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Canadian ship owners manipulate cabotage rules

Canadian ship owners manipulate cabotage rules

Canada:Cabotage is the regulation of the coasting trade within a country’s domestic waters.

The word cabotage itself is derived from a French word meaning to travel by the coast. Canadian cabotage laws essentially state that trips between domestic ports are reserved for Canadian vessels and crews, whereas shipping between international ports can happen with vessels flagged in any country. A vessel is regulated by the state whose flag it flies. Several states, such as Panama and the Marshall Islands, offer open ship registries, and limited regulation.

Under Canadian law, shipping companies must apply to the Canadian Transportation Agency for permission to operate a non-Canadian vessel between Canadian ports. The CTA is then supposed to publish the request, and any Canadian ship owners may offer a suitable vessel. Barring the rare objection from Canadian ship owners, permission is usually granted.

The requests often come from Canadian companies, who wish to use foreign flagged vessels they own domestically, or they have chartered a foreign ship for a voyage, or a period of time. Approved vessels are allowed to operate in Canadian waters, but operate under their flag state’s labour rules, with their crews being granted temporary foreign worker permits.

The Canadian merchant fleet is small, and Canadian flagged vessels are generally all employed, often leaving no available ships. This leaves an situation that’s perfect for shipowners. They maintain the smallest possible domestic fleet, and import foreign ships and crews when required for the overflow work. This is why there are so few objections to the granting of permits.

The Seafarers International Union Canada has a problem with this. “Many of these foreign workers made as little as $2.41 per hour while working in Canada,” the SIU said in a news release.

Shipping companies can save a lot of money not only by using foreign flagged vessels but by avoiding the capital costs of adding new vessels to their domestic fleets.

September saw 10 Coasting Trade Applications for the East Coast. SeaDrill requested to use its Panamanian drill rig West Aquarius off the coast of Nova Scotia from Oct. 16 to Dec. 31. It is currently drilling a sidetrack on its exploratory well for BP. The initial application expires Oct. 15, so this is requesting an extension to finish the work.

SeaDrill also requested an additional year for the jackup drilling rig, Noble Regina Allen, which is capping wells in the Sable Gas Field. Eight of 22 wells are capped. There are no Canadian-registered drill rigs.

Irving Oil requested to use the American combination Tug COHO with barge Penn No. 92 to move liquid asphalt from its Saint John refinery to Halifax, and ports in Newfoundland.

Quebec based Petro-Nav also requested to use three foreign flagged tankers to move oil from the refinery in Levis, Que. to points on the east coast and the Great Lakes due to pipeline flow reductions and ship maintenace.

Montreal based Fednav applied to use one of its Marshall Island flagged ice classed bulk carriers to transport iron ore from the Baffinland mine in Nunavut to Nanticoke, Ont. The extra vessel is required due to ice delays earlier in the season. Baffinland Mines also requested to use the Estonian icebreaker Botnica in Milne Inlet to assist vessels at the mine.

Providence Grain Group applied to use a bulk carrier to remove grain from the Port of Churchill. The grain was stranded at the port when the terminal operators closed the port in July 2016, and they have until Sept. 30 to remove it, and thus need a ship as soon as possible.