FEDERAL REG

SOR/2016-163: Regulations Amending the Small Fishing Vessel Inspection Regulations

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
June 23, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Executive summary Issues: Despite the combined efforts of Government and industry, the number of accidents on fishing vessels remains unacceptably high. The lack of adequate safety equipment, vessel stability, and clear vessel operational procedures on board fishing vessels pose a significant threat to safety, r... (Click for more)


Published on June 23, 2016

Bill Summary

SOR/2016-163: Regulations Amending the Small Fishing Vessel Inspection Regulations

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Executive summary Issues: Despite the combined efforts of Government and industry, the number of accidents on fishing vessels remains unacceptably high. The lack of adequate safety equipment, vessel stability, and clear vessel operational procedures on board fishing vessels pose a significant threat to safety, rendering commercial fishing one of the most dangerous occupations in Canada. Numerous Transportation Safety Board recommendations are still open, even though Transport Canada has officially responded to them as per the appropriate statutory requirements. Finally, the regulations governing fishing vessels are more than 40 years old and have not kept pace with industry best practices and technological developments. Description: Transport Canada is amending the regulations governing fishing vessels in a phased approach to introduce a comprehensive safety regime based on risk, regardless of size or tonnage. The Regulations Amending the Small Fishing Vessel Inspection Regulations (Phase 1) updates the current safety equipment and vessel stability requirements as well as introduces safe operating procedures requirements for small fishing vessels. Cost-benefit statement: Transport Canada conducted an in-depth analysis of the benefits and costs to assess the impacts of Phase 1 of the amendments on the fishing vessel industry and the Government. A discount rate of 7% and constant 2012 Canadian dollars are used throughout the analysis, which was undertaken for the period of 2016 to 2025. The present value of the total costs to the marine industry is estimated to be $14.9 million over the 10-year period of the analysis. These costs stem primarily from the requirement to carry safety equipment on board the vessels. The present value of the benefits to fishing vessel owners and operators (i.e. mitigation measures for vessel stability and safety equipment) is estimated to be $273.1 million over the 10-year period of the analysis and the present value of the benefits to the federal government (i.e. reduced costs for the Government of Canada’s Search and Rescue system) is estimated to be $955,000 over the 10-year period of the analysis. “One-for-One” Rule and small business lens: The “One-for-One” Rule applies to Phase 1 of the amendments and will be considered an OUT. A discount rate of 7% and constant 2012 Canadian dollars are used in this particular analysis, which was undertaken for the period of 2016 to 2025. The present value of the total administrative savings is estimated to be $167,646 over a 10-year period, which corresponds to an annualized value of $23,869. The small business lens applies to this regulatory proposal and the annualized average cost to the overall industry over a 10-year period is $2,098,271. It is important to note that this industry comprises mainly small owner-operators, with only a few large corporations. Background Commercial fishing is one of the most dangerous occupations in Canada due to the conditions in which fishing vessels are operated (type of voyage, weather, etc.). Between 2009 and 2013, 40% of all marine accidents were attributed to fishing vessels (approximately 134 per year), and between 1999 and 2012, an average of 13 fishing vessel fatalities were reported (16 in 2013). The Transportation Safety Board of Canada (TSB) has made numerous recommendations to address safety on board fishing vessels — it has issued more than 40 recommendations on this issue since 1992. Since 2010, the TSB also publishes the “Watchlist.” The TSB Watchlist, published every two years, identifies the safety issues that pose the greatest risk to Canadians. It is important to note that the loss of life on fishing vessels has been an item on the TSB Watchlist since its inception in 2010, including the 2014 Watchlist, which called upon Transport Canada (TC) to update its regulations governing fishing vessels and federal, provincial, and fishing safety representatives to collaborate to promote a safety culture in the fishing industry. The current requirements pursuant to the Canada Shipping Act, 2001 (CSA, 2001) that govern small and large fishing vessels (see footnote 1) are in the Small Fishing Vessel Inspection Regulations and the Large Fishing Vessel Inspection Regulations. Issues Despite the combined efforts of Government and industry, the number of accidents, incidents, and fatalities on fishing vessels remains unacceptably high. The main contributors to these accidents, incidents, and fatalities are vessel stability (the ability of a vessel to stay upright in all operating conditions), unsafe operating practices, and safety equipment (which includes firefighting and life-saving equipment). Between 1999 and 2010, 58% of deaths occurred due to stability-related accidents such as capsizing, flooding, foundering or sinking. During the same period, 27% of all fishing fatalities resulted from a person falling overboard and in some cases being unable to re-board the vessel. These main causes have remained fairly consistent over time and must be addressed through efficient mitigating measures to reduce the high number of accidents, incidents, and fatalities. Many TSB recommendations are still open even though the Minister of Transport has officially responded to them as per the appropriate statutory requirements. These active recommendations were issued following high profile accidents such as the capsizing of the Cap Rouge II, the Ryans Commander, and the Melinda & Keith II. For instance, one recommendation is that unsafe practices be addressed by means of a code of best practices for small fishing vessels, including loading and stability (i.e. recommendation M03-07, which was issued after the capsizing of the Cap Rouge II in 2003). The regulations that govern fishing vessels are more than 40 years old and have not kept pace with industry best practices and technological developments. For example, fishing vessels are currently required to have fire buckets (a bucket to fill with water) and sand on board for firefighting. In addition, only herring and capelin vessels are required to demonstrate vessel stability, and there are no required safe operating procedures to help operators safely carry out their intended operations. The fact that commercial fishing vessels are required to have a lower number of less capable equipment items and procedures than pleasure craft of similar size, despite the more hazardous area of operations and risk associated with commercial fishing, illustrates how outdated these requirements are. Finally, technological advancements and changes to the nature of fishing operations (e.g. vessels repurposed for multiple fisheries and vessels modified from their original designs to fish further from shore) and fluctuations in fish stocks have drastically changed the fishing industry. Finally, to date, non-regulatory measures have not been successful in decreasing the number of fishing vessel incidents, accidents and casualties. For example, Transport Canada published a number of Safety Advisory Bulletins and signed memoranda of understanding (MOU) regarding safety at sea with the Department of Fisheries and Oceans (DFO) and the Workers’ Compensation Board of British Columbia. The industry has also led education and awareness activities to promote safety on board fishing vessels (such as Fish Safe BC, in British Columbia), but these efforts have been undertaken locally and have not successfully been implemented equally across Canada. In the absence of any regulatory intervention, fishing vessels would continue to be regulated by the current regulations governing fishing vessels, and the safety risks faced by Canadian fishers would continue to be inadequately mitigated. Objectives The first objective of the amendments to the regulations governing fishing vessels is to help in lowering the two primary causes of fatalities on commercial fishing vessels as reported by the TSB: stability-related accidents (58% of fatalities) and falling overboard (27% of fatalities). The second objective is to address the majority of the TSB recommendations. Finally, the third objective of these amendments is to ensure Transport Canada’s regulatory regime can adapt to technological changes. Consequently, TC is introducing a comprehensive safety regime for fishing vessels based on risk, regardless of size or tonnage, to reduce the number of accidents and to increase survivability when they do occur. These amendments are designed to contribute to the promotion of a safety culture by modernizing the requirements for fishing vessels without creating unnecessary economic barriers or undue hardship to fishers or communities that depend on fishing. Description Transport Canada is amending the regulations governing fishing vessels in a phased approach to introduce a comprehensive safety regime for fishing vessels based on risk, regardless of size or tonnage. Phase 1 of the amendments consists of amendments to the Small Fishing Vessel Inspection Regulations that updates and enhances the current safety equipment and vessel stability requirements and introduces safe operating procedures for small fishing vessels. It also amends the name of the Small Fishing Vessel Inspection Regulations to the Fishing Vessel Safety Regulations. Phase 1 of these amendments applies to fishing vessels that are not more than 24.4 m in length (see footnote 2) and not more than 150 gross tonnage. Phase 2 will update the current construction requirements for small fishing vessels; and Phase 3 will introduce the requirements of the International Maritime Organization (IMO) Cape Town Agreement (with appropriate Canadian modifications) for large fishing vessels. The amendments are risk-based. Risk is determined based on a vessel’s hull length, (see footnote 3) type of operation, and types of voyage. Therefore, small fishing vessels with the highest risk need to meet more stringent requirements, while small fishing vessels with very low risk are subject to the least regulatory intervention. For example, a small fishing vessel conducting operations farther from shore is required to have more safety equipment items than a small fishing vessel conducting operations close to shore. It should be noted that the requirements provided below are solely examples. The new requirements pertain to three main topics: safe operating procedures, safety equipment, and vessel stability. Safe operating procedures The new provisions on safe operating procedures require all small fishing vessels to develop safe operating procedures in writing (in English or in French, or in both, according to the needs of the crew), and to implement them to familiarize the persons on board the fishing vessel with the following: the location and use of all safety equipment; all of the measures that must be taken to protect persons on board, in particular measures to prevent persons from falling overboard; measures to retrieve persons who have fallen overboard; measures to protect limbs from rotating equipment, and measures to avoid ropes, docking lines, nets, and other fishing equipment that may pose a safety hazard to persons on board; in the case of beam trawling and purse seining operations, the quick release of loads that can be activated in an emergency; all of the measures that must be taken to prevent fires and explosions on the vessel; if the vessel has a deck or deck structure, all of the measures that must be taken to maintain watertightness and weathertightness and to prevent flooding of the interior spaces of the hull or, if the vessel has no deck or deck structure, all the measures that must be taken to prevent swamping of the vessel; all of the measures that must be taken to ensure safe loading, stowage and unloading of fish catches, baits, and consumables; and the operation of towing and lifting equipment and the measures that must be taken to prevent overloading of the vessel. Drills on the safety procedures need to be held to ensure that the crew is at all times proficient in carrying out those procedures, and a record needs to be kept of every drill. Safety equipment All small fishing vessels are subject to the updated safety equipment requirement. They require small fishing vessels to have firefighting equipment (e.g. different types of portable fire extinguishers) and modernized life-saving equipment (e.g. life raft, immersion suits, lifebuoys) on board. Personal life-saving appliances are required for all small fishing vessels according to their hull length. There are different requirements for small fishing vessels that have a hull length of not more than 6 m, more than 6 m but not more than 9 m, more than 9 m but not more than 12 m, more than 12 m but not more than 15 m, and more than 15 m. For example, a small fishing vessel that has a hull length of not more than 6 m is required to carry on board a buoyant heaving line of not less than 15 m in length. In contrast, a small fishing vessel that has a hull length of more than 15 m in length is also required to carry on board a buoyant heaving line of not less than 30 m in length, have an International Convention of the Safety of Life at Sea (SOLAS) lifebuoy attached to a buoyant line of not less than 30 m in length as well as a SOLAS lifebuoy that is equipped with a self-igniting light. Life rafts and other life-saving appliances are required based on the class of voyage and hull length of small fishing vessels, namely, unlimited voyage; near coastal voyage, class 1; near coastal voyage, class 2 (for small fishing vessels that have a hull length of not more than 12 m); near coastal voyage, class 2 (for small fishing vessels that have a hull length of more than 12 m); sheltered waters voyage; and near coastal voyages, class 2, that are restricted to two miles. For instance, a small fishing vessel that engages in an unlimited voyage (see footnote 4) is required to have two or more SOLAS life rafts or reduced capacity life rafts with a total capacity that is sufficient to carry, on each side of the vessel, the number of persons on board; one recovery boat; and an immersion suit of an appropriate size for each person on board. In contrast, a small fishing vessel engaged in a near coastal voyage, class 1, (see footnote 5) is only required to carry one or more SOLAS life rafts or reduced capacity life rafts with a total capacity that is sufficient to carry the number of persons on board and an immersion suit of an appropriate size for each person on board. These new requirements differ from the previous life-saving requirements, which were based on tonnage, length, and construction type. For example, every fishing vessel of closed construction not exceeding 12.2 m in length was previously required to carry one approved life jacket for each person on board and one approved lifebuoy fitted with 27 m of line (among other requirements). These new requirements are based on risk and are also easier to measure (as the construction and tonnage are not taken in consideration for the purposes of these requirements). The requirements for firefighting equipment are based on vessel hull length. There will be different requirements for small fishing vessels that have a hull length of not more than 6 m, more than 6 m but not more than 9 m, more than 9 m but not more than 15 m, and more than 15 m. For example, a small fishing vessel no more than 6 m in hull length is required to have a 1A:5B:C portable fire extinguisher and a second 1A:5B:C fire extinguisher if it is equipped with a fuel-burning cooking, heating, or refrigerating appliance. These new requirements differ from the previous firefighting equipment requirements, which were based on length and construction. For example, fishing vessels not exceeding 12.2 m in length if of closed construction were previously required to carry a 4.5 L foam extinguisher (among other requirements). The new requirements are based on risk and are also easier to measure as they use the classifications of fire extinguishers as opposed to the net weight of the foam in fire extinguishers. Stability requirements The stability and, if applicable, the buoyancy and flotation (see footnote 6) of small existing fishing vessels that have a hull length of not more than 24.4 m and not more than 150 gross tonnage that are not required to undergo a stability assessment are required to be adequate for the vessels to safely carry out their intended operations. Small new fishing vessels that have a hull length of not more than 6 m are required to be compliant with the standards for buoyancy, flotation and stability set out in section 4 of TP 1332 (Construction Standards for Small Vessels, published by the Department of Transport). Small new vessels that have a hull length of more than 6 m but not more than 9 m are required to be compliant with recommended practices and standards according to their vessel type and their intended operations. Recommended practices and standards as defined in the amendments are published by any marine classification society (such as Lloyd’s Register, American Bureau of Shipping, Det Norske Veritas — Germanischer Lloyd), standards development organization (such as the International Organization for Standardization), industrial or trade organization, government, and government agency or international body (such as the International Maritime Organization or any foreign national standards organization). These recommended practices can be found on the Web sites of the organizations mentioned above, in classification society rules, and through fishing vessel safety associations (among other means). The latest versions of these publications should be used to ensure they accurately reflect vessel types and their intended operations. In other words, small fishing vessels that are new and not more than 9 m in hull length are not required to have a formal stability assessment, while small fishing vessels that are new and have a hull length from 9 to 24.4 m are required to have one. Stability assessments are an evaluation of a vessel’s stability. A full stability assessment consists of inclining the vessel (i.e. shifting weights transversely across the deck of a vessel through a known distance) and developing a stability booklet, which is an essential tool for operators to understand the operational limits of their vessels and load them in a safe manner to avoid the risks associated with swamping, capsizing, foundering, and sinking. The same is true of a simplified stability assessment, except the testing process and documentation produced are simpler and less involved from an engineering perspective, and the cost is reduced. Determining whether a stability assessment must be full or simplified depends on the operational risks of the vessel. Stability assessments, full or simplified, are required for small new fishing vessels that have a hull length of more than 9 m; small existing fishing vessels that have a hull length of more than 9 m that undergo a major modification (see footnote 7) or a change in activity that is likely to affect their stability; existing fishing vessels more than 15 gross tonnage that are used for catching herring or capelin (and during the period beginning on July 6, 1977, and ending on the day before this Division comes into force, their keel were laid; they were registered under Part 2 of the Canada Shipping Act, 2001, or under Part 1 of the Canada Shipping Act, chapter S-9 of the Revised Statutes of Canada, 1985; they were converted to herring or capelin fishing or they underwent any modifications that adversely affected their stability characteristics); or fishing vessels that are fitted with an anti-roll tank. Small fishing vessels are required to undergo a full stability assessment if they carry fish in bulk that exhibit free surface effects (among other technical requirements), if they are fitted with an anti-roll tank, or if they are new and have a hull length of more than 18 m. The vessel stability assessments requirements are mandatory only for a portion of the small fishing vessel fleet, to focus on the future generations of small fishing vessels. The amendments also allow for an exemption to the vessel stability assessment requirements for populations of similar small fishing vessels. A group of authorized representatives applying for an exemption need to demonstrate that a population of fishing vessels is not required to undergo a stability assessment because each vessel in the population is similar to a vessel representative of the population and because the group can demonstrate that not requiring each vessel to be assessed does not decrease the level of safety of the vessel population. Once those criteria are met, only the vessel representative of the population is required to undergo a full stability assessment. Fishing vessel owners have up to one year to familiarize themselves with these new requirements and become compliant with Phase 1 of the Fishing Vessel Safety Regulations. Regulatory and non-regulatory options considered Both regulatory and non-regulatory options were considered for this regulatory proposal. To date, non-regulatory measures have not been successful in decreasing the number of fishing vessel incidents, accidents and casualties. For example, Transport Canada published a number of safety advisory bulletins and signed a Memoranda of Understanding (MOU) regarding safety at sea with the Department of Fisheries and Oceans (DFO) and the Workers’ Compensation Board of British Columbia. Industry has also led education and awareness activities to promote safety on board fishing vessels (e.g. Fish Safe BC, in British Columbia). Fish Safe BC, for example, implements a successful fishing industry-driven program for improving safety on board commercial fishing vessels, but these efforts have been undertaken locally and have not been implemented equally across Canada. Transport Canada is therefore amending the regulations governing fishing vessels to ensure its regulatory regime can adapt to technological changes, reduce the number of casualties, and address the majority of the Transportation Safety Board’s recommendations. The first regulatory option considered was to put forward the amendments as a phased approach. This option has numerous benefits in that it facilitates the implementation process in the fishing industry and ensures the mitigating measures to increase safety aboard fishing vessels are put in place without delay, which addresses the majority of TSB recommendations. The second regulatory option considered was to introduce the complete amendments to the current regulations at the same time. This option would have taken more time to implement than the first option, since all of the construction requirements for small and large fishing vessels would also have to be completed simultaneously to the safety equipment, vessel stability and safe operation procedures requirements. Transport Canada has decided to use the first option (the phased approach) to increase safety in the fishing industry in a timely manner. Transport Canada has put forward two official proposals pursuant to Phase 1 of the amendments. (see footnote 8) The first proposal introduced the same requirements for safety equipment and safe operational procedures as the revised proposal (and as described in the “Description” section of this Regulatory Impact Analysis Statement [RIAS]), but proposed a different application to the vessel stability requirements — the initial proposal required that all small fishing vessels above 9 m in hull length have stability assessments (as opposed to solely small new fishing vessels that have a hull length of more than 9 m; small fishing vessels that have a hull length of more than 9 m that undergo a major modification or a change in activity that is likely to affect their stability; small existing fishing vessels of more than 15 gross tonnage that are used for catching herring or capelin [and, during the period beginning on July 6, 1977, and ending on the day before this Division comes into force, their keel was laid; they were registered under Part 2 of the Canada Shipping Act, 2001 or under Part 1 of the Canada Shipping Act, chapter S-9 of the Revised Statutes of Canada, 1985; they were converted to herring or capelin fishing or they underwent any modifications that adversely affected their stability characteristics]; or small fishing vessels that are fitted with an anti-roll tank). The table below demonstrates the change in costs for the vessel stability requirements and the number of vessels these requirements apply to from the initial to the revised proposal. This table demonstrates the change in costs for the vessel stability requirements and the number of vessels these requirements apply to from the initial to the revised proposal. Stability testing costs (present value over 10 years) Initial Proposal Revised Proposal No assessment (exemption of populations of vessels) $498,567 $23,131 Simplified assessment $12,281,118 $599,760 Full assessments $4,013,434 $545,113 Costs of failed stability tests $4,801,557 — Total stability costs $21,594,676 $1,168,003 Total number of vessels 15 695 825 The revised proposal for Phase 1 of the amendments consists of a holistic approach combining both regulatory and non-regulatory initiatives. In terms of regulatory initiatives, Transport Canada is amending the Small Fishing Vessel Inspection Regulations by introducing mandatory requirements for vessel stability, safety equipment and safe operating procedures. Transport Canada is undertaking two major non-regulatory initiatives that will support these amendments and thereby contribute to the benefits of this regulatory proposal. First, the guidelines on adequate stability and major modification or change in activity expand on these concepts and help vessel owners understand their regulatory obligations. Second, the creation of the Small Vessel Compliance Program – Fishing ensures oversight and proper implementation of these amendments. After extensive consultation with stakeholders, this approach was deemed to be the best option, given that the cost of meeting the mandatory vessel stability assessment requirements for the majority of the existing fleet was considered too high. Benefits and costs Transport Canada conducted an analysis of the benefits and costs to assess the impacts of Phase 1 of the amendments on the fishing vessel industry and the federal government. A discount rate of 7% and constant 2012 Canadian dollars are used throughout the analysis, which was undertaken for the period of 2016 to 2025. The full cost-benefit analysis is available upon request. Costs All small fishing vessels are required to develop and implement safe operating procedures. No costs are associated with the safe operating procedures — these requirements are already integrated into the everyday operations of the vessels and are, for the most part, already being implemented through written plans. Numerous guidelines are available to fishing vessel owners and operators to draw from to develop these procedures. Safe operating procedures help fishing vessel owners and operators better manage safety on board their vessels, thereby reducing the overall incidents and accidents as well as the maintenance costs. All small fishing vessels are required to enhance their firefighting and life-saving equipment (i.e. almost 20 000 vessels). Personal life-saving appliances are required for all small vessels according to their hull length, and life rafts and other life-saving appliances are required based on the class of voyage of a vessel. More than 20 000 life-saving appliances are needed across the fishing vessel fleet — the cost of each of these additional life-saving appliances is estimated to be between $650 and $2,806. Finally, firefighting equipment is based on vessel hull length. The cost measures are estimated to be between $10 and $50 per firefighting equipment piece, with a total of more than 25 000 to be added across the fishing vessel fleet. The present value of the total cost of safety equipment is estimated to be $13.7 million over the 10-year period, which corresponds to an annualized cost of $1.9 million. Safety equipment costs are one-time costs that are assumed for year two of this period of analysis. Since vessel stability requirements are only introduced to a portion of the small fishing vessel fleet, the cost is integrated in the overall construction cost of the new vessel and is considered negligible as a stand-alone cost. It is estimated that 825 new vessels will require stability assessments over 10 years. These assessments cost between $1,360 and $6,055, depending on the required assessment. The present value of the average cost over a 10-year period, per small fishing vessel, is approximately $712 if the vessel is not required to undergo a stability assessment and $2,878 if it is required to do so. Fishing vessel owners could also apply to have their vessels included in a traditional, very low risk fleet in order for their vessels to not be required to have a full or simplified stability assessment. The present value of the total cost of vessel stability assessment is estimated to be 1.2 million over the 10-year period, which corresponds to an annualized cost of $166,000. Overall, the total present value of the costs to fishers and fishing vessel owners (i.e. the safety equipment and vessel stability assessments) is estimated at $14.9 million over the 10-year period of the analysis, which corresponds to an annualized cost of $2.1 million. Benefits The benefits to the fishing industry are measured by lives and vessels saved. It is estimated that 5.23 lives and 16.43 vessels and associated catch will be saved annually — vessels and catch constitute the vessels and the fish that are lost at sea when a vessel sinks. More specifically, the vessel stability testing measures will help reduce the number of fatalities caused by capsizing and foundering. The benefits of the stability testing requirements are estimated to be $123 million over a 10-year period of analysis, which corresponds to an annualized value of $17.5 million. The safety equipment mitigation measures will help reduce the severity of marine incidents by increasing the chances of an individual surviving such an incident. The total present value of the benefits due to emergency equipment mitigation measures is $150.2 million over a 10-year period, which corresponds to an annualized value of $21.4 million. The present value of the benefits to fishing vessel owners and operators is therefore estimated to be $273.1 million over the 10-year period of the analysis. Benefits received by the federal government are measured by the call-outs to the Government of Canada’s Search and Rescue system saved per year due to the prevented accidents. It is estimated that 5.09 call-outs per year will be saved due to this regulatory proposal, at an approximate value of $39,343 each. The reduction in the Government of Canada’s Search and Rescue system costs will save the federal government $955,000 over a 10-year period, which corresponds to an annualized value of $136,000. Overall, the present value of the total benefits is estimated to be $274 million over the 10-year period of the analysis, which corresponds to an annualized value of $39 million. Transport Canada recognizes that the costs and benefits are not equally distributed among the provinces. As the small fishing vessel fleet in the Atlantic region accounts for approximately 75% of all fishing vessels in the Canadian fleet, it assumes the majority of the costs and benefits associated with this proposal. A sensitivity analysis was conducted as part of the cost-benefit analysis. It demonstrated that it is unlikely that there are extensive variations to the variables in the cost-benefit analysis given the underlying assumptions. Cost-benefit statement Overall, it is expected that this regulatory proposal will generate $259 million in net benefits over a 10-year period, which corresponds to an annualized value of $37 million. This table presents the cost-benefit statement. Cost-Benefit Statement Base Year (2016) 2017 2018 2019 Final Year (2025) Total Present Value Annualized Costs Benefits Benefits Benefits Benefits Benefits Benefits Benefits Benefits Fishers $0 $44,845,316 $44,845,316 $44,845,316 $44,845,316 $273,063,223 $38,878,060 Government $0 $156,944 $156,944 $156,944 $156,944 $955,631 $136,060 Total $0 $45,002,260 $45,002,260 $45,002,260 $45,002,260 $274,018,854 $39,014,120 Costs Costs Costs Costs Costs Costs Costs Costs Fishers $0 $15,919,335 $191,822 $191,822 $191,822 $14,905,022 $2,122,140 Total $0 $15,919,335 $191,822 $191,822 $191,822 $14,905,022 $2,122,140 Net benefits Net benefits Net benefits Net benefits Net benefits Net benefits $259,113,832 $36,891,980 “One-for-One” Rule As per the Red Tape Reduction Act and Regulations, the “One-for-One” Rule applies to this proposal and results in an annualized decrease in administrative burden of $23,869. In accordance with the Red Tape Reduction Regulations, a discount rate of 7% and constant 2012 Canadian dollars were used in this analysis, which was undertaken for the period of 2016 to 2025. Phase 1 of the Regulations eliminates the requirement for Transport Canada to approve the stability documentation of a vessel, but maintains the requirement that the booklet is assessed by an independent naval architect or engineer and kept on board the vessel (while still maintaining oversight by Transport Canada using monitoring and compliance and enforcement techniques). Before these amendments, the duplication of both Transport Canada and engineer assessing the stability documentation increased the time fishing vessel owners took to comply with the regulatory requirement to have a professionally produced stability booklet. The new requirement allows the owner of the vessel to be more in control of the time it takes to comply with the regulatory requirement to have a professionally produced stability booklet and reduces the administrative burden associated with such applications. In actual numbers, 141 stability booklets per year no longer require approval. The estimated time for each stability booklet submission will depend whether it requires revisions. A normal stability booklet submission is estimated to take four hours to complete, with an hourly rate of $29.80. It is estimated that 50% of the stability booklets submissions would require additional revisions, and that these revisions would take six hours. It is estimated that four hours are needed to obtain a provisional certificate for the vessels that would need to continue to operate while waiting for the additional revisions to their stability booklets. Over a 10-year period, the present value of the administrative savings due to this requirement is estimated to be $230,263. These Regulations also add the requirement that fishing vessel owners inform the Minister of Transport of major modifications that are undertaken on a vessel. It has been assumed that 25% of all fishing vessels in the Canadian fleet would fall under this category, and that informing the Minister would take 0.25 hours (at an hourly rate of $29.80). Over a 10-year period, the present value of the administrative burden due to this requirement is estimated to be $21,821. Furthermore, these Regulations allow fishing vessel owners to apply to have their vessel included in a traditional, very low risk fleet, which is not required to have a full or simplified stability assessment. It has been assumed that 20.5% of the fishing vessels that would require stability assessments over the 10-year period of analysis fall under this category and that the application would take one hour (at an hourly rate of $29.80). Over a 10-year period, the present value of the administrative burden due to this requirement is estimated to be $3,069. While informing the Minister of Transport of modifications and applying to the Minister of Transport for vessels to be categorized as low risk are all administrative burdens, eliminating the requirements for Transport Canada to approve the stability booklets is an administrative saving. Over a 10-year period, the present value of the total administrative savings is estimated to be $167,646 (2012 constant Canadian dollars), which corresponds to an annualized value of $23,869 (2012 constant Canadian dollars). Small business lens Extensive consultation was conducted with stakeholders through national Canadian Marine Advisory Council meetings for a period of 14 years where industry and stakeholder input, as well as feedback, have been discussed, evaluated, implemented and accounted for. Initially, Transport Canada proposed more extensive requirements and, over the years of building on industry and stakeholder comments, Transport Canada has been able to develop a regulatory proposal that contributes to reducing fatalities, injuries and loss or damage to vessels in the commercial fishing industry without placing unnecessary barriers to an economically viable fishing industry. Phase 1 of the amendments has incorporated more options that reflect the current demands of the fishing industry which, in turn, provides stakeholders with more compliance options. Such compliance options are chosen by stakeholders according to the specific operations of their vessels. The amendments impact mostly small fishing vessels owners. It is expected that the cost will be proportionate to the risk taken by a given operation. The amendments will result in significant benefits for fishers in terms of reduced accidents. Furthermore, it is expected that the cost that will be passed on to consumers will be negligible, as the costs required to meet the regulatory proposal represent a small fraction of the total costs to small fishing vessel owners to operate their business, and hence, a small fraction of the price consumers see. This table presents the initial and flexible options. Initial option Initial option Flexible option Flexible option Short description Initially, Transport Canada had proposed that all small fishing vessels enhance their safety equipment (based on vessel hull length and type of voyage) and that all fishing vessels that have a hull length of more than 9 m have a vessel stability assessment. Initially, Transport Canada had proposed that all small fishing vessels enhance their safety equipment (based on vessel hull length and type of voyage) and that all fishing vessels that have a hull length of more than 9 m have a vessel stability assessment. The flexible option consists in the option as per the "Description" section of this RIAS. The flexible option consists in the option as per the "Description" section of this RIAS. Number of vessels impacted 19 241 for the safety requirements (15 256 for the stability requirements) 19 241 for the safety requirements (15 256 for the stability requirements) 19 241 for the safety requirements (825 for the stability requirements) 19 241 for the safety requirements (825 for the stability requirements) Annualized average ($) Present value ($) Annualized average ($) Present value ($) Compliance costs $5,030,439 $35,331,695 $2,122,140 $14,905,022 Annualized average ($) Present value ($) Annualized average ($) Present value ($) Administrative savings $93,378 $655,851 $23,869 $167,646 Total costs (all small businesses) $4,937,061 $34,675,844 $2,098,271 $14,737,376 Total cost per small vessel $256.59 $1,802.19 $109.05 $747.02 Risk considerations Note: Costs have been estimated using the Standard Cost Model. Detailed calculations are available upon request. Note: Costs have been estimated using the Standard Cost Model. Detailed calculations are available upon request. Note: Costs have been estimated using the Standard Cost Model. Detailed calculations are available upon request. Note: Costs have been estimated using the Standard Cost Model. Detailed calculations are available upon request. Note: Costs have been estimated using the Standard Cost Model. Detailed calculations are available upon request. The initial option to have a larger application for the vessel stability requirements was first considered, but following consultations, this option was deemed impractical and was not continued. The flexible option was chosen as it offers a high level of safety while reducing the cost to fishing vessel owners. Compliance costs have been minimized by introducing proportionate safety equipment and vessel stability assessments based on vessel size and type of operation. Consultation Extensive consultation has taken place with stakeholders for 14 years. Stakeholders included fishing vessel owners, provincial safety groups and representatives of fishing safety associations, such as Fish Safe BC and the Eastern Fishermen’s Federation, just to name these two. Topics included Division 1 (i.e. safe operating procedures), Division 2 (i.e. safety equipment), Division 3 (i.e. vessel stability) and the guidelines on adequate stability and major modification/change in activity, amongst others. The venues for these consultation sessions across Canada include, but are not limited to, national and regional Canadian Marine Advisory Council (CMAC) meetings (including the Standing Committee on Fishing Vessel Safety and the Working group on regulatory issues); information and advisories posted on the CMAC Web site; direct mail out to all holders of a fishing vessel license; direct emails using Transport Canada’s stakeholder information; special town hall meetings; and ad-hoc outreach meetings. Phase 1 of the amendments is therefore the result of extensive collaboration and consultation with the industry over the last 14 years — it was a two-way communication, where both the government and industry came to the table with proposed options. For example, national ad-hoc consultation sessions on Division 3 of Phase 1 of the amendments were held in Gaspé (Quebec) on October 14, 2014, in Vancouver (British Columbia) on October 16, 2014, and in Halifax (Nova Scotia) on October 17, 2014, to address outstanding industry concerns on this Division. More specifically, industry had previously stated at the 2015 Spring national CMAC meeting that the costs associated with Division 3 would pose an undue financial burden on the fishing industry. Consequently, during these national ad-hoc sessions in October 2014, TC proposed three different policy options to attempt to reduce the cost to industry while still ensuring a high level of safety. Consensus was originally reached on the option presented in this RIAS at the 2014 Fall national CMAC meeting. During the Winter of 2015, it was brought to the attention of TC that there were still outstanding concerns from certain industry groups in the Atlantic region on certain provisions, such as adequate stability, as well as on the non-regulatory measures (the guidelines on adequate stability and major modification/change in activity) that support Phase 1 of the amendments. In order to address these concerns, national ad-hoc teleconferences were held on March 17 and March 18 (in English and in French, respectively) and further correspondence letters were sent at the request of industry groups in April 2015. From April 21 to 23, 2015, TC consulted stakeholders at the 2015 Spring national CMAC meeting on the amendments and on the guidelines for major modification. It was agreed that TC and industry would continue their extensive communication via email to address outstanding concerns on the wording of certain provisions of Division 3 of Phase 1 of the amendments. TC is pleased to announce that formal industry support was obtained on May 6, 2015. Since December 2015, TC has been developing the guidelines on vessel stability and major modification/change in activity that will support Phase 1 of the amendments in collaboration with the Canadian Independent Fish Harvesters Federation, which represent more than 10 000 fish harvesters in Canada. Industry is satisfied with the intent as well as with the progress made on these documents. Drafts of these guidelines were also presented at the 2016 Spring national CMAC meeting. The Regulations Amending the Small Fishing Vessel Inspection Regulations were published in the Canada Gazette, Part I, on February 6, 2016, followed by a 60-day comment period. A total of 15 comments were received, examples of which are provided below. In terms of safe operating procedures, one stakeholder suggested that there may have been a lack of consultations on the safe operating procedures requirement of the amendments, and that the procedures were complicated. Consultations on this regulatory project began in 2001 and all of the requirements, whether safe operating procedures, safety equipment or vessel stability were consulted upon throughout their development. The consultations went as follows: when presenting decks to the CMAC, the Department would provide regulatory updates and encourage stakeholders to send in their questions on the proposed regulatory requirements (TC provided the contact information for stakeholders on the last slide of every presentation, discussion document, and cover sheet of the draft regulations presented). The Department received no comments or suggested changes on these requirements. TC also did not receive any proposal to change the proposed requirements in the 60-day comment period of the Canada Gazette, Part I. As for the content of these procedures, fishing vessel owners should already have the majority of these procedures as per other statutory or regulatory requirements (i.e. the Canada Shipping Act, 2001 and the Marine Personnel Regulations), as is the case with other small vessels operating in Canada, such as small passenger vessels and workboats. The amendments are solely scoping the existing requirement as appropriate for fishing vessel operations. Further, the procedures fishing vessels will be required to have are very simple in nature — in short, fishing vessel owners may write down where their safety equipment is and how it is used, and inform their crew members very quickly. To facilitate the process further, TC will provide simple templates that use plain language to draw from to develop these procedures as needed. One question was also received on the rationale for the stability testing that was required in the Quebec Region on many vessels before the amendments came into force. The answer is that inspectors asked for testing pursuant to the Ship Safety Bulletin (SSB) 04/2006 entitled Safety of Small Fishing Vessels: Information to Owners/Masters about Stability Booklets. This bulletin sets out the process for determining whether a small fishing vessel requires a stability booklet (and what to do if it does). If a vessel (new or existing) had any of the pre-established risk factors (e.g. anti-roll tanks, modifications/changed fishing operations in a way that reduces stability), it had to have a stability booklet on board. The purpose of this SSB was to set out a standard interpretation of section 48 of the Small Fishing Vessel Inspection Regulations (this provision stated: “an inspector may, in addition to any inspection or test required by these Regulations, conduct any inspection or require any test to be made to satisfy himself that anything on a fishing vessel that may affect its seaworthiness is safe and suitable for the purpose for which it is intended”). As the Regulations introduce new vessel stability requirements for new vessels, this SSB will be repealed (the Regulations set out which vessels will be required to have stability booklets). As the requirements for stability booklets are for new vessels, the impact will be that fewer existing vessels will be required to have stability booklets. It is also important to note that section 48 is repealed — in its place, section 3.03 has been added. As TC is introducing requirements based on risk, the authority of inspectors will focus on vessels where design, construction, or equipment may be an issue to seaworthiness pursuant to section 3.03. (see footnote 9) The impact on stakeholders will be that they will be required to solely satisfy these factors. In terms of comments on safety equipment, stakeholders proposed that subsection 3.29(1) be amended so that fishing vessels that have a hull length of more than 12 m operating in Near Coastal Voyage, Class 2, would be required to carry the same life rafts and other life-saving appliances than vessels not more than 12 m in length operating in the same voyage class. In practice, this would allow vessels more than 12 metres in length to have the option to —carry one or more life rafts, or a combination of life rafts and recovery boats with a total capacity that is sufficient to carry the number of persons on board; OR carry the following equipment: an emergency position-indicating radio beacon (EPIRB) or a means of two-way radio communication, unless the vessel is carrying on board an EPIRB required by the Ship Station (Radio) Regulations, 1999; and an immersion suit or an anti-exposure work suit of an appropriate size for each person on board if the water temperature is less than 15°C. This proposed change was not retained, as it is a reduction from both these amendments and, most importantly, from the requirements that were in force pursuant to the Small Fishing Vessel Inspection Regulations. In short, those requirements required that vessels that are more than 12.2 m in length and operate in Near Coastal Voyages, Class 2, carry a sufficient number of lifeboats, boats, dories, skiffs, or seine skiffs. This proposed change would therefore reduce the safety of these vessels compared to what is currently required and what is in these amendments. Other stakeholders also suggested that subsection 3.29(1) be amended so that the cut-off for the different requirements for vessels operating in Near Coastal Voyages, Class 2, set in the amendments at 12 m, be changed to 15 gross tonnage. This proposed change was not retained because it goes against the proposed regulatory reform of the Department. In short, the Department is currently aligning its regulations with the international regime — at the international level, requirements for vessels that have a hull length of less than 24 m solely include metres as a measurement, not gross tonnage. Therefore, as this proposed change would re-insert gross tonnage as a measurement, it could not be adopted. (see footnote 10) In terms of comments on administrative issues, one stakeholder asked why section 3.62 included that procedures must be “in English or French or in both, according to the needs of the crew”, while subsection 3.68(1) did not. After further analysis, TC revised subsection 3.68(1) to include the requirement that the written procedures be “in English or French or in both, according to the needs of the crew” and ensure all requirements regarding procedures are consistent. A stakeholder also suggested to add section 5 of the Vessel Pollution and Dangerous Chemicals Regulations to subsection 3.15(2) for accuracy. Accordingly, after further analysis, TC revised subsection 3.15(2) of the amendments to ensure that no person shall permit fuel or oil to be discharged from a fishing vessel except in accordance with the provisions relating to discharges of oil or oily mixtures in section 5 of Part 1 of the Vessel Pollution and Dangerous Chemicals Regulations (in addition to Subdivision 4 of Division 1 of Part 2 of these same Regulations). It should be noted that TC presented all of the comments received for this regulatory project at the 2016 Spring national CMAC meeting, and has also posted the presentation on the CMAC Web site and the Department’s response to each of these comments for stakeholders who were unable to attend. This established consultation process for regulatory projects ensures the highest level of consultation and transparency. Solely the concerns on safe operating procedures were reiterated by the industry following TC’s response to their comments. Some stakeholders were still opposed to some of the details of this requirement (such as that the procedures be established in writing), and stated that further consultations should be conducted before final publication. However, they also expressed their willingness to work with the Department on the development of an engagement and implementation strategy to further discuss these issues following the publication. Finally, Transport Canada also made a few administrative changes to Phase 1 of the amendments following its publication in the Canada Gazette, Part I, but as they are administrative in nature, the intent and the main components or requirements of these Regulations remain unchanged. An example of a change is that a typographical error was made in section 3.51(5) — this section now includes solely sections 8.1 to 8.4 in Chapter 8 of Part B of the IS Code (see footnote 11) (as opposed to including 8.5 as it is currently proposed). Chapter 8.5 does not provide any requirements for fishing vessels, thereby it has been deleted. In terms of consultations on Phase 2 and Phase 3, TC will continue to consult stakeholders on these phases. Rationale Transport Canada is amending the regulations governing fishing vessels in a phased-in approach to facilitate the implementation process in the fishing industry and to ensure the mitigating measures to increase safety aboard fishing vessel are put in place without delay, addressing the majority of the TSB recommendations. Phase 2 of the amendments will amend the Fishing Vessel Safety Regulations to update the provisions addressing the requirements for vessel construction of small fishing vessels. When Phase 2 comes into force, the entire Fishing Vessel Safety Regulations package will be in force and the current Small Fishing Vessel Inspection Regulations will be repealed. Phase 3 of the amendments will repeal the Large Fishing Vessel Inspection Regulations and will amend the Fishing Vessel Safety Regulations to bring into force the requirements of the IMO “Cape Town Agreement of 2012 on the Implementation of the Provisions of the 1993 Protocol relating to the Torremolinos International Convention for the Safety of Fishing Vessels, 1977” (the Cape Town Agreement) for large fishing vessels (with appropriate Canadian modifications), if Canada ratifies the Convention. Both Phase 2 and Phase 3 will focus on the construction of fishing vessels in Canada. As is the case when construction requirements are updated to reflect modern standards and technological advances in any industry, only new constructions will be required to abide by the new requirements. In other words, only the safety equipment and the safe operating procedures requirements put forward in the three-phased approach will not be grandfathered. The amendments are also put forward because of the current renewal of the fishing fleet. In recent years, many owners of fishing vessels have opted to replace their aging vessels with new constructions in order to take advantage of changes to the policies on vessel replacement of the Department of Fisheries and Oceans (DFO) or to modify their vessels for improved efficiency and capability. As the majority of the fleet is yet to be renewed, the DFO rule changes are drivers that justify even more the amendments. Finally, Phase 1 of the amendments results in significant benefits to fishing vessel owners and operators from reduced fatalities and injuries, cargo loss, vessel damage and loss (i.e. it is expected that this regulatory proposal will generate $259 million in net benefits). Implementation, enforcement and service standards Phase 1 of the amendments includes non-regulatory measures. Transport Canada is developing guidelines that will expand on essential concepts included in the regulations, such as adequate stability and major modification/change in activity to help vessel owners understand their regulatory obligations. The guidelines on adequate stability will help fishing vessel owners determine whether their vessel may or may not have adequate stability, and propose possible courses of action to make sure they can safely operate their vessel. For example, the adequate stability guidelines include information on how to avoid free surface effect and how to safely load and unload a small fishing vessel. The free surface effect is the change in the stability of a vessel caused by liquids moving about freely in a tank or hold. As a vessel rolls, liquids in tanks or breached compartments accentuate the roll by moving freely from side to side in the tank, accumulating first on one side and then the other, and may adversely affect the stability of the ship. It is important to note that Transport Canada is developing these guidelines in collaboration with the fishing industry. The guidelines on major modification/change in activity provide guidance on what constitutes a major modification/change in activity and when fishing vessel owners may be required to have their vessels undergo a mandatory vessel stability assessment. Transport Canada is also putting in place the Small Vessel Compliance Program — Fishing (SVCP-F). This program will serve to oversee and ensure proper implementation of the regulations. It will help fishing vessel owners who need to have their vessels inspected and certified (owners of vessels more than 15 gross tonnage) better understand the requirements. The SVCP-F will have a series of tools to ensure the inspection and certification regime is consolidated and delivered in a uniform manner. Participation will be voluntary for owners of vessels below 15 gross tonnage, but the program will still provide guidance to fishing vessel owners on how they can comply with the requirements that pertain to their size/type of vessel. It is important to note that the Fishing Vessel Safety Regulations does not contain any inspection and plan approval requirements. (see footnote 12) These requirements will be moved to the proposed Vessel Certificates Regulations. To ensure that the repealed sections of the Small Fishing Vessel Inspection Regulations are still respected (until the proposed Vessel Certificate and Inspection Regulations come into force), Transport Canada has included these requirements, without changes, in inspection and plan approval policies under the authority of the Canada Shipping Act, 2001. Sections of the Small Fishing Vessel Inspection Regulations that are not addressed by Phase 1 will remain in force until Phase 2 is complete. Phase 1 of the amendments includes a delayed application provision of the first anniversary of the publication in the Canada Gazette, Part II, allowing fishing vessel owners sufficient time to familiarize themselves with the new requirements. Fishing vessel owners who signed a contract for the construction of a vessel more than one year after the day on which these amendments come into force have an additional year to familiarize themselves with the new requirements. Transport Canada is not seeking additional resources for implementation or enforcement or to meet service standards. In terms of implementation, existing resources who were carrying out their mandate duties under the Small Fishing Vessel Inspection Regulations are receiving appropriate training, guidance and any other type of support needed in order for them to carry on with the implementation of the amendments. In terms of enforcement, action will be taken according to the level of the fishing vessel owner’s non-compliance pursuant to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations (for adequate stability as well as the other requirements) to the extent that it is applicable. In short, the levels of enforcement actions could consist of the issuance of a notice of deficiency, assurance of compliance, administrative monetary penalties, or detention (depending on the level of non-compliance). Contact Ian Campbell Manager Small and Fishing Vessels, Design and Equipment and the Office of Boating Safety Marine Safety and Security Department of Transport Place de Ville, Tower C, 11th Floor 330 Sparks Street Ottawa, Ontario K1A 0N5 Telephone: 613-998-0652 Fax: 613-991-4818 Email: [email protected] Footnote a S.C. 2001, c. 26 Footnote 1 C.R.C., c. 1486 Footnote 2 SOR/2000-260 Footnote 3 SOR/2000-265 Footnote 4 SOR/2010-91 Footnote 5 Small fishing vessels have a hull length of not more than 24.4 m and not more than 150 tons gross tonnage, while large fishing vessels are more than 24.4 m in hull length or more than 150 tons gross tonnage. These vessel hull length cut-offs are in line with international standards. It is important to note that small fishing vessels constitute approximately 99% of the fishing fleet in Canada (approximately 20 000 fishing vessels). Footnote 6 Length is defined as the distance from the fore part of the uppermost end of the stem to the aft side of the head of the stern post, except that if a stern post is not fitted to the vessel, the measurement shall be taken to the foreside of the head of the rudder stock, or, if the vessel has no rudder stock or has rudder stock situated outside the hull at the stern, the distance from the foreside of the foremost permanent structure of the vessel to the aft side of the aftermost permanent structure of the vessel, not including guards or rubbing strakes. Footnote 7 Hull length, in respect of a fishing vessel, means the distance measured from the forward end of the foremost outside surface of the hull shell to the aft end of the aftermost outside surface of the hull shell. Footnote 8 A voyage that is not a sheltered waters voyage, a near coastal voyage, class 2, or a near coastal voyage, class 1. Footnote 9 A voyage that is not a sheltered waters voyage or a near coastal voyage, class 2; that is between places in Canada, the United States (except Hawaii), Saint-Pierre and Miquelon, the West Indies, Mexico, Central America or the northeast coast of South America; and during which the vessel engaged on the voyage is always north of latitude 6°N, and within 200 nautical miles from shore or above the continental shelf. Footnote 10 Only for small fishing vessels of open construction (that may be affected by swamping). Footnote 11 A major modification means a modification or repair, or a series of modifications or repairs, that substantially changes the capacity or size of a fishing vessel or the nature of a system on board a fishing vessel, that affects its watertight integrity or its stability, or that substantially increases its service life. Footnote 12 Transport Canada considered several in-house policy options and ultimately put forward these two proposals. Footnote 13 Subsection 3.03(1) The authorized representative of a fishing vessel shall ensure that the vessel is designed, constructed and equipped to operate safely and be seaworthy in its area of operation. Subsection 3.03(2) If the Minister has reasonable grounds to believe that the design, construction or equipment of a fishing vessel adversely affects its safe operation or seaworthiness in its area of operation, the Minister shall request the authorized representative of the vessel to establish that the vessel meets the requirements of subsection (1). Footnote 14 While the current amendments include gross tonnage (in the application section for example), it will not include references to gross tonnage once Phase 2 of the amendments come into force (then the entire Fishing Vessel Safety Regulations package will be in force and the current Small Fishing Vessel Inspection Regulations will be replaced). Footnote 15 The IS Code means the annex to the International Maritime Organization Resolution MSC.267(85), International Code on Intact Stability, 2008 Footnote 16 More specifically, they will not include the provisions of the Small Fishing Vessel Inspection Regulations dealing with inspection and plan approval for vessels exceeding 15 gross tonnage (sections 6 through 8, 44 through 47, 49, and Schedule 1).

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