Vol. 147, No. 10 — May 8, 2013

Registration

SOR/2013-68 April 18, 2013

CANADA SHIPPING ACT, 2001

Regulations Amending the Vessel Pollution and Dangerous Chemicals Regulations

P.C. 2013-374 April 18, 2013

Whereas the proposed Regulations set out standards that are additional or complementary to the standards set out in the International Convention for the Prevention of Pollution from Ships, 1973 and the Protocols of 1978 and 1997 relating to the Convention, and the Governor in Council is satisfied that those additional or complementary standards meet the objectives of the Convention and Protocols;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Transport and the Minister of Natural Resources, pursuant to subsections 35(1) (see footnote a) and 120(1) and (2), section 190 and paragraphs 207(2)(a) and 244(a) of the Canada Shipping Act, 2001 (see footnote b), makes the annexed Regulations Amending the Vessel Pollution and Dangerous Chemicals Regulations.

REGULATIONS AMENDING THE VESSEL POLLUTION AND DANGEROUS CHEMICALS REGULATIONS

AMENDMENTS

1. (1) The definitions “Canadian pleasure craft”, “foreign pleasure craft”, “major conversion” and “sludge oil” in subsection 1(1) of the Vessel Pollution and Dangerous Chemicals Regulations (see footnote 1) are replaced by the following:

“Canadian pleasure craft”
« embarcation de plaisance canadienne »

“Canadian pleasure craft” means a pleasure craft that

• (a) is licensed under Part 10 of the Act; or
• (b) is principally maintained or operated in Canada, is not a Canadian vessel and is not registered or licensed under the laws of another state.

“foreign pleasure craft”
« embarcation de plaisance étrangère »

“foreign pleasure craft” means a pleasure craft that is not a Canadian vessel or a Canadian pleasure craft.

“major conversion”
« transformation importante »

“major conversion” means, in the case of a vessel referred to in Division 1, 2, 4 or 6 of Part 2, a conversion of a vessel that

• (a) substantially alters the dimensions or carrying capacity of the vessel;
• (b) changes the type of the vessel;
• (c) is intended to substantially prolong the life of the vessel; or
• (d) alters the vessel such that it becomes subject to any provision of that Division that would not be applicable to it otherwise.

“sludge oil”
« boues d’hydrocarbures »

“sludge oil” means sludge from the fuel oil or lubricating oil separators, waste lubricating oil from main or auxiliary machinery, and waste oil from bilge water separators, oil filtering equipment or drip trays.

(2) Subsection 1(1) of the Regulations is amended by adding the following in alphabetical order:

“cargo vessel”
« bâtiment de charge »

“cargo vessel” means a vessel that is not a passenger vessel or a pleasure craft.

“emission control area”
« zone de contrôle des émissions »

“emission control area” means

• (a) for the purposes of section 110.3,
  • (i) the North American Emission Control Area, and
  • (ii) the United States Caribbean Sea area described in Appendix VII to Annex VI to MARPOL; and
• (b) for the purposes of section 111,
  • (i) the Baltic Sea area, as defined in regulation 1.11.2 of Annex I to MARPOL,
  • (ii) the North Sea area, as defined in regulation 5(1)(f) of Annex V to MARPOL,
  • (iii) the North American Emission Control Area, and
  • (iv) the United States Caribbean Sea area described in Appendix VII to Annex VI to MARPOL.

“Great Lakes and St. Lawrence waters”
« eaux des Grand Lacs et du fleuve Saint-Laurent »

“Great Lakes and St. Lawrence waters” means the Great Lakes and the St. Lawrence River and their connecting waters, and the Gulf of St. Lawrence to the baseline of the territorial sea.

“installed”
« installé »

“installed”, in respect of a marine diesel engine, means that the engine is fitted on a vessel, and that the engine’s cooling or exhaust system is an integral part of the vessel or that the engine’s fuelling system is permanently affixed to the vessel.

“marine diesel engine”
« moteur diesel marin »

“marine diesel engine” means any reciprocating internal combustion engine operating on liquid or dual fuel, including any booster system or compound system.

“marine sanitation device”
« appareil d’épuration marine »

“marine sanitation device” means any equipment that is installed on a vessel and is designed to receive and treat sewage.

“North American Emission Control Area”
« zone de contrôle des émissions de l’Amérique du Nord »

“North American Emission Control Area” means the North American area described in Appendix VII to Annex VI to MARPOL.

“passenger vessel”
« bâtiment à passagers »

“passenger vessel” means a vessel that carries more than 12 passengers.

“Resolution MEPC.184(59)”
« résolution MEPC.184(59) »

“Resolution MEPC.184(59)” means the Annex to the 2009 Guidelines for Exhaust Gas Cleaning Systems, IMO Resolution MEPC.184(59).

2. The portion of section 5 of the Regulations before paragraph (a) is replaced by the following:

Exceptions to prohibited discharges

5. For the purposes of section 187 of the Act and sections 7, 29, 67, 82, 95, 100 and 126, substances may be discharged, and for the purposes of subsection 109(1) and section 110.6, substances may be emitted, if

3. Section 8 of the Regulations is repealed.

4. The portion of subsection 9(1) of the Regulations before paragraph (a) is replaced by the following:

Requirements

9. (1) The authorized representative of a Canadian vessel or a Canadian pleasure craft must ensure that any equipment that is referred to in paragraph 25(2)(a), subsection 93(2), paragraph 111.2(a) or 122(1)(b) or subsection 131.1(6) and that is on the vessel

5. The Regulations are amended by adding the following after section 27:

STS operations Plan

27.1 (1) Every oil tanker of 150 gross tonnage or more that is not alongside a wharf or quay and that is engaged with another oil tanker in a transfer operation involving oil or an oily mixture in bulk must keep on board an STS operations Plan that meets the requirements of regulation 41 of Annex I to MARPOL. In the case of a Canadian vessel, the STS operations Plan must be written in English or French or in both, according to the needs of the crew.

Exception

(2) Subsection (1) does not apply in respect of

• (a) transfer operations associated with fixed or floating platforms, including
  • (i) drilling rigs,
  • (ii) floating production, storage and off-loading facilities used for the offshore production and storage of oil, and
  • (iii) floating storage units used for the offshore storage of produced oil;
• (b) bunkering operations; or
• (c) transfer operations necessary for the purpose of saving lives or securing the safety of a vessel, or for combatting specific pollution incidents in order to minimize the damage from pollution.
  

6. Section 32 of the Regulations is amended by adding the following after subsection (3):

Application in waters that are not Canadian waters

(4) Despite subsection (1),

• (a) paragraph 38(1)(l) also applies in respect of Canadian vessels in waters other than waters under Canadian jurisdiction; and
• (b) section 39.1 also applies in respect of Canadian vessels in the territorial sea or the exclusive economic zone of a foreign state that is a party to MARPOL.

7. The Regulations are amended by adding the following after section 36:

Overall advisory control of transfers between oil tankers

36.1 (1) The authorized representative of an oil tanker of 150 gross tonnage or more must ensure that a transfer operation to which section 27.1 applies is under the overall advisory control of a person who meets the qualifications set out in section 6.2.1.2 of the Manual on Oil Pollution, Section I – Prevention, published by the IMO.

Duties

(2) The person must carry out the duties set out in section 6.2.1.3 of the Manual.

8. Section 37 of the Regulations is replaced by the following:

Requirements for transfer operations — vessels

37. The authorized representative of a vessel that engages in a transfer operation must ensure that it is supervised on board the vessel by a person who is required to be part of the complement of the vessel

• (a) in the case of a Canadian vessel, by paragraph 207(3)(a), (b) or (c) or subparagraph 207(3)(d)(i) of the Marine Personnel Regulations; and
• (b) in the case of a foreign vessel, by paragraph 241(a), subparagraph 241(b)(ii) or (iii) or paragraph 241(d) of the Marine Personnel Regulations.

9. Subsection 38(1) of the Regulations is amended by striking out “and” at the end of paragraph (j), by adding “and” at the end of paragraph (k) and by adding the following after paragraph (k):

• (l) the vessel’s STS operations Plan is implemented, if the vessel is of 150 gross tonnage or more and section 27.1 applies to the transfer operation.

10. The Regulations are amended by adding the following after section 39:

Notification of transfers between oil tankers

39.1 (1) The master of an oil tanker of 150 gross tonnage or more must ensure that the tanker does not engage in a transfer operation to which section 27.1 applies unless, at least 48 hours before the transfer operation begins, the master gives notice in accordance with regulation 42.2 of Annex I to MARPOL to

• (a) if the transfer operation is in waters under Canadian jurisdiction, a marine communications and traffic services officer; and
• (b) if the transfer operation is in the territorial sea or the exclusive economic zone of a foreign state that is a party to MARPOL, the appropriate official of the foreign state.
  

Information not available 48 hours before transfer

(2) Despite subsection (1), information that is specified in regulation 42.2 of Annex I to MARPOL and that is not, because of exceptional circumstances, available 48 hours before the transfer operation begins, does not need to be included with the notice. The master of an oil tanker that is planning to unload oil or an oily mixture must ensure that the tanker does not engage in the transfer operation unless the information that was not available is provided at the earliest opportunity to the marine communications and traffic services officer or the appropriate official, as the case may be.

Change in estimated arrival time

(3) If the estimated time of arrival of an oil tanker at the location for the transfer operation changes by more than six hours, the master of the tanker must ensure that it does not engage in the transfer operation unless a revised estimated time of arrival is provided at the earliest opportunity to the marine communications and traffic services officer or the appropriate official, as the case may be.

11. The Regulations are amended by adding the following after section 42:

STS operations Plan — Records

42.1 (1) The master of an oil tanker of 150 gross tonnage or more that is required by section 27.1 to keep on board an STS operations Plan must ensure that the records required by the Plan are made.

Three years

(2) The oil tanker must keep each record on board for three years after it is made.

12. Section 76 of the Regulations is replaced by the following:

Requirements for transfer operations — vessels

76. The authorized representative of a vessel that engages in a transfer operation must ensure that it is supervised on board the vessel by a person who is required to be part of the complement of the vessel

• (a) in the case of a Canadian vessel, by paragraph 207(3)(a), (b) or (c) or subparagraph 207(3)(d)(i) of the Marine Personnel Regulations; and
• (b) in the case of a foreign vessel, by paragraph 241(a), subparagraph 241(b)(ii) or (iii) or paragraph 241(d) of the Marine Personnel Regulations.

13. The definition “marine sanitation device” in section 83 of the Regulations is repealed.

14. Subsection 109(4) of the Regulations is replaced by the following:

Non-application — vessels constructed before May 19, 2005

(4) In the case of a vessel that is constructed before May 19, 2005, subsection (3) does not apply in respect of any system, equipment, insulation or other material that contains an ozone-depleting substance and that

• (a) is fitted before that date; or
• (b) if the contractual delivery date of the system, equipment, insulation or other material to the vessel is before that date, is fitted at any time.
  

Non-application — vessels constructed before January 1, 2020

(5) In the case of a vessel that is constructed before January 1, 2020, subsection (3) does not apply in respect of any system, equipment, insulation or other material that contains a hydrochlorofluorocarbon but no other ozone-depleting substance and that

• (a) is fitted before that date; or
• (b) if the contractual delivery date of the system, equipment, insulation or other material to the vessel is before that date, is fitted at any time.
  

Non-application — repair or recharge

(6) Subsection (3) does not apply in respect of the repair or recharge of any system, equipment, insulation or other material to which subsection (4) or (5) applies.

Non-application — permanently sealed equipment

(7) This section does not apply in respect of permanently sealed equipment that has no refrigerant-charging connections or potentially removable components containing ozone depleting substances.

15. The heading before section 110 and sections 110 and 111 of the Regulations are replaced by the following:

Nitrogen Oxides (NO_x) — Marine Diesel Engines

Application

110. Sections 110.1 to 110.3 do not apply in respect of a marine diesel engine that is

• (a) intended to be used solely for emergencies;
• (b) intended to be used solely to power any device or equipment that is intended to be used solely for emergencies on the vessel on which the device or equipment is installed; or
• (c) installed in a lifeboat that is intended to be used solely for emergencies.
  

Tier I — power output of more than 130 kW

110.1 (1) This section applies in respect of a marine diesel engine that has a power output of more than 130 kW and that is installed on

• (a) a Canadian vessel or a Canadian pleasure craft that was constructed after December 31, 1999 but before January 1, 2011 and that does not engage only on voyages in waters under Canadian jurisdiction;
• (b) a foreign vessel or a foreign pleasure craft that was constructed after December 31, 1999 but before January 1, 2011;
• (c) a Canadian vessel or a Canadian pleasure craft that was constructed after May 2, 2007 but before the day on which this section comes into force and that engages only on voyages in waters under Canadian jurisdiction;
• (d) a Canadian vessel or a Canadian pleasure craft that was constructed before January 1, 2000 and that does not engage only on voyages in waters under Canadian jurisdiction, or a foreign vessel or a foreign pleasure craft that was constructed before January 1, 2000, if
  • (i) after December 31, 1999 but before January 1, 2011,
    • (A) the engine replaced a marine diesel engine that is not identical to the engine, or
    • (B) the engine was installed as an additional engine,
  • (ii) after December 31, 1999, a substantial modification, as defined in section 1.3.2 of the NO_x Technical Code, is made to the engine, or
  • (iii) after December 31, 1999, the maximum continuous rating of the engine is increased by more than 10%; or
• (e) a Canadian vessel or a Canadian pleasure craft that was constructed before May 3, 2007 and that engages only on voyages in waters under Canadian jurisdiction, if
  • (i) after May 2, 2007 but before the day on which this section comes into force,
    • (A) the engine replaced a marine diesel engine that is not identical to the engine and that was installed on the vessel before May 3, 2007, or
    • (B) the engine was installed as an additional engine, or
  • (ii) after May 2, 2007,
    • (A) a substantial modification, as defined in section 1.3.2 of the NO_x Technical Code, is made to the engine, or
    • (B) the maximum continuous rating of the engine is increased by more than 10%.

Tier I — power output of more than 5 000 kW

(2) This section applies in respect of a marine diesel engine that has a power output of more than 5 000 kW and a displacement of 90 L or more per cylinder, and that is installed on

• (a) a Canadian vessel or a Canadian pleasure craft that was constructed after December 31, 1989 but before May 3, 2007 and that engages only on voyages in waters under Canadian jurisdiction;
• (b) a Canadian vessel or a Canadian pleasure craft that was constructed after December 31, 1989 but before January 1, 2000 and that does not engage only on voyages in waters under Canadian jurisdiction; or
• (c) a foreign vessel or a foreign pleasure craft that was constructed after December 31, 1989 but before January 1, 2000.
  

Emission limits

(3) Subject to sections 110.5 and 110.6 and, in the case of a marine diesel engine to which subsection (2) applies, regulations 13.7.1 to 13.7.3 of Annex VI to MARPOL, the authorized representative of a vessel must ensure that a marine diesel engine is not operated on the vessel if the quantity of nitrogen oxides emitted from the engine, calculated as the total weighted emission of NO₂, exceeds the following limits, where n represents the rated engine speed (crankshaft revolutions per minute) of the engine:

• (a) 17.0 g/kWh, where n is less than 130 revolutions per minute;
• (b) 45.0 × n^-0.2 g/kWh, where n is 130 revolutions per minute or more but less than 2,000 revolutions per minute; and
• (c) 9.8 g/kWh, where n is 2,000 revolutions per minute or more.

Certificates

(4) In the case of a Canadian vessel that engages only on voyages in waters under Canadian jurisdiction, a reference in regulation 13.7.1 of Annex VI to MARPOL to the vessel’s International Air Pollution Prevention Certificate is to be read as a reference to the vessel’s Canadian Air Pollution Prevention Certificate.

Tier II

110.2 (1) This section applies in respect of a marine diesel engine that has a power output of more than 130 kW and that is installed on

• (a) a vessel that is constructed after December 31, 2010, other than a Canadian vessel or a Canadian pleasure craft that was constructed before the day on which this section comes into force and that engages only on voyages in waters under Canadian jurisdiction;
• (b) a vessel, other than a Canadian vessel or a Canadian pleasure craft that was constructed before the day on which this section comes into force and that engages only on voyages in waters under Canadian jurisdiction, if
  • (i) the vessel was constructed before January 1, 2011, and
  • (ii) after December 31, 2010,
    • (A) the engine replaces a marine diesel engine that is not identical to the engine and that was installed on the vessel before January 1, 2011, or
    • (B) the engine is installed as an additional engine; or
• (c) a Canadian vessel or a Canadian pleasure craft that engages only on voyages in waters under Canadian jurisdiction, if
  • (i) the vessel was constructed before the day on which this section comes into force, and
  • (ii) on or after the day on which this section comes into force,
    • (A) the engine replaces a marine diesel engine that is not identical to the engine and that was installed on the vessel before the day on which this section comes into force, or
    • (B) the engine is installed as an additional engine.

Non-application

(2) This section does not apply in respect of a marine diesel engine to which section 110.3 applies.

Emission limits

(3) Subject to sections 110.5 and 110.6, the authorized representative of a vessel must ensure that a marine diesel engine is not operated on the vessel if the quantity of nitrogen oxides emitted from the engine, calculated as the total weighted emission of NO₂, exceeds the following limits, where n represents the rated engine speed (crankshaft revolutions per minute) of the engine:

• (a) 14.4 g/kWh, where n is less than 130 revolutions per minute;
• (b) 44.0 × n^-0.23 g/kWh, where n is 130 revolutions per minute or more but less than 2,000 revolutions per minute; and
• (c) 7.7 g/kWh, where n is 2,000 revolutions per minute or more.

Tier III

110.3 (1) This section applies in respect of a marine diesel engine that has a power output of more than 130 kW and that is installed on

• (a) a vessel that is constructed on or after January 1, 2016; or
• (b) a vessel that is constructed before January 1, 2016 if, on or after January 1, 2016,
  • (i) the engine replaces a marine diesel engine that is not identical to the engine and that was installed on the vessel before January 1, 2016, or
  • (ii) the engine is installed as an additional engine.

Exception — marine diesel engines installed on certain vessels

(2) This section does not apply in respect of a marine diesel engine that is

• (a) installed on a vessel with a length less than 24 m that has been specifically designed for, and is used solely for, recreational purposes;
• (b) installed on a vessel with a combined nameplate diesel engine propulsion power of less than 750 kW, if it is not possible for the engine to meet the requirements of subsection (4) because of design or construction limitations of the vessel;
• (c) installed on a vessel after December 31, 2015 as a replacement for a marine diesel engine that is not identical to the engine, if it is not possible for the engine to meet the requirements of subsection (4); or
• (d) installed on a vessel that is entitled to fly the flag of the United States.
  

Exception — vessels operating in certain waters

(3) This section does not apply in respect of

• (a) a Canadian vessel or a Canadian pleasure craft that is operating
  • (i) in arctic waters, or
  • (ii) in waters that are not waters under Canadian jurisdiction and are not within an emission control area; or
• (b) a foreign vessel or a foreign pleasure craft that is operating in arctic waters or in Hudson Bay, James Bay or Ungava Bay.
  

Emission limits

(4) Subject to sections 110.5 and 110.6, the authorized representative of a vessel must ensure that a marine diesel engine is not operated on the vessel if the quantity of nitrogen oxides emitted from the engine, calculated as the total weighted emission of NO₂, exceeds the following limits, where n represents the rated engine speed (crankshaft revolutions per minute) of the engine:

• (a) 3.4 g/kWh, where n is less than 130 revolutions per minute;
• (b) 9.0 × n^-0.2 g/kWh, where n is 130 revolutions per minute or more but less than 2,000 revolutions per minute; and
• (c) 2.0 g/kWh, where n is 2,000 revolutions per minute or more.

Change of date

(5) If the IMO, in accordance with regulation 13.10 of Annex VI to MARPOL, sets a later date for the purposes of regulation 5.1.1 of that Annex, the references in subsection (1) to January 1, 2016 are to be read as references to that later date.

Determining quantity of nitrogen oxides

110.4 For the purposes of subsections 110.1(3), 110.2(3) and 110.3(4), the quantity of nitrogen oxides emitted must be determined in accordance with the NO_x Technical Code.

Exhaust gas cleaning systems

110.5 A marine diesel engine may be operated if an exhaust gas cleaning system or any other equivalent method is used to reduce the quantity of nitrogen oxides emissions to no more than the limits specified in subsection 110.1(3), 110.2(3) or 110.3(4), as the case may be.

Exceptions to prohibited emissions

110.6 Nitrogen oxides may be emitted in the circumstances set out in section 5 that apply in respect of the emission.

Sulphur Oxides (SO_x)

Maximum sulphur content of fuel oil

111. (1) Subject to subsections (2) to (5) and section 111.1, the authorized representative of a vessel must ensure that the sulphur content of the fuel oil used on board the vessel does not exceed

• (a) 3.50% by mass before January 1, 2020, in the case of a foreign vessel or a foreign pleasure craft that is operating in arctic waters or in Hudson Bay, James Bay or Ungava Bay;
• (b) 3.50% by mass before January 1, 2020, in the case of a Canadian vessel or a Canadian pleasure craft that is operating in arctic waters or in Hudson Bay, James Bay or Ungava Bay;
• (c) 3.50% by mass before January 1, 2020, in the case of a Canadian vessel that is operating in waters that are not waters under Canadian jurisdiction and that are not in an emission control area;
• (d) 0.50% by mass after December 31, 2019, in the case of a foreign vessel or a foreign pleasure craft that is operating in arctic waters or in Hudson Bay, James Bay or Ungava Bay;
• (e) 0.50% by mass after December 31, 2019, in the case of a Canadian vessel or a Canadian pleasure craft that is operating in arctic waters or in Hudson Bay, James Bay or Ungava Bay;
• (f) 0.50% by mass after December 31, 2019, in the case of a Canadian vessel that is operating in waters that are not waters under Canadian jurisdiction and that are not in an emission control area;
• (g) 1.00% by mass before January 1, 2015, in the case of a Canadian vessel or a Canadian pleasure craft that is operating in waters under Canadian jurisdiction other than arctic waters;
• (h) 1.00% by mass before January 1, 2015, in the case of a Canadian vessel that is operating in waters that are not waters under Canadian jurisdiction and that are in an emission control area;
• (i) 1.00% by mass before January 1, 2015, in the case of a foreign vessel or a foreign pleasure craft that is operating in waters under Canadian jurisdiction other than arctic waters or in Hudson Bay, James Bay or Ungava Bay;
• (j) 0.10% by mass after December 31, 2014, in the case of a Canadian vessel or a Canadian pleasure craft that is operating in waters under Canadian jurisdiction other than arctic waters;
• (k) 0.10% by mass after December 31, 2014, in the case of a Canadian vessel that is operating in waters that are not waters under Canadian jurisdiction and that are in an emission control area; and
• (l) 0.10% by mass after December 31, 2014, in the case of a foreign vessel or a foreign pleasure craft that is operating in waters under Canadian jurisdiction other than arctic waters or in Hudson Bay, James Bay or Ungava Bay.
  

Steam-powered foreign vessels and foreign pleasure craft

(2) Subject to subsections (3) and (4), in the case of a foreign vessel or a foreign pleasure craft that is powered by a propulsion boiler that was not originally designed for continued operation on marine distillate fuel or natural gas, the vessel’s authorized representative must ensure that, when the vessel is operating in the North American Emission Control Area or in the Great Lakes and St. Lawrence waters, the sulphur content of the fuel oil used on board the vessel does not exceed

• (a) 3.50% by mass before January 1, 2020; and
• (b) 0.50% by mass after December 31, 2019.
  

Non-application

(3) Subsections (1) and (2) do not apply in respect of a foreign vessel or a foreign pleasure craft that

• (a) is powered by a propulsion boiler that was not originally designed for continued operation on marine distillate fuel or natural gas; and
• (b) operates solely on the Great Lakes and their connecting waters.
  

Alternative measure

(4) Instead of meeting the requirements of subsection (1) or (2), the authorized representative of a vessel may ensure that

• (a) the vessel operates an exhaust gas cleaning system that meets the requirements of Resolution MEPC.184(59); and
• (b) the emissions of sulphur oxides produced by the operation of the system do not exceed the emissions that would be produced were fuel oil with the sulphur content by mass required by that subsection used on board the vessel.
  

When different fuel is ussed

(5) The master of a vessel referred to in subparagraph 122(1)(a)(ii) or (iii) must ensure that the requirements of regulation 14.6 of Annex VI to MARPOL are met if the vessel is entering or leaving an emission control area and the fuel oil used on board within the area is different from the fuel oil used on board outside the area.

Residues from exhaust gas cleaning systems

(6) If a vessel operates an exhaust gas cleaning system that has been certified in accordance with Resolution MEPC.184(59), the vessel’s authorized representative must ensure that

• (a) any exhaust gas cleaning system residues are delivered to an onshore reception facility; and
• (b) the washwater from the operation of the system, as well as the monitoring and recording of the washwater, meets the requirements of section 10 of the Resolution.
  

Application

111.1 (1) This section, instead of section 111, applies in respect of an authorized representative’s Canadian vessels when they are operating in the Great Lakes and St. Lawrence waters during the period referred to in paragraph (4)(a) or during a year referred to in subsection (4) if, before the period or year begins, the authorized representative

• (a) notifies the Minister that the authorized representative elects to have this section apply in respect of that period or year; and
• (b) provides the Minister with a report that specifies the manner in which each of the vessels will be managed for the purposes of meeting the requirements of subsection (4) or (6) for that period or year.

Application — alternative

(2) This section, instead of section 111, applies in respect of an authorized representative’s Canadian vessels when they are operating in the Great Lakes and St. Lawrence waters during the period beginning on the day on which this section comes into force and ending on December 31, 2020 if the authorized representative

• (a) before the period begins, notifies the Minister that the authorized representative elects to have this section apply in respect of that period; and
• (b) before the period referred to in paragraph (5)(a) and before each year referred to in column 3 of the table to subsection (5), provides the Minister with a report that specifies the manner in which each of the vessels will be managed for the purposes of meeting the requirements of subsection (5) or (6) for that period or year.
  

Fuel oil used in other waters under Canadian jurisdiction

(3) In the notification, the vessels’ authorized representative may

• (a) for the purposes of calculating the total amount of fuel oil used on board the vessels, elect to include the fuel oil used on board any of the vessels when they are operating in waters under Canadian jurisdiction that are not within the Great Lakes and St. Lawrence waters; and
• (b) for the purposes of calculating the average sulphur content by mass of the total amount of fuel oil used on board the vessels, elect not to include
  • (i) 10% of the sulphur content by mass of the fuel oil used on board any of the vessels that were first delivered after December 31, 2008 but before August 1, 2012, and
  • (ii) 20% of the sulphur content by mass of the fuel oil used on board any of the vessels that were first delivered after July 31, 2012 or on which a marine diesel engine that has a power output of more than 5 000 kW was installed after July 31, 2012.

Average sulphur content

(4) If an election is made under subsection (1), the vessels’ authorized representative must ensure that the average sulphur content by mass of the total amount of fuel oil used on board the vessels does not exceed

• (a) 1.30% in the period beginning on the day on which this section comes into force and ending on December 31, 2013;
• (b) 1.20% in 2014;
• (c) 1.10% in 2015;
• (d) 1.00% in 2016;
• (e) 0.80% in 2017;
• (f) 0.60% in 2018;
• (g) 0.40% in 2019; and
• (h) 0.10% in 2020.

Average sulphur content and cumulative average sulphur content

(5) If an election is made under subsection (2), the vessels’ authorized representative must ensure that the average sulphur content by mass of the total amount of fuel oil used on board the vessels does not exceed

• (a) 1.70% during the period that begins on the day on which this section comes into force and ends on December 31, 2013;
• (b) the amount set out in column 1 of the table to this subsection during the year set out in column 3; or
• (c) the amount set out in column 2 of the table to this subsection during the period that begins on the day on which this section comes into force and ends on December 31 of the year set out in column 3.

TABLE

Item	Column 1 Average sulphur content by mass	Column 2 Cumulative average sulphur content by mass	Column 3 Year
1.	1.60%	4.40%	2014
2.	1.50%	5.50%	2015
3.	1.40%	6.50%	2016
4.	1.20%	7.20%	2017
5.	1.00%	7.70%	2018
6.	0.80%	8.00%	2019
7.	0.10%	8.00%	2020

Alternative measures

(6) Instead of meeting the requirements of subsection (4) or (5), the vessels’ authorized representative may ensure that any combination of the following on one or more of the vessels results in total emissions of sulphur oxides that do not exceed the total emissions of sulphur oxides that would be produced were fuel oil with the sulphur content by mass required by that subsection used on board the vessels:

• (a) the operation of an exhaust gas cleaning system that meets the requirements of Resolution MEPC.184(59);
• (b) the use of equipment or materials or the carrying out of procedures; and
• (c) the use of fuel oil with a reduced sulphur content.
  

Washwater from exhaust gas cleaning systems

(7) The vessels’ authorized representative must ensure that

• (a) any exhaust gas cleaning system residues are delivered to an onshore reception facility that is licensed by the jurisdiction where the facility is located; and
• (b) if one or more of the vessels operate an exhaust gas cleaning system that has been certified in accordance with Resolution MEPC.184(59), the washwater from the operation of the system, as well as the monitoring and recording of the washwater, meets the requirement of section 10 of the Resolution.

Report — the manner in which vessels will be managed

(8) The vessels’ authorized representative must provide the Minister with a revised report as soon as feasible if

• (a) after a report is provided under paragraph (1)(b), the manner in which any of the vessels are managed in order to meet the requirements of subsection (4) or (6) changes; or
• (b) after a report is provided under paragraph (2)(b), the manner in which any of the vessels are managed in order to meet the requirements of subsection (5) or (6) changes.

Interim report — the manner in which vessels are being managed

(9) The vessels’ authorized representative must, during the period beginning on June 1 and ending on September 30 of any year in respect of which an election is made under subsection (1) or (2), provide the Minister with an interim report that describes how each of the vessels is being managed in order to meet the requirements of subsection (4), (5) or (6) for that year.

Report — how vessels were managed

(10) The vessels’ authorized representative must

• (a) if an election is made under subsection (1) in respect of a period or year, provide the Minister, on or before March 1 of the year following the period or year, with a report that describes the manner in which each of the vessels was managed in order to meet the requirements of subsection (4) or (6) for that period or year; or
• (b) if an election is made under subsection (2), provide the Minister, on or before March 1 of each year starting in 2014 and ending in 2021, with a report that describes the manner in which each of the vessels was managed in order to meet the requirements of subsection (5) or (6) for
  • (i) the period that begins on the day on which this section comes into force and ends on December 31, 2013, in the case of a report made in 2014, or
  • (ii) the year before the report is made, in any other case.
    

Auditing

(11) The reports referred to in subsection (10) must be audited for accuracy by a person who has knowledge of the methods of conducting audits and is independent of the authorized representative.

Canadian Air Pollution Prevention Certificates

(12) Despite paragraph 122(1)(a), if an election is made under paragraph (1)(a) or (2)(a) in respect of a vessel, the vessel

• (a) must hold and keep on board a Canadian Air Pollution Prevention Certificate; and
• (b) is not required to hold and keep on board an International Air Pollution Prevention Certificate, unless the vessel operates in waters that are not waters under Canadian jurisdiction and are not within the Great Lakes and St. Lawrence waters.
  

Documentation if exhaust gas cleaning system is operated

111.2 If a vessel operates an exhaust gas cleaning system referred to in paragraph 111(4)(a) or 111.1(6)(a) or (c),

• (a) the vessel must hold and keep on board a certificate of type approval certifying that the system meets the applicable requirements referred to in Resolution MEPC.184(59);
• (b) the vessel must keep on board an EGC System Technical Manual “Scheme A” that meets the requirements of section 4.2.2 of Resolution MEPC.184(59) or an EGC System Technical Manual “Scheme B” that meets the requirements of section 5.6 of Resolution MEPC.184(59);
• (c) the vessel must keep on board a SO_x Emissions Compliance Plan that meets the requirements of section 9.1.1 of Resolution MEPC.184(59);
• (d) the authorized representative must ensure that the information required by Resolution MEPC.184(59) respecting the operation, maintenance, servicing, adjustments and monitoring of the system is recorded as required by the Resolution; and
• (e) the vessel must keep on board the information referred to in paragraph (d) in the form and manner required by Resolution MEPC.184(59).
  

Diesel Engines with a Displacement of Less than 30 L Per Cylinder

New diesel engines

111.3 (1) The authorized representative of a Canadian vessel or a Canadian pleasure craft must ensure that any new diesel engine that has a displacement of 7 L or more per cylinder but less than 30 L per cylinder, and that is installed on the vessel for its propulsion, has been certified

• (a) by the United States Environmental Protection Agency as meeting the requirements of Title 40, section 1042.101, of the Code of Federal Regulations of the United States for Category 2 engines; or
• (b) by the government of another state as meeting requirements for emissions of particulate matter, nitrogen oxides and hydrocarbons that are equivalent to the requirements referred to in paragraph (a).

Deferred application

(2) Subsection (1) does not apply before January 1, 2016.

16. Section 112 of the Regulations is amended by adding the following after subsection (2):

VOC management plan

(3) The authorized representative of a crude oil tanker must ensure that a volatile organic compounds management plan that meets the requirements of regulation 15.6 of Annex VI to MARPOL is implemented.

17. Section 113 of the Regulations is amended by striking out “and” at the end of paragraph (c) and by adding the following after paragraph (d):

• (e) sewage sludge and sludge oil that are not generated on board the vessel; and
• (f) exhaust gas cleaning system residues.
  

18. Subsection 115(5) of the Regulations is replaced by the following:

Batch-loaded shipboard incinerators

(5) The authorized representative of a vessel on which a batch-loaded shipboard incinerator is installed must ensure that it is designed so that the temperature in the combustion chamber reaches 600°C within five minutes after start-up and stabilizes at not less than 850°C.

19. The Regulations are amended by adding the following after section 116:

Unavailability of Compliant Fuel Oil

Canadian vessels and Canadian pleasure craft

116.1 (1) If a Canadian vessel or a Canadian pleasure craft cannot, while voyaging in accordance with its voyage plan, obtain fuel oil that meets the requirements of this Division, its master must notify the Minister and, if its port of destination is not in Canada, the competent authority of that port.

Foreign vessels and foreign pleasure craft

(2) If a foreign vessel or a foreign pleasure craft whose port of destination is in Canada cannot, while voyaging in accordance with its voyage plan, obtain fuel oil that meets the requirements of this Division, its master must notify the Minister.

Contents of notification

(3) The notification must include

• (a) the vessel’s name and, if applicable, the vessel’s IMO ship identification number;
• (b) the vessel’s port of origin and port of destination;
• (c) details of the attempts that were made to obtain fuel oil that meets the requirements of this Division, including the names and addresses of the fuel oil suppliers contacted, and the dates on which contact was made;
• (d) the sulphur content of the fuel oil that was obtained; and
• (e) the measures that will be taken to obtain, as soon as feasible, fuel oil that meets the requirements of this Division.

Energy Efficiency

Interpretation

116.2 (1) The following definitions apply in this section.

“bulk carrier”
« vraquier »

“bulk carrier” means a vessel that is intended primarily to carry dry cargo in bulk, but does not include combination carriers.

“combination carrier”
« transporteur mixte »

“combination carrier” means a vessel designed to carry liquid or dry cargo in bulk.

“container vessel”
« porte-conteneurs »

“container vessel” means a vessel designed exclusively for the carriage of containers.

“existing vessel”
« bâtiment existant »

“existing vessel” means a vessel that is not a new vessel.

“gas carrier”
« transporteur de gaz »

“gas carrier” means a cargo vessel constructed or adapted, and used, for the carriage in bulk of any liquefied gas.

“general cargo vessel”
« bâtiment pour marchandises diverses »

“general cargo vessel” means a vessel with a multi-deck or single deck hull designed primarily for the carriage of general cargo, but does not include livestock carriers, barge carriers, heavy load carriers, yacht carriers or nuclear fuel carriers.

“new vessel”
« bâtiment neuf »

“new vessel” means a vessel

• (a) for which the building contract is placed after June 30, 2013;
• (b) that is constructed after June 30, 2013, in the absence of a building contract; or
• (c) that is delivered 30 months or more after June 30, 2015.

“refrigerated cargo carrier”
« transporteur de cargaisons réfrigérées »

“refrigerated cargo carrier” means a vessel designed exclusively for the carriage of refrigerated cargoes in holds.

“ro-ro cargo vessel”
« bâtiment de charge roulier »

“ro-ro cargo vessel” means a vessel designed for the carriage of cargo transportation units.

“ro-ro cargo vessel (vehicle carrier)”
« bâtiment de charge roulier (transporteur de véhicules) »

“ro-ro cargo vessel (vehicle carrier)” means a multi-deck ro-ro cargo vessel designed for the carriage of empty cars and trucks.

“ro-ro passenger vessel”
« bâtiment roulier à passagers »

“ro-ro passenger vessel” means a passenger vessel with ro-ro cargo spaces.

“tanker”
« bâtiment-citerne »

“tanker” means a chemical tanker, NLS tanker or oil tanker.

Application

(2) Subsections (3) and (4) do not apply in respect of

• (a) a Canadian vessel that engages only on voyages in waters under Canadian jurisdiction or in the Great Lakes and St. Lawrence waters; or
• (b) a vessel that has a diesel-electric propulsion, turbine propulsion or hybrid propulsion system.
  

Attained Energy Efficiency Design Index

(3) In the case of a vessel of 400 gross tonnage or more that is a bulk carrier, combination carrier, container vessel, gas carrier, general cargo vessel, passenger vessel, refrigerated cargo carrier, ro-ro cargo vessel, ro-ro cargo vessel (vehicle carrier), ro-ro passenger vessel or tanker, the authorized representative of the vessel must ensure that the requirements of regulation 20 of Annex VI to MARPOL are met if

• (a) the vessel is a new vessel; or
• (b) the vessel is an existing vessel and is considered to be a newly constructed vessel for the purposes of chapter 4 of Annex VI to MARPOL.
  

Required Energy Efficiency Design Index

(4) In the case of a vessel of 400 gross tonnage or more that is a bulk carrier, combination carrier, container vessel, gas carrier, general cargo vessel, refrigerated cargo carrier or tanker, the authorized representative of the vessel must ensure that the requirements of regulation 21 of Annex VI to MARPOL are met if

• (a) the vessel is a new vessel; or
• (b) the vessel is an existing vessel and is considered to be a newly constructed vessel for the purposes of chapter 4 of Annex VI to MARPOL.
  

Waivers

(5) In the case of a foreign vessel, the requirements of subsections (3) and (4) are subject to the exercise of the power conferred by regulation 19.4 of Annex VI to MARPOL by the government of the state whose flag the vessel is entitled to fly.

20. Section 120 of the Regulations is replaced by the following:

Issuance of Canadian Air Pollution Prevention Certificates

120. (1) On application by the authorized representative of a Canadian vessel or a Canadian pleasure craft, and subject to paragraphs 16(4)(b) to (d) of the Act, the Minister must issue a Canadian Air Pollution Prevention Certificate to the vessel if the applicable requirements of this Division, other than those of section 116.2, are met.

Issuance of International Air Pollution Prevention Certificates

(2) On application by the authorized representative of a Canadian vessel or a Canadian pleasure craft, and subject to paragraphs 16(4)(b) to (d) of the Act, the Minister must issue an International Air Pollution Prevention Certificate to the vessel if the applicable requirements of chapter 3 of Annex VI to MARPOL are met.

Issuance of International Energy Efficiency Certificate

(3) On application by the authorized representative of a Canadian vessel or a Canadian pleasure craft, and subject to paragraphs 16(4)(b) to (d) of the Act, the Minister must issue an International Energy Efficiency Certificate to the vessel if the applicable requirements of chapter 4 of Annex VI to MARPOL are met.

21. Section 122 of the Regulations is replaced by the following:

Certificates, etc.

122. (1) Every vessel of 400 gross tonnage or more must

• (a) hold and keep on board
  • (i) a Canadian Air Pollution Prevention Certificate, or an International Air Pollution Prevention Certificate in the form set out in appendix I to Annex VI to MARPOL, if the vessel is a Canadian vessel or a Canadian pleasure craft and engages only on voyages in waters under Canadian jurisdiction or in the Great Lakes and St. Lawrence waters,
  • (ii) an International Air Pollution Prevention Certificate in the form set out in appendix I to Annex VI to MARPOL, if the vessel
    • (A) is a Canadian vessel or a Canadian pleasure craft and does not engage only on voyages in waters under Canadian jurisdiction, or
    • (B) is entitled to fly the flag of a foreign state that is a party to Annex VI to MARPOL, or
  • (iii) a certificate of compliance certifying that the vessel meets the applicable requirements of Annex VI to MARPOL, if the vessel is entitled to fly the flag of a state that is not a party to Annex VI to MARPOL; and
• (b) keep on board
  • (i) if the vessel has a marine diesel engine in respect of which any of sections 110.1 to 110.3 apply, an applicable certificate of type approval and a Technical File that meets the requirements of section 2.3.4 of the NO_x Technical Code,
  • (ii) if the vessel has a shipboard incinerator in respect of which section 115 applies, a certificate of type approval and an equipment operation manual that specifies how to operate the incinerator within the limits set out in paragraph 2 of appendix IV to Annex VI to MARPOL, and
  • (iii) if the vessel is referred to in subparagraph (a)(ii) or (iii), a list, in the form set out in Appendix I to Annex VI to MARPOL, of equipment that contains ozone depleting substances, other than equipment referred to in subsection 109(5).
    

VOC management plan

(2) Every crude oil tanker must keep on board the volatile organic compounds management plan referred to in subsection 112(3).

International Energy Efficiency Certificates, etc.

(3) Every vessel of 400 gross tonnage or more must hold and keep on board

• (a) an International Energy Efficiency Certificate in the form set out in appendix VIII to Annex VI to MARPOL, if the vessel
  • (i) is a Canadian vessel and does not engage only on voyages in waters under Canadian jurisdiction, or
  • (ii) is entitled to fly the flag of a foreign state that is a party to Annex VI to MARPOL; or
• (b) a certificate of compliance certifying that the vessel meets the applicable requirements of Annex VI to MARPOL, if the vessel is entitled to fly the flag of a state that is not a party to Annex VI to MARPOL.
  

Ship Energy Efficiency Management Plans

(4) Every vessel of 400 gross tonnage or more that does not engage only on voyages in waters under Canadian jurisdiction, and every Canadian vessel of 400 gross tonnage or more that engages only on voyages in waters under Canadian jurisdiction, must keep on board a Ship Energy Efficiency Management Plan that meets the requirements of regulation 22 of Annex VI to MARPOL. The Plan may form part of the vessel’s Safety Management System, if the vessel has one.

Non-application — U.S. vessels

(5) Subsections (3) and (4) do not apply in respect of a vessel that is entitled to fly the flag of the United States.

22. Section 123 of the Regulations is replaced by the following:

Record book of engine parameters

123. A vessel that is fitted with a marine diesel engine in respect of which any of sections 110.1 to 110.3 apply must keep on board a record book of engine parameters and maintain it in accordance with section 6.2.2 of the NO_x Technical Code.

23. Subsection 124(1) of the Regulations is amended by replacing “subparagraph 122(a)(ii) or (iii)” with “subparagraph 122(1)(a)(ii) or (iii)”.

24. Section 125 of the Regulations and the heading before it are replaced by the following:

Ozone Depleting Substances Record Book

124.1 (1) Every vessel referred to in subparagraph 122(1)(a)(ii) or (iii) that has a rechargeable system containing ozone depleting substances, other than any system or equipment referred to in subsection 109(5), must maintain an Ozone Depleting Substances Record Book and keep it on board.

Entries

(2) The vessel’s master must ensure that entries are made without delay in the Ozone Depleting Substances Record Book in respect of the following:

• (a) the repair or maintenance of equipment containing ozone depleting substances;
• (b) the recharge, full or partial, of equipment containing ozone depleting substances;
• (c) any emission of ozone depleting substances;
• (d) the transfer of ozone depleting substances to land-based reception facilities; and
• (e) the supply of ozone depleting substances to the vessel.
  

Mass of ozone depleting substances

(3) The entries must include the mass of the ozone depleting substances that are involved in a recharge of equipment or that are emitted, transferred or supplied, as the case may be.

Subdivision 6 Exemptions and Equivalents

Board

125. (1) The Board may, in respect of Canadian vessels and Canadian pleasure craft, exercise the powers of the Administration conferred by regulations 3.2 and 4 of Annex VI to MARPOL.

Foreign governments

(2) In the case of a foreign vessel or a foreign pleasure craft, the requirements of this Division are subject to the exercise of the powers conferred by regulations 3.2 and 4 of Annex VI to MARPOL by the government of the state whose flag the vessel is entitled to fly.

25. Subsection 131(4) of the French version of the Regulations is replaced by the following:

Langue

(4) La déclaration est conforme au modèle figurant à l’annexe 4 et est rédigée :

• a) dans le cas d’un bâtiment canadien ou d’une embarcation de plaisance canadienne, en français ou en anglais;
• b) dans le cas d’un bâtiment étranger ou d’une embarcation de plaisance étrangère, en français, en anglais ou en espagnol.

26. The Regulations are amended by adding the following after section 131:

DIVISION 9 GREYWATER

Definitions

131.1 (1) The following definitions apply in this section.

“greywater”
« eaux grises »

“greywater” means drainage from sinks, laundry machines, bath tubs, shower-stalls or dishwashers. It does not include sewage, or drainage from machinery spaces or workshop areas.

“new passenger vessel”
« bâtiment à passagers neuf »

“new passenger vessel” means

• (a) a passenger vessel that is constructed on or after the day on which this section comes into force;
• (b) a passenger vessel that, on or after the day on which this section comes into force, undergoes a conversion that
  • (i) substantially alters the dimensions or carrying capacity of the vessel, or
  • (ii) is intended to substantially prolong the life of the vessel; or
• (c) a vessel that, on or after the day on which this section comes into force, is converted into a passenger vessel.

“release”
« libération »

“release” includes spilling, leaking, pumping, pouring, emitting, emptying, throwing and dumping.

Application

(2) This section applies in respect of vessels in waters under Canadian jurisdiction other than arctic waters.

Non-application

(3) This section does not apply in respect of a release of greywater that

• (a) is necessary for the purpose of saving lives, securing the safety of a vessel or preventing the immediate loss of a vessel; or
• (b) occurs as a result of an accident of navigation in which a vessel or its equipment is damaged, unless the accident occurs as a result of an action that is outside the ordinary practice of seafarers.
  

Solids in water and sheen on water prohibited

(4) The authorized representative of a vessel must ensure that any release of greywater by or from the vessel into the water does not result in the deposit of solids in the water or leave a sheen on the water.

New passenger vessels

(5) The authorized representative of a new passenger vessel that is carrying more than 500 passengers must ensure that any release of greywater by or from the vessel into the water

• (a) is passed through a marine sanitation device that meets the requirements of section 90; or
• (b) is made at a distance of at least three nautical miles from shore.

Certificates of type approval

(6) Every vessel that is fitted with a marine sanitation device in order to meet the requirements of paragraph (5)(a) must keep on board

• (a) a certificate of type approval
  • (i) in the case of a device referred to in subsection 90(1), certifying that the device meets the applicable requirements referred to in that subsection, and
  • (ii) in the case of a device referred to in subsection 90(2), certifying that the device was approved as an approved device under the Great Lakes Sewage Pollution Prevention Regulations and bearing the approval number; and
• (b) a manual that sets out the operational and maintenance procedures for the device.
  

CONSEQUENTIAL AMENDMENT AND COMING INTO FORCE CONSEQUENTIAL AMENDMENT TO THE VESSEL CLEARANCE REGULATIONS

27. Paragraph 4(1)(c) of the Vessel Clearance Regulations (see footnote 2) is amended by striking out “and” after subparagraph (iv) and by adding the following after subparagraph (v):

• (vi) an International Energy Efficiency Certificate; and

COMING INTO FORCE

Registration date

28. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Executive summary

2. Background

Sulphur oxides are produced from the sulphur in fuel when it is burned in the engine. Nitrogen oxides are produced by marine engines from compounds naturally occurring in air as a by-product of the combustion process. Environment Canada (EC) and Health Canada (HC) research focussed on these pollutants and found their emissions from vessels were growing significantly and led to public health impacts.

Air emissions of sulphur and nitrogen oxides travel hundreds of kilometres in the atmosphere, penetrate inland, settle and deposit in Canada’s land and waters. High sulphur fuels are associated with emissions of particulate matter, which in turn are associated with respiratory health impacts and particularly affect the air quality in port cities. Vessel emissions also adversely impact sensitive environmental areas across Canada and affect animal and plant life in terrestrial and aquatic ecosystems through acidification and alteration of biogeochemistry.

In response to the EC and HC evidence on the impacts of air emissions on human health and the environment, the Government of Canada published, on October 21, 2006, a “Notice of intent to develop and implement regulations and other measures to reduce air emissions.” The Notice of Intent provided the framework for establishing emissions reducing regulations relating to transportation sources (among other areas). In the Notice of Intent, the Government stated that it set fixed targets for air pollutants that “are at least as rigorous as those in the United States or other environmental performance leading countries.” For air emissions from the marine sector, the Notice of Intent set out the approach for the adoption of new international standards for air emissions under the CSA 2001.

The International Maritime Organization (IMO) is the United Nation’s Specialized Agency setting global standards for safety and security of shipping and to prevent pollution by vessels. The CSA 2001 implements 39 IMO Conventions, including MARPOL. Canada worked at IMO with other countries to update standards controlling air pollution from vessels. On October 10, 2008, IMO revised MARPOL Annex VI and established new limits on emissions of sulphur oxides and nitrogen oxides and set standards for managing ozone depleting substances and shipboard incinerators.

On July 13, 2009, Canada, the United States, and France (for Saint-Pierre and Miquelon) jointly submitted a proposal to the IMO to designate the area within 200 nautical miles off the East and West coasts of Canada and the United States as an ECA under Annex VI to MARPOL. TheNorth AmericanECA was adopted by IMO and came into force internationallyon August 1, 2012, and will join two other ECA areas already in force covering the North Sea and the Baltic Sea.

On December 18, 2009, the EPA published its rules implementing MARPOL Annex VI, the North American ECA, and controlling air emissions in the United States from maritime shipping. Of note, the stricter ECA standards were applied to American internal waters, including American portions of the Great Lakes and the St. Lawrence Seaway. Of note, in the shared waters of the Great Lakes and St. Lawrence River vessels from both countries routinely voyage in each other’s waters. A study found that in 2010, maritime commerce on the Great Lakes Seaway System supported $34 billion in business revenue in both Canada and the United States.

On July 15, 2011, the IMO adopted amendments to MARPOL Annex VI establishing the Energy Efficiency Design Index (EEDI) for new vessels and the Shipboard Energy Efficiency Management Plan (SEEMP) for all vessels.

3. Issue

Marine air pollutants from vessels contribute to serious health and environmental impacts. Sulphur oxides, nitrogen oxides, and particulate matter originating from vessels are linked to incidences of premature mortality, bronchitis, hospital visits and restricted activity days. Without intervention, by 2020, vessels are expected to significantly contribute to acidic sulphur and nitrogen deposition in Canada and erode the environmental improvements that have been achieved over the last two decades. There has also been growing concern about the potential for climate change and social cost of greenhouse gas emissions from vessels. While there are a number of vessel exhaust gases that are considered to be greenhouse gases, for vessels, the main gas that is of concern is carbon dioxide.

In response to these environmental and health concerns, new vessel emission standards were developed at the IMO, as well as the approval of the North American ECA. As Canada is a Party to MARPOL Annex VI, there is an obligation to implement these standards in Canadian law.

The United States set rules implementing ECA standards in all U.S. waters, but provided certain exemptions in the Great Lakes and St. Lawrence Seaway based on the American fleet. As vessels from both countries routinely voyage in each other’s waters, Canadian regulations need to be compatible, while reflecting needs for Canada’s fleet.

As well, two other environmental issues require regulatory action. The first is updating Canadian requirements for tankers transferring oil cargo at sea to current international standards. The second is to address some concerns for discharges of greywater, which is drainage from sinks, laundries, and kitchens, that can be a source of environmental contaminants.

4. Objectives

The Regulations update standards to improve controls on air emissions and greenhouse gases from vessels in accordance with Government of Canada’s Clean Air Agenda. As described in the supporting 2006 policy document “Notice of intent to develop and implement regulations and other measures to reduce air emissions,” the Regulations implement new international standards for air emissions under the legislative authority and framework of the CSA 2001.

The Regulations implement Canada’s portion of the North American ECA, more stringent global standards controlling vessel air pollution, new air emissions standards for Canadian vessels operating in the Great Lakes and St. Lawrence waters, and new standards to reduce greenhouse gas emissions.

They also update safety standards for the transfer of oil between tankers at sea to be consistent with international regulations.

Finally, the Regulations provide a regime for managing greywater discharges under the CSA 2001. They introduce minimum requirements for vessels to manage their greywater in a manner consistent with other discharges. New passenger vessels, built after the Regulations come into force, are required to treat greywater to specific standards.

5. Description

Implementation of updated standards under MARPOL Annex VI

New IMO standards which came into force on July 1, 2010, set limits on emissions of sulphur and nitrogen oxides from vessel exhausts and prohibit deliberate emissions of ozone-depleting substances. These standards will be implemented for all vessels that are currently subject to the existing Vessel Pollution and Dangerous Chemicals Regulations, namely vessels of 400 gross tonnage or more.

The primary approach to reduce sulphur oxide emissions is to limit the percentage of sulphur content, by mass, in marine fuel. As the standards allow for the use of emissions control systems, emissions performance of vessels can also be set by limits that are equivalent to the sulphur content in marine fuel. This equivalent approach compares concentrations of sulphur dioxide and carbon dioxide in a vessel’s exhaust gas. The ratio of sulphur dioxide to carbon dioxide in the exhaust is equivalent to the percentage of sulphur in the fuel.

The Regulations incorporate the new global standards of MARPOL Annex VI, Regulation 14, which reduces the maximum permissible sulphur content of fuel used on board a vessel as follows:

Maximum allowable fuel sulphur content (global), MARPOL Annex VI

Dates	Maximum allowable fuel sulphur content
Before January 1, 2012	4.50%
January 1, 2012, to December 31, 2019	3.50%
January 1, 2020, and thereafter	0.50%

A study on global fuel supplies will be completed in 2018 and may result in the implementation of the 0.50% standard being deferred to January 1, 2025.

The new standards allow vessels to use emissions control technology that results in the same emissions performance as using the lower-sulphur fuel.

Nitrogen oxides come from the combustion of nitrogen in the air that is drawn into an engine. Thus, limiting the formation of nitrogen oxides requires adjustments to the operation of a vessel’s engines. Therefore, the IMO developed emission limits of nitrogen oxides in exhaust gases for different workloads of a vessel’s engine. The IMO also developed a technical code setting out guidance to achieve them: the NO_x Technical Code 2008 (or Technical Code on Control of Emission of Nitrogen Oxides from Marine Diesel Engines).

The Regulations phase in these new IMO standards and parts of the NO_x Technical Code 2008 for engines installed on vessels built after January 1, 2011, to meet 20% more stringent limits on nitrogen oxide emissions, known as Tier II standards. Details of these standards are presented below:

Tier I/Tier II nitrogen oxide emissions standards

Tier I	Tier II
17.0 g/kWh when n is less than 130 rpm; 45 · n-0.2 g/kWh when n is 130 or more but less than 2 000 rpm; and 9.8 g/kWh when n is 2 000 rpm or more.	14.4 g/kWh when nis less than 130 rpm; 44 · n-0.23 g/kWh when n is 130 or more but less than 2 000 rpm; and 7.7 g/kWh when n is 2 000 rpm or more.

Notes: “g/kWh” refers to grams per kilowatt-hour
“n” refers to rated engine speed (crankshaft revolutions per minute)

Implementation of the North American Emission Control Area

The Regulations implement the North American ECA which comprises waters along the Pacific Coast, the Atlantic Coast, the Gulf of Mexico and the eight Hawaiian Islands. It also includes the waters under Canadian jurisdiction on the East and West coasts south of latitude 60°N and almost 200 nautical miles offshore. This measure joins other ECAs in the waters of the Baltic Sea, the North Sea, and the United States Caribbean territory.

The Regulations require vessels subject to MARPOL Annex VI to comply with the emissions standards for ECAs. These levels are more stringent than the aforementioned global standards, with maximum allowable sulphur content in fuel as follows:

North American ECA maximum allowable fuel sulphur content, by date

Dates	Maximum allowable fuel sulphur content
August 1, 2012	1.00%
January 1, 2015, and thereafter	0.10%

The Regulations also provide for recognizing alternative compliance methods in accordance with Regulation 4 of MARPOL Annex VI. These methods can include fitting technology, using alternative fuels, or adopting procedures that result in equivalent reductions in emissions. Under this provision, TC assesses and approves equivalencies for Canadian vessels and Canadian pleasure craft in accordance with pending IMO guidelines. For foreign vessels and foreign pleasure craft, the countries where they are registered (known as flag States) will assess and approve these alternative compliance methods.

In addition to controls on sulphur oxides, vessels operating in any ECA that are built on or after January 1, 2016, will be required to adhere to the most stringent standards for nitrogen oxide emissions. Known as Tier III standards, they represent an 80% reduction from current nitrogen oxide emissions under current standards. It is expected that these vessels will need to use emissions control systems. Details of these standards are set out below:

Tier III standards for emissions of nitrogen oxides

• 3.4 g/kWh when n is less than 130 rpm;
• 9 · n^-0.2 g/kWh when n is 130 or more but less than 2 000 rpm; and
• 2.0 g/kWh when n is 2 000 rpm or more

Notes: “g/kWh” refers to grams per kilowatt-hour
“n” refers to rated engine speed (crankshaft revolutions per minute)

Implementing ECA standards in the Great Lakes and St. Lawrence waters

To bring ECA standards to inland waters, the Regulations set a fleet averaging approach to control sulphur oxide emissions from Canadian vessels operating in the Great Lakes and St. Lawrence waters. From the date the Regulations come into force, the permissible sulphur emissions (expressed as an equivalent percentage of sulphur content of fuel oil, by mass) for a fleet progressively decline on January 1 of each year. The permissible sulphur emissions start from 1.30% and decline to 0.10% on January 1, 2020, at which time the requirements in the Great Lakes and St. Lawrence waters match those of the North American ECA. However, provisions permit these annual fuel sulphur limits to be exceeded by a maximum cumulative amount of 0.40% before 2017, declining to 0.10% in 2020, at which time cumulative sulphur emissions in excess of the base annual limits will have been offset with corresponding reductions.

Fleet averaging responds to a proposal by the Canadian marine shipping industry to provide flexibility in attaining progressively more stringent air emissions requirements that are compatible with new requirements introduced by the EPA for vessels within the American waters of the shared seaway.

The options available to the regulated population include use of lower-sulphur fuel, use of exhaust gas cleaning systems (commonly known as “scrubbers”), and use of materials and procedures which result in equivalent emissions to using lower-sulphur fuel. Vessel owners also have the option of averaging emissions across their own fleet of vessels each year, which provides flexibility in managing fleet renewal and achieving compliance.

TC will issue Canadian certificates for Canadian vessels operating in the Great Lakes and St. Lawrence waters whose owners have elected to use the fleet averaging option. A shipping firm needs to provide TC by March 1 of each year with a report that describes how emission targets for its fleet were met in the past shipping season and how targets will be met in the coming shipping season. The report must list the vessels in the fleet, and indicate the amount of fuel used for each vessel in the past season and its sulphur content, as well as the planned fuel quantity and sulphur content for the next season. The report also must indicate if the vessel had emissions control technology installed as an equivalent. An interim report, indicating performance of the fleet mid-year and allowing for adjustments, also needs to be submitted to TC. This report can then be submitted at any time between June 1 and September 30.

As well, following consultations with the United States EPA, the Regulations allow for U.S. vessels subject to U.S. domestic air emissions rules to continue operate under those rules when in Canadian waters. The Regulations also allow foreign vessels to operate under exemptions for steamships set out in MARPOL Annex VI.

Implementation of the Energy Efficient Design Index (EEDI) and International Energy Efficiency (IEE) Certificate

The EEDI is a standardized way to measure efficiency of new vessels in terms of carbon dioxide emissions per tonne nautical mile of cargo carried. It is analogous to fuel efficiency figures for vehicles. It was adopted under MARPOL Annex VI in July 2011 for new vessels and will come into effect on January 1, 2013.

Broadly, new requirements apply to new vessels (vessels which have a build contract in place or are constructed after June 30, 2013, or are delivered 30 months or more after June 30, 2015) of 400 gross tonnage or more. Affected vessels would be required to meet an efficiency target against a baseline for their class. These vessels are required to have their EEDI calculated and to carry an IEE Certificate to demonstrate compliance with the EEDI requirements. The requirements do not initially apply to vessels of all types. Generally, cargo, container, tanker and combination carriers are affected. The requirements do not apply to vessels which engage only on voyages in waters under Canadian jurisdiction or in the Great Lakes and St. Lawrence waters, nor to pleasure craft. Other types of vessels are intended to be included in these requirements through future regulatory amendments as the technical specifications for these vessels are developed and approved at IMO.

Implementation of the Ship Energy Efficiency Management Plan (SEEMP)

The purpose of a SEEMP is to establish a mechanism for existing vessels to improve their energy efficiency. The SEEMP was also adopted under MARPOL Annex VI in July 2011, and the requirements will come into effect on January 1, 2013.

The Regulations require new and existing vessels of 400 gross tonnage or more to have a SEEMP on board and that it be developed taking into account IMO guidelines. This document can be part of the vessel’s Safety Management System, to minimize administrative burden. This approach reflects the IMO view that shipping firms will be motivated by fuel prices to increase energy efficiency. The SEEMP will detail how the specific vessel is to increase its energy efficiency, thus reducing its greenhouse gas emissions.

Implementation of domestic air emissions standards for smaller marine diesel engines

Smaller marine diesel engines with displacements of 7 litres or more per cylinder and under 30 litres per cylinder are similar to engines used in trains, and are also a concern for pollutants. In the United States, the engine manufacturers of these types of marine engines are required to ensure that their engines meet emissions control standards set by the EPA. These standards are known as “Category 2 standards.”

The Regulations require that when a new engine of this type is installed on a vessel for its propulsion, on after January 1, 2016, it needs to be certified to meet either the U.S. Category 2 standards, or an equivalent international standard such as those in Europe.

While the authority to regulate vessels exists under the CSA 2001, the authority to regulate engine manufacturers exists under the Canadian Environmental Protection Act, 1999. A survey of Canadian marine engine manufacturers determined that no Category 2 marine engines are made in Canada; rather, they are imported. Therefore, the Regulations require vessels installing such engines to meet the Category 2 standards or equivalent to ensure a consistent North American approach.

New requirements concerning ship-to-ship (STS) transfer of oil at sea

The IMO Resolution MEPC.186(59) amended MARPOL Annex I in order to create new requirements for oil cargo transfers at sea that entered into force on January 1, 2011. As a result of this resolution, the Regulations introduce requirements applicable to oil tankers of 150 gross tonnage or more.

Those oil tankers are required to keep on board an STS operations Plan, if they are not alongside a wharf or quay and are engaged with another oil tanker in a transfer operation involving oil or an oily mixture in bulk. For Canadian tankers, the owner or operator is required to ensure that the Plan is implemented. For foreign tankers, this requirement is the responsibility of the master. Records required by the STS operations Plan are required to be made and kept on board for three years.

If the transfer operation involves a Canadian vessel and is in the territorial sea or Exclusive Economic Zone of any Party to MARPOL other than Canada, the vessel’s master is required to notify the local authorities at least 48 hours prior to the operation.

If the transfer operation is in waters under Canadian jurisdiction the vessel’s master is required to notify Canadian authorities at least 48 hours prior to the operation.

Implementation of standards for greywater discharge

The Regulations require that discharges of greywater from a vessel in waters under Canadian jurisdiction other than arctic waters must not result in the deposit of solids or cause any sheen on the water.

The Regulations also require new, large passenger vessels which are carrying more than 500 passengers to ensure that any greywater released from the vessel (non-sewage drainage from sinks, laundry machines, bathtubs, shower stalls or dishwashers) has been passed through a certified marine sanitation device or is done at least three nautical miles from shore.

6. Regulatory and non-regulatory options considered

The Regulations implement the international requirements of MARPOL Annex VI, which deal with reducing air emissions from vessels. As a Party to the Annex, Canada is obligated to incorporate its requirements into domestic laws. As well, implementation of a regulatory program for shipping supports the Government of Canada’s Clean Air Agenda.

Similarly, the Regulations also implement international standards under MARPOL Annex I for STS transfers of oil, which must be incorporated into Canada’s legal framework.

For the air emissions standards for Canadian vessels operating in the Great Lakes and St. Lawrence waters, the Regulations implement a fleet averaging regime based on proposals from Canadian vessel owners. Two other alternatives were considered and consulted upon. The first was to implement ECA-level emissions standards in the Great Lakes and St. Lawrence waters at the same time as the North American ECA. The second was a phase-in option which allowed older vessels more time to meet air emission standards than newer vessels. The fleet averaging option best reflects the interests of Canada’s fleet and provides the greatest flexibility in encouraging fleet modernization through a gradual transition to more stringent standards. Because vessels from both Canada and the U.S. routinely voyage in each other’s waters, Canada’s requirements need to be set in regulations in order for the U.S. to recognize Canadian standards when Canadian vessels voyage in U.S. waters.

For the provisions relating to controlling air emissions and STS transfers of oil, there are no viable alternatives to the Regulations, given the obligations for these standards to be implemented under domestic laws.

The Regulations also set standards to ensure new, large passenger vessels are equipped to manage greywater. This aims to address growing concerns that contaminants in greywater pose increasing pollution risks. Other jurisdictions, namely the United States, are beginning to regulate greywater.

Voluntary guidelines in the form of the Pollution Prevention Guidelines for Cruise Ships Operating in Waters under Canadian Jurisdiction have high compliance among major cruise lines operating in Canada. These cruise lines comprise large foreign vessels and have adopted advanced waste water treatment systems that manage both sewage and greywater. However, domestic cruise and excursion lines with older vessels lacking the technology are currently not in a position to comply. A review of available technology found that systems are available, but time is required for fitting this technology.

The Regulations, therefore, set requirements for new passenger vessels carrying over 500 passengers to ensure their greywater will be managed under the CSA 2001. Maintaining a voluntary approach under guidelines does not foster compatibility with other jurisdictions that are beginning to regulate greywater.

Overall, the Regulations provide the best alternative to incorporate outstanding international and national provisions in a timely manner.

7. Benefits and costs

The full cost-benefit analysis (CBA) is available upon request.

The baseline human health and environmental risk in Canada of sulphur oxide, nitrogen oxide, and particulate matter emissions from vesselsis detailed in the July 2009 submission to the IMO by Canada, the United States and France, and is available upon request.

Summary of costs and benefits

The period of analysis is 20 years (2013–2032). An 8% discount rate was used for analyzing costs and benefits and all figures are expressed in 2010 dollars. In accordance with Treasury Board of Canada accepted methods to estimate costs, only Canadianflagged vessels were included in the analysis.

Three principal impacts of the Regulations were assessed:

• (1) The total direct costs incurred by shipowners. A portion, or all, of these costs could potentially be passed on to the consumer;
• (2) The total costs incurred by Government to implement the amendments; and
• (3) The total environmental and health benefits to Canadian society at large of air pollution and GHG emissions reductions.

For the purpose of the cost-benefit study, all references to vessels also include pleasure craft. The number of vessels in the domestic marine shipping sector of 400 gross tonnage or more is presented below:

Regulated Canadian vessels of 400 gross tonnage or more, by region

ECA East	ECA West	Great lakes	Arctic	Total
41	27	94	51	213

This represents the principal population of Canadian vessels that are subject to the Regulations.

Costs to be borne by Canadian vessel owners and operators for the Regulations were estimated to be an annualized value of $60 million per year from 2013 to 2032, for a total present value of $576 million over the analysis period.

Against these annual costs, total expected health benefits were estimated to be an annualized value of $1 billion per year commencing in 2020, for a total present value of $9.86 billion over the same period.

The net benefit of the Regulations is $9.29 billion. These benefits will be realized between 2020 and 2032.

Cost-benefit statement

Cost-Benefit Statement		Base Year (2013)	Year 2020	Final Year (2032)	Total(Present value)	Annualized Value
A. Quantified impacts (in millions of 2010 dollars)
Benefits	Canadian society	0	1,246.27	1,253.47	9,862.03	1,004.47
	Total	0	1,241.57	1,253.47	9,862.03	1,004.47
Costs	Marine industry	0.61	74.60	45.45	576.44	58.71
	Government	1.38	0.79	0.79	8.83	0.90
	Total	1.99	75.38	46.24	585.27	59.61
Net benefits					9,276.76
B. Qualitative impacts
Environment		(1) Reduce sulphur emissions from vessels by 96% and nitrogen emissions by 80%; (2) Reduce acidification of some 15 000 wetlands across Canada; (3) Contribute to a 5% overall reduction of all sulphur oxide emissions in Canada; (4) Additional benefits through the adoption of updated standards to reduce greenhouse gas emissions from vessels and to prevent pollution from oil and greywater.
Consumers		Costs passed to consumers were estimated to be negligible. Marine shipping costs for goods imported to Canada represent a small fraction of consumer prices. However, in the cruise sector, a 2% to 5% total vacation cost increase could be seen.
Business		Some impact on freight rates for businesses dependent upon marine shipping. Typical marine shipping costs can account for between 1% and 2% of Canadian retail prices. In remote coastal locations such as the Arctic, marine shipping cost can account for a significantly higher portion of retail prices.

Costs of the Regulations

The total estimated incremental costs to the marine industry as a consequence of the Regulations (2013–2032) are

Cost category	Millions ($)
Capital cost of switching to distillate fuel	33.79
Incremental cost of switching to distillate fuel	98.02
Capital cost of installing emissions control systems	222.04
Operating and maintenance cost of emissions control systems	67.21
EEDI cost	124.79
SEEMP cost	4.93
Incremental cost of new, compliant small marine diesel engines	1.01
Cost of ship-to-ship operations Plan	0.04
Total cost	585.27

A key cost of the Regulations will be changing fuel used by vessels to low sulphur distillate fuels from the currently widely used residual fuels, which have sulphur contents ranging from 1.6% to 2.5% depending on their source.

As well, new vessels which enter service after 2016 must meet the Tier III nitrogen oxides standards, for which they are expected to meet through the use of emission control systems. The following assumptions were made concerning new vessel construction and installation of emissions control systems aboard new and existing vessels:

• (a) New vessel construction for the Great Lakes and St. Lawrence waters was estimated to be 23 new vessels from 2013 to 2020, based on announcements of shipping firms, with 25 emissions control systems installed from 2016 to 2020;
• (b) For the Arctic region, it was assumed that no new vessels would be constructed for exclusive use in the Arctic, and no emissions control systems installed over the 20-year period;
• (c) New vessel construction for the West Coast region was estimated to be 26 new vessels from 2014 to 2027 (based on BC Ferries data) and one emissions control system installed in 2016; and
• (d) New vessel construction for the East Coast region was estimated to be 5 new vessels in 2014, with 15 emissions control systems installed from 2016 to 2018.

Unit costs for such technology were estimated at a capital cost of $5 million per unit. Operating and maintenance costs were estimated at $200,000 per unit per year. The total cost of installing, operating, and maintaining emission control systems, such as selective catalytic converters or scrubbers, is estimated at $371.45 million.

Heavy fuel is comparatively inexpensive to distillate fuels. Distillate fuels command on average a premium of 40% to 60%, depending on the market. For the purpose of assessing costs, this premium was determined to be $240 per tonne. The capital cost of switching to distillate fuel was determined to be $82,395, from a range of $15,449 to $82,395, as derived from a report prepared for the United States Department of Transportation.

A significant portion of the Canadian fleet already uses distillate fuels, and will continue to do so after the Regulations come into force. Over the analysis period, commercial adoption of scrubber systems that enable vessels to meet both the sulphur and nitrous oxides requirements of the Regulations while burning residual fuel is expected. For these reasons, the cost of installing and operating emissions control systems was forecasted to exceed the cost of the Canadian fleet’s migration to low-sulphur distillate fuel over the period 2013 to 2032. Incremental fuel costs would, however, significantly exceed scrubber installation costs in the early years which follow the Regulations’ entry into force.

Costs of determining the EEDI and to meet the targets set in that standard for new vessels were estimated to range from $50,000 to $3.1 million, depending on the features adopted to meet energy efficiency targets. Costs for the SEEMP were estimated to be minimal at approximately $2,200 per vessel. Combined fleet costs for Canadian vessels were estimated to be $5 million annually. For the energy efficiency measures, cost elements include calculation of the EEDI, preparing the SEEMP and obtaining certificates.

For vessel owners in the Great Lakes and St. Lawrence waters who elect to develop and submit plans to TC in order to engage in fleet averaging, incremental combined administrative and auditing costs to each owner were forecasted to be $10,000 per year for each year between 2012 and 2020 in which the owner elects this option. This equates to an estimated total industry cost of approximately $560,000 dollars over the period.

With regard to new provisions concerning installation of new diesel engines with a displacement of greater than 7 litres per cylinder but less than 30 litres per cylinder, the costs of compliant engines in 2012 were estimated by the EPA to be no more expensive than current designs. However, in 2016 when more stringent standards will be implemented by manufacturers, costs were estimated to increase by 16% and result in a total incremental cost to the Canadian fleet of approximately $1 million. These engines are not manufactured in Canada, but are imported into Canadian markets.

The administrative costs for oil tankers and vessels which carry oil in bulk to prepare a STS transfer plan were estimated to cost about $1,000 per vessel in crew time and record keeping. These requirements are part of global standards. Thus, in many cases, tankers already have these plans. This measure will help further reduce risks of spills during transfer operations between vessels.

Costs for vessels to manage greywater were assessed as negligible, as requirements reflect existing standards for any discharges from vessels. Costs for new passenger vessels carrying over 500 passengers involve the fitting of marine sanitation devices. Such vessels already have larger wastewater volumes and need to fit this equipment to manage their sewage under existing regulations. Because high volume marine sanitation devices can also treat greywater, careful selection of the equipment will result in no new costs.

Strategies to mitigate costs

Transport Canada recognizes the concerns of vessels that operate for a significant part of their routes within the waters of the North American ECA. To minimize impacts, the Regulations provide for the greatest possible flexibility, while still attaining the public health and environmental benefits.

Furthermore, TC is continuing to work for a framework at IMO to assess proposals for alternative compliance methods to verify that they provide equivalent performance to the standards. This framework will go beyond emissions control systems, which already have clear guidelines to assess performance. The Regulations are already positioned to recognize alternative compliance methods.

Scrubber installation can enable a new vessel to use, or an existing vessel to continue to use, heavy residual fuels while attaining emissions standards. These systems can offset the higher fuel costs from migration to low-sulphur fuel that is otherwise a consequence of these Regulations. The payback period for recouping a scrubber investment is highly variable and dependent on a vessel’s operating profile. Current, typical estimates for high-mileage vessels on transoceanic routes to recoup scrubber investment costs range between four to five years.

Benefits of the Regulations

Benefits of the Regulations were derived from reduced emissions from vessels and the resultant effects on public health and the environment. First, EC’s Meteorological Service of Canada carried out atmospheric modelling to estimate the dispersion of marine emissions and their eventual deposition across Canada. Reduced emissions were then applied to the model to project estimated benefits. The geographic dispersion of the deposits enabled scientists to assess environmental benefits of reduced acidification of freshwaters. However, these environmental benefits could not be monetized as accepted methods to do so are not available. From this data on projected emissions deposits, HC used a simulation model known as the Air Quality Benefits Assessment Tool (AQBAT), which estimates the human health and welfare benefits or damages associated with changes in Canada’s ambient air quality. The AQBAT provided figures for expected health benefits, and monetized these benefits using accepted methods, namely in terms of the “value of a statistical life.” Given that changes are being phased in, the analysis took a conservative approach and assumed no benefit up to 2020, with benefits starting in 2020 and remaining constant to 2032.

The Regulations are expected, by 2020, to reduce vessel source emissions of sulphur oxides by 96%, nitrogen oxides by 80%, and particulate matter emissions by 80%. The monetized benefit of the Regulations in public social and health savings was estimated to an annualized value of $1 billion per year, for a net present value of $9.86 billion over the analysis period. This included reduced emissions from Canadian and foreign vessels. A summary of the reduction in adverse health effects is set out below:

Expected annual Canadian health benefits resulting from the Regulations (2020 and later)

Health effect from vessel emissions	Expected baseline incidences in 2020	Expected reduction in 2020 with Regulations
Mortalities	390	175
Hospital admissions	99	34
Emergency room visits	320	95
Adult chronic bronchitis cases	260	140
Child acute bronchitis episodes	1 520	780
Asthma symptom days	76 000	19 000
Minor restricted activity days	110 000	20 000
Restricted activity days	290 000	150 000
Acute respiratory symptom days	790 000	280 000

As a portion of the overall benefits, the average annual benefits from the reduction of greenhouse gas (carbon dioxide) emissions were estimated at $49.0 million for 2013 to 2032, using a derived value for the social cost of carbon of $26 per tonne. Carbon dioxide emissions produced in Canada from both Canadian and foreign vessels were estimated at 27 million tonnes annually. Benefits for reduced carbon dioxide emissions were estimated using an estimate for the social cost of carbon as determined by published research, the price of carbon on international exchange markets and target prices announced by key jurisdictions.

Non-monetary benefits

Improving vessel emissions from current performance to North American ECA standards will result in declines in both total sulphur and total nitrogen deposition over Canada in the year 2020 and beyond.

This will have a significant benefit in reducing pollution impacts by acid forming compounds in freshwater bodies in Canada. For example, in southwestern British Columbia, it is expected to result in a 19% reduction in excess total sulphur and nitrogen deposition above the acidity critical load level — a level above the natural ability of freshwater lakes and streams to absorb and buffer acidifying deposits. In New Brunswick, an 11% reduction is expected. Most importantly, it is expected to eliminate excess deposition over an area of approximately 13 500 km² across Canada. As a result, the risk of soil and lake acidification and associated threats to the health of vegetation and aquatic wildlife will be minimized. Given the qualitative nature of this benefit, it was monetized as there are no accepted methods to attribute monetary benefits to natural features of the environment.

Regional impacts

Implementation of the ECA is expected to yield the majority of benefits (72%) on the West Coast. This is because of the intense shipping activities in Port Metro Vancouver, which is Canada’s busiest port, and the high population density in the surrounding Greater Vancouver region. The distribution of benefits and costs is presented below:

Distribution of relative incremental GHG and health benefits over regions of Canada, 2013–2032

Benefit	Great Lakes	Arctic	West Coast	East Coast	Canada
GHG benefits, in $ million	-	1.17	22.74	25.07	48.97
Health benefits, in $ million	2,293.91	-	7,144.38	374.77	9,813.06
Total benefits, in $ million	2,293.91	1.17	7,167.16	399.84	9,862.03
Total benefits, as percentage	23.3%	-	72.6%	4.1%	100%

Distribution of relative incremental costs to marine industry over regions of Canada, 2013–2032

	Great Lakes	Arctic	West Coast	East Coast	Canada
In $ million	278.57	38.90	112.31	146.66	576.44
as %	48.3%	6.7%	19.5%	25.5%	100%

With only 0.3% of Canada’s population (according to 2011 Census data) spread over a vast geographic area, the CBA did not attribute public health benefits for the Arctic region. However, given the long range atmospheric transport of pollutants, the Arctic is expected to realize environmental benefits from reductions in deposits of acidifying pollutants and greenhouse gas emissions from shipping.

Other impacts

Notwithstanding the increased fuel costs previously noted, the cost that will be passed on to consumers is expected to be negligible. Marine shipping costs for goods imported into Canada represent a small fraction of the price consumers see. For international freight, the marine mode remains the most efficient, and obviously for overseas trade is the sole practical option. This is a reason why marine shipping carries 90% of the world’s trade. Vessels that operate along coastal routes of North America serve market demands to move products. Increased fuel costs, while presenting some impact, will not result in modal shifts.

Some impacts involve freight rates for those businesses that depend on marine shipping for moving product to market or obtaining supplies. However, modern containerized shipping has resulted in marine shipping being among the lowest part of a product’s total costs. Generally, final consumers are sensitive to changes in the delivered price of products, not to changes in the transportation price. Typical marine shipping costs can account for between 1% and 2% of Canadian retail prices. It is acknowledged that in remote coastal locations, such as the Arctic, marine shipping costs can account for a significantly higher portion.

In examining the impacts of the North American ECA on container shipping, an expected impact was estimated to be $1 to $12 to the overall cost of shipping a 20-foot equivalent container to the United States or Canada from overseas. Between 2000 and 2010, daily charter rates for a single container, known as a 20-foot equivalent unit or TEU, have varied from $2.70 to $35.40 according to the United Nations Conference on Trade and Development (UNCTAD). Current rates in 2012 remain low, with the ongoing economic situation. At 10 to 17 days voyage time, depending on the port of origin, using the UNCTAD rates, the cost to move a single container may vary from $27.00 to $601.80 (in times of higher economic activity). A $1 to $12 increase amounts to a 2% to 3% increase for the cost of shipping a container. As the marine shipping cost represents 1% to 2% of the consumer cost, the impact will be around 0.01%, a negligible amount as there will be other drivers related to the broader economy impacting consumer costs. Therefore, the impact is expected to be negligible for consumers and small businesses.

Cruise lines operate for longer periods of time within the North American ECA than other vessels which can return to the high seas. They have reported potential impacts of $100 per ticket on some routes, while other sources have estimated impacts to be around $50 per ticket. While this can amount to a 2% to 5% impact on total vacation costs, it is important to note that fuel price is one element of a decision for cruise lines to offer a destination; other reasons focus on market demand for a destination (a function of its attractions); the demographics of people who are seeking such a destination; and the fares they are willing to pay. Discussions in 2011 with cruise sector stakeholders indicated that the cruise sector in Atlantic Canada is expanding.

Nevertheless, TC recognizes the concerns of vessels that operate for a significant part of their routes within the waters of the North American ECA.

Sensitivity analysis

A sensitivity analysis was carried out to determine the implications of uncertainty in key variables of

• (1) Discount rate (3% versus 8%). Under the 3% scenario, total benefits were 34.4% greater ($13.28 billion) and costs were 38.8% greater ($892.2 million).

• (2) Distillate and residual fuel oil prices (cost premium of distillate fuel raised by 50% and 100% above the baseline assumption). The incremental cost to industry of distillate fuel was $98.0 million in the baseline scenario, $147.0 million in the 50% increase scenario, and $196.0 million in the 100% increase scenario.

• (3) Cost of emissions control systems (cost of emission control systems decreased by 25% and 50% below the baseline assumption). The incremental cost to industry of emissions control systems was $634.0 million in the baseline scenario, $541.2 million in the 25% decrease scenario, and $448.3 million in the 50% decrease scenario.

The overall analysis was highly sensitive to changes in the discount rate, and modestly sensitive to changes in fuel oil prices and the cost of emissions control systems.

8. “One-for-One Rule”

The “One-for-One” Rule applies to these Regulations as there will be an increase in administrative burden as a result of the amendments. The increased administrative cost would apply to shipping companies that operate large fleets of cargo vessels in the Great Lakes and St. Lawrence waters and who would elect to follow the fleet averaging provisions previously described. Five to seven companies are expected to utilize fleet averaging. Costs are to assemble historical and projected fleet fuel use data, to summarize information in a short report, and to audit the report and submit it to TC once per year. The total administrative cost increase to all businesses is estimated to be an annualized average of $47,070. For individual businesses, this equates to approximately $6,700 per business per year over an eight-year period from 2012 to 2020. The basis for these costs is approximately 160 person-hours of effort per business per year to perform the aforementioned activities at an average labour rate of $43 per hour. TC developed an overall cost estimate which encompassed these activities through consultations. No comments were received on these estimates during prepublication.

9. Small business lens

For small business, the overall impact is expected to negligible. Businesses operating vessels subject to the Regulations are generally medium to large enterprises.

The requirements to meet standards of the North American Emission Control Area standards, the 2008 MARPOL Annex VI, the 2011 Energy Efficiency Standards, and the 2010 revised ship-to-ship transfer operations are focussed on large commercial vessels with capital outlays over $30 million. The requirements for vessel owners installing smaller diesel engines to meet the “Category 2” standards and for owners of new large passenger vessels to treat greywater cover medium-sized companies, representing vessels with multi-million dollar values. Finally, for vessel owners to meet minimum requirements with respect to discharging greywater, these requirements are consistent with general requirements for any discharge and do not pose additional burdens. Small businesses are not intended to be regulated under the Regulations.

10. Consultation

Transport Canada, working with EC, has undertaken significant consultations with stakeholders since 2006. Overall, there is support for the environmental performance goals of the Regulations, though industry stakeholders remain concerned about costs and available technology. TC plans continued consultations to facilitate and promote the adoption of technology among stakeholders to meet the standards and to respond to issues as the Regulations are finalized and implemented.

An Air Emissions Working Group was established at the national meetings of the Canadian Marine Advisory Council (CMAC). This forum represents the principal consultation mechanism with the marine industry and will continue to be the main consultation body for implementation of the Regulations. In addition, presentations were provided to Regional Marine Advisory Councils held across TC’s five regions. In 2009, before the joint submission of the North American ECA, TC and EC held public stakeholder meetings in Vancouver, Ottawa, Montréal, and Halifax. As well, provincial governments have been consulted both in bilateral meetings and through existing committees for the Government’s Gateways initiatives as the Regulations were being developed. Finally, bilateral meetings were held with key industry associations and their member firms.

In addition to consulting with domestic stakeholders, TC carried out international discussions in advance of proposing the North American ECA. Key discussions were held with the EPA, the main partner and driving agency for the North American ECA, as well as the USCG, the primary marine regulatory agency, the Department of Transportation, the State Department, the National Oceanographic and Atmospheric Administration and the Maritime Administration.

Beyond discussions with the United States, discussions also took place at IMO and with key member States: France (a cosponsor), Norway, Denmark, the United Kingdom, Japan, Panama, the Marshall Islands, Mexico, the Bahamas, and Australia. Other international discussions included the Consultative Shipping Group; an informal forum of key trading partners with the United States; the International Transport Forum; and the Organization for Economic Cooperation and Development.

Overall, stakeholders accept the need for the Regulations to improve air quality. The marine industry supports the health and environmental benefits of these measures and wishes to see flexibility so that it can comply in the most cost-effective manner possible.

Domestic firms operating in the Great Lakes and St. Lawrence waters proposed a “fleet averaging” concept, which TC adopted, to support their fleet renewal efforts. Domestic firms, who compete to an extent with railways and trucking, noted that the impact of adopting the ECA standard could result in modal shifts, particularly for grain.

Foreign firms operating in coastal and inland waters also sought flexibility and options for compliance. MARPOL Annex VI provides for its member countries to approve alternative compliance methods for their vessels. The IMO framework to approve the complete range of methods is not fully developed. TC is developing guidelines to assess proposals for alternative compliance approaches that are allowed under MARPOL Annex VI. By providing a predictable assessment framework, industry has clear targets and means to self-assess proposals to gauge success before advancing them to governments.

The guidelines for assessing options will also provide benefits to Canadian firms operating in established ECAs (North America, the North Sea, and the Baltic Sea) and any future such areas.

Provincial governments, notably Newfoundland, New Brunswick, Nova Scotia, Prince Edward Island and Quebec, expressed concern about the impact that the North American ECA has on cruise ships and tourism. These provinces have invested in strategies to attract cruise ships. As these cruise ships are foreign vessels, the flexibilities will be found in the international standards.

British Columbia expressed support for actions to reduce sulphur emissions, as they faced health impacts in the lower mainland. British Columbia did not express concern on impacts for cruise ship tourism, as their ports provide destinations that allow voyages from the continental United States to Alaska to be considered as international voyages under American law. This allows cruise lines to operate foreign vessels with overseas crews, instead of U.S. registered vessels and American crews. Thus, destinations in British Columbia provide a major cost savings for the cruise sector and will remain on cruise itineraries.

Transport Canada will also continue consultations through the National CMAC meetings to facilitate compliance. Key priorities will include promoting technical solutions to reduce air emissions and facilitating discussions between shipping firms and equipment or alternative fuel suppliers.

Prepublication

The Regulations were prepublished in Part I of the Canada Gazette on July 21, 2012, followed by a 75-day public comment period, during which comments were received from five stakeholders. TC has replied directly to each organization that provided comments. The following is a summary of comments received.

A key comment from three stakeholders reflected that foreign vessels were not included in the cost-benefit analysis. This reflects the Cabinet Directive on Regulatory Management, in which cost-benefit calculations are carried out for impacts on Canadian interests. However, TC acknowledged costs borne by foreign vessels in a qualitative statement in the final cost-benefit assessment.

As well, TC is engaged in discussions with the EPA, the United States Coast Guard, the Government of France, the Maritime Administrations of the Bahamas and Malta, as well as cruise sector stakeholders concerning alternative compliance options. TC is also working through IMO on international guidance for assessing alternative compliance options to ensure consistency between countries. As well, Canada and the United States have advocated that when alternatives are proposed for an Emission Control Area, the countries that are part of that Emission Control Area need to be consulted and should accept the proposed alternatives.

No changes are required to the Regulations, as they already recognize alternative compliance options. It is important to note that alternative compliance options resulting from these discussions will be available to all marine industry stakeholders subject to the Regulations.

Another comment from two stakeholders concerned the application of the U.S. EPA’s “Category 2” standards to smaller marine diesel engines fitted on Canadian vessels. Potential challenges exist for contracts that would be in place when the Regulations enter into force. A small number of vessels are affected, which, as a maximum estimate, amounts to less than 8% of vessel nitrogen oxide emissions subject to the Regulations, but pose a significant economic cost if these contracts are cancelled. TC agreed to defer application of these standards to Canadian vessels to January 1, 2016. This will allow existing contracts to be completed and remains aligned to the U.S. EPA’s timeline to implement its most stringent component of these standards beginning on January 1, 2017.

One stakeholder commented on provisions related to Canadian vessels on voyages within Canadian jurisdiction and in Great Lakes and St. Lawrence waters. Two principal comments concerned the geographic area of application for the fleet averaging provisions and the application of the Energy Efficiency Design Index, or EEDI.

The first comment concerned the seaward boundary of the Great Lakes and St. Lawrence waters, where the stakeholder indicated that the boundary should reflect domestic trade routes of Canadian vessels that include several ports in Cape Breton.  These waters extend seaward of the baseline of Canada’s territorial sea and fall within the ECA. As Canada has obligations under the MARPOL Convention for Canadian vessels to adhere to ECA standards while operating in the ECA, the boundary was not extended. However, alternative compliance options for vessels voyaging in the ECA may be proposed by stakeholders to TC.

The second comment concerned the application of the EEDI to new Canadian vessels that voyage in domestic, Great Lakes and St. Lawrence waters. Following publication of the proposed Regulations, TC completed a technical study that had been contracted before the prepublication of the Regulations. This expert study concluded there were substantial difficulties in applying the EEDI to new Canadian vessels that voyage only in domestic or Great Lakes and St. Lawrence waters. Accordingly, such vessels will be exempted from the EEDI at this time. The study did provide recommendations on how to better apply the EEDI, which will require more time to implement. Therefore, this issue will be revisited in future regulatory amendments. As Canada is a Party to Annex VI of the MARPOL Convention, it is important to note, however, that new Canadian vessels voyaging overseas will be required to adhere to the EEDI standards.

The remaining comments from this stakeholder and TC responses are summarized below in the order of their relevant sections in the Regulations.

On ozone depleting substances, one comment noted some differences between the Regulations and the Federal Halocarbon Regulations, 2003 (SOR/2003-289), which are administered by Environment Canada and implement the standards of the Montréal Protocol, an international measure to control ozone depleting substances. The Regulations set out international standards that have been agreed upon through IMO, which in turn has coordinated with the Secretariat for the Montréal Protocol to ensure IMO standards for ozone depleting substances are consistent with those of the Montréal Protocol. As well, it was noted that both the Regulations and the Federal Halocarbon Regulations, 2003 require vessels to keep a logbook to track the use of ozone depleting substances. It was asked if it was possible that these separate requirements could be met by one document. TC will discuss possibilities with Environment Canada.

In regard to exemptions from the air emissions standards provided by the Regulations for foreign steamships, a question was raised if such exemptions could also apply to Canadian vessels. These exemptions were included as part of an understanding with the U.S. to accept fleet averaging. In the Great Lakes, the U.S. Congress exempted steamships from all air emissions standards. The Regulations, therefore, maintain this as part of the mutual understanding of both countries. Canadian vessels do not have such an exemption as TC consultations indicated such an exemption offered no benefit because the Canadian steamships comprise only six vessels and will be among the first vessels to be replaced under fleet renewal. The Regulations instead set out the fleet averaging regime, which is uniquely tailored to the Canadian fleet.

One question concerned applying the energy efficiency credits under the fleet averaging regime to existing vessels with new engines installed. The energy efficiency credits were determined from data provided about new vessels; therefore, the proposed Regulations do not make reference to them. However, in a case where a new engine provides efficiency gains, a request could be made to the Marine Technical Review Board (MTRB), along with supporting evidence of the efficiency gained for a vessel.

The need for audited, interim reports under the fleet averaging option of the proposed Regulations was questioned. For oversight needs, the Regulations will retain interim reports, but auditing will be required only for the annual reports.

Under the fleet averaging regime, the annual reports were required to be submitted to TC each February 1, and it was requested that this date be adjusted to March 1. As the intent was to align this requirement with business cycles, the Regulations will require annual reports by March 1.

Finally, there were comments made that the proposed Regulations should clarify when a shipowner may seek alternative compliance options through the MTRB, particularly for supply operations to Arctic communities. No change was required to the Regulations as the MTRB and its basis to operate are already established in the Act.

11. Regulatory cooperation

Most of the provisions of the Regulations implement international standards that vessels around the world are required to adhere to and that are negotiated at IMO and implemented in the domestic law of most other maritime nations. Thus, compliance with the Regulations ensures that Canadian vessels can smoothly access ports around the world.

Two Canadian provisions are included in the Regulations: an air emissions regime for Canadian vessels operating in the Great Lakes and St. Lawrence waters, known as fleet averaging, along with requirements to manage greywater.

The provisions for fleet averaging are available to marine shipping firms in the Great Lakes and St. Lawrence waters. TC proposed this option in light of decisions by the United States to provide exemptions for steamships to their air emissions regulations, which resolved issues for their fleet. The fleet averaging approach provides a more gradual implementation of the ECA standards to allow for the introduction of new emissions control technology and support modernization of Canada’s domestic fleet. This is coupled with the Government’s decision in October 2010 to remove the 25% duty on the importation of new vessels. Since then firms have committed to order 14 new vessels. By supporting fleet modernization, further emissions reductions are expected to be released as more efficient modern vessels are introduced into a fleet whose vessels have an average age of over 40 years.

To ensure the smooth flow of maritime trade and open navigation of vessels within Canada’s shared waters with the United States, TC has engaged in dialogue with the United States EPA and the United States Coast Guard. The Regulations allow for U.S. vessels subject to U.S domestic air emission rules to continue to operate under those rules when in Canadian waters. This is part of a reciprocal arrangement for Canadian vessels that operate in U.S. waters. The Regulations also allow foreign steam-powered vessels to operate in waters under Canadian jurisdiction under exemptions set out in MARPOL Annex VI.

The provisions of managing greywater, drainage from showers, laundry sinks and kitchens are minimal; vessels need to ensure discharges of greywater do not create sheens or deposit solids on shorelines. New passenger vessels built after the Regulations are in force and that are certified to carry more the 500 passengers must treat greywater. These provisions begin to bring Canadian requirements in line with considerably more stringent requirements in the United States.

12. Rationale

The Regulations support the Government of Canada’s objective under the Clean Air Agenda to improve controls on air emissions and greenhouse gases from vessel transportation. This be achieved by implementing, in Canadian law, Canada’s obligations under MARPOL Annex VI, the Canadian portion of the North American ECA, and new standards concerning installation of new, smaller marine diesel engines. Without the Regulations, the Government will not be in a position to enforce these standards that Canada is not only Party to, but actually played an active role in concert with trading partners at IMO to put in place.

The Regulations will achieve, by 2020, a 96% reduction in sulphur oxide emissions and an 80% reduction in nitrogen oxide emissions. An estimated annual public health benefit of $1.0 billion (after 2020) is foreseen against estimated annual costs of $60 million to the Canadian marine industry. This represents a minimal impact to consumers, as marine shipping represents on average an estimated 1% to 2% of retail prices in Canada. The impact will be an approximate 0.01% increase to the cost of shipped consumer goods which will be indistinguishable from other cost variables. Therefore, the Regulations provide significant public health benefits for minimal costs. The efficiency of modern marine containerized and bulk marine shipping assures that the marine mode will remain compellingly attractive and modal shifts will not result. The impact is expected to be negligible for small business.

The Regulations have been developed through extensive consultations with the marine industry and other stakeholders since 2006. TC responded to concerns by taking a performance approach to allow industry the maximum flexibility to attain the goals of reduced emissions. This is demonstrated in the fleet averaging approach that will be available to Canadian vessels and recognition of alternative compliance methods approved by other administrations. The additional costs can be mitigated by alternative compliance measures, use of emissions control systems, transition to alternative fuels and the reduced fuel consumption to be realized on a cargo-tonne per kilometre basis.

13. Implementation and enforcement

Additional funding of $5.9 million was provided to TC to implement the Regulations under the Clean Air from Transportation initiative. The funding will be used to address additional personnel and operating costs such as dedicated compliance promotion, inspections, certificate issuance, training and enforcement activities.

Transport Canada will provide the annual Canadian certificates for Canadian vessels operating in the Great Lakes and St. Lawrence waters whose owners have elected to use the fleet averaging option. When a vessel meets international requirements, an International Air Pollution Prevention Certificate will be issued by the Minister of Transport (the Minister), which will be valid for five years.

The international certificates could be issued by Classification Societies, specialized marine engineering firms who survey vessels and certify their compliance with international and domestic standards, including the Regulations. TC has a Delegated Statutory Inspection Program (DSIP), where vessels can be surveyed by Classification Societies who are authorized to act on behalf of the Minister. In order to promote an efficient marine transportation system and encourage the harmonization of marine practices, the Minister has entered into formal delegation agreements with certain Classification Societies, under the authority of the CSA 2001. These agreements cover the delegation of statutory inspection and certification functions.

A Classification Society that has entered into such an agreement with the Minister is a Recognized Organization (RO). There are currently five ROs for the purposes of vessel inspection in Canada:

• Lloyd’s Register of Shipping;
• American Bureau of Shipping;
• Germanischer Lloyd;
• Det Norske Veritas; and
• Bureau Veritas.

Classification Societies already perform inspection and certification functions on vessels around the world and have extensive expertise in the construction and operation of modern ships. This program therefore reduces duplication of effort. Delegating these functions to the ROs allows TC to monitor the performance of both vessel operators and the ROs through planned and unplanned visits to vessels. The result of DSIP is that vessels are subject to increased safety oversight.

These inspections and Classification Societies are monitored for the services provided to the shipping industry. Classification Societies are subject to DSIP and are subject to audit by TC for surveys and inspections they carry out on behalf of TC, when vessel owners elect to use their services. Details are available at www.tc.gc.ca/eng/marinesafety/dvro-fsc-dspi-1781.htm.

Transport Canada, under its Flag State Control program, is responsible for ensuring that Canadian vessels are inspected in accordance with both Canadian regulations and, for Canadian vessels on international voyages, the appropriate international conventions and protocols that Canada has ratified, adopted or acceded to. Furthermore, TC is responsible for taking all other steps necessary to give these instruments full and complete effect to ensure that, from a point of view of safety of life and environmental protection, a Canadian vessel is fit for the service intended.

For foreign vessels, TC’s Port State Control program is responsible for inspections of foreign vessels entering Canada’s waters to ensure compliance with domestic laws implementing international maritime conventions, including MARPOL.

Transport Canada’s Port State Control program works in cooperation with other countries to ensure that vessels trading in their area are not substandard. This is done under two Memoranda of Understanding (MOU): the Paris MOU, with a focus on European trade, and the Tokyo MOU, with a focus on Asian trade. Vessel inspections are carried out at all major ports by TC marine safety inspectors. An inspection database and a list of detained vessels are maintained by TC, which in turn feed into the two MOU databases.

Violations of provisions of these Regulations will constitute offences under the CSA 2001. Penalties for offences under the CSA 2001 include maximum fines up to $1,000,000 or imprisonment for up to 18 months. In addition, vessels could be detained under section 222 of the CSA 2001 for being in contravention of a relevant provision.

Measures taken by TC marine safety inspectors against vessels that have allegedly polluted are done in accordance with Canadian laws and international treaties to which Canada is a Party, including the United Nations Convention on the Law of the Sea, and MARPOL.

Service standards for the issuance of vessel pollution prevention certificates and for processing requests for exemptions through the MTRB have not been published. TC is working to formalize its service standards and communicate them to the public by early winter of 2013. Typically, requests for vessel pollution prevention certificates are resolved within 10 to 15 working days, assuming all information provided by the vessel owner or operator is correct. Typically, requests for MTRB exemptions are resolved within 40 working days, although complicated applications requiring risk assessments from the applicant or expert evidence often result in longer resolution times.

14. Performance measurement and evaluation

Major challenges exist for measuring environmental results with respect to pollution from vessels. These challenges include such factors as the vast ocean areas involved and that changes to water quality may be caused by various other factors, such as shore-based pollution.

Transport Canada cannot feasibly monitor each vessel operating in waters under Canadian jurisdiction, and therefore cannot readily obtain the aggregate/actual total quantities of air emissions and greywater. TC is, however, committed to measuring results for Canada and will use estimates where actual measurements are too costly or not feasible. For example, for the above indicator measurement, actual data on compliant vessels in the fleet will be used to generate an estimate of current air pollutant emissions levels.

In its commitment to results-based management, TC has developed a detailed performance measurement and evaluation plan (PMEP). The PMEP includes key activities and associated products and services that will be developed by TC to determine if the Regulations are attaining their goals to ensure their successful implementation. The key activities measured will include the development of standards, guidelines, and compliance and monitoring activities. In addition, communications and consultations, which are key to both the development and implementation of the Regulations, will be monitored. Finally, output measures have been developed to analyze the coverage and efficiency of key products and services envisaged under the Regulations, such as inspections.

Extensive consultations were conducted with stakeholders to ensure that the development of the PMEP was well informed of the unique challenges which exist in this area. Hence, the PMEP contains metrics on the extent of stakeholder consultations and their level of engagement during the development of the Regulations.

The outcomes of the Regulations are also assessed in the PMEP. The immediate outcomes include the awareness of the Regulations by those to whom it applies. Intermediate outcomes include the rate of compliance with the Regulations, for example the extent to which prescribed targets are met. In addition to using the results of inspections, investigations and aerial surveillance will also be used as indicators of environmental performance by the shipping industry. Finally, the ultimate impacts, which include lower level air pollutants and lower greenhouse gases,will be assessed. Evidence of reduced respiratory ailments and related public health benefits will provide an overall indicator of progress towards the regulatory goals.

The performance data will be reported annually under TC’s Sustainable Development Strategy.

The complete PMEP is available upon request.

15. Contact

Paul Topping
Manager
Environmental Protection (AMSEE)
Operations and Environmental Programs
Marine Safety and Security
Transport Canada
Place de Ville, Tower C, 11th Floor
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Telephone: 613-991-3168
Fax: 613-993-8196
Email: paul.topping@tc.gc.ca

• Footnote a
  S.C. 2005, c. 29, s. 16(1)
• Footnote b
  S.C. 2001, c. 26
• Footnote 1
  SOR/2012-69
• Footnote 2
  SOR/2007-125