Dionysios Rossi
Partner

Dionysios is the National Co-Leader of BLG’s Transportation and Logistics Group. He practices in the areas of shipping and transportation law, environmental law, and energy law. He represents a wide variety of transportation industry clients (including shipowners, charterers, shipping lines, and terminals) in transactions, regulatory matters, and disputes.

Every major rankings publication recognizes Dionysios as one of the leading shipping and transportation lawyers in Canada, including: Chambers Canada (Band 1), Best Lawyers (four-time “Lawyer of the Year” in shipping & transportation categories), Benchmark Litigation (“Litigation Star”), Legal 500 (“Leading Partner”), Lexpert (“Consistently Recommended”), and Martindale Hubbell (“AV Preeminent”).

Dionysios has served as Chair of the National Maritime Section of the Canadian Bar Association. He currently serves as a Director of the Vancouver Maritime Arbitrators Association, and as the Marine Environment Committee Chair of the Canadian Maritime Law Association. He is a frequent speaker and author on shipping and maritime law.

Jean-Marie Fontaine
Partner

Jean-Marie Fontaine is the National Co-Leader of BLG’s Transportation and Logistics Group.

He frequently represents shipowners, financial institutions, private equity investors, insurers, and shipping and logistics companies before major courts, including the Superior Court of Québec, the Federal Court, the Federal & Quebec Courts of Appeal and the Supreme Court. His role extends to commercial and regulatory matters, as he advises clients on, vessel financing, ship sale agreements, shipbuilding contracts merger and acquisition of transportation enterprises, multimodal transportation agreements and he also actively offers counsel on regulatory matters impacting the shipping industry.

He is the Vice-President for Québec of the Canadian Maritime Law Association.

Jean-Marie Fontaine consistently ranked by Chambers Canada (Band 1). In 2025, he was recognized as ‘Lawyer of the Year’ for Maritime Law by Best Lawyers, and continues to be recognized in the 2026 edition across Railroad Law, Insurance Law, and Maritime Law categories.

Braeden Stang
Associate

Braeden is an associate lawyer based in Vancouver with a developing shipping and maritime law practice, advising domestic and international clients across the marine transportation sector. His work spans contentious and advisory matters, ranging from marine casualties, cargo claims, vessel arrests, and allisions, to judicial reviews and complex transportation agreements.

His practice focuses on the intersection of transportation and environmental law, regularly advising marine terminal clients and large-scale project proponents throughout all phases of development and operations.

Braeden currently serves on the executive of the Canadian Bar Association Maritime Law (B.C. Branch) Subsection.

Ship Mortgages and Vessel Finance Security

Canada occupies a distinct position in international shipping finance due to the division of powers between its federal and provincial governments. Canada’s ship mortgage regime is built on a federal registration system, administered through the Canadian Register of Vessels, and enforced through a body of Canadian maritime law that combines statutory rules, common law admiralty principles and a national Federal Court. The result is a robust security model, but one that requires careful attention to potential conflicts between federal and provincial jurisdiction, particularly with respect to bankruptcy and insolvency matters.

In complex financings, a ship mortgage is typically only one part of a broader security package. The statutory mortgage provides the principal form of security over the vessel, but specific repayment obligations, insurance, earnings, covenants, defaults and enforcement mechanics are typically dealt with in collateral agreements. Canadian law gives registered mortgagees meaningful remedies, including a power of sale and access to in rem proceedings, but not every asset connected with the vessel is automatically captured by a mortgage.

The Canadian Register of Vessels: Public Registration and Due Diligence

Canadian vessels, other than pleasure craft, are generally registered in the Canadian Register of Vessels, a public register established and maintained by the Chief Registrar under Part 2 of the Canada Shipping Act, 2001. The Register also records discharges, transfers and transmissions of mortgage interests. Members of the public may examine online or obtain copies of entries relating to a vessel or fleet from the Register, making the Register an important first point of reference for due diligence purposes.

The distinction between large and small vessels is important. The Small Vessel Register is used for certain small commercial (non-pleasure craft) vessels, including commercial vessels with a gross tonnage of 15 or less that are powered by a motor of 7.5 kilowatts (10 horsepower), barges with a gross tonnage of 15 or less, and commercial river rafts. However, mortgages cannot be registered against vessels in the Small Vessel Register. A vessel that otherwise qualifies for the Small Vessel Register must therefore be registered in the Large Vessel Register if a ship mortgage is to be recorded against it, or if the party wishes to reserve a name for the vessel.

For a mortgage to be registered, the vessel must first be recorded in the Large Vessel Register. Once the vessel is recorded, a ship mortgage is typically registered by using Marine Mortgage Form 7 (though the Chief Registrar may also require any evidence they consider necessary prior to registering the vessel or mortgage). All filings are carried out online. Although original documents need not be filed, they must be available if requested by the Chief Registrar. The typical processing time for the registration of a marine mortgage is five business days.

Once filed in the Register, the mortgage is perfected for the purposes of the federal ship registry regime. The date and time of filing can be critical because registered mortgages rank in order of registration. This priority ranking can be changed if all of the registered mortgagees provide their written consent to the Chief Registrar.

Vessel Registry Limits

The Canadian Register of Vessels is central to ship mortgage security, but it should not be treated as being comprehensive of every claim that may affect a vessel. Maritime liens, statutory rights in rem, certain special legislative rights and unregistered equitable mortgages may not be listed in the Register, and (as discussed further below) some of those claims can rank ahead of a registered mortgage.

Equally important is the interplay between federal and provincial law. In Canada, there is a constitutional division of powers between the federal and provincial governments. While maritime matters are generally federal in nature, property and civil rights fall within provincial jurisdiction. Pursuant to this division, each Canadian province maintains a personal property security registry in which security interests in personal property, including vessels, may be registered. In most provinces, personal property security legislation expressly excludes security agreements governed exclusively by federal law, including ship mortgages. Even where that exclusion is not express, Canadian courts have treated federal ship mortgage registration for commercial vessels as constitutionally paramount. Where federal vessel registration is optional, however, as for pleasure craft, provincial registrations can be highly relevant and may affect priority.

Accordingly, both federal and provincial registry searches should be undertaken during due diligence. In addition to reviewing the federal Register, a lender or purchaser may wish to search the personal property registry in the province in which the vessel owner is ordinarily resident or incorporated and, where different, the province in which the vessel is located. Depending on the transaction, lenders may also take a collateral marine agreement or other security interest and register it provincially, particularly where the security package extends beyond the vessel itself.

Scope of the Canadian Ship Mortgage

Under Canadian law, a mortgage may be granted over a vessel or over shares in a vessel (reflecting the statutory rule that a Canadian vessel is divided into 64 shares). Canadian law also recognizes unregistered legal and equitable ship mortgages, although such mortgages do not enjoy the same priority position as registered mortgages.

As in many common law jurisdictions, the statutory mortgage is typically accompanied by a deed of covenants and finance documents that contain further details of the transaction. Those documents typically require repayment of principal and interest, maintenance of seaworthiness and insurance, preservation of registration, casualty reporting, restrictions on unauthorized transfers or bareboat charters, and inspection rights. They will also define events of default and the circumstances in which the mortgagee may take possession or exercise sale rights. While the Marine Mortgage Form 7 will refer to the underlying deed of covenants and loan documents, they are not typically filed with the vessel registry, preserving their confidentiality.

The mortgage will ordinarily extend beyond the hull to machinery, equipment and items required for navigation, such as lifeboats, anchors and associated equipment. However, important financing terms such as interest, enforcement costs, accessory claims, insurance proceeds, earnings and bunkers are commonly contained in collateral agreements or other finance documents. There are no express Canadian restrictions on the currency of claims secured by a ship mortgage, and Canadian ship mortgages can secure obligations arising under foreign-law loan agreements.

Other FORMS of Security on Vessels

In addition to vessel mortgages, the suite of security on a vessel owner and operator will typically include an Assignment of Freight and Hire, which will give the lender the right to collect directly the revenues generated by the vessel. Most lenders will also insist on an assignment of insurance proceeds by which the Hull & Machinery underwriters of the vessel will pay out the insurance proceeds directly to the lender in the event that the vessel becomes a total loss or constructive total loss.

Priority and the Ranking of Claims

A registered Canadian ship mortgage generally ranks ahead of later registered mortgages over the same vessel or share. Equitable (i.e., unregistered) mortgages rank below registered mortgages and rank among themselves according to the dates on which they were created. That said, maritime claims may arise outside the registry system and outrank a registered mortgage.

Although a Canadian court may vary priority on equitable grounds to prevent substantial injustice, the traditional priority ranking of maritime claims in Canada is generally understood as follows:

1. disbursements of the admiralty marshall or sheriff;
2. costs of the judicial sale of a vessel;
3. possessory liens predating other liens;
4. maritime liens;
5. possessory liens arising after maritime liens;
6. registered mortgages;
7. equitable mortgages;
8. statutory rights in rem.

With respect to maritime liens, unlike some other jurisdictions, Canada will recognize and give effect to foreign maritime liens, even if the claim would not qualify for a maritime lien under Canadian law. In particular, a maritime lien validly created under foreign law will be recognized and given the same priority in Canada as would be given to a maritime lien created in Canada under Canadian law unless opposed to some rule of domestic policy or procedure which prevents the recognition of the right.

This is significant because maritime liens generally outrank registered and equitable mortgages.

Canadian law does, however, provide specific protections for registered mortgagees. A mortgage cannot be discharged from the Register without the mortgagee’s participation in the prescribed discharge process. In addition, where a registered vessel ceases to be required or entitled to be registered following a change in ownership, registered mortgagees must be given notice and an opportunity to protect their position. Importantly, cancellation of vessel registration also does not affect an existing registered mortgage.

Mortgages can be discharged by having the mortgagee complete the “Discharge” section of the original Marine Mortgage Form 7 and filing a scanned version of the discharge on the Vessel Registry’s online platform.

Enforcement

A Canadian ship mortgagee generally does not need to obtain judgment before commencing enforcement measures, unless the terms of the mortgage and related covenants provide otherwise. Upon default, subject to the terms of the mortgage and related covenants, the mortgagee may take possession of the ship or shares for the purpose of realizing on its security.

The mortgagee can also commence admiralty law proceedings and arrest the vessel. The Federal Court of Canada has jurisdiction over claims relating to vessel mortgages and may exercise that jurisdiction in rem against the ship, other property or sale proceeds, as well as in personam against the owner. This jurisdiction extends not only to Canadian registered ship mortgages, but also to foreign registered mortgages and unregistered legal or equitable mortgages over Canadian or foreign vessels. Certain provincial superior courts also exercise concurrent admiralty jurisdiction.

The enforcement route to pursue is a strategic decision. A non-judicial sale by the mortgagee may be faster and less expensive, but the purchaser receives only the title that the mortgagor could convey, leaving the vessel potentially subject to pre-existing maritime lien claims. By contrast, a judicial sale is more costly and time-consuming, but it generally transfers the vessel free of any existing liens, encumbrances and mortgages, giving the purchaser clean title under Canadian law. That feature often makes judicial sale the preferred route where there are competing claimants or uncertainty about pre-existing encumbrances (such as maritime liens).

Depending on the rank of the registered mortgagee, the mortgagee may have no choice but to seek a judicial sale. This is because the Canada Shipping Act, 2001 provides that if there is more than one registered mortgage of the same vessel or share, a subsequent mortgagee may not sell the vessel or share without the agreement of every prior mortgagee absent a Federal Court order.

Under the Marine Liability Act, causes of action arising under “Canadian maritime law” which would include claims in respect of vessel mortgages, are subject to a general three-year limitation period. This makes prompt enforcement planning important, particularly where the vessel’s trading pattern may affect the availability of arrest and the practical timing of a sale.

Bankruptcy and Insolvency

The bankruptcy of a mortgagor after registration does not affect a mortgage over a vessel or share in a vessel. Under the Canada Shipping Act, 2001, the mortgage is preferred to the rights, claims and interests of the bankrupt’s other creditors and of any trustee or assignee acting on their behalf. Nevertheless, marine insolvencies in Canada can engage both federal (admiralty) and provincial (bankruptcy and insolvency) jurisdictions, creating a risk of parallel proceedings before the federal and provincial superior courts. In practice, Canadian courts generally seek to coordinate such proceedings under the principle of cooperative federalism but creditors should anticipate delays arising from forum selection issues.

Apart from bankruptcy, Canadian restructuring statutes may affect enforcement. Debtors may seek protection under the Companies’ Creditors Arrangement Act or under proposal proceedings in the federal Bankruptcy and Insolvency Act. Those regimes typically impose a stay of proceedings that prevents creditors from enforcing pre-filing claims, and secured claims may be compromised through a court-supervised process. A mortgagee may apply to lift the stay, but that relief is discretionary and generally requires a showing of material prejudice or another equitable basis.

Canada also provides for recognition of foreign insolvency proceedings under both the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act. If a foreign main proceeding is recognized in Canada, creditors may be precluded from taking action against Canadian assets. Where no recognition order or stay is in place, creditors may remain able to proceed against assets located in Canada despite foreign insolvency proceedings. The practical outcome will depend on the facts, the location of the vessel or proceeds, and the timing of any recognition application.

Ships Under Construction and Builder’s Mortgages

Canada permits a vessel that is under contract to be constructed in Canada or under construction in Canada to be temporarily recorded in the Register. A builder’s mortgage may then be registered against that vessel. Unlike some jurisdictions that characterize builder’s mortgages as equitable, a Canadian builder’s mortgage is treated as a legal mortgage and gives the mortgagee security for repayment of a loan or performance of an obligation by reference to the vessel or shares in the vessel under construction.

Importantly, however, the recording system is available only for vessels being built in Canada. Once construction is completed, the recorded owner must provide the required builder’s certificate within the prescribed period. The mortgage registration process uses a separate builder’s mortgage form (Form 16), but the substantive lender considerations are broadly aligned with those applicable to completed vessels.

Practical Implications

Lenders should verify the vessel’s registration status and eligibility, confirm whether mortgage registration is available for the vessel category, obtain current Register searches, consider provincial personal property searches and registrations, and ensure the loan agreement, deed of covenants and ancillary security documents expressly cover interest, enforcement costs, insurance, earnings, bunkers and other collateral intended to support the facility. Where there are multiple creditors, lenders should also assess whether an intercreditor or priority agreement is required and whether written consents should be filed to alter mortgage priority.

Canada offers a robust and commercially familiar framework for the registration and enforcement of ship mortgage security. Federal (and sometimes provincial) registration provides a dependable mechanism for perfecting and ranking mortgages, and Canadian maritime law gives mortgagees meaningful enforcement options, including possession, in rem proceedings and judicial sale.

However, Canadian ship finance security is not a registry-only exercise. The Canadian Register of Vessels should be combined with wider due diligence, comprehensive contractual and finance documents and, where appropriate, provincial personal property registrations. With that approach, Canada provides a stable and practical platform for secured vessel financing in cross-border maritime transactions.