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Transport Canada Must Address CTA Waiver Abuses

Article Featured in the June 2022 Issue of The Canadian Sailor

The SIU of Canada has always championed the Canadian Coasting Trade Act (CTA), an act that regulates our industry, our Members and seafarers across the country. The Coasting Trade Act regulates all marine activities in our industry and protects Canadian cabotage to ensure that Canadian operators and seafarers have the right to work in Canada.

For the past number of years, the SIU of Canada has been constantly monitoring the waiver application process for foreign ship operators to conduct business in Canada. Under the currently regulations, companies are only granted a permit when there are no Canadian vessels available or able to perform the tasks dictated by the foreign company. This system has ensured that Canadian seafarers and Canadian vessels have priority over foreign crews and vessels in Canadian waters. For years, although fragile, this system has worked relatively well. However, we are now beginning to see a number of foreign companies look for and abuse loopholes in this system.

To put it simply, due to these loopholes that companies are now attempting to exploit, the CTA Waiver process needs a full review by Transport Canada to ensure the requirements to operate in Canada do not contain options for foreign companies to manipulate the system to operate in Canadian waterways unfairly or illegally. Foreign companies are spending considerable money and resources looking through the Coasting Trade Act to find further ways to circumvent the existing regulations to take advantage of vague or unclear language within the Act. This cannot go unaddressed by the federal government any longer. If a review is not undertaken soon, it will soon be meaningless.

Foreign companies applying for a waiver to operate in Canada should have to provide sworn evidence of the need for their ‘specialized’ equipment, vessels, and seafarers, which is not required at the current time. As it stands, companies can say whatever they want in their application, without any evidence, and the CTA must take their word for it. This fact does not create a just system, and the SIU believe that foreign companies cheat the system if the prospect of profit is involved. There is nothing governing this process to ensure these companies are telling the truth on their applications. A system of this importance with such little oversight by the Federal Government is begging for further abuses by these foreign companies operating in bad faith.

Another way to help improve the CTA is to require foreign companies applying for a waiver to give advance notice to Canadian companies regarding their application, so that Canadian companies can try to procure a vessel or specialized equipment themselves and bring it under a Canadian flag. Similar measures are in place to allow us to seek out Canadian seafarers to fill positions on these vessels. However, the same guidelines are not available for Canadian shipowners regarding vessels or equipment. Canadian companies often have worldwide reach and could provide these so called ‘specialized’ vessels or equipment. However, without the advance notice, this is not possible. Being blindsided by foreign companies who often fabricate the need for some of this ‘specialized’ equipment or these vessels points to large blind spots within the CTA.

The bottom line is that these foreign operators are allowed the flexibility, under the current state of the CTA, to make it look as if they are the only company with a vessel to perform a certain task, when that is often not the case. These companies also frequently claim that a very specific vessel, or certificate for a seafarer, is required, when that is simply not the case. These claims are made specifically to make it seem as though their specific task cannot be done by a Canadian vessel or Canadian seafarer, so they wish to bring in cheaper labour and substandard vessels that save the company money. The lack of oversight of those applying for waiver under the CTA is creating a system where the CTA will soon be meaningless and Canadian waters will soon be operating as if no regulations exist whatsoever.

The current system worked for years, but now that companies are focusing resources on finding ways to manipulate the Act to work to their favour, there are clear loopholes that need to be addressed by the federal government for the Act to continue to do what it is designed to do. There are no checks or balances for the CTA, and this is being overtly abused by foreign companies. Like anything in life, the CTA must adapt as new challenges appear on the horizon. If the Canadian Government is not up to the task of continuing to modernize the CTA to address some of these issues, the CTA will be completely useless.