Further to our Bulletin of September 11^th, 2003 concerning the captioned issue, please see below the contents of an industry article published by Rui Fernandes of the law firm Fernandes Hearn LLP and reproduced here with their permission.

Notes From Parliament Hill

Canadian Marine Liability Act, Part 4 (Compulsory Insurance)

Last January (2003) the Canadian Department of Transport released the Mariport Report and its recommendations which included an immediate application for all vessels except those involved in the adventure tourism business. Mariport suggested a graded implementation for the adventure tourism industry and also additional consultations with US operators. The Canadian Department of Transport is currently developing the regulations for the proposed compulsory insurance scheme. These proposed regulations are expected to appear in the Canada Gazette later this year (2004).

Current indications are that operators engaged in the domestic carriage of passengers will be required to maintain insurance against their maximum liability under the Act which in the case of death or personal injury to a passenger will be $350,000.00 per person per carriage. For example, a vessel certified to carry 20 passengers will be required to maintain $7 million in insurance coverage, 20 x $350,000.00. However, there is talk that the regulations will contain a threshold which once again will be 15 GRT. Vessels below that threshold will not be expected to maintain full insurance cover and the reduced limits will be dependant upon whether the vessel carries 12 or more passengers. Indications are that these reduced limits may be as little as $1 million per vessel where the passenger complement is less than 12. Fleet operators with more than one vessel will be required to maintain sufficient coverage to accommodate the largest vessel in the fleet and each vessel will be deemed to be separately insured.

The proposed regulations will not apply to non-motorized and/or inflatable vessels such as zodiacs nor will they apply to vessels engaged in international carriage such as ferry services between Canada and the US. The Canadian Department of Transport has indicated that compulsory insurance for international carriage of passengers will be considered in the future together with the Athens protocol of 2002 which introduces the subject internationally for the first time.

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