Canada’s merchant fleet: we stand on guard for thee


It has always been true that when workers begin to do well, corporations and government soon come after us. And it’s especially true in the maritime industries. The history books are littered with examples of strong seafarers’ unions and strong dockworkers’ unions taken on – and taken down – by industry and government. The ash bins of history are filled with the remnants of formerly strong unionized workforces that once boasted thousands of workers, cut down now to a handful in isolated niche sectors.

It happened to Canada.

Our nation once boasted the third-largest merchant marine in the world. Seafarers’ unions were strong and workers were growing prosperous after returning from the sacrifices made during the Second World War. It wasn’t to last. Due to a number of global economic, industrial and labour factors, the majority of the Canadian public’s wartime fleet was soon transferred into private corporate hands. The majority of the vessels were sold to Canadian shipping companies for pennies on the dollar, and a large portion of that fleet was then flagged out.

How did it work? Canadian operators were highly dependent on the growth of the British economy, and when the expected growth failed to meet forecasts, it sent the shipping markets into a tailspin. Canadian shipowners wanted to get out from under the strong Canadian trade-union control of their labour force. Under the leadership of Vancouver maritime lawyer J.V Clyne, an alliance of shipowners and the Canadian government entered into negotiations with the British government to transfer three-quarters of Canadian tonnage to the UK register, which turned it into a de facto Flag of Convenience. Under the deal, the ships could transfer to the UK registry but remain Canadian-owned. They would operate through a special management scheme authorized by the Exchequer. They would be allowed to earn both dollar and sterling freights; profits would go to their Canadian owners and taxes, fees and other incentives would benefit the UK. The British government insisted that the UK-registered ships would be expected to carry British crews, or at least be paid British rates of pay – a benefit to Canadian owners, because at the time Canadian seafarers were pretty much on top of the heap in terms of pay and benefits.

The story of the Canadian fleet, built by public money, being sold to private interests for pennies on the dollar, is a dark one. It raises many questions. This is the same period that saw the rise of Aristotle Onassis and Greek shipping. How did a poor, agrarian, war-torn nation such as Greece become the world’s largest ship-owning nation? The same way Norway, Denmark and many other countries grew their fleets: they were gifted Canadian ships built by the taxpayers of Canada and built for the purpose of saving the world from fascism.

The story raises another unsettling point.

It means that in the end, Canada is largely to blame for enabling the global dominance of the world’s most transnational of industries, often the most brutal of employers and definitely the most loosely regulated market in the world: Flag of Convenience shipping.

All of this is really just background to understanding the fight that Canadian seafarers face today: to ensure that Canadian-flag domestic shipping remains in the hands of Canadian-based companies that register their ships in Canadian registries, that are covered by the Canada Shipping Act and whose vessels remain crewed by Canadian seafarers.

It’s not going to be an easy battle. As part of the CETA trade deal the Harper Conservatives are trying to sign with Europe, our government is poised to sell out our domestic shipping industry to the Europeans — who still operate cheaper, FOC-like registries that do not require any Europeans to actually work on, for example, the UK or Norwegian-registered ships.

Once again, the Canadian government is selling out domestic shipping to European interests. This is not good for Canadian seafarers. It is not good for the public purse. And it will certainly mean a cascading risk to the marine environment when Canadians no longer have care and control of the vessels that ferry potentially hazardous goods through Canadian waterways.

So this July 1, no matter what our industry, let us commit to ensuring that Canadian industry benefits Canadian communities and workers – including our seafarers.

Happy Canada Day.

For more information on the CETA struggle, click here and here.

You can find more on the transfer of Canadian tonnage to the UK registry in this book.




7 responses to “Canada’s merchant fleet: we stand on guard for thee

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  6. Peter Lahay

    Thanks Terry. Your comment is really helpful to furthering the discussion. This blog aims to do a few things and one of them is to highlight the absurdity of the Canadian trade and corporate positioning and how that represents a danger to the marine environment and the marine community as a whole. I hope you don’t mind, but your comment backs up our thoughts on doing a slightly more comprehensive article on what exactly CETA maritime provisions mean to Canada’s coastal maritime communities.


  7. Terry Engler

    Excellent article. I hadn’t made the connection regarding Canada’s impact on the beginnings of the FOC campaign but Canada’s position on Corporate Rights deals (so called free trade deals) today carries on this outrageous history. DFAIT the Canadian government department dealing with trade is amongst the strongest supporters internationally of giving multinational corporations rights over national governments. DFAIT is one of the most powerful government departments in Canada and they are working very hard to promote Corporate Rights deals like CETA at the expense of our national, provincial and municipal rights.
    Multinational Corporations are already too powerful they do not need our governments support. These deals, like CETA will harm local Canadian companies and Canadian workers. We must fight these deals because our children and their children will need a green sustainable environment and family supporting jobs in the future and Multinational Corporations care only about their bottom line and their bottom line looks better when workers’ rights and environmental regulations don’t exist.


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