

Domestic and international coordination and cooperation: Some provinces require that any person operating a marine passenger service for remuneration acquire a permit that must be accompanied by a certificate of marine civil liability insurance. The proposed Regulations would cover a wider scope of ships with generally higher levels of liability insurance required, as well as provide a uniform level of coverage across Canada and align the marine industry with all other modes of transportation.

Vessel operators that comply with current provincial and territorial regulations that require passenger insurance would need to comply with the proposed Regulations when their current policy expires or is altered or cancelled. As the proposed Regulations would apply to domestic voyages only, international coordination is not applicable.

Background

Part 4 of the Marine Liability Act (the Act) introduced a comprehensive liability regime for passengers carried on commercial or public purpose ships. The liability regime is based on the International Maritime Organization’s Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 as amended by the Protocol of 1990 (1990 Athens Convention).

The 1990 Athens Convention presumes the carrier to be liable for injuries resulting from shipwreck, collisions, stranding, explosion, fire and any defect of the ship. As a trade-off, carriers can limit their liability to each passenger to 175 000 Special Drawing Rights (see footnote 1) (SDR). For this trade-off to work, carriers must have the financial resources to cover this liability. The 1990 Athens Convention does not require carriers to insure this liability; however, section 39 of the Act provides authority to make regulations requiring carriers to maintain insurance to cover their liability to passengers up to the maximum limit of liability.

On June 16, 2000, the tour boat True North II sank in 15 m of water in Georgian Bay resulting in the drowning of two children. The inquest found that the owner-operator was not insured and recommended compulsory insurance for commercial ships carrying passengers. Following this incident, the Minister of Transport made a commitment in 2001 to the House of Commons Standing Committee on Transport and Government Operations to enact regulations requiring compulsory insurance for ships carrying passengers.

The Minister publicly announced the Government’s plans to proceed with these Regulations in 2003. The Department of Transport (the Department) undertook a comprehensive implementation study (Mariport Report) in 2002 and extensive consultations with marine stakeholders and marine insurers in 2003–2004.

However, the Department was unable to proceed with the Regulations because the adventure tourism industry (e.g. white water rafting) could not acquire insurance without “waivers of liability” that are invalid under Part 4 of the Act. The Act was amended in 2009 to exclude adventure tourism activities (subsection 37.1(1) of Part 4 of the Act). Liability for these activities now falls under Part 3 of the Act.

Issues

While the Act contains a liability regime for passengers carried on board commercial or public purpose ships, carriers are not required to maintain liability insurance towards their liability to passengers.

Objectives

The objective is to ensure the financial security of compensation due to passengers or their dependents in the event of a marine accident involving personal injury or loss of life by requiring marine carriers to maintain appropriate insurance.

Description

The proposed Regulations would require ships carrying passengers to maintain liability insurance for death or personal injury. More specifically, they would

The proposed Regulations would not apply to

To facilitate compliance, the proposed Regulations provide for implementation in two stages.

Existing insurance policies

Carriers who hold an insurance policy for liability to passengers when the proposed Regulations come into force would need to comply with them upon the renewal, modification or cancellation of the policy.

New insurance policies

Carriers who hold no insurance policy for liability to passengers when the proposed Regulations come into force would be required to comply with them 60 days after they come into force.

Regulatory and non-regulatory options considered

Status quo: continue voluntary compliance

Consultations with stakeholders revealed that most owners of passenger ships over 15 gross tonnage (GT) carry sufficient insurance. However, owners of other ships and those that are 15 GT or less that may carry passengers may have insufficient insurance or no insurance at all.

For example, some ships may carry passengers when not used for their primary purpose (e.g. fishing vessels used for whale watching when not commercially fishing). In those cases, carriers must inform the Department that they occasionally carry passengers and comply with the requirements of the Canada Shipping Act, 2001.

Owners of such ships may insure against losses associated with their primary purposes (e.g. hull and machinery insurance), but may overlook the need for liability insurance. Indeed, during consultations, some small businesses engaged in such passenger services stated that they could not afford liability insurance. They would therefore likely be incapable of meeting their financial obligations if a passenger were injured or killed as a result of a marine accident. Since the True North II incident, there have been other marine accidents where the lack of passenger insurance has been an issue.

A 2008 Ontario Coroner’s inquest reiterated the recommendation that all small commercial vessels up to 15 gross tons be required to maintain liability insurance. (see footnote 4)

Not introducing compulsory insurance would mean that a carrier could make a business decision that would be prejudicial to the passenger’s right to compensation for injuries or death in the case of a marine accident. Continuing a policy of voluntary compliance would perpetuate the disadvantages of marine passengers compared to the passengers in other modes of transport where compulsory insurance is the norm. Therefore, the continued voluntary compliance would not meet the objective of protecting the general public in the event of a marine accident.

Compulsory insurance regulations solely for passenger ships over 15 GT

Implementing a threshold such as 15 GT and above would protect passengers aboard ships over the threshold, but could possibly imply that they are more “valued” than passengers on ships below 15 GT. (see footnote 5) Similarly, applying the proposed Regulations solely to ships whose primary purpose is passenger carriage would devalue passengers on non-passenger ships that are carrying passengers on an occasional basis.

Limiting the application of the proposed Regulations to ships of a certain size or purpose could also provide an incentive for carriers to misrepresent either the size of their ships or the nature of their operations. This could competitively disadvantage carriers that comply with the proposed Regulations. Such exemptions may also confuse passengers who assume that they are covered.

Compulsory insurance regulations for commercial and public purpose ships carrying passengers (the proposed Regulations)

Under this option, commercial and public purpose ships engaged in the domestic carriage of passengers would be required to maintain liability insurance for death or personal injury in an amount of not less than $250,000 multiplied by the passenger capacity of the ship.

This would meet the objective of ensuring a uniform approach to the compensation of passengers or their dependants in the event of a marine accident involving personal injury or loss of life.

Finally, the proposed Regulations would also align with the compulsory insurance regulations that provide financial protection to Canadian passengers in other transportation modes (air, rail, and road).

Benefits and costs

Benefits

The proposed Regulations are expected to result in a range of benefits, including enhancing the financial protection of marine carriers and their passengers, meeting public expectations, and improving safety on board small ships.

The financial protection of marine passengers would be enhanced by ensuring that carriers have the financial resources to pay compensation for accidental injuries or deaths. Compulsory insurance would protect carriers against catastrophic losses and possibly civil actions that could lead to the carrier losing his or her boat, business, house and other personal assets.

There is a perception that public transportation is governed by rules that protect the interests of individual travellers. The Canadian public expects that commercial carriers in all modes are insured for accidents as is indeed the case for all non-marine carriers (airlines, taxis, buses and trains). The proposed Regulations would meet public expectations and increase confidence in Canadian marine carriers.

Compulsory liability insurance is also expected to have a positive impact on the safety of small commercial ships carrying passengers, as carriers would have an incentive to maximize the safe operation of their ships to minimize their liability insurance costs. Insurance companies would likely be unwilling to insure carriers that do not comply with passenger safety regulations or that have poor safety records.

Costs

The main direct costs of the proposed Regulations are the liability insurance costs to carriers operating small ships that are uninsured or not sufficiently insured to cover their liability in the event of an incident. The majority of passenger ships already carry liability insurance and are therefore already compliant with the proposed Regulations.

To identify those smaller operators most likely to be non-compliant, Industry Canada’s (see footnote 6) data on the number of small businesses by industry classification for marine-related sectors was used. Some of these sectors use ships that are usually restricted from carrying passengers under the Canada Shipping Act, 2001. However, such ships can legally carry passengers if they meet the safety requirements provided for under the Canada Shipping Act, 2001. Any ships of 15 GT or less that carry more than 12 passengers must advise Transport Canada of their activities and hold a passenger vessel safety certificate issued under the Vessel Certificates Regulations. All ships of 15 GT or less may carry up to 12 passengers without a passenger vessel safety certificate, but must still meet the regulatory requirements under the Small Vessel Regulations of the Canada Shipping Act, 2001.

It was therefore assumed that approximately 10% of the ships not registered as passenger vessels would carry passengers on an occasional basis. Operators of small non-passenger vessels that occasionally carry passengers but fail to meet the passenger vessels safety requirements would contravene the Canada Shipping Act, 2001. Because such operators already operate outside the law, they are not included in the estimated 10% of the population that would need to acquire insurance following the passage of the proposed Regulations.

Small operators in sectors that carry passengers are all assumed to be non-compliant. Based on these assumptions, it is estimated that 1 756 ship operators would need to buy liability insurance annually. The average cost of insurance per ship operator is estimated to be $2,100 based on discussions with the insurance industry. Therefore, the cost of liability insurance is estimated to have a present value of $24.18 million over a 10-year period, with an annualized value of $3.44 million.

The proposed Regulations would not impose costs on the Department. Currently, Transport Canada operates an online National Training Program for enforcement officers. For the purpose of the proposed Regulations, it would be mandatory for enforcement officers to complete the online training prior to the Regulations coming into force. There are no additional costs associated with the training of enforcement officers.

Cost-benefit statement
 

Base Year: 2016

Year 2020

Final Year

Total (PV)

Annualized Average

A. Quantified impacts (in Can$, 2012 price level / constant dollars)

Costs

By stakeholder

         

Costs to industry

Cost of buying liability insurance policies for death or personal injury

Carriers / Marine and non-marine insurers

1,843,958

3,687,915

3,687,915

24,179,047

3,442,552

Total costs

 

1,843,958

3,687,915

3,687,915

24,179,047

3,442,552

B. Qualitative impacts

Positive impacts

Benefits

  • 1- Enhanced protection of passengers travelling by water
  • 2- Meeting public expectations
  • 3- Improved safety

Negative impacts

Costs

1- The proposed Regulations are not expected to result in significant costs to stakeholders beyond the liability insurance costs quantified and monetized above.

The prices were held constant using fiscal year 2012 as the period base.

“One-for-One” Rule

The “One-for-One” Rule does not apply, as there would not be any additional administrative burden associated with this regulatory proposal.

Small business lens

The small business lens would apply to these Regulations since their expected impact is estimated to have a net present value of over $10 million and they would impact small businesses. Since larger passenger ship operators are currently insured to the maximum limit of their liability (175 000 SDRs per passenger), the proposed Regulations would impact mostly smaller operators that are uninsured or not fully insured. However, it is expected that the cost would be proportionate to the size of a given operation — small businesses with fewer vessels and fewer passengers are expected to carry lower costs.

Flexibility has been provided in the proposed Regulations by setting a fixed amount of insurance of $250,000 per passenger rather than requiring that the insurance reflect the full liability of 175 000 SDRs. This liability has exceeded the $250,000 proposed insurance by as much as 41% over the 10 years ending on March 31, 2016. Fixing the amount in Canadian dollars rather than SDRs facilitates the acquisition of the insurance from Canadian underwriters and reduces the premium by requiring a lower level of insurance and eliminating the insurers’ concerns about currency exchange risks.

All carriers will also benefit from the flexibility of the two-stage entry into force process. Those carriers who currently maintain a liability insurance policy for passenger injury or death would not have to comply with these new requirements until the policy is next renewed, modified or cancelled. Carriers who do not maintain such insurance would have to comply with the proposed Regulations 60 days after they come into force.

To provide greater flexibility for smaller businesses, the regulatory proposal would accept those smaller fishing and hunting and inland fishing operators that have existing commercial liability insurance for their passenger liability requirements (provided their existing policies allow for this coverage). It is estimated that this would reduce the number of these types of operators that would have to obtain additional insurance (i.e. from 10% to 5% of these operators). Therefore, the implementation of this regulatory proposal will allow all affected operators to update their coverage when their existing insurance coverage is up for renewal. For the small business lens analysis, the “initial option” was compared to a lower cost “flexible option.” This lower cost “flexible option” would be approximately 12.6% lower than the proposed “initial option.”

 

Flexible Option

Initial Option

Short description

Assume only 5% of hunting and fishing and inland fishing outfitters require insurance

Assume 10% of hunting and fishing and inland fishing outfitters require insurance

Number of small businesses impacted

1 756

1 885

 

Annualized Average ($2012)

Present Value ($2012)

Annualized Average ($2012)

Present Value ($2012)

Compliance costs

$3,459,400

$24,297,600

$3,959,100

$27,807,300

Administrative costs

$0

$0

$0

$0

Total costs

$3,459,400

$24,297,600

$3,959,100

$27,807,300

Average cost per small business

$1,970

$13,837

$2,100

$14,752

The completed small business checklist is attached as an appendix to the Regulatory Impact Analysis Statement.

Consultation

The Department initially consulted industry on this regulatory proposal in fall 2010. The issues raised in these initial consultations were reflected in a discussion paper released in March 2012 that included a draft regulatory proposal. Stakeholders were invited to comment on these draft Regulations by the end of 2012. Most stakeholders supported, in principle, this regulatory proposal.

However, stakeholders expressed various concerns that are summarized below along with changes incorporated in the proposed Regulations to address them.

Scope of application

Stakeholders expressed concern that the Act does not define ships used for “commercial and public purposes” and that the lack of a definition could create uncertainty for the public and enforcement officers. There were concerns that the draft Regulations could apply to pleasure craft or commercial fishing or other activities they felt should be exempted.

It was suggested that the following exemptions be added to the draft Regulations:

Other stakeholders suggested that the compulsory insurance requirements should exclude passengers that do not have a contract of carriage. The draft Regulations were amended to specifically exclude pleasure craft. Further changes that were made to the nature of insurance required (described below) should accommodate the children’s camps.

The other exemptions and exclusions were not addressed in order to avoid undermining the key policy intent of providing a uniform approach to protecting the interests of Canadians and their families in the event of an incident involving passengers carried on board a domestic commercial or public purpose ship.

Passenger capacity

Some stakeholders were concerned with the determination of passenger capacity. For example, some stakeholders noted that fishing vessels would not have a passenger capacity, while others noted that a ship may have a capacity of nine passengers but never carry more than four passengers.

The proposed Regulations are not prescriptive as to how an operator must determine the ship’s passenger capacity. All operators of vessels used to carry passengers, including fishing vessels, need to comply with the Canada Shipping Act, 2001 regulations on the carriage of passengers. In doing so, they need to determine the number of passengers that the vessel has been outfitted to carry (e.g. number of life jackets). This determination should inform their insurance policy requirements.

Cost and availability of insurance

Stakeholders were concerned that the cost of liability insurance on a per passenger basis could threaten the financial stability of small businesses. Operators who are unable to afford insurance are also unlikely to have the financial resources to compensate passengers that may die or be injured in an accident. They risk bankruptcy and possible loss of personal assets if there is an accident.

Others expressed concern that the draft Regulations could force the homeowners’ market insurance sector to exclude boat insurance from a homeowner’s policy on the basis that they cannot offer the same premiums as marine insurers who specialize in such risks. This concern arose from a perception that “pleasure craft” could be used for commercial purposes as, for example, when a real estate agent uses his or her “pleasure craft” to show waterfront properties to prospective clients. Insurers therefore proposed that pleasure craft under 8 m in length be excluded from the compulsory insurance regulations to allow their continued coverage as “pleasure craft” under typical homeowners’ policies.

However, such usage of a vessel would require that it be registered as a commercial vessel and meet passenger safety standards. To avoid confusion, the proposed Regulations specifically exclude pleasure craft as defined in section 2 of the Canada Shipping Act, 2001 (i.e. a vessel that is used for pleasure and does not carry passengers, including a vessel of a prescribed class).

Dedicated amount

The 2012 draft Regulations also proposed that the required amount of marine insurance be dedicated solely to liabilities to passengers. Some stakeholders were concerned that this could create uncertainty as to how the courts would apportion available compensation when an incident involves various types of claimants.

Furthermore, it implied that commercial general liability (CGL) policies would not be accepted, requiring the holders of such policies (e.g. operators of children’s camps and hunting and fishing outfitters) to obtain separate marine passenger insurance at an additional cost. This requirement was subsequently removed from the draft Regulations, and the proposed Regulations allow for CGL policies provided they include cover for marine passenger liability.

Stakeholders also noted that some provinces already impose mandatory general liability insurance for certain businesses in amounts that have been sufficient to cover passenger claims in the past. The proposed Regulations may lead to a slight increase in insurance premiums for these businesses only in provinces where the amount of insurance is less than the amount required under the Regulations.

Certificate of Insurance

Certain stakeholders had an issue with the wording of the Certificate of Insurance (the Certificate) annexed to the draft Regulations as it applied to fleet policies. The proposed Regulations reflect modifications to respond to this concern.

The requirement to carry the Certificate on board the ship was a concern to carriers operating small boats with no cover or protected place to store it. The proposed Regulations will allow such carriers the option to provide the Certificate to a designated officer within 24 hours after the officer boards the ship.

Stakeholders proposed that the draft Regulations be amended to accept a ship’s Certificate of Entry (CoE) from a member club of the International Group of Protection and Indemnity Associations (IGP&I Clubs) as evidence of insurance in place of the Certificate of Insurance prescribed by the draft Regulations. The 13 member clubs of the IGP&I Clubs collectively underwrite 90% of ocean-going ships and are quite reputable. These clubs issue CoEs indicating that a ship has insurance cover for all marine liability under international conventions, including the Athens Convention. The proposed Regulations accepted this proposal to avoid unnecessary administrative burden (and costs).

Scope of consultations

Some stakeholders commented that the Department did not fully consult the carriers who would be impacted by the compulsory insurance requirements. Initial consultations with marine carriers were held during the fall 2010 meetings of the regional Canadian Marine Advisory Council across Canada. The carriers’ views were sought during these meetings and were subsequently reflected in a discussion paper that was circulated widely to allow carriers to provide further input. The Department has also informed stakeholders that publication in Part I of the Canada Gazette will give them a further opportunity to comment.

Communications

Insurance providers confirmed that they would inform their clients of the new compulsory insurance requirements and proposed that the Department inform the public via stakeholder communications, web content, interviews and social media messages.

Some insurers felt that they may not be in a position to offer proper advice when the proposed Regulations first come into effect and suggested that a grace period be incorporated to allow carriers time to comply if found without a policy in place. The two-stage entry into force process explained above should provide sufficient time for carriers to comply, and the Department will take every opportunity to inform the public, marine stakeholders and their insurers.

Regulatory cooperation

Some provinces currently require marine passenger services to maintain liability insurance. For example, Quebec’s Regulation respecting the transport of passengers by water (1998) [chapter T-12, r. 15] requires that any person operating a marine passenger service for remuneration acquire a permit. The application for this permit must be accompanied by a certificate of marine civil liability insurance of $5 million for ships with a capacity exceeding 12 passengers and $1 million for ships with a capacity of 12 passengers or less.

Quebec and other provinces and territories, i.e. Alberta, Saskatchewan and Nunavut, also require the licensing of outfitters providing hunting, fishing and outdoor activities that often involve transporting passengers by water. To obtain a licence, outfitters are required to maintain public liability insurance coverage in amounts ranging from $1 million to $5 million, depending on the province or territory. Similarly, Parks Canada requires service providers operating within park boundaries to maintain general liability coverage of $2 million, including marine passenger service providers.

The proposed Regulations would cover a wider scope of ships with generally higher levels of liability insurance required ($250,000 per passenger). Vessel operators that comply with current provincial, territorial and Parks Canada regulations that require passenger insurance would need to comply with the proposed Regulations when their current policy expires or is altered or cancelled.

Rationale

Proceeding with compulsory insurance regulations for ships carrying passengers would ensure a uniform approach to protecting the financial interests of passengers who are injured in a marine incident. The proposed Regulations would also align with the compulsory insurance regulations in other modes of transport and would meet public expectation that carriers in all modes (air, rail, road and marine) have liability insurance cover for personal injuries or fatalities.

The proposed Regulations would impact mostly smaller carriers that are uninsured or not fully insured. However, it is expected that the cost would be proportionate to the size of a given operation — small businesses with fewer vessels and fewer passengers are expected to carry lower costs.

While passengers and their dependants are expected to be the main beneficiaries of the proposed Regulations, carriers would also benefit by having protection and the support of insurers when dealing with passenger claims. The cost per passenger of this benefit should not be significant for most businesses and may be passed on to consumers at a negligible cost.

The proposed Regulations may improve safety as insurers may be unwilling to underwrite carriers that do not comply with passenger safety regulations or have poor safety records. Carriers would have an incentive to maximize the safe operation of their ships to minimize their liability insurance costs.

The consultations that took place across Canada in 2010–2012 confirmed that most stakeholders support, in principle, this regulatory proposal.

Implementation, enforcement and service standards

To facilitate compliance, the proposed Regulations provide for implementation in the following two stages: (1) carriers who have a liability insurance policy for death or personal injury when the proposed Regulations come into force would comply with the new requirements when their policy is renewed, modified or cancelled; and (2) other carriers would have 60 days after the proposed Regulations come into force to comply.

Transport Canada will publicize the final Regulations at marine sector events, including meetings of various marine associations, and via Transport Canada’s website. The Department will also work with insurance associations to ensure they can inform their clients about the final Regulations.

The proposed Regulations would be enforced by designated officers (Transport Canada marine safety inspectors) who can request operators of ships carrying passengers to produce a Certificate of Insurance in accordance with the proposed Regulations. If the carrier does not have a Certificate of Insurance or a Certificate of Entry, then the designated officer would have the power, pursuant to the Act, to detain the ship or a court could impose a fine not exceeding $100,000 upon summary conviction.

Contact

Doug O’Keefe
Chief
International Marine Policy
Transport Canada
Place de Ville, Tower C, 26th Floor
Ottawa, Ontario
K1A 0N5
Telephone: 613-608-8904 
Fax: 613-998-1845
Email: doug.okeefe@tc.gc.ca

Small Business Lens Checklist

1. Name of the sponsoring regulatory organization:

Transport Canada

2. Title of the regulatory proposal:

Regulations Respecting Compulsory Insurance for Ships Carrying Passengers

3. Is the checklist submitted with a RIAS for the Canada Gazette, Part I or Part II?

Canada Gazette, Part I ☐ Canada Gazette, Part II

A. Small business regulatory design

I

Communication and transparency

Yes

No

N/A

1.

Are the proposed Regulations or requirements easily understandable in everyday language?

2.

Is there a clear connection between the requirements and the purpose (or intent) of the proposed Regulations?

3.

Will there be an implementation plan that includes communications and compliance promotion activities, that informs small business of a regulatory change and guides them on how to comply with it (e.g. information sessions, sample assessments, toolkits, Web sites)?

4.

If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes?

II

Simplification and streamlining

Yes

No

N/A

1.

Will streamlined processes be put in place (e.g. through BizPaL, Canada Border Services Agency single window) to collect information from small businesses where possible?

The Regulations will not require the collection of information from small businesses.

2.

Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed?

3.

Has the impact of the proposed Regulations on international or interprovincial trade been assessed?

4.

If the data or information, other than personal information, required to comply with the proposed Regulations is already collected by another department or jurisdiction, will this information be obtained from that department or jurisdiction instead of requesting the same information from small businesses or other stakeholders? (The collection, retention, use, disclosure and disposal of personal information are all subject to the requirements of the Privacy Act. Any questions with respect to compliance with the Privacy Act should be referred to the department’s or agency’s ATIP office or legal services unit.)

The Regulations will not require the collection of information from small businesses.

5.

Will forms be pre-populated with information or data already available to the department to reduce the time and cost necessary to complete them? (Example: When a business completes an online application for a licence, upon entering an identifier or a name, the system pre-populates the application with the applicant’s personal particulars such as contact information, date, etc. when that information is already available to the department.)

The Regulations will not require the collection of information from small businesses.

6.

Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate?

The Regulations will not require the collection of information from small businesses.

7.

Will reporting, if required by the proposed Regulations, be aligned with generally used business processes or international standards if possible?

The Regulations will not require reporting information.

8.

If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements?

The Regulations will require a Certificate of Insurance in a prescribed form that is annexed to the Regulations. The current forms do not collect the information that will be required by the Regulations.

III

Implementation, compliance and service standards

Yes

No

N/A

1.

Has consideration been given to small businesses in remote areas, with special consideration to those that do not have access to high-speed (broadband) Internet?

2.

If regulatory authorizations (e.g. licences, permits or certifications) are introduced, will service standards addressing timeliness of decision making be developed that are inclusive of complaints about poor service?

A Certificate of Insurance will be required to be kept on board the ship and produced upon demand to an enforcement officer only.

3.

Is there a clearly identified contact point or help desk for small businesses and other stakeholders?

A communication strategy will be prepared, including questions and answers that will be posted on Transport Canada’s website; other information documents will also be available to the public.

B. Regulatory flexibility analysis and reverse onus

IV

Regulatory flexibility analysis

Yes

No

N/A

1.

Does the RIAS identify at least one flexible option that has lower compliance or administrative costs for small businesses in the small business lens section?

Examples of flexible options to minimize costs are as follows:

  • Longer time periods to comply with the requirements, longer transition periods or temporary exemptions;
  • Performance-based standards;
  • Partial or complete exemptions from compliance, especially for firms that have good track records (legal advice should be sought when considering such an option);
  • Reduced compliance costs;
  • Reduced fees or other charges or penalties;
  • Use of market incentives;
  • A range of options to comply with requirements, including lower-cost options;
  • Simplified and less frequent reporting obligations and inspections; and
  • Licences granted on a permanent basis or renewed less frequently.

2.

Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, quantified and monetized compliance and administrative costs for small businesses associated with the initial option assessed, as well as the flexible, lower-cost option?

3.

Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, a consideration of the risks associated with the flexible option? (Minimizing administrative or compliance costs for small business cannot be at the expense of greater health, security or safety or create environmental risks for Canadians.)

4.

Does the RIAS include a summary of feedback provided by small business during consultations?

V

Reverse onus

Yes

No

N/A

1.

If the recommended option is not the lower-cost option for small business in terms of administrative or compliance costs, is a reasonable justification provided in the RIAS?

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to paragraphs 39(a) (see footnote a) and (b) (see footnote b) of the Marine Liability Act (see footnote c), proposes to make the annexed Regulations Respecting Compulsory Insurance for Ships Carrying Passengers.

Interested persons may make representations to the Minister of Transport concerning the proposed Regulations within 60 days after the date of publication of this notice. All such representations must be in writing and cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Doug O’Keefe, Chief, International Marine Policy, Marine Policy Directorate, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, Ottawa, Ontario K1A 0N5 (tel.: 613-608-8904; fax: 613-998-1845; email: doug.okeefe@tc.gc.ca).

Ottawa, December 15, 2016

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Respecting Compulsory Insurance for Ships Carrying Passengers

Interpretation

Definition of Act

1 In these Regulations, Act means the Marine Liability Act.

Application

Application

2 (1) These Regulations apply to

Non-application

(2) These Regulations do not apply to

Liability Insurance

Coverage for damages for death or personal injury

3 (1) A person who performs the whole or part of a carriage by ship must maintain liability insurance coverage for damages for death or personal injury caused by an incident that occurred in the course of the carriage and was due to the fault or neglect of the person or of the person’s servants, agents or mandataries acting within the scope of their employment.

Minimum amount

(2) The coverage must be for an amount that is not less than $250,000 multiplied by the passenger capacity of the ship.

Certificate of Insurance

Requirement to carry

4 (1) The person referred to in section 3 must ensure that

Exception

(2) Despite paragraph (1)(b), the certificate of insurance or a copy of it is not required to be carried on board a ship if it is not feasible to do so because the ship does not have any space where the certificate or copy can be protected from the elements. However, if a designated officer boards the ship under subsection 128(1) of the Act, the person referred to in section 3 must produce the certificate or the copy to the designated officer within 24 hours after the designated officer boarded the ship.

Signed by insurer

(3) The certificate of insurance or Certificate of Entry must be signed by the insurer or its authorized representative as proof that the insurer has issued a liability insurance policy to the person referred to in section 3 for the liability insurance coverage required by that section.

Fleets

(4) In the case of a liability insurance policy referred to in subparagraph (1)(b)(ii), the certificate of insurance must

Exceptions to form of certificate

(5) Despite subparagraph (1)(b)(ii),

Application

5 Sections 3 and 4 do not apply until

Coming into Force

30th day after publication

6 These Regulations come into force on the 30th day after the day on which they are published in the Canada Gazette, Part II.

SCHEDULE

(Paragraph 4(1)(b))

Certificate of Insurance

Number of the liability insurance policy

Name of the Insured

Address

City, Province

Postal Code

Name of Ship(s) (see note *)

Official Number

Passenger Capacity

Amount of Insurance (not less than $250,000 × passenger capacity)

       
       
       

Pursuant to the Regulations Respecting Compulsory Insurance for Ships Carrying Passengers, made under Part 4 of the Marine Liability Act, and subject to the terms and conditions of the above-mentioned liability insurance policy, this is to certify that there is in force, in respect of the above-named Insured, a liability insurance policy for the carriage of persons on board the ships listed in this Certificate.

If the liability insurance policy provides coverage in respect of a fleet of ships, the policy provides the same coverage as if a separate policy had been issued in respect of each ship listed in this Certificate.

INSURER

Name

Address

City, Province

Postal Code

Policy effective date

Policy expiry date

_______________________________
Insurer or Authorized Representative of the Insurer

_______________________________
Date

[52-1-o]