Shipping 2026 Comparisons

Authority for navigation and shipping matters lies with the federal government and disputes arising from maritime matters are heard in the Federal Court, which is Canada’s admiralty court. The Federal Court is a single circuit court for the country hearing matters locally. While the superior courts of the provinces maintain concurrent subject-matter jurisdiction, in practice the Federal Court is the venue for marine and shipping disputes. Personal injury matters arising from maritime issues are frequently brought in the superior courts.

The authority of the maritime courts in Canada is established by the Federal Courts Act, and the principal legislation dealing with marine matters includes the following, together with their respective regulations:

• Canada Marine Act;
• Marine Insurance Act;
• Marine Liability Act; and
• Canada Shipping Act 2001.

Some provinces have legislation dealing with similar areas but the federal legislation is of primary concern.

Common maritime and shipping claims heard in Federal Court are disputes with respect to the following:

• ownership title and possession of ships;
• ship mortgages;
• claims for damage or loss of life and personal injury caused by or occurring in connection with a ship;
• damage or loss of cargo or goods carried on a ship;
• claims arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading regardless of the place of the damage or loss;
• disputes related to charterparty agreements, salvage, towage or pilotage;
• disputes related to ship supplies and services;
• contracts related to construction, repair and equipping of ships;
• crew wages and advances made on account of the ship;
• dock charges, harbour dues or tolls;
• claims in connection with contracts of marine insurance;
• general average; and
• claims related to pollution by vessels.

The Marine Safety and Security Branch of Transport Canada is responsible for port state control in Canada. Transport Canada ensures compliance with various international obligations and domestic laws and regulations, including:

• International Convention for the Safety of Life at Sea (SOLAS);
• International Convention for the Prevention of Pollution from Ships (MARPOL);
• International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW);
• Tokyo MOU and Paris MOU; and
• domestic laws applicable to vessels in Canadian waters.

In port, Transport Canada inspectors may board and inspect foreign vessels to verify safety and compliance with Canadian and international laws and may order that issues be addressed before the vessel is permitted to leave port. If issues are not addressed, particularly as concerns pollutants, Transport Canada can issue fines and lay charges against the ship-owners.

Transport Canada is also responsible for investigating accidents to verify compliance with federal laws and regulations, including labour laws. In cases of more serious accidents and incidents, the Transportation Safety Board may also opt to investigate.

The Canadian Coast Guard regulates marine traffic and is responsible for screening vessels and issuing clearance to ships prior to entry into Canadian waters. Vessels entering Canadian waters must report their identity, condition, destination and any pollutants or dangerous cargo carried aboard. Unlike its American counterpart, the Canadian Coast Guard is not a law enforcement agency, although it provides operational support to law enforcement agencies in respect of maritime security. Transport Canada will also work alongside law enforcement authorities where appropriate, usually the Royal Canadian Mounted Police and the Canada Border Services Agency.

The Canada Shipping Act 2001 (CSA) and its regulations govern ship registration in Canada with Transport Canada responsible for the registration of vessels. Registered vessels are listed in separate registries depending on gross tonnage, with vessels exceeding 15 GT registered with the Canadian Register of Vessels and those of less than 15 GT in the Small Vessel Register.

A Canadian registered vessel may be jointly owned by up to five persons, one of whom must be a “qualified person”, which is defined as either a Canadian corporation or a Canadian citizen or permanent resident. A non-citizen may own a Canadian registered vessel if they are a permanent resident or if they do so jointly with a Canadian corporation or citizen. In the event that an unqualified person is the registered owner of the vessel, any interested person may apply to the Federal Court for an order for the sale of the vessel, or their share in the vessel, to a qualified person.

An exception to this rule is that a foreign corporation may own a vessel registered in Canada if a subsidiary of that corporation registered in Canada, an employee or director of a branch office of that corporation carrying on business in Canada, or a ship management company incorporated in Canada is acting in respect to all matters relating to the vessel.

A vessel under construction cannot be entered into the registry but it can be recorded with Transport Canada. This allows the party building the vessel or the intended owner to register a shipbuilder’s mortgage, secure a vessel registration number and reserve a name for the vessel.

A vessel may be temporarily registered in Canada provided that it is bare-boat chartered exclusively to a “qualified person”, but the registration in the foreign jurisdiction must be suspended in respect of the right to fly that state’s flag for the duration of the charter and the registration period.

Canada does not permit the dual registration of vessels except insofar as this is part of a temporary registration of a bare-boat charter as described above.

Ship mortgages must be filed with the Chief Registrar of the Canadian Registry of Vessels, who maintains the registry of such mortgages pursuant to the Canada Shipping Act 2001 (CSA). A mortgage may only be registered under the CSA for vessels appearing in the register.

A party registering a ship’s mortgage must submit a Mortgage Form supplied by Transport Canada which includes:

• the names and addresses of the mortgagors and mortgagees;
• the principal amount; and
• additional details such as the rate of interest, method of payment or the date on which the collateral agreement was executed.

Notwithstanding the ship mortgage requirements of the CSA, the provinces maintain concurrent jurisdiction over security interests in vessels in accordance with their respective personal property security regimes and security interests on vessels may be perfected in those registries as well.

The ship mortgage register is not publicly accessible but non-owners may file a request with Transport Canada and pay a fee in order to access information in the registry.

Ship loan financing typically involves a mortgage or line of credit secured against the ship asset or other assets. Some debt and equity financing is also done in exchange for shares. Personal guarantees may be requested. Most common are ship mortgages, which can be registered on the ship registry for registered vessels.

There has not been an increase in ship leasing transactions in Canada. Lendor/borrower relationships are typically backed by a ship mortgage. Lessor/lessee relationships may be backed by personal guarantees. Courts and arbitral tribunals treat both relationships as contractual relationships. Sale and leaseback transactions occur in Canada.

Canada is a signatory to and has implemented a number of international conventions that will impact upon the liability of owners and interested parties in events of pollution and wreck removal. A brief summary of these conventions is as follows.

• International Convention on Civil Liability for Oil Pollution Damage, 1992 (the “1992 CLC”) – Ratified by Canada in 1998 and in force in 1999. Holds ship-owners strictly liable for oil pollution damage from persistent oils (eg, tankers), with compulsory insurance and limits based on tonnage and Special Drawing Rights (SDR).
• International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (the “1992 Fund Convention”) and 2003 Protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (the “Supplementary Fund Protocol”) – The 1992 Fund Convention was ratified by Canada in 1998 and in force in 1999. The Supplementary Fund Protocol was ratified by Canada in 2009 and in force in 2010. They establish mechanisms for compensation beyond the ship-owner’s limit under the CLC. They are financed by contributions from any person who has received more than the set amounts of crude oil and/or heavy fuel oil in one calendar year in a member state.
• International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (the “Bunkers Convention”) – Ratified by Canada in 2009 and in force in 2010. Extends strict liability and compulsory insurance to all seagoing vessels carrying bunker fuel (≥1,000 GT), with liability limits based on tonnage of the ship.
• International Convention for the Prevention of Pollution from Ships, 1973, as amended by the Protocol of 1978 (“MARPOL 73/78”) – The MARPOL Convention and the Protocol of 1978 entered into force in October 1983. All six annexes have entered into force. MARPOL 73/78 governs pollution prevention from ships (oil, noxious substances, sewage, garbage, air emissions) via technical and operational standards. Canada has adopted most aspects of the MARPOL Convention under the Canada Shipping Act 2001, while domestic legislation with stronger restrictions regarding sewage discharge in Canadian Arctic Waters are in force.
• International Convention on Oil Pollution Preparedness, Response and Co-operation (the “1990 OPRC”) – Ratified and in force in Canada in 1995. Provides for oil pollution preparedness and mutual response co-operation. The Canada Shipping Act 2001 gives effect to the OPRC and provides the legislative frameworks in order to meet the requirements under the convention. The Canadian Coast Guard has various national and international contingency plans in place to fulfil Canada’s obligations under the convention.
• Protocol of 2010 to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (the “2010 HNS Protocol”) – Ratified by Canada in 2018. Creates liability, compensation and reporting obligations for hazardous and noxious substances cargoes; Canada implemented the 2010 HNS Protocol via amendments to Canada’s Marine Liability Act 2001 and the Marine Liability and Information Returns Regulations.
• International Convention on Salvage, 1989 – Ratified and entered into force in Canada in 1996, subject to a reservation that the convention does not apply when the property involved is maritime cultural property of prehistoric, archaeological or historic interest and is situated on the seabed. Governs salvage operations, including those involving pollutive wrecks.
• Nairobi International Convention on the Removal of Wrecks, 2007 – Entered into force in Canada in 2019. The convention imposes strict liability for wreck removal on ship-owners, mandates compulsory insurance, enables coastal states to act when ship-owners fail, and provides for liability limits under the International Convention on Limitation of Liability for Maritime Claims (LLMC). However, Canada has taken a reservation on the application of the LLMC to claims related to wreck removal. Ship-owners are not able to limit liability for claims related to the raising, removal, destruction or rendering harmless of a ship that is sunk, wrecked, stranded or abandoned. Canada also extended the application domestically to non-seagoing vessels.

Canada has various domestic laws that apply in events relating to pollution and wreck removal.

• Marine Liability Act 2001 (MLA) – Among other things, the MLA implements the CLC, 1992 Fund Convention, Bunkers Convention, 2010 HNS Protocol, International Convention on Salvage, 1989, and enhances Canada’s Ship-source Oil Pollution Fund (SOPF) to include oil from unknown sources.
• Marine Liability and Information Return Regulations (SOR/2016-307) – Require exporters/importers of bulk oil and HNS to report quantities and pay levies to fund pollution liabilities.
• Canada Shipping Act 2001 and its various pollution regulations – Encompass MARPOL implementation, oil pollution prevention, pollutant discharge reporting, Arctic pollution prevention, sewage, and infrastructure for response organisations.
• Ship source Oil Pollution Fund (SOPF) – A federal fund established under the Marine Liability Act, which compensates for clean-up and damage in Canadian waters resulting from ship-source oil spills when other sources are unavailable.
• Wrecked, Abandoned or Hazardous Vessels Act 2019 – Implements the Nairobi Convention domestically, prohibits abandonment, and empowers government to intervene and seek recovery.

Canada has incorporated the principles of the Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels (the “1910 Brussels Convention”) into Canadian maritime law primarily through the Marine Liability Act and the Canada Shipping Act 2001.

Canada’s Marine Liability Act establishes the legal framework for who pays for damages, sets liability limits, mandates insurance for passenger vessels, and outlines compensation for injuries, damages and losses in Canadian waters.

Canada has also incorporated the International Regulations for Preventing Collisions at Sea (COLREGs) of 1972 into its domestic Collision Regulations under the Canada Shipping Act 2001, which establishes the rules for safe navigation and preventing collisions, and dictates post-collision duties. Canada made certain domestic modifications and supplementations to the COLREGs.

As for salvage, in 1996 Canada ratified and entered into force the International Convention on Salvage, 1989, subject to a reservation that the convention does not apply when the property involved is maritime cultural property of prehistoric, archaeological or historic interest and is situated on the seabed. The Canada Shipping Act 2001 implements this convention directly in Schedule 3. Canada’s Marine Liability Act 2001 defines “salvor” and enables limitation of liability under the International Convention on Limitation of Liability for Maritime Claims (LLMC).

Canada ratified the 1996 Protocol on 9 May 2008 and it entered into force on 7 August 2008. The 1996 Protocol is incorporated into Canadian domestic law through the Marine Liability Act 2001. However, Canada has taken a reservation on the application of the LLMC to claims related to wreck removal. Ship-owners are not able to limit liability for claims related to the raising, removal, destruction or rendering harmless of a ship that is sunk, wrecked, stranded or abandoned. Canada also extended the application domestically to non-seagoing vessels. The 2012 amendments to the 1996 Protocol have not been ratified or implemented.

Canada acceded to the 1969 Vienna Convention on the Law of Treaties on 14 October 1970 and the convention entered into force on 27 January 1980. Courts may apply its interpretative framework to international treaties incorporated into domestic law. For the Convention on Limitation of Liability for Maritime Claims and 1996 Protocol, which came into force after the 1969 Vienna Convention on the Law of Treaties, Canadian courts can apply the Vienna rules to interpret their domestic effect under Canada’s Marine Liability Act.

Under Canada’s Marine Liability Act 2001 (MLA), establishing a limitation fund for maritime claims follows the legal structure based on the Convention on Limitation of Liability for Maritime Claims 1976 and its 1996 Protocol (LLMC).

Under the MLA, persons entitled to limit liability are: the owner, charterer, manager and operator of all ships (and not just “seagoing” ships) and any person with an interest in or possession of a ship. Additionally, an owner of a dock, canal or port may also limit liability.

The person seeking limitation applies to the Federal Court (Admiralty Court) in Canada. The person may assert the right to limitation of liability in a defence filed, or by way of action or counterclaim for declaratory relief. The limits of liability are generally calculated based on the ship’s gross tonnage and, for passenger ships, the number of passengers. The limits of liability are established by Articles 6 and 7 of the LLMC and Sections 28, 29 and 30 of the MLA.

A deposit is required; however, the Federal Court may determine what form of guarantee it considers to be adequate for the purposes of paragraph 2 of Article 11 of the LLMC.

Canada ratified the Maritime Labour Convention, 2006 (MLC) on 15 June 2010 and the convention took effect in Canada on 20 August 2013. Various regulations under the Canada Shipping Act 2001, such as the Marine Personnel Regulations (Part 3) and the Vessel Construction and Equipment Regulations (SOR/2023-257), implement provisions of the MLC. The Merchant Seaman Compensation Act 1985 (c. M-6) provides compensation to seafarers for injuries and workplace accidents, supplementing the MLC protections. The Canada Labour Code (R.S.C. 1985, c. L-2) through the Maritime Occupational Health and Safety Regulations (SOR/2010-120) also applies to seafarers aboard Canadian-registered ships.

Canada’s MLA incorporates the Hague-Visby Rules (Brussels Protocol 1968), giving them the force of law for contracts for the carriage of goods by water between Canada and other “Contracting States”, and for contracts on domestic routes (Canada-to-Canada, direct or via foreign ports) unless a bill of lading is absent and the contract expressly excludes them.

Under Section 2 of the Bills of Lading Act 1985, every consignee of goods named in a bill of lading, and every endorsee of a bill of lading to whom the property in the goods therein mentioned passes on or by reason of the consignment or endorsement, has and is vested with all rights of action and is subject to all liabilities in respect of those goods as if the contract contained in the bill of lading had been made with such party.

Canada’s MLA incorporates the Hague-Visby Rules (Brussels Protocol 1968) and the LLMC Convention as amended by the Protocol of 1996.

Under Article I of the Hague-Visby Rules, a “carrier” includes the owner or charterer who enters into a contract of carriage with a shipper. Article III of the Hague-Visby Rules sets out the responsibilities and liabilities of the carrier. Article IV of the Hague-Visby Rules sets out the rights and immunities of the carrier and ship including the limits of liability.

Article VIII of the Hague-Visby Rules provides that the provisions of these Rules shall not affect the rights and obligations of the carrier under any statute for the time being in force relating to the liability of owners of vessels.

Part 3 of Canada’s MLA incorporates the LLMC Convention. Article 1 of the LLMC Convention entitles ship-owners and salvors to limit their liability. “Shipowners” is defined as the owner, charterer, manager and operator of a seagoing ship. Article 6 of the LLMC Convention set out the general limits.

Under Section 25(1)(b) of Canada’s MLA, the definition of “shipowners” in the LLMC Convention is extended to include non-seagoing ships and any person who has an interest in or possession of a ship from and including its launching. Section 29(b) of Canada’s MLA provides that the maximum liability for cargo damage maritime claims involving a ship of less than 300 GT is CAD750,000.

Under Article III of the Hague-Visby Rules, which are incorporated into Canada’s Marine Liability Act (MLA), the shipper is deemed to have guaranteed to the carrier the accuracy of the marks, number, quantity and weight of the goods and the shipper shall indemnify the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such particulars. There are no current reported judgments approving or denying claims made against the shipper for misdeclaration of cargo.

Under Article VI of the Hague-Visby Rules, which are incorporated into Canada’s Marine Liability Act (MLA), legal action must be commenced within one year from the delivery date – or, for non-delivery, within one year of the date the goods should have been delivered. This applies whether the action is founded in contract or in tort. This period may be extended if the parties agree after the cause of action has arisen. If no bill of lading or similar document of title applies to the carriage, for example if a sea waybill was issued, then the time bar set out in the terms and conditions of said seaway bill would likely apply.

Canada is not a signatory to any international conventions on ship arrest. Instead, ship arrests are governed by the Federal Courts Act and the Federal Court Rules.

Maritime liens are not necessarily distinguished from maritime claims, except in so far as maritime liens are by definition in rem against the vessel itself, though they can likely also be brought as a claim in personam against the owners of the vessel.

No maritime lien arises for the provision of necessaries to a Canadian vessel, but Canada’s MLA provides that a statutory lien arises for necessaries supplied to a foreign vessel by persons carrying on business in Canada as well as for repairs, stevedoring and lighterage.

A maritime lien arising in another jurisdiction will be recognised in Canadian law even where the basis for that lien does not exist in Canadian law. The validity of such a lien will be assessed by the Canadian court in accordance with the law of the jurisdiction in which it arises.

Canadian law recognises four kinds of maritime liens:

• for damages to or by a vessel;
• salvage liens;
• Master’s disbursements and Master’s and seamen’s wages; and
• bottomry and respondentia.

Canadian law does not recognise a maritime lien for injuries to the crew.

Maritime liens arise without notice, do not require registration and are enforceable by an action in rem against the vessel, which may be arrested to satisfy the lien. A maritime lien will rank in priority above other claims against the vessel regardless of when they arose, including a ship’s mortgage. The statute of limitations of the province in which the lien arises will govern, which is generally two years in Canada.

Maritime liens will ordinarily be extinguished by the payment of the lien, the posting of security into court to secure the ship’s release, or the loss of the vessel but will not expire upon the sale of the vessel, except by court order, or the bankruptcy of the owner.

Maritime liens may arise as a result of a bare-boat or time charter but the lien claimant may have to prove that the charterer was acting as the owner’s agent in incurring the debt depending on the particular circumstances.

The maritime liens recognised in Canadian law are against the vessel itself and do not require that the ship’s owners also be liable in personam. In circumstances where no lien arises, it may be necessary for the claimant to demonstrate that a charterer was acting as the owner’s agent in order for a debt to arise against the vessel making it liable for arrest.

A vessel can be arrested for maritime liens arising as a result of a bare-boat or time charterparty but the lien claimant may have to prove that the charterer was acting as the owner’s agent in incurring the debt.

A bunker supplier can arrest a vessel in connection with unpaid bunkers if a Canadian bunker supplier has supplied a foreign-owned vessel in Canada or if the enforcement of a valid lien for unpaid bunkers from a foreign jurisdiction is sought in Canada.

A maritime lien for necessaries is against the vessel itself and will generally not depend on whether the bunkers were ordered by the charterer rather than the owner. As with any claim for necessaries, the lien claimant must show it provided the bunkers in question in order to obtain the lien. The lien cannot be for any bunkers carried by the vessel.

The procedures for arresting a vessel are set out in the Federal Courts Rules. The party seeking to arrest the vessel must first file a Statement of Claim and an Affidavit to Lead Warrant upon receipt of which the Court will issue a Warrant. The Statement of Claim, Affidavit to Lead Warrant and Warrant must be served on the vessel. The Warrant is national in scope and once served the vessel cannot be moved without the permission of the Court or consent of the parties. There is no requirement that the arresting party provide security.

The arresting party does not need to file copies of documents supporting the claim or the grounds for arrest in order to obtain the Warrant. However, such documents will be needed later in the litigation and may be filed with the Federal Court in either English or French. A certified translation will be required for documents in any other language.

It is possible to arrest freight and bunkers provided that the action relates to the specific property contemplated in the contract at issue. With respect to bunkers, they would need to be the bunkers at issue and not merely bunkers possessed by the ship-owner.

The Federal Courts Act provides that any action which can be brought against a ship can be brought against any other ship with the same beneficial owner. That each vessel is owned by a separate company both with the same owner, does not operate to defeat the sister-ship arrest provisions. The Federal Court will not issue separate warrants for a vessel and its sister-ship so the claimant must elect to pursue one or the other.

Attachment orders or warrants may be obtained against cargo and other material and supplies provided to the vessel.        

The parties may agree to the release of the vessel on whatever terms they decide. Such terms could include a letter of undertaking from a P&I club but this would be an arrangement between the parties and is not a court-approved form of security.

The court will release an arrested vessel upon a cash payment into court of the amount claimed or otherwise upon receipt of security or bail, which can take the form of a bank guaranty, a surety bond from a company licensed to do business in Canada, or a bail bond in the form prescribed by the court. The bank guaranty does not need to be from a Canadian bank, though it would be preferable in most circumstances.

The arresting party may move, before or after judgment, for sale of the vessel. There is no set procedure for the judicial sale of a vessel but a court may direct that the vessel be appraised, that notice be given to parties who may have a claim to the proceeds of the sale, and require public posting of the proposed sale setting out timelines and procedures for advancing such a claim. The court may decide that the vessel be sold either by public auction or private sale.

Possession of the vessel does not pass to the arresting party and remains with the ship-owner during the course of the arrest. Expenses for maintaining the vessel therefore remain with the owner during that time. Where the owner of the vessel does not pay those expenses, the court may order that the vessel be surrendered to the possession of the sheriff, but the sheriff will not ordinarily pay for the upkeep of the vessel. Some other interested party will be required to pay the expenses associated with maintaining the vessel during that time, whether it is a mortgagee or, if no party interested in the vessel can be found, the arresting party itself.

The priority of claims in respect of vessels sold pursuant to a court order are:

• marshal’s expenses of arrest, including expenses incurred to maintain the vessel during the arrest;
• costs of selling the ship, including costs incurred by the sheriff;
• possessory liens arising before the maritime liens;
• maritime liens;
• possessory liens arising after maritime liens;
• mortgages, in order or registration; and
• statutory rights in rem, such as claims for the supplies of necessaries.

Canada’s equivalent of “Chapter 11” of the United States Bankruptcy Code proceedings are found in the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act.

A party with a true maritime lien, as opposed to statutory rights in rem, is considered a secured creditor under the Bankruptcy and Insolvency Act and will not be subject to a stay of proceedings under its provisions. Where a vessel has been arrested and is the subject of a judicial sale, the Federal Court of Canada will not stop the sale and surrender the vessel to the trustee in bankruptcy unless the trustee pays into court the amounts claimed in relation to the sale of the arrested vessel in the Federal Court action.

The court will order that damages be paid for a wrongful ship arrest only if malice or gross negligence on the part of the arresting party can be proven.

Canada’s MLA sets out the laws applicable to the resolution of maritime passenger claims. The MLA incorporates both the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 as amended by the Protocol of 1990 (the “Athens Convention”), and the LLMC Convention.

Generally speaking, the Athens Convention applies to limit liability for injuries suffered by passengers, typically paying, aboard a vessel being operated for a commercial purpose. The LLMC Convention limits liability for all other personal injuries and deaths that occur on board a ship or arise directly from its operation.

Section 27 of the MLA provides that Canada is a state party to the LLMC Convention. The limits of liability are found at Articles 6 and 7 of the LLMC Convention. For ships of less than 300 GT, Sections 28 and 29 of the MLA set out the limits of liability for claims for loss of life or personal injury to passengers.

Section 37 of the MLA provides that Articles 1 to 22 of the Athens Convention have force of law in Canada. The MLA expands the scope beyond purely international voyages to apply to domestic voyages as well. The limits of liability are found under Articles 7 and 8 of the Athens Convention. Where the total amount that would be payable to all claimants under the Athens Convention limitation of liability exceeds the limit of liability set out in Article 7 of the LLMC Convention, a ship-owner may limit such claims to the amount of the LLMC Convention limit through a pro rata scaling of each claim.

Under Article 16 of the Athens Convention, any action for damages arising out of the death of or personal injury to a passenger or the loss of or damage to luggage shall be time-barred after a period of two years.

Under Section 14 of the MLA, no action may be commenced by the dependants of the person injured or deceased later than two years after the cause of action arose. Under Section 23(1) of the MLA, no action may be commenced later than two years after the loss or injury arose to enforce a claim or lien against a ship in collision or its owners in respect of any loss to another ship, its cargo or other property on board, or any loss of earnings of that other ship, or for damages for loss of life or personal injury suffered by any person on board that other ship, caused by the fault or neglect of the former ship, whether that ship is wholly or partly at fault or negligent. Under Section 140 of the MLA, except as otherwise provided in the MLA or any other federal statute, no proceedings under Canadian maritime law may be commenced later than three years after the day on which the cause of action arises.

Claims for indemnities for personal injury of a passenger are recognised as maritime claims rather than maritime liens. Maritime liens are reserved for bottomry and respondentia, salvage, collision, seamen’s wages, Master’s disbursements, and goods and services provided to foreign ships.

The Courts in Canada will recognise and enforce foreign law and jurisdiction clauses stated in bills of lading under certain circumstances.

Section 46 of MLA allows cargo claimants the option to sue in Canada despite an exclusive foreign jurisdiction clause. It states the following.

“46 (1) If a contract for the carriage of goods by water provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, if:

(a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada;

(b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or

(c) the contract was made in Canada.

(2) Notwithstanding subsection (1), the parties to a contract referred to in that subsection may, after a claim arises under the contract, designate the place where the claimant may institute judicial or arbitral proceedings.”

Section 46 of the MLA does not define “a contract for the carriage of goods by water”. However, the courts have determined that the meaning can be imported from Article 1(b) of the Hague-Visby Rules, which is incorporated into Canadian law by Section 43 of the MLA. Article 1(b) of the Hague-Visby Rules defines that a contract of carriage applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by water, including any bill of lading or any similar document. The court will have to determine the true nature and effect of the shipping document in order to determine whether a stay of the proceedings in favour of another jurisdiction is appropriate. If the shipping document is determined to be akin to a waybill, then Section 46 of the MLA will not apply. See Arc-en-Ciel Produce Inc. v BF Leticia (Ship) [2023] 1 FCR 520.

Where Section 46 of the MLA is not applicable, the courts will apply the “strong cause” test. The test requires that the court take into account all the circumstances of the particular case. These include factors such as:

• in what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial;
• whether the law of the foreign court applies and, if so, whether it differs in any material respects;
• what country either party is connected to, and how closely;
• whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages; and
• whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would:
1. be deprived of security for that claim;
2. be unable to enforce any judgment obtained;
3. be faced with a time-bar not applicable in Canada; or
4. for political, racial, religious or other reasons be unlikely to get a fair trial.

Arbitration clauses are subject to the same judicial principles as jurisdiction clauses as well as Section 46 of the MLA. Arbitration clauses are enforceable in Canada.

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) entered into force in Canada in 1986. Canada made one reservation – it applies only to commercial disputes, except in Quebec, which does not apply that commercial disputes limitation.

Canada has implemented the New York Convention through the United Nations Foreign Arbitral Awards Convention Act 1985 and the Commercial Arbitration Act 1985. In addition, all provinces and territories in Canada have legislation giving domestic effect to the New York Convention for matters that fall under provincial jurisdiction.

The Federal Court of Canada will order the arrest of a vessel and permit attachment even when the underlying dispute is subject to a foreign arbitration or foreign court pursuant to a bill of lading or charterparty clause. While the Court may stay the substantive proceedings in favour of the designated foreign tribunal, it will typically maintain the arrest or security to safeguard the claimant’s interests while the dispute is resolved elsewhere.

Canada does not have a domestic arbitration institute that specialises in maritime claims.

Where proceedings are commenced in breach of a foreign jurisdiction or arbitration clause, the defendant can apply to the court for a stay of the proceedings. Under Section 50(1) of the Federal Courts Act 1985, the Federal Court of Appeal or the Federal Court may, in its discretion, stay proceedings in any cause or matter (i) on the ground that the claim is being proceeded with in another court or jurisdiction; or (ii) where for any other reason it is in the interest of justice that the proceedings be stayed.

Tax relief for income earned by vessel owners primarily involves exemptions for international shipping income for non-residents whose country extends a similar exemption to Canadian companies.

The application of force majeure is contract driven and is dependent on the force majeure clause. Typically, the party invoking force majeure must demonstrate that the event was beyond its control. Frustration is a common law principle which applies when in the circumstances performance of the contract is impossible.

Canada has fully implemented the IMO 2020 rule. Transport Canada is responsible for monitoring and enforcement actions. There are a number of enforcement actions every year in Canada.

Canada recognises international trade sanctions under the United Nations Act and the Special Economic Measures Act. For example, under these laws there are sanctions linked to Russia’s ongoing violations of Ukraine’s sovereignty. Individuals have been sanctioned. See, for example, Makarov v Canada (Foreign Affairs), 2025 FCA 223. Canada has a formal mechanism to authorise financial transactions or other dealings that are otherwise prohibited under its sanctions regime. The Minister of Foreign Affairs may issue permits or certificates to activities and transactions. Permits and certificates are granted on an exceptional basis.

Given its geographic location, there have not been any direct impacts of ongoing global conflicts in Canada outside the trade sanctions arising from the Russian invasion of Ukraine. Canada has imposed sanctions against a number of countries, organisations and individuals. Indirect impacts from delays are present. There have not been any recent cases in Canadian courts showing the impact of international conflicts on Canadian shipping.

The following points are worth noting.

• Employment law for interprovincial or international shipping for companies operating in Canada is governed by the Canada Labour Code.
• Pilotage – Canada has a number of pilotage regions administered by pilotage authorities. The use of pilots in some regions is compulsory. A pilot will guide ships through local waters for a fee. The limitation of a pilot is CAD1,000 for any damage.
• Towage in Canada is usually governed by a towage contract with standard towing conditions.
• Shipbuilders and repairers are governed by contract and have common law possessory liens (in addition to contractually created liens) for fees.
• Marine Insurance is governed by the Marine Insurance Act 1993, which is based on the English 1906 Act.