Application of the Coasting Trade Act to offshore oil and gas operations

The main features of the 1992 Coasting Trade Act are summarized. The main purpose of the Act is to protect Canadian ship owners and to ensure they have an opportunity to recover their investments in having Canadian built and crewed vessels. The Coasting Trade Act replaces provisions of the Canada Shipping Act which prohibited non-British ships from entering into Canadian domestic trade. The intention for the Coasting Trade Act is to reserve the coasting trade of Canada to Canadian-registered ships. However, when a Canadian ship is not available, a suitable foreign ship may be temporarily permitted to engage in the Canadian coasting trade as long as Canadian safety standards are met and duties are paid. The Canada Customs and Revenue Agency deals with licence applications while the Canadian Transportation Agency deals with unfair practices and enforcement. The provisions relating to the Coasting Trade License applications are examined along with how they are administered with particular reference to offshore oil and gas operations. The paper also presents recent decisions regarding application licences for Tycom (US) Inc., the Norwegian Polar Ship Management, and the Cyprus-registered seismic vessel, the Northern Access. It is noted that in evaluating the suitability and availability of a Canadian vessel for an activity proposed to be performed by a foreign vessel, the Canadian Transportation Agency examines the technical, financial and commercial elements brought by the parties