Canada Gazette

The proposed Administrative Monetary Penalties Regulations (the proposed Regulations) set monetary penalties for the contravention of designated provisions of the Canada Shipping Act, 2001 (CSA 2001) and identify those provisions for which a separate penalty may be imposed for each day that a violation continues. In addition, the proposed Regulations provide methods for serving notices related to administrative monetary penalties (AMPs) on individuals, corporations and vessels.

Ultimately, it is intended that the proposed Regulations will be amended to result in a comprehensive list of all the relevant provisions (as that term is defined in section 210 of the CSA 2001) with an individual penalty range for failure to comply with each.

The CSA 2001 received Royal Assent on November 1, 2001. Upon entry into force on July 1, 2007, it replaced the Canada Shipping Act (CSA), one of the oldest pieces of Canadian legislation, with a streamlined and modern framework for the regulation of marine transportation in Canada for safety, environmental and administrative purposes.

The CSA 2001 is one of a growing number of federal transportation Acts that provide for the imposition of AMPs for contraventions of legislation. Other legislation, such as the Aeronautics Act and the Canada Transportation Act, has included AMPs systems since the mid-1980s. In the marine transportation sector, the CSA 2001 and amendments to the Marine Transportation Security Act in 2001 have included them. The AMPs method of enforcement has been added as an alternative to the prosecution of offences because of its expeditiousness and cost savings to all concerned.

The CSA 2001 AMPs system contains two tools from which the Minister of Transport can choose to promote compliance:

1) An assurance of compliance if the contravener agrees to enter into it. This suspends the penalty, and the contravener undertakes to remedy the non-compliance within a specific period. If the undertaking is fulfilled, nothing further is done about that contravention. If not, the default confirms the contravention and the penalty is doubled.

Similar to the AMPs system under the Aeronautics Act, the Canada Transportation Act and the Marine Transportation Security Act, persons and vessels subject to an AMP under the CSA 2001 may request a review of the violation, the amount of the penalty or a default under an Assurance of Compliance by the Transportation Appeal Tribunal of Canada (the Tribunal). The Tribunal is an independent, administrative, quasi-judicial body established under the Transportation Appeal Tribunal of Canada Act in 2001. It has the mandate to review and hear appeals of decisions made under various federal transportation Acts. For instance, under the CSA 2001, the Tribunal deals with AMP decisions and decisions on the issuance, cancellation and suspension of Canadian Maritime Documents.

Under the CSA 2001, the AMPs system applies to all parts of the Act except Navigation Services (Part 5), Wreck (Part 7), Pollution Prevention and Response (Part 8) and Pleasure Craft (Part 10), which will continue to be enforced through criminal court proceedings and the issuance of tickets under the Contraventions Act.

Section 2 of the proposed Regulations designates the provisions of the CSA 2001 that are set out in the schedule to the proposed Regulations as the provisions that will be subject to the AMPs system.

At the moment, only statutory provisions under the CSA 2001 will be designated by the proposed Regulations. Once the AMPs system is in place, the Regulations will be reviewed to identify which regulatory provisions should be designated. The designation of these provisions will be done in subsequent amendments to the proposed Regulations.

For each of the designated provisions of the CSA 2001, the schedule sets out an applicable penalty range. Penalty ranges rather than fixed amounts are being used to ensure that the amount imposed is appropriate to the circumstances of each case and that full consideration can be given to any mitigating or aggravating factors such as the compliance record of the offender and any consequences of the violation.

The penalty ranges were developed first by assessing the seriousness of each violation as low, medium or high, because of the subject matter of the designated provision and the possible consequences of non-compliance with it. Then, within each low, medium and high category, the minimum amount for a first violation, the average amount for a second violation and the maximum amount for a third or subsequent violation was set. This was done both for individuals and vessels/corporations. As a matter of general policy, vessels and corporations will be subject to higher penalties than individuals.

The penalty ranges set the minimum amount that an individual will pay for a first violation and the maximum amount that a vessel/corporation will pay for a third or subsequent violation. For example, in the above table, the range of penalties for a first violation by an individual is from $250 to $1,250.

When there is a contravention, the penalty amount is determined within the range by the Minister using the Department of Transport's policies and guidelines. The maximum penalty permitted by the Act is $25,000 per violation. If the amount is not paid, it becomes a debt due to Her Majesty.

The schedule to the proposed Regulations also sets out (in column 3) which designated provisions could attract a separate penalty for each day of a continuing violation. These provisions were identified by whether a violation was likely to be continuing and if it might be appropriate to impose a separate penalty for each day of that violation. The fact that a penalty can be imposed for each day of a violation does not mean in every case that it actually will be. Compliance and enforcement policies and procedures will provide guidelines on the amount of the AMP and whether each day of a continuing violation should constitute a separate violation.

Section 3 of the proposed Regulations addresses how AMP notices may be served to an individual, corporation or vessel. These notices are a notice of violation of a provision, a notice of compliance with an assurance of compliance and a notice of default of an assurance of compliance.

The variety of means of service proposed in section 3 is consistent with emerging court practices for service of documents, including the use of modern technologies. The proposed Regulations authorize service by way of personal delivery, registered mail, courier, fax or other electronic means and, in the case of a vessel, the fixing of a copy of the notice to a prominent part of the vessel.

The CSA 2001 requires that regulations be made if effect is to be given to the AMPs system. Without the proposed Regulations, enforcement of contraventions of the legislation would be limited to prosecuting them in the criminal courts, vessel detention, using the ticketing system provided under the Contraventions Act or, in certain instances, suspending or cancelling Canadian maritime documents. This would be inconsistent with government initiatives to de-criminalize regulatory offences and would run contrary to the intention of Parliament when it included the authority to impose AMPs in the CSA 2001.

The proposed Regulations benefit the Canadian public by enforcing requirements using administrative processes and proceedings rather than judicial ones. Judicial proceedings often result in considerable cost to the federal government and to the person or vessel involved.

Individuals, corporations and vessels subject to an AMP will have the right to apply to the Tribunal to have the AMP reviewed. The Tribunal has demonstrated its ability to adjudicate AMP cases in an independent, fair, consistent and expeditious manner.

The Tribunal is less formal than a court. Legal and technical rules of evidence do not apply to the Tribunal hearings. As a result, the individual, corporation or vessel may present a case without needing a lawyer. It also allows the Tribunal to hear and decide a case more quickly than a court. Tribunal members hearing cases under the CSA 2001 will have expertise in marine matters. Full and proper consideration will be given to all marine technical issues.

The means of the service of document provisions introduced in the proposed Regulations (section 3) provide flexibility to officials by giving alternatives to personal service, which results in a reduction in costs.

The proposed Regulations will have a minor effect on the costs of monitoring compliance with the CSA 2001 and its regulations or for investigating contraventions.

There is a one-time capital cost of $492,600 for the development of the Marine Enforcement Management (MEM) database and a yearly cost of $36,900 for the maintenance of the database thereafter. The MEM database will be a comprehensive database of Marine Safety registrations, inspections and enforcement actions of or against all individuals, corporations and vessels. The development of the MEM database is required because section 239 of the CSA 2001 requires that records of enforcement activity be expunged five years after certain events occur. Furthermore, the MEM database is a fundamental necessity of Transport Canada Marine Safety's (TCMS) Compliance and Enforcement Policy to ensure consistency throughout the country in the use of enforcement tools provided by the CSA 2001.

For the federal government, costs of Tribunal proceedings will be lower than proceeding in court. Court proceedings can be lengthy and Crown Counsel must present the case. The Tribunal is usually much more expedient and only in rare cases are government lawyers involved. Experience in other transport enforcement programs has shown that federal inspectors and program personnel can properly present cases before the Tribunal.

It is not possible at this time to predict how many AMPs will be imposed, or what percentage of these would be heard by the Tribunal. However, an analysis of the trend for the past ten years of AMPs issued under the Aeronautics Act by Transport Canada Civil Aviation and heard by the Tribunal indicates that TCMS will need to have at least three full-time employees based at TCMS Headquarters to effectively implement the AMPs system. Furthermore, there will be some regional resource implications resulting from the AMPs system that cannot be identified at this time.

For those cases that are heard by the Tribunal, federal government costs are forecast to average $3,000 to $6,000 per case, depending on whether the case includes only a review or both a review hearing and an appeal. A single Tribunal member hears a review. The decision of the single member can then be appealed to a panel of Tribunal members. The decision of the appeal panel is final.

Costs to the Tribunal currently average $5,000 per case, which includes rental of hearing facilities, court reporter fees, cost of the transcript of proceedings, Tribunal members' travel and per diem fees and publication of the decision in both official languages. These costs compare favourably to those incurred by the courts to hear and decide a case.

Regarding costs to the regulated marine community, only those individuals, corporations and vessels subject to an AMP would be affected. The individual, corporation or vessel may choose to pay the penalty imposed. Alternatively, a review of the AMP may be requested. Costs to the individual, corporation or vessel for Tribunal proceedings would not be more than those in court and, except in unusual cases, will be considerably less. As well, the maximum penalties for an AMP are $5,000, $12,000 and $25,000. In court, there are maximum fines of $10,000, $100,000 and $1,000,000 for the same provisions. Also, the court may impose conditions along with the fine, while the Tribunal cannot do this with a penalty.

All monies paid as a result of an AMP will be deposited into the federal government's Consolidated Revenue Fund. None of these amounts will be credited to TCMS.

The proposed Regulations will not have significant positive or negative environmental impacts requiring a detailed environmental assessment. However, the proposed Regulations will result in an indirect positive benefit to the environment by introducing an effective administrative enforcement system that will increase compliance with the CSA 2001 and with regulations made under the CSA 2001.

The proposed Regulations do not raise any privacy issues. It should be noted that section 240 of the CSA 2001 requires that a public record of AMPs cases be maintained. Decisions of the Tribunal in AMPs cases are also part of the public record.

These proposed Regulations are consistent with the principles of minimizing the regulatory burden on Canadians as much as possible while at the same time promoting regulatory compliance.

The federal government has widely consulted marine industry stakeholders and federal and provincial agencies involved in marine safety on the AMPs system and on the policies and regulations that will bring it into effect. Consultations date back to the late 1990s, when the CSA 2001 and its compliance and enforcement provisions were developed and subsequently debated in Parliament. More current consultations on details of the policies and proposed Regulations began in the fall of 2003 and have continued to the present through discussion and information papers developed and distributed by TCMS. These consultations have been conducted under the umbrella of the Canadian Marine Advisory Council (CMAC), which meets semi-annually at the national and regional levels. All major marine industry stakeholders are represented at the CMAC.

The provisions of the CSA 2001 to be designated for AMPs purposes and the penalty range for each were identified in a discussion paper presented at the fall 2003 National CMAC. The proposed Regulations are based on that discussion paper, with some minor additions. The discussion paper did not address the identification of continuing violations (column 3 of the schedule to the proposed Regulations) or the service of notices. Consultations on these additions were conducted at regional CMACs in 2005 and 2006.

Not all marine stakeholders supported the proposed AMPs system and the review role of the Tribunal. These stakeholders were concerned that AMPs might be imposed inconsistently across the country. They also questioned the knowledge and ability of the Tribunal to hear marine cases. The use of AMPs has worked well in aviation transport for approximately 20 years. The Tribunal has an established track record of making fair and consistent decisions in an expeditious and economical manner. Furthermore, members with marine experience will be appointed to hear marine cases.

Pleasure craft operators and law enforcement agencies raised the concern that there should be a common enforcement regime for all small vessels (under 24 m in length), whether pleasure craft or not. These stakeholders pointed out that, for the same offence, an AMP may only be imposed on a vessel that is not a pleasure craft and a ticket may only be issued to a pleasure craft. They would rather see the use of tickets for all small vessels. The federal government agrees and a review is being conducted to determine which small vessel provisions should be added to the Contraventions Regulations. However, before these provisions are added, law enforcement agencies presently issuing tickets to pleasure craft will be given authority over other small vessels through delegations and agreements.

In addition to the two general concerns identified above, stakeholders have raised the following specific concerns.

Whether AMP amounts for individuals, vessels and corporations should be the same or different

The initial AMPs proposal to stakeholders in 2003 included two penalty ranges, one for individuals and a much higher one for vessels and corporations. This follows the Aeronautics Act system and the proposed Marine Transportation Security Act system.

Some stakeholders wanted this difference written directly into the proposed Regulations. Others did not because the CSA 2001 does not require distinct penalty limits for individuals and vessels/corporations, as do the Aeronautics Act and the Marine Transportation Security Act.

The proposed Regulations do not create separate penalty ranges for individuals and corporations/vessels. However, government policies will dictate that higher penalty amounts be imposed on corporations and vessels. This higher amount will provide the appropriate deterrent effect to the AMP.

Whether AMPs are appropriate for contraventions that have an element of mens rea

Some stakeholders questioned the appropriateness of AMPs for violations committed "wilfully," "with intent" or "knowingly." Their concern was that the maximum penalty amount of $25,000 might be less than what is appropriate in serious circumstances. Examples of these types of violations are paragraphs 23(a), (b), (c), (d) and (e), subsections 57(4) and 82(3) and sections 117 and 223 of the CSA 2001.

The federal government agrees with the stakeholders' concern, and the more serious of the violations will be prosecuted in criminal court because of the higher fines available there. However, for less serious circumstances, these provisions should be included in the AMPs system so that greater flexibility in enforcement alternatives is available for them.

Whether AMPs should be available for contraventions of environmental protection provisions

Some stakeholders also raised concerns with regard to the environmental protection provisions of the Act and its Regulations because contraventions of these provisions may involve detailed technical issues and have a high public profile.

While environmental cases may involve and turn on very technical issues, this is not a factor that should prevent the use of an AMP. Tribunal members hearing marine cases will have appropriate marine expertise and the Tribunal may engage technical experts to assist it in the same way that a court can.

Whether the proposed Regulations properly categorize the seriousness of each violation of the provisions of the CSA 2001 as low, medium or high

Some stakeholders suggested that the penalty ranges proposed in the 2003 discussion paper were too low and did not reflect the potential seriousness of each violation. Examples given were subsections 16(3), 17(2), 46(2), 57(1) and (4) and 58(2) of the CSA 2001, all of which were proposed as potential violations of medium seriousness, and where subsection 17(2) provides against improper possession of a Canadian maritime document. These stakeholders felt the latter was a serious offence warranting a maximum penalty of $25,000 rather than $12,000.

Each categorization and corresponding penalty range has been reviewed in detail and are considered appropriate in view of the risks of non-compliance.

How Transport Canada will ensure national consistency in determining AMP amounts

The greatest number of stakeholders expressed concerns over the last few years about how the federal government will ensure that AMPs are imposed prudently and consistently throughout the country.

The federal government is developing a number of policies, procedures and guidelines to address these concerns. Procedures currently under development will require the review and approval of the AMP by two departmental executives: one at the TCMS Regional Office and one at TCMS Headquarters. As well, consistency will be further ensured by training inspectors on AMPs and the MEM database that will cover all enforcement actions, including AMPs. Finally, the Tribunal will also play a role in national consistency by determining appropriate AMP amounts in the cases it hears.

The proposed Regulations do not create requirements or offences themselves; they simply create a new system for enforcing legislation. Therefore, no specific compliance and enforcement strategy is necessary.

The imposition of an AMP will be only one of the enforcement tools that will be used by TCMS to deal with contraventions of the CSA 2001 and its proposed Regulations. Other tools include warnings (oral and written), assurances of compliance, the use of tickets under the Contraventions Act, prosecution in criminal court, suspending or cancelling Canadian maritime documents, and vessel detention. Which tool to be used in any particular instance will depend upon the

(b) circumstances when it was committed (e.g. whether it was committed wilfully or deliberately);

(e) willingness of the offender to take measures to ensure compliance in the future.

In all cases, the enforcement response by TCMS will be tailored to achieve both compliance and deterrence. AMPs will generally be imposed only where less drastic tools cannot achieve that objective.

A phased-in approach for the AMPs system will be used and AMPs will only be issued after March 1, 2008. This will allow for increased awareness and education of marine stakeholders about the AMPs system, appointment and training of marine Tribunal members and training of marine safety inspectors on AMPs policies and procedures.

Frank Ritchie
Project Manager, Regulatory Services and Quality Assurance (AMSX)
Transport Canada, Marine Safety
Place de Ville, Tower C
330 Sparks Street, 11th Floor
Ottawa, Ontario
K1A 0N5
Telephone: 613-949-4643
Fax: 613-991-5670
Email: ritchif@tc.gc.ca

Notice is hereby given that the Governor in Council, pursuant to paragraphs 244(f) to (j) (see footnote a) of the Canada Shipping Act, 2001 (see footnote b), proposes to make the annexed Administrative Monetary Penalties Regulations.

Interested persons may make representations to the Minister of Transport, Infrastructure and Communities with respect to the proposed Regulations within 60 days after the publication date of this notice. All representations must be in writing and cite the Canada Gazette, Part I, and the publication date of this notice, and be sent to Frank Ritchie, Project Manager, Regulatory Services and Quality Assurance, Marine Safety Directorate, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, 11th Floor, Ottawa, Ontario K1A 0N5 (tel.: 613-949-4643; fax: 613-991-5670; e-mail: ritchif@tc.gc.ca).

2. (1) The contravention of a provision of the Act set out in column 1 of the schedule is designated as a violation that may be proceeded with in accordance with sections 229 to 242 of the Act and by the issuance of a notice of violation.

(2) The range of penalties set out in column 2 of the schedule is the range of penalties in respect of a violation set out in column 1.

(3) If "X" is set out in column 3 of the schedule, a violation set out in column 1 constitutes a separate violation for each day on which it is continued.

(i) with the individual, or

(ii) if the individual cannot conveniently be found, with someone who appears to be an adult member of the same household at the last known address or usual place of residence of the individual; or

(b) by sending a copy of it by registered mail, courier, fax or other electronic means to the last known address or usual place of residence of the individual.

(a) sending a copy of it by fax, registered mail or courier to the head office or place of business of the corporation or to the corporation's agent;

(b) leaving a copy of it at the corporation's head office or place of business with an officer or other individual who appears to be in control of or to manage the head office or place of business or with the corporation's agent; or

(a) delivering a copy of it personally to the master or any other person who is, or appears to be, in charge of the vessel;

(c) if the vessel's authorized representative is an individual, sending a copy of it by fax, registered mail or courier to the authorized representative; or

(i) sending a copy of it by fax, registered mail or courier to the authorized representative's head office or place of business,

(ii) leaving a copy of it at the authorized representative's head office or place of business with an officer or other individual who appears to be in control of or to manage the head office or place of business or with the authorized representative's agent, or

(iii) sending a copy of it by electronic means, other than fax, to an individual referred to in subparagraph (ii).

(5) A document that is served by registered mail is deemed to be served on the fourth day after the day on which it was mailed.

(a) in the case of a document transmitted by fax, a proof of transmission produced by the fax machine that sets out the date and time of transmission; or

(b) in any other case, an acknowledgment of service signed by or on behalf of the person served, specifying the date and place of service.