THE CLEVELAND TRANS-ERIE FERRY FEASIBILITY STUDY
May 20, 2004
SUMMARY OF CONTENTS IN A
AN ANALYSIS OF U.S. AND CANADIAN
STATUTORY AND REGULATORY REQUIREMENTS
The Cleveland-Cuyahoga County Port Authority authorized a feasibility study
concerning the commencement of a ferry service on Lake Erie. The study examined the
feasibility of transporting passengers and cargo between Cleveland and a port in Ontario,
Canada. In order to effectively accomplish one of the goals of the study, it was necessary
to identify the U.S. and Canadian statutory and regulatory requirements applicable to the
implementation and operation of such a service. The analysis identified several hundred
laws and regulations that will impact the implementation and operation of the ferry
service. The full report, while not completely exhaustive of all possible service
applications, highlights those laws and regulations that are critical to the feasibility
analysis. This Summary of Documents is intended to provide an overview of such laws
The legal and regulatory framework study and analysis is broken down into four parts.
Part I is titled: “United States-Canada Treaties, Agreements and Memorandums of
Understanding; United States Laws and Regulations and State of Ohio Laws”. Part II is
titled: “A Review of Canadian Laws and Regulations. Part III is titled “Appendix of
Statutes and Regulations”. Part IV is titled: “Legal Analysis of the Harbor Maintenance
Tax, Truck Cabotage, and The Canadian Coasting Trade Act”.
In keeping with the goals of the study, this part focused on the following activities:
Identifying U.S. laws and regulations affecting the implementation and operation
of the ferry service.
An analysis of U.S. laws and regulations that will impact the implementation and
operation of the ferry service as administered by the newly created Department of
Homeland Security through it Directorate of Border and Transportation Security
(BTS) and the U.S. Coast Guard. This includes an analysis of laws and
regulations previously administered by the U.S. Customs Service, The
Immigration and Naturalization Service, the Department of Agriculture and the
Transportation Security Administration.
An analysis of U.S. – Canada bilateral agreements (treaties, memorandums of
understanding, etc.) that may affect the implementation and operation of the ferry
Analysis of any Federal Maritime Commission and U.S. Maritime Administration
laws and regulations that might affect the implementation and operation of the
Analysis of the differences between flagging the ferry under a domestic flag
versus a foreign flag for operation of the service.
Review of Ohio state laws and regulations.
The new Department of Homeland Security and its agencies are discussed as they relate
to the ferry service. The most prominent of these involves the U.S. Coast Guard and its
regulations regarding marine safety and the security of passengers, goods and terminals.
Coast Guard marine safety regulations will impact a decision on whether to operate under
the U.S. flag or under a foreign flag - other than Canadian. Canada and the U.S. have
various reciprocating agreements on most marine safety regulations that allows
uniformity and compliance.
Citizenship requirements for flagging under the flag of the United States as well as
crewing and manning regulations are identified and discussed.
Customs regulations will affect the movement of goods and passengers. How Customs
views the ferry operation will determine whether a harbor maintenance tax is imposed on
the operator. Customs requirements for clearance facilities are identified. Customs
regulations and official Rulings will have an impact on how Canadian trucks that enter
via the ferry can operate in the United States. These issues are more comprehensively
discussed in Part IV.
The administration of immigration regulations will impact the operation of the ferry
service. Whether a program can be designed to speed passengers through immigration at
a ferry terminal as is done at land border crossings is unknown at this time. Given tighter
security at the border, the need for U.S. - Canadian cooperation for the efficient
processing of passengers and goods will affect the viability of the ferry service.
One of the major issues on the U.S. side that will have an impact is the Harbor
Maintenance Tax. The Harbor Maintenance Tax will depend on whether the ferry service
is considered to be a passenger service or the commercial transportation of goods service
or a combination thereof. This is an issue that will deserve close attention from a
Another issue concerns foreign commercial truck movements in the United States
(cabotage). Customs Rulings will have an impact on the feasibility and financial viability
of transporting commercial trucks on the ferry to transport goods into and out of the
United States. This issue will also deserve close attention from a prospective operator.
The review of Canadian laws and regulations focused on:
Identifying Canadian laws and regulations affecting the implementation and
operation of the ferry service.
An analysis of Canadian laws and regulations that may impact the implementation
and operation of the ferry service administered under the authority of The
Customs and Revenue Act, The Customs Act, The Immigration and Refugee Act
of 2001, The Animal and Plant Health Act, The Canadian Food Inspection
Agency Act of 1997, The Marine Act, The Shipping Act, The Pre-Clearance Act,
The Canada Pilotage Act, Canada Transport Act of 1996, The Coasting Trade
Act, Oceans Act of 1996, Harbour Commission Act of 1985, The Marine
Transportation Security Act, Marine Liability Act, and others.
An identification and analysis of Ontario provincial laws and regulations that may
affect the implementation and operation of the ferry service.
An analysis of the use of Canadian or foreign flag for the operation of the ferry
Canadian maritime or port policies that might affect the implementation and
operation of the ferry service.
The study identified numerous laws and regulations that will affect the implementation of
the ferry service. One of the most important issues involves the application of the
Coasting Trade Act. The Act is designed to protect the Canadian shipping industry.
Under current Canadian law and under certain circumstances, the proposed ferry
operation would fall within the Canadian coastwise trade, thus, posing additional
financial and operational hurdles for a non-Canadian flag operator. Thus, the nationality
of the ferry is a vital decision for the operation of the ferry service. The Coasting Trade
Act is more comprehensively discussed in a legal memorandum in Part IV.
Canada has some public ports that are under the authority of the Federal government.
Port Stanley is one of those public ports. Currently, Transport Canada is soliciting
expressions of interest for the divestiture of the port. At this time, the fate of Port Stanley
is unknown. When and how the port is divested, if at all, has a definite impact on the
feasibility of the service. Although an analysis of internal Canadian policy concerning
public ports is not the primary purpose of this report, the effects of the non-divestiture or
divestiture of Port Stanley is discussed in more detail in this Part. Although the
divestiture of Port Stanley is a policy and legal issue for the Canadian government, the
eventual legal governance and structure of the “new” Port Stanley will play a role in the
feasibility of the service.
The Shipping Act is probably the most comprehensive law that will affect the
implementation and operation of the ferry service. It is encompasses numerous aspects of
marine safety and the transportation of passengers and goods. An important part of the
Shipping Act deals with the citizenship requirements for Canadian flag vessels as well as
crewing and manning regulations. The Act and its implementing regulations are
comparable to U.S. laws and regulations.
The study also focuses on Canadian Customs, immigration plus food and plant inspection
laws and regulations and their relationship to commerce between the United States and
Canada. The need to comply with Canadian Customs regulations and the need for
infrastructure improvements at Port Stanley are discussed.
Recently proposed marine security regulations are identified and discussed. Canadian,
U.S or foreign flag vessels on the Great Lakes and the implications of the Pilotage Act
are also discussed.
This section indexes the U.S. and Canadian laws and regulations deemed most applicable
to the implementation and operation of the ferry service. The list is not all inclusive due
to the voluminous number of individual statutes and regulations that may apply in some
context. Only those that were deemed critical for the initial analysis are listed. The laws
and regulations that were deemed most important in determining the size and type vessel
to operate for the service are highlighted as having the “greatest impact”, “some impact”
to “little or no impact”.
This Part contains three legal memoranda prepared during the course of the study. Due to
the critical impact of these three issues, we were asked to provide a more comprehensive
legal analysis of the Harbor Maintenance Tax, truck cabotage and the Canadian Coasting
Because of the complexity of the issues they are hard to summarize in a few phrases in
the Summary of Contents. The reader is directed to them so that they can be read in their
entirety. It should be kept in mind that laws, regulations and Customs Rulings change in
time. Thus, an up-to-date legal review should be undertaken by an interested party at the
appropriate time in the future.