Bill C-7

Governance of the Ship-source Oil Pollution Fund

120. (1) The Administrator shall cause

(a) books of account and records in relation to them to be kept; and

(b) control and information systems and management practices, related to financial and management matters, to be maintained.

(2) The books, records, systems and practices shall be kept or maintained, as the case may be, in a manner that provides reasonable assurance that

(a) the assets of the Ship-source Oil Pollution Fund are safeguarded and controlled;

(b) the transactions of the Ship-source Oil Pollution Fund are conducted in accordance with this Part; and

(c) the financial, human and physical resources of the Ship-source Oil Pollution Fund are managed economically and efficiently and the operations of that Fund are carried out effectively.

121. (1) The Administrator shall, as soon as feasible, but in any case within three months after the end of each fiscal year, submit an annual report, in any form that the Minister may direct, on the Administrator’s operations in that year to the Minister who shall cause a copy of the report to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after he or she receives it.

(2) The annual report must include

(a) the financial statements of the Ship-source Oil Pollution Fund;

(b) the auditor’s report with respect to the Ship-source Oil Pollution Fund’s financial statements; and

(c) the costs of preparing the auditor’s report.

122. (1) The Administrator shall cause a special examination to be carried out in respect of the Ship-source Oil Pollution Fund to determine if the Fund’s systems and practices referred to in paragraph 120(1)(b) were, in the period under examination, maintained in a manner that provided reasonable assurance that they met the requirements of paragraphs 120(2)(a) and (c).

(2) A special examination shall be carried out at least once every five years by the Administrator and at any additional times that the Governor in Council or Minister may require.

(3) The Governor in Council, Minister or Administrator shall appoint a person to act as an examiner for the purpose of conducting a special examination.

(4) The examiner shall not accept or hold any office or employment inconsistent with their functions under this section and section 123.

(5) Before an examiner begins a special examination, they shall survey the systems and practices of the Ship-source Oil Pollution Fund to be examined and submit a plan for the examination, including a statement of the criteria to be applied in the examination, to the Minister and the Administrator.

(6) Any disagreement between the examiner and the Administrator with respect to the plan shall be resolved by the Minister.

123. (1) On the conclusion of the special examination, an examiner shall provide a report of their findings to the Minister and the Administrator.

(2) The examiner’s report must include

(a) a statement whether in their opinion, with respect to the criteria established under subsection 122(5), there is reasonable assurance that there are no significant deficiencies in the systems and practices examined; and

(b) a statement of the extent to which they relied on internal audits.

124. (1) If the examiner considers it necessary to enable them to prepare a report as required by this Part, they may request that present or former Administrators, Deputy Administrators, employees, agents or mandataries of the Ship-source Oil Pollution Fund provide the examiner with the following to the extent they are reasonably able to do so:

(a) information and explanations; and

(b) access to that Fund’s records, books of account, accounts, vouchers and other documents.

(2) On the examiner’s request, the Administrator shall

(a) provide any information and explanations that the examiner considers necessary to enable the examiner to prepare any report that is required by this Part and that the Administrator is reasonably able to provide; and

(b) obtain from the former Administrator or the present or former Deputy Administrator, employees, agents or mandataries of that Fund any information and explanations that the examiner considers necessary to enable the examiner to prepare any report that is required by this Part and that the former Administrator or the present or former Deputy Administrator, employees, agents or mandataries are reasonably able to provide and provide the examiner with the information and explanations so obtained.

Regulations

125. The Governor in Council may make regulations

(a) prescribing the manner in which the levy payable under section 112 is to be paid;

(b) respecting the filing with the Minister of information returns by the persons referred to in paragraph 112(4)(a) or (b) from whom the levy may be recovered;

(c) providing for the filing with the Minister or the Administrator of information returns necessary to enable the Administrator to discharge his or her obligations under section 117; and

(d) generally for carrying out the purposes and provisions of this Part.

PART 8

GENERAL PROVISIONS

Administration and Enforcement

126. (1) The Minister may designate a person or class of persons as officers to be responsible for the administration and enforcement of this Act.

(2) A designated officer is not personally liable for anything they do or omit to do in good faith under this Act.

127. Subsection 126(2) does not, by reason of section 10 of the Crown Liability and Proceedings Act, relieve the Crown of liability for a tort or extracontractual civil liability to which the Crown would otherwise be subject.

128. (1) A designated officer may, for the purpose of verifying compliance or preventing non-compliance with this Act, board a ship at any reasonable time. To that end, the designated officer may

(a) direct the ship to stop; and

(b) direct the ship to proceed to a place specified by them.

(2) The owner, the master of the ship and any other person on board shall give a designated officer all reasonable assistance to enable the officer to carry out their duties and functions.

129. (1) If a designated officer believes, on reasonable grounds, that an offence in respect of sections 55 or 73 or regulations made under paragraph 39(a) or (b) has been committed by or in respect of a ship, they may make a detention order in respect of the ship.

(2) A detention order must be in writing and be addressed to every person empowered to grant clearance in respect of the ship.

(3) Notice of a detention order must be served on the master of the ship

(a) by delivering a copy of the notice personally to the master; or

(b) if service cannot reasonably be effected in the manner provided in paragraph (a), by leaving a copy of the notice with the person who is, or appears to be, in charge of the ship or, if there is no such person, by fixing a copy of it to a prominent part of the ship.

(4) The notice must

(a) indicate the measures to be taken to ensure compliance with section 55 or 73 or regulations made under paragraph 39(a) or (b) that must be taken for the detention order to be revoked within any time specified in the order; and

(b) if an information has been laid in respect of the alleged offence, indicate the amount not exceeding $100,000 and form of security that, pending the outcome of any proceedings related to the information, must be deposited with the Minister for the detention order to be revoked.

(5) A designated officer shall

(a) revoke a detention order made under this section if they are satisfied that the measures indicated in the notice have been taken and, if applicable, that security in the amount and form indicated in the notice has been deposited with the Minister; and

(b) notify, in the form and manner specified by the Minister, the master and the persons referred to in subsection (2) of the revocation.

(6) No person to whom a detention order made under this section is addressed shall, after having received notice of the order, grant clearance to the ship in respect of which the order is made unless they are notified that the order has been revoked.

(7) Subject to section 130, no person shall move a ship that is subject to a detention order made under this section.

(8) The owner of a ship that is detained under this section is liable for all expenses incurred in respect of the detained ship.

(9) The Minister, following the conclusion of any proceedings in respect of which security is deposited,

(a) may apply the security to reimburse Her Majesty in right of Canada, either fully or partially, if any of the expenses or any fine imposed is not paid; and

(b) shall return the security, or any part of it that remains if it is applied under paragraph (a), if all expenses and any fine imposed are paid.

(10) The Governor in Council may make regulations respecting the detention of ships, including the review of detention orders.

130. The Minister may

(a) on application made by the owner or the master of a detained ship, in the form and manner prescribed by the Minister, permit the master to move it in accordance with the Minister’s directions;

(b) on application made by the owner of a dock or wharf, or by the person in charge of a harbour, at which a detained ship is situated, in the form and manner prescribed by the Minister, direct the person who is, or appears to be, in charge of the ship to move the ship in accordance with the Minister’s directions; and

(c) if a person to whom a direction is given under paragraph (b) does not comply with it and the Minister is satisfied that the applicant for the direction has sufficient insurance in place to cover any incident that may arise from the moving of the ship, authorize the applicant to move it in accordance with the Minister’s directions and at the owner’s expense.

Offences

131. Every person who, or ship that, contravenes subsection 55(1) or (2), 73(1) or (2), 128(2) or 129(6) or (7) or regulations made under section 39 is guilty of an offence and liable on summary conviction to a fine not exceeding $100,000.

132. (1) Any person who wilfully evades or attempts to evade payment of an amount payable under section 112 is guilty of an offence and liable on summary conviction to a fine not exceeding $100,000.

(2) Any person who fails to file the information return referred to in paragraph 125(b) is guilty of an offence and liable on summary conviction to a fine not exceeding $1,000 for each day of default.

(3) Any person who knowingly destroys, mutilates or falsifies, or who knowingly makes any false entry or statement in, any record, book of account or other document required to be kept under section 118 is guilty of an offence and liable on summary conviction to a fine not exceeding $100,000.

(4) Every person who contravenes subsection 117(5), section 118 or subsection 119(9) is guilty of an offence and liable on summary conviction to a fine not exceeding $100,000.

(5) For the purposes of this section, “person” has the same meaning as in Article I of the Civil Liability Convention within the meaning of subsection 47(1).

133. When a person or a ship is charged with having committed an offence under this Act, any court in Canada that would have had cognizance of the offence if it had been committed by a person or ship within the limits of its ordinary jurisdiction has jurisdiction to try the offence as if it had been committed there.

134. In a prosecution of a ship for an offence under this Act, it is sufficient proof that the ship has committed the offence to establish that the act or omission that constitutes the offence was committed by the master or any person on board, other than a designated officer, whether or not the person on board is identified.

135. (1) Proceedings by way of summary conviction under this Act may be instituted within two years after the day on which the Minister becomes aware of the subject matter of the proceedings.

(2) A document that purports to have been issued by the Minister and that certifies the day on which he or she became aware of the subject matter of the proceedings is admissible in evidence without proof of the signature or official character of the person appearing to have signed the document and is evidence that the Minister became aware of the subject matter on that day.

(3) If the proceedings cannot be commenced within two years because the proposed defend-ant is outside Canada, the proceedings may be commenced not later than two months after the defendant returns to Canada.

Sale of Ships

136. (1) The Minister may apply to any court of competent jurisdiction for an order authorizing him or her to sell a ship that has been detained under section 129 if

(a) an information is laid in respect of an offence under subsection 55(1) or (2) or 73(1) or (2) or of a regulation made under paragraph 39(a) or (b), and

(i) the security required under paragraph 129(4)(b) is not deposited within the time specified in the detention order,

(ii) the person or ship charged is convicted, and

(iii) the fine imposed and the expenses incurred in respect of the detained ship have not been paid; and

(b) no information is laid and

(i) the measures referred to in paragraph 129(4)(a) have not been taken within the time specified in the detention order, and

(ii) the expenses incurred in respect of the detained ship have not been paid.

(2) A court seized of an application for the sale of a ship may

(a) authorize the Minister to sell the ship in the manner and subject to the terms and conditions that it considers appropriate; and

(b) on application by the Minister or a person referred to in paragraph 137(1)(b) or (c), give directions concerning the ranking of the interests in the ship.

137. (1) As soon as is feasible after making an application under section 136, the Minister shall give notice of the application by registered mail to

(a) the registrar of the register in which the ship is registered;

(b) the holder of any mortgage registered against the ship that is registered in the register referred to in paragraph (a); and

(c) the holder of any maritime lien against the ship and the holder of any similar interest, if the holder is known to the Minister at the time of the application.

(2) A notice sent by registered mail is deemed to have been given to the person to whom it is sent on the day on which the Minister receives an acknowledgement of receipt.

(3) If the court that is seized of an application for the sale of a ship is satisfied that it is appropriate to do so, it may relieve the Minister of the obligation to give the notice referred to in subsection (1), or authorize him or her to give the notice in any other manner that it considers appropriate.

138. (1) If a ship is sold under an order, the proceeds of the sale shall be applied to satisfy claims in the following order of priority:

(a) the expenses incurred in respect of the detained ship and its sale;

(b) the claims of the master and crew members for wages;

(c) the amount of any fine imposed;

(d) the interests of persons who have been recognized and ranked by the court under paragraph 136(2)(b).

(2) Any surplus of the proceeds of sale remaining after all claims have been satisfied is to be paid to the person registered as the owner of the ship or, in the absence of any registration, to the person who owns the ship.

(3) If the proceeds of sale of a ship are insufficient to satisfy the claims described in paragraphs (1)(a) and (c), the Minister may proceed against the owner of the ship for the balance owing.

(4) On selling a ship under an order, the Minister may, by bill of sale, give the purchaser a valid title to the ship free from any mortgage or other claim that is in existence at the time of the sale.

12. The Act is amended by adding the following in numerical order:

Maritime Lien

139. (1) In this section, “foreign vessel” has the same meaning as in section 2 of the Canada Shipping Act, 2001.

(2) A person, carrying on business in Canada, has a maritime lien against a foreign vessel for claims that arise

(a) in respect of goods, materials or services wherever supplied to the foreign vessel for its operation or maintenance, including, without restricting the generality of the foregoing, stevedoring and lighterage; or

(b) out of a contract relating to the repair or equipping of the foreign vessel.

(2.1) Subject to section 251 of the Canada Shipping Act, 2001, for the purposes of paragraph (2)(a), with respect to stevedoring or lighterage, the services must have been provided at the request of the owner of the foreign vessel or a person acting on the owner’s behalf.

(3) A maritime lien against a foreign vessel may be enforced by an action in rem against a foreign vessel unless

(a) the vessel is a warship, coast guard ship or police vessel; or

(b) at the time the claim arises or the action is commenced, the vessel is being used exclusively for non-commercial governmental purposes.

(4) Subsection 43(3) of the Federal Courts Act does not apply to a claim secured by a maritime lien under this section.

Limitation Period

140. Except as otherwise provided in this Act or in any other Act of Parliament, no proceedings under Canadian maritime law in relation to any matter coming within the class of navigation and shipping may be commenced later than three years after the day on which the cause of action arises.

13. The Act is amended by adding the following in numerical order:

Inconsistency

141. In the event of an inconsistency between this Act and the provisions of the Arctic Waters Pollution Prevention Act, the provisions of this Act prevail to the extent of the inconsistency.

Coming Into Force

142. Section 45 comes into force on a day to be fixed by order of the Governor in Council.

14. Schedule 1 to the Act is amended by replacing the reference “(Section 24)” after the heading “SCHEDULE 1” with the references “(Section 24 and subsections 26(2) and 31(1))”.

15. Schedule 1 to the Act is amended by adding the following after Part 2:

PART 3

Text of reservations made under Article 18 of the Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the Protocol of 1996 to amend the Convention on Limitation of Liability for Maritime Claims, 1976

1. Claims in respect of the raising, removal, destruction or rendering harmless of a ship that is sunk, wrecked, stranded or abandoned, including anything that is or has been on board that ship.

16. Schedule 2 to the Act is amended by replacing the reference “(Section 35)” after the heading “SCHEDULE 2” with the references “(Sections 35 and 40)”.

17. The Act is amended by adding, after Schedule 4, the Schedules 5 to 8 set out in the schedule to this Act.

FEDERAL COURTS ACT

18. Subsection 43(8) of the English version of the Federal Courts Act is replaced by the following:

(8) The jurisdiction conferred on the Federal Court by section 22 may be exercised in rem against any ship that, at the time the action is brought, is owned by the beneficial owner of the ship that is the subject of the action.

TRANSITIONAL PROVISIONS

19. A claim to recover loss, damage, costs or expenses filed with the Administrator under section 85 of the Marine Liability Act before the day on which this section comes into force is deemed to have been filed under section 103 of the Marine Liability Act, as enacted by section 11.

20. The Administrator and Deputy Administrator who are in office on the day on which this section comes into force shall continue to perform their duties and functions as if they had been appointed under section 94 or 95, as the case may be, of the Marine Liability Act, as enacted by section 11.

CONSEQUENTIAL AMENDMENTS

Arctic Waters Pollution Prevention Act

21. Section 2.1 of the Arctic Waters Pollution Prevention Act is replaced by the following:

2.1 In the event of an inconsistency between the provisions of this Act, or any regulation made under this Act, and the provisions of the Marine Liability Act, the provisions of that Act prevail to the extent of the inconsistency.

Nunavut Waters and Nunavut Surface Rights Tribunal Act

22. Subsection 152(3) of the Nunavut Waters and Nunavut Surface Rights Tribunal Act is replaced by the following:

(3) For the purposes of the definition “developer” in subsection (1) and for the purposes of sections 153 and 154, the words “discharge”, “oil”, “owner” and “ship” have the same meaning as in section 91 of the Marine Liability Act.

23. Subsection 154(2) of the Act is replaced by the following:

(2) In relation to loss or damage resulting from a discharge of oil from a ship that is engaged in marine transportation as described in paragraph (c) of the definition “development activity” in subsection 152(1), the Ship-source Oil Pollution Fund established under Part 7 of the Marine Liability Act is liable to the same extent that a developer would be liable under section 153 if paragraph 153(2)(b) did not apply.

COMING INTO FORCE

24. (1) Sections 1 to 10, 12, 14 to 16 and 18 come into force 90 days after the day on which this Act receives royal assent.

(2) Sections 11, 13, 17 and 19 to 23 come into force on a day to be fixed by order of the Governor in Council.