[1] At issue before us in this appeal is whether the fees fixed by the Minister of Fisheries and Oceans (the "Minister") for marine navigation services provided to ships by the Canadian Coast Guard under the Fee Schedule for Marine Navigation Services, 1997-1998 (the "Fee Schedule") adopted pursuant to s. 47 of the Oceans Act, R.S.C. 1996, c. 31 (the "Act") discriminate on the basis of a ship's nationality and if so, whether the discrimination is permissible under the enabling legislation.

[2] Before proceeding further, I will reproduce the relevant legislation :

OCEANS ACT:

47. (1) The Minister may, subject to any regulations that the Treasury Board may make for the purposes of this section, fix the fees to be paid for a service or the use of a facility provided under this Act by the Minister, the Department or any board or agency of the Government of Canada for which the Minister has responsibility.

(2) Fees for a service or the use of a facility that are fixed under subsection (1) may not exceed the cost to Her Majesty in right of Canada of providing the service or the use of the facility.

*************

FEE SCHEDULE:

1. [...]

"aggregates" means gravel, sands and whole or crushed stone, suitable for construction.

"bulk carriers" means ships constructed generally with single-deck, topside-tanks and hopper side tanks in cargo spaces and intended primarily to carry dry cargo in bulk. Bulk carriers includes self-unloading bulkers.

[...]

"marine navigation services" means

(a) the buoys, beacons, lighthouses, LORAN-C, racons or other devices, structures and facilities provided by the Minister for the purpose of assisting the navigation of ships; and

(b) vessel traffic services and information provided by Canadian Coast Guard marine communications and traffic services centres.

[...]

Non-Canadian Ships

6. (1) Subject to subsections (2) and (3) and sections 7 and 10, the fee payable, for marine navigation services, by a non-Canadian ship that is loading or unloading cargo at a Canadian port is the amount obtained by multiplying the weight in tonnes of the cargo that is loaded, to a maximum of 50,000 tonnes, by

(a) $0.16, in the Laurentian and Central Regions;

(b) $0.075, in the Bay of Fundy ports in the Maritimes Region;

(c) $0.176 in the Northumberland Strait and PEI ports in the Maritimes Region;

(d) $0.095 in all other Nova Scotia ports in the Maritimes Region;

(e) $0.085 in the Bay of Chaleur ports in the Maritimes Region;

(f) $0.176 in the Miramichi River ports in the Maritimes Region;

(g) $0.145 in the Newfoundland Region.

(2) In calculating the fee prescribed by subsection (1), the weight of cargo that is loaded or unloaded shall not include the weight of transshipped cargo that has been carried by another ship for which a fee has been paid.

(3) The fee calculated in subsection (1) shall not exceed $0.05 per tonne for aggregates and $0.15 per tonne for gypsum.

[...]

Canadian Ships

8. (1) Subject to subsections (2) to (5), the quarterly fee payable, for marine navigation services, by a Canadian ship that is operating in Canadian waters in the Maritimes, Newfoundland or Laurentian and Central Regions is the amount obtained by multiplying the gross tonnage of that ship by $1.25.

(2) The fee payable for marine navigation services, by a Canadian ship that is a bulk carrier or container ship that is operating in Canadian waters in the Maritime Region, Newfoundland Region or Central and Laurentian Regions is the amount obtained by multiplying 1/100 of the distance travelled in kilometers, rounded to the next highest whole number, by the tonnes carried by $0.0076.

(3) Notwithstanding the calculation of the fee in subsection (2), the fee payable by a bulk carrier or container ship shall not exceed $0.05 per tonne for aggregates, $0.15 per tonne for gypsum and $0.16 per tonne for all other commodities.

(4) In calculating the fee prescribed by subsection (2), the weight of cargo that is loaded or unloaded shall not include the weight of transshipped cargo that has been carried by another ship for which a fee has been paid.

(5) The quarterly fee payable for marine navigation services, by a Canadian ship that is a ferry that is operating in Canadian waters is

(a) the amount obtained by multiplying the gross tonnage of the ship by $1.25 for ferries operating in the Central and Laurentian Regions.

(b) the amount obtained by multiplying the gross tonnage of the ship by $1.12 for ferries operating in the Newfoundland Region.

(c) the amount obtained by multiplying the gross tonnage of the ship by $1.80 for ferries operating in the Maritimes Region.

(d) the amount obtained by multiplying the gross tonnage of the ship by $1.46 for ferries operating between the Maritimes Region and the Newfoundland Region.

GENERAL

[...]

10. The fee payable, for marine navigation services, by a non-Canadian ship or a non-duty paid Canadian ship that is operating in Canadian waters pursuant to a temporary entry permit issued under the Coasting Trade Act is the amount obtained by multiplying the gross tonnage of that ship by the number of months during which the permit is in effect and by $0.42.

LOI SUR LES OCÉANS :

47. (1) Le ministre peut, sous réserve des règlements d'application du présent article éventuellement pris par le conseil du Trésor, fixer les prix à payer pour la fourniture de services ou d'installations au titre de la présente loi par lui-même ou le ministère, ou tout organisme fédéral dont il est, du moins en partie, responsable.

(2) Les prix fixés dans le cadre du paragraphe (1) ne peuvent excéder les coûts supportés par Sa Majesté du chef du Canada pour la fourniture des services ou des installations.

*************

BARÈME DES DROITS

1. [...]

« agrégats » Gravier, sable et pierrailles destinés à la construction.

[...]

« services à la navigation maritime » S'entend :

a) des bouées, balises, phares, système LORAN-C, racons ou autres dispositifs, structures et installations fournis par le ministre pour aider à la navigation maritime;

b) des services de trafic maritime et de la diffusion d'information par les centres des Services des communications et du trafic maritimes de la Garde côtière canadienne.

[...]

« transporteurs de vrac » Navires comportant un seul pont, des ballasts latéraux et des ballasts-trémies dans les cales et destinés principalement au transport des marchandises sèches en vrac. Les vraquiers autodéchargeurs sont également des transporteurs de vrac.

[...]

Navires non canadiens

6. (1) Sous réserve des paragraphes (2) et (3) et des articles 7 et 10, le prix que doit payer, pour des services à la navigation maritime, le navire non canadien qui charge ou décharge une cargaison dans un port canadien est le produit de la mulitiplication du poids, en tonnes métriques, de la cargaison chargée ou déchargée, jusqu'à concurrence de 50 000 tonnes, par :

a) 0,16 $, pour les régions Laurentienne et du Centre;

b) 0,075 $, pour les ports de la baie de Fundy dans la région des Maritimes;

c) 0,176 $, pour les ports du détroit de Northumberland et de l'Î.-P.-E., dans la région des Maritimes;

d) 0,095 $, pour tous les autres ports de la Nouvelle-Écosse dans la région des Maritimes;

e) 0,085 $, pour les ports de la baie des Chaleurs dans la région des Maritimes;

f) 0,176 $, pour les ports de la rivière Miramichi dans la région des Maritimes;

g) 0,145 $, pour la région de Terre-Neuve.

(2) Dans le calcul du prix visé au paragraphe (1), le poids de la cargaison chargée ou déchargée ne comprend pas le poids de la cargaison transbordée qu'un autre navire a transportée et pour laquelle un prix a déjà été payé.

(3) Le prix calculé selon le paragraphe (1) ne peut dépasser 0,05 $ par tonne métrique d'agrégats et de 0,15 $ par tonne métrique de gypse.

[...]

Navires canadiens

8. (1) Sous réserve des paragraphes (2) à (5), le prix trimestriel que doit payer, pour des services à la navigation maritime, le navire canadien qui est exploité dans les eaux canadiennes de la région des Maritimes, de la région de Terre-Neuve et des régions Laurentienne et du Centre est le produit de la multiplication de sa jauge brute par 1,25 $.

(2) Le prix trimestriel que doit payer, pour des services à la navigation maritime, le navire canadien qui est un transporteur de vrac ou un porte-conteneurs exploité dans les eaux canadiennes de la région des Maritimes, de la région de Terre-Neuve ou des régions du Centre et Laurentienne est le produit de la multiplication de 1/100 de la distance parcourue en kilomètres, arrondie au prochain nombre entier le plus élevé, par le nombre de tonnes métriques transportées au prix de 0,0076 $.

(3) Malgré le calcul du prix au paragraphe (2), le prix payable par un transporteur en vrac ou porte-conteneurs ne doit pas dépasser 0,05 $ par tonne métrique d'agrégats, 0,15 $ par tonne métrique de gypse et 0,16 $ par tonne métrique de toutes autres marchandises.

(4) Dans le calcul du prix visé au paragraphe (2), le poids de la cargaison chargée ou déchargée ne comprend pas le poids de la cargaison transbordée qu'un autre navire a transportée et pour laquelle un prix a déjà été payé.

(5) Le prix trimestriel que doit payer, pour des services à la navigation maritime, le navire canadien qui est un traversier exploité dans les eaux canadiennes est

a) le produit de la multiplication de sa jauge brute par 1,25 $ dans le cas des traversiers exploités dans les régions du Centre et Laurentienne.

b) le produit de la multiplication de sa jauge brute par 1,12 $ dans le cas des traversiers exploités dans la région de terre-Neuve.

c) le produit de la multiplication de sa jauge brute par 1,80 $ dans le cas des traversiers exploités dans la région des Maritimes.

d) le produit de la multiplication de sa jauge brute par 1,46 $ dans le cas des traversiers exploités entre les régions des Maritimes et de Terre-Neuve.

DISPOSITIONS GÉNÉRALES

[..]

10. Le prix que doit payer, pour des services à la navigation maritime, le navire non canadien qui est exploité dans les eaux canadiennes conformément à un permis d'entrée temporaire délivré en vertu de la Loi sur le cabotage est le produit de la multiplication de sa jauge brute par 0,42 $ et le nombre de mois durant lequel le permis est valide.

[3] Subsection 6(1) of the Fee Schedule sets out the fees payable by non Canadian ships that load and unload cargo in Canadian waters. It provides that the basis for calculation of the fees payable by those ships is the amount of cargo loaded or unloaded, limited to a maximum of 50,000 tons, multiplied by a value which depends on the region in which the cargo is either loaded or unloaded, for example, $0.16 in the Laurentian and Central Regions.

[4] As to subsection 6(3), it provides that that the fees payable under subsection 6(1) will not exceed $0.05 per ton where aggregates are loaded or unloaded.

[5] Subsection 8(1), which deals with Canadian ships, provides for a different basis of calculation of the fees payable, which are arrived at by multiplying the gross registered tonnage (the "GRT") of the ship by $1.25. These fees are payable on a quarterly basis.

[6] Subsections 8(2) and 8(3) deal specifically with Canadian bulk carriers and container ships. Subsection 8(3) provides that the fees payable under subsection 8(1) shall not exceed $0.05 per ton when aggregates are carried.

[7] Finally, section 10 deals with ships temporarily operated in Canadian waters pursuant to a licence issued under the Coasting Trade Act, R.S.C. 1992, c. 31. In regard to these ships, fees are calculated by multipying the ship's GRT by the number of months during which the licence is in effect and by $0.42.

[8] A brief outline of the relevant facts will be helpful in understanding this appeal.

[9] The appellant, a Canadian company, operates ships in Canadian waters and more particularly in the St. Lawrence River. In February 1998, the appellant was granted a coasting trade licence pursuant to the Coasting Trade Act to operate the foreign vessel M.V. Bjorn in Canadian waters for the period of February 9 to March 9, 1998. At all material times, the M.V. Bjorn's GRT was 17,594 tons.

[10] During the period in which the appellant operated the M.V. Bjorn in Canadian waters under its coasting trade licence, the respondent, through the Department of Fisheries and Oceans and the Canadian Coast Guard, provided marine navigation services in Canadian waters and in particular to the M.V. Bjorn.

[11] On March 6, 1998, the respondent, relying on s. 10 of the Fee Schedule, invoiced the appellant in the sum of $8,420.68 ($7,389.48 plus $1,031.20 in taxes) for marine navigation services rendered to the M.V. Bjorn.

[12] The appellant refused to pay these charges on the ground that the fees fixed under section 10 discriminated on the basis of the ship's nationality. Accordingly, the appellant, relying on subsection 8(3) of the Fee Schedule, paid to the respondent the sum of $1,368.62 which, in its view, represented the fees to which the respondent was entitled.

[13] As a result, the respondent commenced legal proceedings against the appellant to recover the outstanding amount. The appellant filed a Statement of Defence and took the position that since the M.V. Bjorn was a foreign bulk carrier on which aggregates had been loaded, section 10 of the Fee Schedule was discriminatory in that it allowed the respondent to claim fees against foreign bulk carriers in excess of those that could be claimed against a Canadian bulk carrier on which the same commodity had been loaded. According to the appellant, the respondent was entitled to collect fees against the M.V. Bjorn, not under section 10, but rather under subsection 8(3). The appellant also took the position that section 47 of the Oceans Act did not authorize the Minister to fix fees that discriminated between foreign and Canadian ships.

[14] The respondent's action proceeded by way of a simplified action before Prothonotary Richard Morneau who, on March 8, 2001, condemned the appellant to pay to the respondent the sum of $7,052.36 with interest and costs. In reaching his decision, the Prothonotary did not deal with the substantive issues concerning the Fee Schedule as he was of the view that the appellant could not, by way of a defence to an action, challenge its validity. In his view, this could only be done by way of a judicial review application of the Minister's decision fixing the fees pursuant to section 47 of the Act. Hence, the Prothonotary allowed the respondent's action in full.

[15] The appellant appealed the Prothonotary's decision and on May 16, 2002, Rouleau J. dismissed the appeal on its merits. Firstly, he concluded, correctly in our view, that the appellant could, by way of a defence to the respondent's action, challenge the validity of the Fee Schedule. There is no appeal with respect to this conclusion.

[16] Rouleau J. then turned his attention to the substantive issues before him. The first issue which he sought to resolve was whether the appellant had been "disadvantaged" because it had operated a foreign ship. He answered that question by a "no" because there was no evidence to support the appellant's contention that the fees payable by the M.V. Bjorn were those set out in subsection 8(3) of the Fee Schedule. Specifically, Rouleau J. concluded that the appellant's failure to prove that the M.V. Bjorn was a bulk carrier was fatal to its contention that subsection 8(3) was the section under which the fees for the respondent's marine navigation services ought to have been claimed.

[17] In the absence of such proof, the learned judge had no difficulty concluding that had the M.V. Bjorn been a Canadian ship, it would have been invoiced for the same amount of fees as those for which it was invoiced under section 10 of the Fee Schedule, albeit by way of a different calculation. Rather than invoicing the appellant under section 10 of the Fee Schedule, the respondent would have invoiced the appellant under subsection 8(1).

[18] Consequently, Rouleau J. concluded that the fees charged to the M.V. Bjorn were not discriminatory. Although that conclusion was sufficient to dispose of the appeal before him, Rouleau J. went on to decide whether the Minister was, in any event, authorized by the enabling legislation to fix fees which discriminate on the basis of a ship's nationality. He answered that question by a "yes".

[19] As we are of the view that Rouleau J. made no error in concluding as he did on the evidentiary issue, we need not address the second substantive issue.

[20] There can be no doubt in the present matter that the burden of proving that the marine navigation services rendered to the M.V. Bjorn ought to have been invoiced in accordance with subsection 8(3) of the Fee Schedule was that of the appellant. Specifically, in order to meet its burden, the appellant had to prove that the M.V. Bjorn was a bulk carrier and that aggregates had been loaded thereon during the February 9 to March 9, 1998 period.

[21] The existence of that burden and the omission to adduce evidence on this issue was brought to the appellant's attention by the Prothonotary during the course of the hearing before him on March 6, 2001.

[22] Notwithstanding this warning, the appellant made no attempt, prior to Rouleau J. having reserved his decision following the hearing before him on April 10, 2002, to adduce evidence in respect of the M.V. Bjorn and the nature of the cargo carried on that ship while in Canadian waters.

[23] On April 15, 2002, the appellant applied to Rouleau J., pursuant to Rule 60 of the Federal Court Rules, 1998, for an order allowing it to adduce into evidence the coasting trade licence which, in its view, clearly showed that the M.V. Bjorn was a bulk carrier and that it had carried aggregates while in Canada. After consideration of all of the relevant circumstances, Rouleau J. denied the appellant's motion. That part of his decision is not under appeal.

[24] Before us, the appellant takes the position that the coasting licence is part of the record and that it shows that the M.V. Bjorn was a bulk carrier that carried aggregates in Canadian waters during the during the February 9 to March, 9, 1998 period.

[25] In support of its proposition, the appellant puts forward two submissions. Firstly, it says that the licence is part of the record, because it admitted in paragraph 1 of its Amended Statement of Claim the allegations made by the respondent in paragraph 5 of its Statement of Claim. These pleadings read as follows:

5. Au mois de février 1998, un navire non canadien exploité par la défenderesse, le M.V. Bjorn, s'est vu délivrer un permis d'entrée temporaire, valide du 9 février 1998 au 9 mars 1998, en vertu de la Loi sur le Cabotage.

******************

IN RESPONSE TO HER MAJESTY'S DECLARATION THE DEFENDANT SAYS:

1. It admits paragraphs 1 through 8 inclusively;

[26] We cannot agree with this submission. At paragraph 5 of the Statement of Claim, the respondent simply alleged that the M.V. Bjorn was a foreign ship which entered Canada on a temporary basis pursuant to a licence issued under the Coastal Trade Act. That allegation, when admitted by the appellant in its defence, was sufficient to allow the respondent to make its claim for fees under section 10 of the Fee Schedule. However, since the respondent made no allegation concerning the type of ship the M.V. Bjorn was, nor did it make any allegation concerning the nature of the cargo carried on that ship, the appellant's admission cannot have had the effect sought by it.

[27] In any event, it appears to us that the filing of the coasting licence, without further proof, would not have been sufficient to prove that the M.V. Bjorn had carried aggregates, which section 1 of the Fee Schedule defines as "... gravel, sand and whole or crushed stone, suitable for construction". There is no evidence that the cargo carried by the M.V. Bjorn met this definition.

[28] The appellant's second submission is that the respondent, by not denying paragraph 10 of the Amended Statement of Defence, which reads as follows:

10. However, Section 8(2) and (3) set forth a different calculation if the vessel is "a bulk carrier", as in this case, and carrying, as in this case, "aggregate",

is deemed to have admitted the truth of those facts.

[29] That submission is simply untenable as it flies in the face of Rule 184(1) of the Federal Court Rules, 1998, which states in unequivocal terms that unless admitted, an allegation of fact in a pleading is deemed to have been denied.

[30] We must therefore conclude that Rouleau J. made no error in concluding that there was no evidence that the M.V. Bjorn was a bulk carrier and that, as a result, the fees charged to the appellant were properly subjected to section 10 of the Fee Schedule.

[31] Consequently, as the appellant has failed to establish that it was entitled to the benefit of the fee rebate or limit found in subsection 8(3) of the Fee Schedule, we need not address the issues of whether the Fee Schedule is discriminatory and, if so, whether the enabling legislation authorized the Minister to make distinctions on the basis of a ship's nationality.

[32] For these reasons, the appeal will be dismissed with costs.

"M. Nadon"

J.A.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-380-02

STYLE OF CAUSE: Mid-Atlantic Minerals Inc. v. H.M.Q.

PLACE OF HEARING: Montreal, Quebec

DATE OF HEARING: January 12 and January 15, 2004

REASONS FOR JUDGMENT (Létourneau J.A., Nadon J.A., Pelletier J.A.)

OF THE COURT:

DELIVERED FROM THE BENCH BY: Nadon J.A.

APPEARANCES:

Mr. David F.H. Marler

FOR THE APPELLANT

Mr. Bernard Letarte

FOR THE RESPONDENT

SOLICITORS OF RECORD:

Marler & Associates

Knowlton, Quebec

FOR THE APPELLANT

Morris Rosenberg

Deputy Attorney General of Canada

Ottawa, Ontario

FOR THE RESPONDENT

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