Abnormally dry weather conditions throughout Western Canada has soil conditions deteriorating in the Prairies. British Columbia’s southern interior, North and coastal regions have been experiencing drought-like conditions as the province enters ‘wild-fire season.’ Conditions don’t look anymore promising for provinces to the East either. The National Agroclimate Information Service in their Canadian Drought Monitor  states: “deteriorating soil moisture conditions and below normal precipitation in the Prairie region led to worsening drought conditions. As a result of this there are increased concerns for feed supply in the growing season.”

A lack of moisture and higher than traditional temperatures for the start of the 2019 growing season could result in less than optimal development for seeds in the coming months. The Western Producer reports that precipitation numbers for this season when compared with last are “below normal in almost all of Western Canada. For a big chunk of central Saskatchewan precipitation has been less than 40 percent of normal. This is surrounded by an even bigger area that’s between 40 and 60 percent.”

The poor weather conditions coupled with rocky relationships with the Chinese means that some Canadian farmers are turning to government aid for assistance. AgriStability, a program designed to “manage risks and financial losses due to poor yields, low commodity process, rising input costs, or market disruptions” provides some assistance. The Financial Post reports that “payments from AgriStability have jumped 37 per cent year over year” according to a federal agriculture department spokesman with the program deadline already extended from April 30 to July 2.

Further discussions regarding the possible implementation of the AgriRecovery framework are ongoing. The purpose of which is to alleviate the “extraordinary costs producers must take on to recover from disasters. Extraordinary costs are costs which producers would not incur under normal circumstances, but which are necessary to mitigate the impacts of a disaster and/or resume farming operations as quickly as possible following a disaster.” First, the individual Province must request an assessment by the Federal government before the 60-40 (federal – provincial) cost share is approved which has yet to happen.

The Trans Mountain Expansion project was approved by the Government of Canada on Tuesday, June 17. The decision comes almost 8 months after initial construction was met with a Federal injunction to halt progress. The initial delay cited a lack of indigenous consultation, and further research needed on the environmental impacts of oil tanker traffic.  In all, the approved expansion will see the development of approximately 980 km of new pipeline, 12 new pump stations, 19 new tanks, 3 new berths at Westridge Marine Terminal. Vessel traffic at the terminal is expected to increase by approximately 34 tankers per month.

The National Energy Board made recommendations to build “capacity and long-term relationships, marine safety, spill prevention, response capacity, cumulative effects, fish and fish habitat, and quieter vessels.” Among the measures, the Quiet Vessel Initiative aims at reducing “vessel noise in the Salish Sea in order to protect the marine environment and vulnerable marine mammals – including the SRKW.” Additionally, the following measurements have been recommended to further marine safety with the predicted increase of vessel traffic –

-Laden tanker tug escort to cover the route through the Strait of Georgia and between Race Rocks and the 12-nm marker

-Pilot disembarkation will be extended to take place near Race Rocks (pilots have been trained to disembark by helicopter)

-Enhanced Situational Awareness techniques will be applied that will require:

-Safety calls by pilots and masters of laden tankers

-Notices to industry issued by Pacific Pilotage Authority

-Tactical use of escort tug along shipping route

-Boating safety engagement and awareness program led by Pacific Pilotage Authority”

See here for further details on the Trans Mountain Expansion.

Bill C-48, first proposed in the House of Commons in 2017, regulates vessels that transport crude oil to/from Ports along the North coast of British Columbia. With its passing earlier this month, the legislation formalizes an oil tanker moratorium in the area shown in this map. The prohibited area in green will complement the already existing voluntary exclusion zone. The narrow margin with which with the bill was passed (3 votes) highlights the controversy surrounding the issue.

Please note the following background information on the motion from the Library of Parliament.

“The moratorium is in keeping with a 1972 federal government policy decision to impose a moratorium on crude oil tanker traffic through Dixon Entrance, Hecate Strait and Queen Charlotte Sound.2 This decision, while never formalized in legislation, was expressed in a House of Commons resolution stating that “the movement of oil by tanker along the coast of British Columbia from Valdez in Alaska to Cherry Point in Washington is inimical to Canadian interests especially those of an environmental nature.” 3

The tanker exclusion zone (see Figure 1) dates back to a 1988 voluntary agreement between the Canadian Coast Guard, the United States Coast Guard and the American Institute of Merchant Shipping (now the Chamber of Shipping of America).4 The purpose of the zone is “to keep laden tankers west of the zone boundary in an effort to protect the shoreline and coastal waters from a potential risk of pollution.””

The Chamber of Shipping succinctly recaps some of the opposing viewpoints in their recent circular –

“The effort to ban tankers on the BC North Coast is almost 40 years in the making and has galvanized attention from coastal First Nations. While many stakeholders were vehemently opposed to the ban and its focus on Canadian energy exports, the Chamber opposed the legislation for its blatant disregard for evidence-based marine policy and the negative precedent it establishes. This legislation does not provide any additional marine safety measures for the BC North Coast and it does not stop a tanker from transiting the area. This precedent is part of a growing trend in Canada and indicative of a lack of Federal focus in demanding and respecting standardized and evidence-based risk assessments.

 The Senate has voted to pass Bill C-48, the Oil Tanker Moratorium Act. The draft legislation passed by a margin of 3 votes after the House of Commons quashed a recommended amendment for a mandatory review of the legislation within 5 years. Alberta has vowed to launch a legal challenge to this bill, claiming that it is discriminatory to Alberta’s ability to access global markets. This legislation does not provide any additional marine safety measures for the BC North Coast and it does not stop a tanker from transiting the area, but it does stop tankers from stopping at ports on the coast of northern BC.”

The marine industry in Vancouver let out a collective sigh of relief following the news that a tentative agreement has been struck between the ILWU and BCMEA. The agreement spells an end to a tumultuous stretch of bargaining. A strike would have threatened all port operations in/out of the West Coast of Canada (except cruise and grain ship services).

The following is a recap released by the BCMEA –

“The British Columbia Maritime Employers Association (BCMEA) and ILWU–Canada are pleased to advise they have come to a tentative agreement that will continue to allow all BC Ports to be a competitive, efficient and reliable gateway for the benefit of all Canadians. The tentative agreement is subject to ratification. Negotiations resumed at noon yesterday and after another round of discussions at the bargaining table, a tentative agreement was reached earlier this morning. “We are pleased to have reached a tentative agreement with the ILWU. We appreciate the efforts of both parties to focus on reaching agreement and ensuring BC Ports remain open for business. The lockout has been lifted and we look forward to getting operations back to normal.”

The potential for automation of container terminal operations seemed to be the major road block in securing an agreement. Both Vancouver and Prince Rupert Terminals have already expressed an interest in pursuing semi/fully automated operations. Currently, there are 6 terminals in North America that provide at least partly automated processes (2 being fully automated). At the heart of the controversy is the potential Roberts Bank Terminal 2 project. This project could include “up to three berths for container ships” and act as a “modern, semi-automated terminal providing 1,500 on-terminal jobs.”

This a huge step in the right direction for all parties, however, the next hurdle will be ratifying the agreement. The ratification meeting is currently scheduled for June 19.

If any issues arise in the meantime we will revert accordingly, although, we are hopeful in the progress made thus far.

The Administrative Monetary Penalty System (AMPS) was enacted by the Canada Border Services Agency (CBSA) in 2002. According to the CBSA website, the “purpose of AMPS is to provide the agency with a means to deter non-compliance by its clients and create a level playing field for all Canadian businesses.” AMPS are monetary penalties for the violation of trade and border legislation in the commercial stream. In a marine context, the penalties are the responsibility of the Master and/or the head owners, the carrier or the agent depending on the circumstance. Most non-compliance results in a monetary penalty with the amount dependent on the contravention breached. While we won’t spend time getting into all the AMPS contraventions (follow this link for further information), these are some common examples we see in the marine industry –

C023 Contravention

Person failed to report conveyances inbound and/or upon arrival.

Penalty 1st: $2,000 2nd: $4,000 3rd and Subsequent: $8,000

C207 Contravention

Master of a ship failed to place alcohol, tobacco and other goods for sale on board the ship under lock or seal and keep them there while the ship was in port.

Penalty 1st: $300* 2nd: $450 3rd and Subsequent: $900

In contravention C023, the party at fault would be those responsible for properly reporting to the CBSA. This can get more complicated depending on the specific situation.

In contravention C207, this is the responsibility of the Master/head owners of the vessel. This is the most common type of infraction we come across and can cause some issues down the road. Once an AMP is issued, a Notice of Penalty Assessment (NPA) is sent to the carrier on record (which is typically not the head owner). The NPA will consist of all relevant information including issuance date, applicable contravention, penalty amount, etc. Unfortunately, this NPA is typically sent to the carrier on record which is not always the party responsible for the AMP penalty. At that point it can become a game of cat and mouse while determining the responsible party and payment.

As agents, we do our best to get ahead of situations like this. The Master is typically aware when an AMP is issued (like in the case of C207) as an officer would have been present. The responsible agency should be informed to contact the CBSA, determine the amount and settle with the vessel prior to departure. In rare circumstances, the CBSA will notify us directly although this is usually not the case. Many times, we are left to answer questions about the AMP months after the vessel has departed. This is the worst-case scenario as we have very little recourse in that situation.