Order Fixing April 1, 2021 as the Day on Which Certain Subsections of that Act Come into Force: SI/2021-11

Canada Gazette, Part II, Volume 155, Number 8

Registration
SI/2021-11 April 14, 2021

BUDGET IMPLEMENTATION ACT, 2018, NO. 2

Order Fixing April 1, 2021 as the Day on Which Certain Subsections of that Act Come into Force

P.C. 2021-221 March 26, 2021

His Excellency the Administrator of the Government of Canada in Council, on the recommendation of the Minister of Transport, pursuant to section 747 of the Budget Implementation Act, 2018, No. 2, chapter 27 of the Statutes of Canada, 2018, fixes April 1, 2021 as the day on which subsections 731(2) to (6), 734(2) to (7), 735(2), 743(2) and (3), 744(2) and 745(2) and (3) of that Act come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

This Order in Council, pursuant to subsection 747 of the Budget Implementation Act, 2018, No. 2 (BIA), chapter 27 of the Statutes of Canada, 2018, fixes April 1, 2021, as the day on which subsections 731(2) to (6), 734(2) to (7), 735(2), 743(2) and (3), 744(2), and 745(2) and (3) of that Act come into force.

Objective

The objective of this Order is to establish a coming into force date for provisions of the Marine Liability Act (MLA) that complete the modernization of the Ship-source Oil Pollution Fund's (SOPF) levy provisions. This Order will bring into force the provisions of the MLA that require the filing of information returns by exporters of oil by ship and set out the obligation of exporters to pay a levy and supplementary levy (should they be imposed).

Background

The MLA is the federal statute that consolidates various liability and compensation regimes in the marine sector that govern the shipowner's liability for pollution, property, passengers and cargo. It also sets out the Ship-source Oil Pollution Fund (SOPF), Canada's domestic compensation fund for oil pollution from ships. Transport Canada (TC) is responsible for the MLA, as well as for developing and implementing related policies and regulations.

The SOPF is Canada's domestic compensation fund and a special purpose account in the Public Accounts of Canada to compensate claims for oil pollution damage from ships. The SOPF is available to pay compensation for reasonable claims for oil pollution response costs and expenses for any type of ship that discharges any type of oil (e.g. persistent and non-persistent oil, including bunker oil used for propulsion and operation of ships) in Canadian waters, including oil spills from unknown sources (i.e. mystery spills). The SOPF's Administrator assesses claims and makes offers of compensation to claimants in accordance with the MLA. The Administrator also ensures that Canada's obligations to report persistent oil receipts and to pay contributions on behalf of oil receivers in Canada to the International Oil Pollution Compensation (IOPC) Funds are met. In the unlikely event that the SOPF is depleted, it can be replenished through a levy on cargo owners involved in marine shipments of oil by ship. The levy to capitalize the SOPF (previously the Maritime Claims Pollution Fund) has not been in effect since 1976.

As part of the Government of Canada's Oceans Protection Plan, the MLA was amended in December 2018 to modernize the Ship-source Oil Pollution Fund (SOPF). These amendments updated the SOPF's levy and sought to ensure that exporters of oil reported their bulk oil movements by ship to the Government in order to contribute to the compensation regime, should the levy be imposed.

As part of the modernization of the Ship-source Oil Pollution Fund's (SOPF's) levy provisions, the Marine Liability and Information Return Regulations have been amended to have exporters report their bulk oil exports by ship to the SOPF's Administrator in order to implement the new provisions of the MLA that require the filing of information returns by exporters of oil by ship and set out the obligation of these exporters to pay a levy and supplementary levy (should they be imposed).

Implications

The legislative amendments are expected to strengthen the polluter pays principle by having exporters report their exports of oil and contribute to the SOPF (should a levy be imposed), which provides compensation for oil spills in Canada. Oil pollution from ships can cause environmental damage and result in economic losses. It is therefore important to ensure that there is adequate compensation available for clean-up operations and to deal with economic losses.

Subsections 731(2) to (6), 734(2) to (7), 735(2), 743(2) and (3), 744(2) and 745(2) and (3) of the BIA were not brought into force upon royal assent in order to allow time for TC to develop the related amendments to the Marine Liability and Information Return Regulations, which are needed to set out the specific requirements for exporters to report their bulk oil exports. The supporting regulatory amendments have been developed, which means that the relevant legislative provisions can now be brought into force.

These provisions set out

As of April 1, 2021, every person who exports by ship, in a calendar year, over

The first report for exporters affected by the entry into force of these provisions will be due in February 2022. While exporters will be subject to reporting requirements and would be liable to pay a levy upon entry into force of these provisions as well as the Regulations Amending the Marine Liability and Information Return Regulations (Exporters), there is currently no plan to activate the levy.

Exporters that fail to comply with the reporting and payment of the levy provisions can be subject to enforcement action via summary conviction (i.e. guilty of an offence and liable on summary conviction to a fine not exceeding $250,000) or an administrative monetary penalty (AMP) [i.e. maximum amount payable for each violation is $50,000 for an individual, and for any other person (e.g. a company), $250,000].

There are no anticipated financial implications for the Government of Canada associated with the entry into force of these amendments to the MLA.

Consultation

Transport Canada has engaged broadly across Canada on potential marine safety and environmental protection enhancements, including in 2016, when the Department undertook engagement with Indigenous peoples and stakeholders in the lead-up to the launch of the Oceans Protection Plan. In August 2018, a discussion paper outlining the proposed legislative amendments, including the MLA, to strengthen marine environmental protection and marine safety was released.

The Canadian Fuels Association, the Canadian Association of Petroleum Producers and the Canadian Maritime Law Association were consulted via a discussion paper that was sent in January 2018 specifically on the modernization of the SOPF's levy. No substantive concerns about the amendments to the MLA were raised by stakeholders during the bill stage for the Budget Implementation Act, 2018, No. 2.

Contact

Caitlin O'Boyle
Manager
Liability, Compensation and Insurance
International Marine Policy
Transport Canada
Telephone: 343‑553‑3914
Email: caitlin.oboyle@tc.gc.ca