FMC Investigating Whether New Canadian Rules Unfairly Burden US Carriers
The Federal Maritime Commission is investigating conditions imposed by the Canadian government that "may adversely affect" the operation of U.S. carriers in the U.S.-Canada Great Lakes trade, the FMC said. The new Canadian regulations, which are set to take effect in September, would require U.S. vessels to install new ballast water management systems, the FMC said in a notice released May 21.
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The commission is beginning its investigation four years after it was told by the Lake Carriers Association that the installation of ballast water management systems would impose a "severe burden" on U.S. vessels. The association said the rules would serve no environmental purpose and only increase compliance costs for American ships (see 2202020027).
The FMC noted that the EPA has been considering similar regulations, but a recent supplemental notice issued by the agency suggests it would make a "less restrictive" final rule than the regulations set to take effect in Canada. The proposed EPA regulation would require ballast water systems only for "covered vessels built in the future," the FMC said.
The Lake Carriers Association asked the FMC in February to "move forward promptly," adding that ships "would have to prepare to comply with the stricter Canadian rules before the compliance date of September 8, 2024, even though the EPA was unlikely to require them to meet the stricter standards," the FMC said. The association also told the FMC that even though the Canadian rule would affect only five of its 50 U.S. ships, it would require them to invest in "multimillion dollar" equipment that those ships may need to remove later to comply with future U.S. requirements, the FMC said.
The commission said its investigation will look into whether "the laws, rules, policies, or practices of Canada result in conditions that 'adversely affect the operations of United States carriers in United States oceanborne trade,'" and whether those conditions don't exist for foreign carriers, including from Canada, operating in the U.S.
If the FMC concludes the Canadian rule is unfairly hurting U.S. carriers, it will be able to impose limits or fees on foreign carriers, including Canada-flagged vessels. The FMC said it could target carriers that are a "contributing cause, or whose government is a contributing cause, to those" unfair conditions.
The FMC is expecting to reach a decision within 120 days. Comments are due June 21, and the commission said it may make an additional request for comment or information as the investigation continues.