Changes to our regulatory fees under the Service Fees Act
In 2017, the Government of Canada introduced the Service Fees Act to replace the User Fees Act. All government departments and agencies that charge fees for services are impacted by this legislation, including Transport Canada.
On this page
- Changes to Government of Canada service fees
- Adjusting service fees for inflation
- Service standards
- Remission of fees
- Transport Canada's Fee Modernization Initiative
Changes to Government of Canada service fees
The Service Fees Act changes the Government of Canada's approach to fees for services, and how departments create more transparency for Canadians.
How? The act requires government departments to:
- report on costs of services we deliver
- publish fee revenues
- issue fee remissions and report on them
- establish service standards and make them accessible to the public
- track and report on performance results
- adjust fees for inflation, per the Consumer Price Index
Each new requirement of the act has a different start date:
- Service standard review by June 2018
- Applying inflation (Consumer Price Indexing) on April 1, 2019
- Implementing a department remission policy on April 1, 2020
Adjusting service fees for inflation
Starting April 1, 2019, the Government of Canada will adjust fees according to the Consumer Price Index, also known as inflation.
The Consumer Price Index is a percentage set by Statistics Canada each year. To set the index, Statistics Canada uses an average of price changes for predefined consumer goods and services, including transportation, food and medical care.
The rate of 2.2% will apply to most Transport Canada regulatory fees as of April 1, 2019. Since inflation is calculated on an annual basis, we will apply a new inflation rate every April 1.
Inflation and regulatory fees at Transport Canada
Not all fees are adjusted each year. Canada's Treasury Board Secretariat established a materiality threshold that determines which services are subject to Service Fees Act requirements for inflation, tracking service standards, remission of fees, and yearly reporting.
We apply inflation to a fee when it is considered material under the Low Materiality Regulations.
The following types of fees are material:
- Formula-based fees (with at least one independent variable), and hourly or other time-based rates
- These fees are always considered material, no matter their amount or annual revenue generated.
- All fees of more than $150, or fees between $51 to $150 that generate more than $500,000 of revenue per year
- Other fees to be listed in Schedule II of the upcoming Low Materiality Regulations
- For example, fixed inspection fees in the $51 to $150 range for Marine Cargo and Domestic Vessel Regulatory Oversight are included in this list
The following types of fees are low material:
- Flat fees of $50 per unit or less, regardless of revenue
- Flat fees of $51 to$150 per unit with an annual revenue of $500,000 or less
- Specific types of fees included in the regulations, such as parking and photocopying
- Fees listed in Schedule I of the Low Materiality Regulations
- For example, vessel registry fees greater than $150 are included in this category
If a fee is low material, we are not required to:
- apply inflation (Consumer Price Index)
- issue a remittance when we do not meet service standards
Invoicing and inflation
The fee totals are based on the adjusted fee rates. Therefore the inflation adjustment will not show as a separate line item on invoices.
Government of Canada
As part of the Service Fees Act, departments must have a service standard for fees that they collect. Service standards are integral to good client service and to effectively managing performance. They help:
- clarify expectations for clients and employees
- drive service improvement
- contribute to results-based management
Service standards reinforce government accountability. They aim to increase the confidence of Canadians in government by demonstrating our commitment to service excellence.
We have service standards for all fee-paying services our department offers Canadians.
In light of the Service Fees Act requirements, Transport Canada ensured that, by June 22, 2018, fees we charge had an associated service standard.
Transport Canada changed some of our existing service standards to better balance client expectation with internal capacity and resources.
Remission of fees
We are required to meet our departmental service standards. If a service standard is not met, we may reimburse the fee, or a portion of it, to the client. This requirement reinforces accountability around service delivery, and helps us set meaningful and realistic service expectations.
According to the Service Fees Act, the remission portion of the Act will become effective when we have additional guidance in the form of a directive. As such, Transport Canada's remission policies are currently under development. Our policies will determine when we issue fee remittances. TC is expecting that its Remission Policy will be effective on April 1, 2020.
Transport Canada's Fee Modernization Initiative
Transport Canada will continue to modernize our fees by updating and/or creating fees, while continuing to implement the Service Fees Act. Our Fee Modernization Initiative will ensure that we continue to provide the quality of services that industry and Canadians expect from us.
Most of our fees have not increased in over 20 years, so they require a detailed review. Some fees that will increase by inflation every April 1, will also be reviewed under this initiative.
We are listening to our stakeholders and including industry and the public in this process. Before a fee modernization regulatory process begins, we consult and engage with a variety of Canadians.