Frequently Asked Questions

The information below is meant to provide Canadians with general information about the Fund.

GENERAL INFORMATION

The Fund compensates those affected by oil pollution from any type of ship or boat, anywhere in Canadian waters.

The Fund is a specified purpose account in the accounts of Canada, established under the Marine Liability Act (the MLA).

Those affected can submit a claim directly to the Fund. The Administrator assesses and offers compensation for eligible claims. Once a claimant receives payment, we take all reasonable measures to recover from the shipowner or other responsible persons.

Alternatively, those affected (including by incurring costs to prevent, mitigate or remedy oil pollution damage) can choose to negotiate with the shipowner, or sue. If a claimant starts a lawsuit, the Administrator becomes party to the lawsuit, providing an extra layer of protection to the claimant.

The Fund covers all types of ships or boats that discharge or threaten to discharge persistent and non-persistent oil, including “mystery spills” (from an unknown ship).

Canada’s compensation regime is based on two principles.

  • First, shipowners are responsible for oil pollution incidents involving their ships, irrespective of fault. This is the polluter pays principle.
  • Second, compensation should be available to those affected by an incident even when the shipowner does not pay or it is not known what ship caused the pollution. The Fund fulfils this role. We have received more than 500 claims since 1989.

Our Fund succeeded the Maritime Pollution Claims Fund (MPCF) established in 1973. From 1972 to 1976, the MPCF collected a levy on oil imported into or shipped from a place in Canada. The original amount was transferred to our Fund when it was created in 1989. Since then, as a special account established in the accounts of Canada, interest is credited to the Fund monthly by the Minister of Finance.

In 2022-2023, the Fund collected $12,047,534 in interest.

TYPES OF CLAIMANTS AND CLAIMS PROCESSING

Any person in Canada that has suffered damages, including:

  • Canadian Coast Guard (CCG)
  • Ports, harbours and marinas
  • Fishing & tourism industries
  • All levels of government
  • Corporations
  • Indigenous communities
  • Individuals
  • Coastal landowners and owners of impacted ships or boats

Our Claims manuals are easy to use and will help you through the process.

In 2022-2023, the majority of non-CCG claimants used our new General Claims Form, launched last year. It’s an easy-to-use document to help claimants in preparing and submitting claims. It was used by four non-CCG claimants out of five. We will continue to develop our tools to guide claimants in the coming year.

Most claimants are able to submit their claims without the need for professional help. However, with large or complex claims, it may be helpful to obtain the advice or assistance of a lawyer or other professional. If this assistance is reasonably necessary, it may be eligible for compensation.

TYPES OF DAMAGES
  • Preventive response measures and clean-up costs
  • Property damage
  • Economic loss
  • Fisheries and tourism losses
  • Costs for reinstatement of the environment
  • Loss of subsistence living

Bear in mind that we can only reimburse for reasonable costs and expenses.

No. For example, if a community suffers an economic downturn as a direct result of a ship-source oil spill, any local businesses that can demonstrate an economic loss can be eligible for compensation.

Economic loss covers cultural and ceremonial uses, to the extent that such usage is negatively affected by a ship-source oil pollution incident. Compensation would extend to the cost of reasonable replacement alternatives. When processing such a claim, the assistance of an expert may be required for us to better understand and quantify the loss.

Yes. In 2022-2023, two thirds of claims were generated by abandoned and derelict vessels. This is an increase of more than 20% from last year. This represents 6,4 million in damages.

See Figure 3.1, 3.2, 4.1 and 4.2 of the annual report for more details.

CLAIMS PROCESSING

$412,367 was paid to Canadian claimants.

We received 33 new claims, totaling $7.5 million in damages. This is the second highest number of claims received in our history.

The claims submitted this year ranged from $3,000 to $2.5 million. In our history, we have only received 12 claims for more than $1 million. Three of them were submitted this year.

Despite the historic number of large claims, most claims were for significantly smaller amounts. Roughly two thirds of claims were for $50,000 or less. About half were for $35,000 or less.

See Figure 1 of the annual report for more details.

The CCG remains our main claimant. 28 out of the 33 claims were submitted by the CCG, representing 85% of the total number of claims.

However, this year, we had the most variety of claimants in the past five years. The number of non-CCG claims more than doubled from last year, from two to five. We received three claims from Indigenous entities and two from ports and harbours.

See Figure 2.1 of the annual report for more details.

Claims once again primarily arose from British Columbia. This year, the distribution was:

  • British Columbia (18);
  • Newfoundland and Labrador (9);
  • Nova Scotia (3);
  • Quebec (2); and,
  • Ontario (1).

See the Map of Our Active Files in 2022-2023 of the annual report for more details.

Claimants received 70% of the amount they claimed under the General Process. This was a notable increase compared to 38% in 2021-2022.

See Figures 7 and 8 of the annual report for more details.

Claimants are entitled to interest on their claim from the day their damage occurred. The interest is calculated and paid at the time of the payment. Due to the delays in submitting the claim, to the processing and payment, interest may accrue over a period of several years.

Most claims for less than $100,000 were processed in less than six months. Only one claim took more than a year to process. In general, larger claims are more complex and they take more time to process.

See Figure 6 of the annual report for more details.

RECOVERY EFFORTS

$19,950 was recovered from polluters. This year we obtained recoveries in five small files. In all these cases, our in-house legal team started settlement discussions or a lawsuit.

In four of our five recoveries, the vessel was insured.

See Figure 10 of the annual report for more details.

FINANCIAL DETAILS

Approximately $414 million.

There is no limit to how much the Fund can compensate. In the event of a disaster, the Fund also has access to additional money.

No levy has been imposed for the Fund and its predecessor MPCF since 1976. However, the Minister of Transport had the power to reimpose a levy of 61.45 cents per metric tonne of oil during (fiscal year 2023-2024).

Totals may differ due to rounding or the basis of accounting used (cash method vs. accrual method).

INTERNATIONAL DIMENSION

This year, we reached significant milestones on the following elements of our preparedness.

  • Signing an agreement with the International Group of P&I Clubs (IGP&I). We signed an Memorandum of Understanding (MOU) in October 2022. The IGP&I provide insurance coverage to around 90% of the international fleet. This agreement will improve our cooperation and collaboration with the IGP&I, to assist Canadian claimants.
  • Signing an agreement with the International Oil Pollution Compensation Funds (IOPC Funds). We also signed an MOU with them in March 2023. This MOU sets out the framework of the relationship between our organizations and will increase our capacity in the event of a tanker incident in Canadian waters.

We also participated in a training session with the IOPC Funds on their Claims Handling System (CHS).

  • Collaboration and agreement discussions ITOPF. In 2022, we attended a presentation from ITOPF’s claims assessment services. They provide these services primarily to governments, shipowners and response organizations worldwide. They provided us with their expertise in advising on various matters related to ship-source spills.

We are also working to securing an MOU with them. This MOU will describe their role in assisting us in claims assessments when a P&I Club is not involved. This MOU is expected to be signed in 2023-2024.

When done, these three MOUs (with ITOPF, IG P&I and the IOPC Funds) will greatly facilitate collaboration between our four organizations. All organizations have already expressed a clear desire to participate in a tabletop exercise in Canada, addressing practical claims management issues.

See section 1.1.4 of the annual report for more details.

The Conventions provide for three cumulative layers of liability in case of tanker spills in the waters of a state party to the convention:

  • The 1992 CLC provides for the shipowner’s mandatory insurance up to its limit of liability. It ranges from about $5.5 million to a maximum of about $110 million, depending on tonnage.
  • The 1992 IOPC Fund Convention provides for up to approximately $370 million per incident;
  • The 2003 Supplementary Fund provides for an additional layer of compensation of approximately $1 billion.

The liability of the shipowner and these two Funds combined provide for a total of approximately $1.365 billion. The exact amount depends on the exchange rate in effect at the time of the incident.

We did not have to pay any Canadian contribution to the IOPC Funds this year. Liabilities based on the oil report submitted in 2022 were offset by IOPC’s decision in October 2022 to reimburse contributors in the Hebei Spirit file. This reimbursement has also resulted in a credit of £65,000 (around CAN $109,000) in Canada’s account with the IOPC Funds. The credit balance will be set off against annual contributions which will be levied in the future.

See section 1.3 of the annual report for more details.

Since 1989, the Fund has paid $58.6 million in contributions to the IOPC Funds. These contributions represent our biggest expense. Our annual contribution generally fluctuates when a new tanker incident occurs.

See Figure 14 of the annual report for more details.

$11,8 million was paid for expenses incurred for the Rio Orinoco incident, on Anticosti Island in 1990.

The International Funds are available only to spills of persistent oil from sea-going tankers. Our Fund is unique in that we cover any type of ship or boat, including:

  • Tankers
  • Cargo, container, and passenger vessels
  • Tugs and barges
  • Fishing vessels
  • Pleasure craft
  • Ex-fishing vessels

The Fund also covers mystery spills (from an unknown ship).

Canada is party to the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (Bunkers Convention). The implementation of the international bunker rules in Canada requires that all ships having a gross tonnage greater than 1,000 must maintain insurance or other financial security that allows claimants for oil pollution caused by such ships to go directly against the insurer or other person providing financial security. This feature is of some significance in non-tanker spills handled by the Fund.

Any person in Canada that has suffered damages can submit a claim directly to the Fund.

Alternatively, they can also choose to negotiate, or sue the shipowner and insurers (as in cases covered by the Nairobi Convention). Where claimants decide to claim directly to an insurer, our office keeps the claim file in abeyance. We will proceed with the assessment only if the claimant does not reach a satisfactory settlement with the insurer.