Maritime Law in Canada

Constitutional Foundation and Federal Jurisdiction

Maritime law in Canada is grounded in the constitutional allocation of legislative authority. Section 91(10) of the Constitution Act, 1867 confers exclusive jurisdiction over navigation and shipping on the Parliament of Canada. This head of power has been broadly construed by the courts, extending to both inland waters and the high seas, and encompassing matters as diverse as shipbuilding, seafarers’ rights, marine safety, and environmental protection. The federal maritime jurisdiction was early recognized as co-extensive with the admiralty jurisdiction historically exercised by the English High Court of Admiralty, and was held to include those rules of maritime law — both domestic and international — that form part of the “general law of the sea” (The “Nord” v. The “Themis”, [1925] SCR 691; ITO-International Terminal Operators Ltd. v. Miida Electronics Inc., [1986] 1 SCR 752).

The Federal Courts Act, RSC 1985, c F-7, confers on the Federal Court exclusive original jurisdiction over maritime matters, including claims for damage to cargo, salvage, collisions, and the arrest of ships. Section 22 of the Act enumerates the heads of maritime jurisdiction — “Canadian maritime law” — which the Supreme Court defined in ITO-International Terminal Operators as “a body of federal law that is uniform across Canada, subject to any provincial laws that do not conflict with it.” In Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 SCR 1021, the Court clarified that Canadian maritime law is not merely the English admiralty law as of 1934 but an evolving body of federal common law that may absorb developments in international maritime law, Canadian jurisprudence, and relevant federal statutes.

The Marine Liability Act

The Marine Liability Act, SC 2001, c 6, is the principal federal statute governing civil liability in the maritime context. It consolidates and modernizes the statutory provisions on shipowner liability, limitation of liability, and the carriage of passengers and goods. Part 3 of the Act implements the Convention on Limitation of Liability for Maritime Claims (LLMC 1976), as amended by the 1996 Protocol, allowing shipowners to limit their liability to a fixed amount calculated by reference to the ship’s tonnage. The right to limit is forfeited where the claimant proves that the loss resulted from the shipowner’s personal act or omission committed with intent to cause such loss, or recklessly and with knowledge that such loss would probably result. Part 4 governs liability for passengers, implementing the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea (1974), while Part 5 addresses the liability of marine facilities and the compulsory insurance requirements for vessels carrying passengers.

The limitation of liability regime has been the subject of significant litigation. In Algonquin Power Fund (Canada) Inc. v. Ontario Northland Transportation Commission, 2005 FC 1047, the Federal Court considered the availability of limitation for claims arising from pollution damage. The interplay between the Marine Liability Act and provincial workers’ compensation legislation was addressed in Canadian National Railway Co. v. Royal & Sun Alliance Insurance Co. of Canada, 2008 SCC 66, [2008] 3 SCR 453, where the Supreme Court held that the federal statutory bar did not preclude a subrogated claim by an insurer.

The Canada Shipping Act, 2001

The Canada Shipping Act, 2001, SC 2001, c 26, is the comprehensive regulatory statute governing Canadian shipping. It addresses vessel registration, safety standards, crew qualifications, and environmental protection. Part 2 establishes the Vessel Registration System, administered by Transport Canada, which maintains the Canadian Register of Vessels. Registration is compulsory for Canadian vessels engaged in commercial activities; unregistered vessels may nonetheless be recognized as Canadian if they meet prescribed ownership criteria.

Part 9 of the Act addresses the marine safety regime, including the requirement for ships to carry valid safety certificates and to comply with construction, equipment, and manning standards. The Act empowers the Governor in Council to make regulations incorporating international conventions, including the International Convention for the Safety of Life at Sea (SOLAS), the International Convention for the Prevention of Pollution from Ships (MARPOL), the International Regulations for Preventing Collisions at Sea (COLREGS), and the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW). The Act also establishes the Transportation Safety Board of Canada’s jurisdiction to investigate marine occurrences.

Carriage of Goods by Water

Canada’s regime for the carriage of goods by water is governed by the Carriage of Goods by Water Act, RSC 1985, c C-27, which implements the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (the Hague Rules) as amended by the Visby Amendments (the Hague-Visby Rules). The rules impose a mandatory minimum level of liability on carriers: the carrier must exercise due diligence to make the ship seaworthy and to properly man, equip, and supply the vessel. The carrier’s liability for loss or damage to goods is limited to a prescribed amount per package or per kilogram, unless the nature and value of the goods have been declared before shipment.

Canadian courts have interpreted the Hague-Visby Rules purposively, holding that the “paramount clause” — the clause incorporating the rules into the contract of carriage — overrides any contrary contractual terms. In Falconbridge Nickel Mines Ltd. v. Chimo Shipping Ltd., [1973] SCR 888, the Supreme Court held that the carrier bears the onus of proving it exercised due diligence to make the vessel seaworthy. In Silver v. Ocean Steamship Co., [1930] 1 KB 416, the English Court of Appeal’s analysis of the scope of the “navigational fault” defence has been influential in Canadian jurisprudence, though the defence has been narrowly construed.

Marine Insurance, Salvage, and Collisions

Marine insurance in Canada is governed by the provincial insurance acts and the common law, supplemented by the federal Marine Insurance Act, SC 1993, c 22, which codifies the law of marine insurance in terms substantially similar to the English Marine Insurance Act, 1906. The Act defines insurable interest, the duty of utmost good faith (uberrimae fidei), warranties, and the measure of indemnity. Canadian courts have held that breach of a warranty discharges the insurer from liability from the date of breach, regardless of whether the breach is causally connected to the loss (The “Good Luck”, [1992] 1 AC 233, as applied in Canada).

Salvage law in Canada follows the international regime established by the International Convention on Salvage (1989), which replaced the traditional “no cure, no pay” principle with a enhanced award structure that includes a special compensation component for salvage operations that prevent or minimize environmental damage. The Federal Court has original jurisdiction over salvage claims and assesses awards based on the factors enumerated in Article 13 of the Convention: the salved value of the property, the skill and efforts of the salvors in preventing environmental damage, the measure of success obtained, and the degree of danger, among others.

Collisions at sea are governed by the International Regulations for Preventing Collisions at Sea (COLREGS), which have the force of law in Canada through regulations under the Canada Shipping Act, 2001. Liability for collision is determined according to the apportionment of fault principle: where two or more vessels are at fault, liability is borne in proportion to the degree of fault attributable to each. The Federal Court applies the divided damages rule only where the respective degrees of fault cannot be determined.

Maritime Liens and the Arrest of Ships

Maritime liens are a distinctive feature of Canadian maritime law. They are proprietary security interests that arise by operation of law and attach to the vessel itself, travelling with it even after a change of ownership. Recognized categories of maritime liens include liens for crew wages, salvage, collision damage, and damage to cargo. In Marlex Petroleum Inc. v. The “Har Rai”, [1987] 1 SCR 57, the Supreme Court confirmed that the categories of maritime liens are not closed and may develop to reflect changes in maritime commerce.

The arrest of ships is the procedure by which a claimant establishes in rem jurisdiction over a vessel. The Federal Court may order the arrest of a ship to secure a maritime claim, provided the claimant establishes a prima facie case and an arguable claim falling within the court’s admiralty jurisdiction. Arrest is a powerful remedy: the vessel is detained until security is posted, and the arresting party may obtain priority over other creditors upon judgment. The Federal Courts Rules (SOR/98-106) set out the procedure for arrest, including the requirement for the claimant to undertake to pay damages if the arrest is found to have been wrongful. The Supreme Court addressed the limits of the arrest power in Isen v. Simms, 2006 SCC 41, [2006] 2 SCR 349, holding that arrest is not available for claims that are purely personal against the owner and unrelated to the vessel.

Marine Environmental Protection

Canada’s Arctic waters are subject to a stringent environmental protection regime under the Arctic Waters Pollution Prevention Act, RSC 1985, c A-12, which prohibits the deposit of waste in Arctic waters and imposes strict liability on shipowners for pollution damage. The Act established a 100-nautical-mile pollution prevention zone — subsequently extended to 200 nautical miles — and requires vessels to comply with construction, manning, and navigational standards. The Arctic Waters Pollution Prevention Act has been a model internationally for the regulation of polar shipping and is recognized as a basis for the Polar Code (International Code for Ships Operating in Polar Waters), adopted by the International Maritime Organization in 2014.

The Canada-United States Joint Marine Pollution Contingency Plan, established under the Canada-United States Great Lakes Water Quality Agreement and the Canada-United States Joint Marine Pollution Contingency Plan for Spills, provides a framework for cooperative response to marine pollution incidents. Canada is also party to the International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC 1990) and the Protocol on Preparedness, Response and Co-operation to Pollution Incidents by Hazardous and Noxious Substances (OPRC-HNS Protocol 2000). The Canada Shipping Act, 2001 and its regulations implement these international obligations, establishing a comprehensive regime for ship-source pollution prevention, response, and liability.