10
TRANSPORTATION INFRASTRUCTURE
Marine Transportation Infrastructure
Ports
Canada's major ports play a significant role in Canada's transportation
system. Vancouver is Canada's largest port and the main terminal
for goods being shipped to the Asia-Pacific region. The Port of
Prince Rupert, located just below the Alaskan Panhandle,
has the shortest sailing distance from North America to Pacific
Rim countries. In the east, shipments are divided among several
ports, including Montreal, Halifax, Port Cartier, Sept-Îles,
Saint John and Quebec City.
Despite the cold climate in winter, many of Canada's deep-water
ports are open year-round. The infrastructure that supports the
port system includes marine terminals with modern container facilities
that connect with container trains, which move goods throughout
North America. Port authorities operate some of these marine
terminals, but often they are owned and operated by independent
companies that rent space from the port.
The Port System
Over the past number of years, the federal government has been
working to reengineer Canada's marine transportation system. As
part of these efforts, the National Marine Policy, announced
in December 1995, set out the government's intention to bring
more commercial discipline to the marine sector to improve efficiency
and give local regions more control over their ports. The commercialization
of the St. Lawrence Seaway is an important part of this policy.
The Canada Marine Act (CMA), which received Royal Assent on
June 11, 1998, enabled Transport Canada to implement the National
Marine Policy. The policy called for three categories of ports:
independently managed Canada Port Authorities (CPAs), regional
and local ports, and remote ports.
Canada Port Authorities are self-sufficient ports that have
been deemed essential to domestic and international trade. As
a group, they make up the National Ports System and include ports
that were formerly Ports Canada local port corporations, major
Canada Ports Corporation divisional ports, and most harbour commissions.
To date, 17 of the 18 ports designated to become Canada Port
Authorities have received their CPA status and have established
their boards of directors:
- Halifax, Montreal, and Vancouver on March 1, 1999
- Fraser River, Prince Rupert, Quebec City, Saguenay, Saint
John, Sept-Îles, St. John's and Trois-Rivières on
May 1, 1999
- Toronto on June 8, 1999
- Nanaimo, North Fraser, Port Alberni, Thunder Bay, and Windsor
on July 1, 1999.
The Port of Hamilton, the only designated port left to be established
as a Canada Port Authority, will receive CPA status when it completes
the letters patent process. In addition to the original 18 ports
listed in the Canada Marine Act, Transport Canada has received
applications for CPA status from two other ports -- Belledune
and Oshawa. Their letters patent are under development.
The Canada Ports Corporation is targetted for dissolution in
2000. The corporation has been kept open with minimal staff during
the implementation phase of the National Ports System to ensure
that all ports have been either transferred to Canada Port Authority
status or divested to local interests.
On March 1, 1999, Part II of the Canada Marine Act came into
force for existing public ports, which consolidated regional and
local ports with other public ports. This category includes Transport
Canada facilities that are not deemed to be remote facilities,
as well as any Canada Ports Corporation facilities or harbour
commissions not incorporated as Canada Port Authorities.
Regional and local ports are being offered to other federal
departments or to provincial governments, municipal authorities,
community organizations or private interest groups. As Table 10-7
shows, Transport Canada has divested a total of 357 public ports
since 1996. These ports were either transferred, deproclaimed
or demolished, or had Transport Canada's interests terminated.
The largest transfer of ports took place in 1996, with the devolution
of 277 ports. In 1999, 35 facilities were divested, while
1998 and 1997 saw the devolution of 11 and 34 ports, respectively.
Table 10-7 summarizes the changes that have taken place in
responsibility for ports' operations since 1996.
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As of December 31, 1999, a total of 192 regional, local and
remote ports remain under federal control. Table 10-8 summarizes
the regional distribution of the ports administered by Transport
Canada from 1995 to 1999. The federal government will continue
to maintain remote ports that serve the basic transportation needs
of isolated communities unless local interests express a willingness
to assume ownership of such port facilities. While 26 remote ports
were divested in 1996 and 1997, there have been no further divestitures
of remote ports since then. Transport Canada continues to administer
34 remote ports in Quebec, Ontario, Manitoba and British Columbia.
A growing number of "other" ports are being operated
by provincial or municipal governments and private interests
as Transport Canada divests itself of its facilities.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e08.GIF)
At the end of 1999, there were 108 other ports, including 57
private, 33 provincial and 18 municipal ports. These ports vary
both in terms of size and activity. They include sites such as
Port Cartier, Quebec, used to ship large volumes of cargo and
Quyon, Quebec, which is used for an interprovincial ferry service
on the Ottawa River. This category of ports has been growing as
facilities have been transferred under the National Marine Policy.
Figure 10-6 shows the divestiture status of regional, local
and remote ports, highlighting those that have been transferred
or deproclaimed, as well as the number of ports yet to be divested.
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Audited financial statements for 1999 are not yet available.
As a result, the following financial results for 1998 are provided
for Ports Canada ports, Harbour Commissions and Transport Canada
facilities not divested prior to December 31, 1998.
In 1998, Ports Canada posted total revenues of $231 million,
with a net income of $20 million and operating cash flows of $62
million. The seven major ports handled 83 per cent of the volume
and generated roughly 77 per cent of the total revenues of Ports
Canada ports
Table 10-9 shows 1998 revenues, expenses and some key ratios
for Ports Canada ports and for divisional ports as a whole.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e09.GIF)
The overall operating ratio for Ports Canada ports was 75 per
cent in 1998. Taken together, the major ports had a ratio
of 81 per cent, with individual ratios ranging from 70 to
95 per cent. Except for Vancouver and Halifax, ratios for all
major ports were above 80 per cent. For divisional ports, the
operating ratio as a whole was 56 per cent.
The return on assets for Ports Canada ports was two per cent
in 1998. Montreal had the highest return on assets, at eight per
cent, with its investment income almost as large as its operating
income. Taken together, the major ports' return was one per cent,
compared with ten per cent for divisional ports.
While revenues at major ports declined three per cent in 1998
from that reported in 1997, operating expenses have also declined
by six per cent. It is noted, however, that approximately one-half
of these reductions are as a result of the new financial statement
format adopted by the Prince Rupert Port Corporation in 1998 whereby
only direct revenues are reflected in revenues earned by the Corporation.
In prior years, revenues realized by the terminal operator were
included in operating revenues. Despite this revision, revenues
earned at major ports have increased five per cent over the five-year
period, while operating costs have declined by four per cent over
the same period.
At the divisional ports, operating revenues and operating expenses
have decreased by 12 per cent and eight per cent respectively
from 1997, or 14 per cent and 13 per cent respectively over the
five-year period. Overall, the operating ratio for all ports remained
relatively equal to that reported in 1997, with a four per cent
improvement over the five-year period.
Total 1998 net income of all ports, major and divisional, has
more than doubled, moving from $9.2 million in 1994 to $20.1 million
in 1998. These financial changes occurred as traffic volumes increased
by one per cent between 1994 and 1998. During this period, revenue
per tonne remained relatively stable at $1.29. Expenses per tonne,
however, dropped from $1.04 in 1994 to $0.97 in 1998, a decrease
of almost seven per cent.
Table 10-10 shows revenues, expenses and incomes for all Ports
Canada ports from 1994 to 1998.
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Harbour Commissions
With the exception of Toronto, all harbour commissions reported
close to positive net incomes in 1998. The Fraser and Hamilton
harbour commissions posted the largest net incomes at $1.3 and
$2.4 million, respectively. Total revenues were $55.8 million
and expenses were $53.3 million, creating an operating ratio of
about 96 per cent. Net income of $8 million provided a return
on total assets of 2.1 per cent.
The financial data for harbour commissions between 1993 and
1998Note
4 shows that both revenues and expenses increased during
the period. Expenses grew by five per cent, revenues by two per
cent. As a result, operating income declined from $4 million to
$2.5 million during the period, although the operating ratio deteriorated
from 93 to 96 per cent.
Traffic volume was 44.1 million tonnes in 1998. Tonnage handled
at harbour commission ports rose by 15 per cent over the
five years between 1993 and 1998 (with year-to-year fluctuations).
Comparing 1998 with 1993, revenues and expenses expressed on a
per-tonne basis were about 11 per cent and eight per cent lower,
respectively. Net income also fell during this period.
Table 10-11 gives financial results for all harbour commissions
for 1998.
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Transport Canada Ports
Approximately 10 per cent of the ports remaining under Transport
Canada's control generated 70 per cent of the total revenues in
fiscal 1998/99. Gross revenues for the same year were $18.6 million,
while expenses were $24.3 million. This left an operating
revenue deficit of $5.7 million and an operating ratio of
131 per cent. Capital expenditures for the year were $4.1 million.
An additional $1.3 million came from grants and contributions
related to transfers associated with ports divestitures.
Revenues increased by 44 per cent during this time, but will
decline as more ports are divested. This revenue rise is due
to traffic growth and fee increases since 1994/95. Expenses fluctuated
over this period but, like revenues, are expected to decline as
more and more ports are divested.
Between 1993 and 1998, revenues per tonne have increased from
$0.15 to $0.23, or by 53 per cent, while expenses per tonneNote
5 have remained relatively stable at approximately
$0.31 per tonne.
Table 10-12 summarizes the financial details of ports and harbours
remaining under Transport Canada's control from 1994/95 to 1998/99.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e12.GIF)
Port Traffic
The following preliminary data shows the traffic at some Canada
Port Authorities in 1999:
- Halifax: almost 14 million tonnes; 107,837 cruise ship passengers
- Montreal: 20.6 million tonnes; 18,300 cruise ship passengers
- Nanaimo: 2.1 million tonnes
- Port Alberni: 1 million tonnes
- Prince Rupert: 8.9 million tonnes
- Quebec City: 16 million tonnes
- Saint John: 20 million tonnes
- Sept-Îles: 20.9 million tonnes
- Thunder Bay: almost 9 million tonnes
- Trois-Rivières: 2.2 million tonnes
- Vancouver: 71.2 million tonnes; 947,659 cruise ship passengers
- Windsor: 5.7 million tonnes
Port Traffic Statistics
Based on Statistics Canada data (available only up to 1998),
Canada's ports handled a total of 376.1 million tonnes of cargo
in 1998, almost the same quantity as in 1997.
Figure 10-7 shows traffic shares by port groups for 1998.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99f10e07.GIF)
In 1998, Ports Canada ports handled the largest amount of traffic,
with a 48 per cent share of the total. Harbour commissions' ports
transported 12 per cent of total, while another 21 per cent of
cargo was moved through Transport Canada facilities. The remaining
19 per cent was handled by other facilities, including those managed
privately and those managed by or on behalf of the Department
of Fisheries and Oceans and provincial and municipal governments.
From 1997 to 1998, the total amount of cargo handled at Ports
Canada ports and Transport Canada facilities decreased by four
per cent, while cargo handled at harbour commissions decreased
by three per cent. Overall, the total tonnage of cargo moved through
Canada's ports remained constant year over year, with increased
traffic in "other" ports offset by equivalent tonnage
decreases at Transport Canada facilities, Ports Canada ports and
harbour commissions.
At those declared public ports where Transport Canada has no
facilities and cargo is transported across private wharves, cargo
shipped totalled 25.8 million tonnes, or 33 per cent of the
total traffic handled by Transport Canada ports. In total, 73.6
million tonnes crossed "other" ports, of which Port
Cartier handled the most at 19.3 million tonnes.
Table 10-13 gives details of tonnage handled by Canada's port
system.
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Small Craft Harbours
The Department of Fisheries and Oceans (DFO) administers harbours
used for commercial and recreational boating under the Fishing
and Recreational Harbours Act. DFO is divesting all recreational
harbours under its responsibility, as well as derelict and low-activity
fishing harbours. All facilities essential to the fishing industry
will remain the property of the federal government to ensure that
these sites preserve their commercial status and that they continue
to provide services to communities. Over the last decade, DFO
has encouraged the creation of local non-profit organizations
known as Harbour Authorities to take over the management of commercial
fishing harbour facilities, as well as to assure the maintenance
of the sites and to provide services to users. It should be noted
that DFO will retain only those fishing harbours managed by a Harbour
Authority.
Fishing Harbours
As of the end of January 2000, a total of 1,070 fishing harbours
were still in the Department of Fisheries and Oceans' inventory,
a decrease of 17.1 per cent from 1994. Harbour Authorities currently
manage 51 per cent of these harbours. By 2003, however, approximately
750 are expected to be managed by Harbour Authorities, while another
300 derelict and low-activity harbours will be divested. It should
be noted that 13 per cent of the remaining small craft harbours
are classified as derelict (sites in a state of disrepair with
no activity, which are slated for demolition).
Table 10-14 reports the fishing harbours remaining under DFO's
responsibility as of January 2000, by region and type of management.
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Recreational Harbours
The Department of Fisheries and Oceans is also gradually divesting
all recreational harbours. Under Program Review, the federal government
committed to withdraw from programs whose function was seen to
be more closely aligned with provincial, community or private-sector
interests in tourism and local economic development than with
federal priorities. The recreational facilities are transferred
mostly to provincial and municipal entities for a nominal cost
and with the assurance that the recipient will continue to operate
the facility for its current purpose and, essentially, at its
current level of operations for at least five years.
Prior to transfer, the Department of Fisheries and Oceans considers
making essential repairs to transfer the installations in
a safe and reasonable condition. The divestiture program
is targetted to end in 2001. No additional funding was allocated
for the divestiture of recreational harbours, and funds used
are, in fact, diverted from the Fishing Harbour Program.
Divesting all recreational harbours will free up funds for
the repair of core fishing harbours. Projected small craft harbour
expenditures for fiscal year 1999/00 are about $59.8 million.
Maintenance (minor and major capital) accounts for 82 per cent
of expenses, while operations account for seven per cent. Salaries
and contributions make up the remainder with nine and two per
cent, respectively. Revenues earned from leases, licences, and
berthage and wharfage dues are projected to drop by 30 per cent
in 1999/00 as a consequence of the divestiture program. The largest
decrease is expected to be observed in Ontario, with revenues
declining by close to $450,000, or 31.4 per cent.
Tables 10-15, 10-16 and 10-17 summarize, by region, the status
of the recreational harbour divestiture program, the recipients
of harbours divested and the type of management of the remaining
facilities in the Department of Fisheries and Oceans' inventory.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e15.GIF)
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e16.GIF)
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St. Lawrence Seaway
The St. Lawrence Seaway connecting the Port of Montreal and
Lake Erie is a shared responsibility between Canada and the United
States. Canada is responsible for the eight locks of the Welland
Canal and five of the seven locks between Montreal and Lake Ontario,
while the US Saint Lawrence Seaway Development Corporation
(SLSDC) operates the remaining two locks.
The Seaway can accommodate vessels 225.5 metres in length,
23.8 metres in beam and eight metres in draft. As a ship
travels west through the Seaway from the Port of Montreal, the
locks eventually raise the ship the height of a 60-storey
building above the water level at Montreal. Figure 10-8 shows
the St. Lawrence Seaway system.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99f10e08.GIF)
The St. Lawrence Seaway Under New Management
In 1999, the Canadian Seaway saw its first full year of management
by the St. Lawrence Seaway Management Corporation (SLSMC). Management
was handed to the Corporation, a not-for-profit, private-sector
organization controlled by Seaway users, on October 1, 1998.
In keeping with the introduction of commercial discipline to
the Seaway, the Ottawa head office of the St. Lawrence Seaway
Management Corporation was closed and services were merged
with the Cornwall office. While the lands and fixed assets of
the Seaway system remain the property of the Government of Canada,
the corporation is responsible for its management, operation and
maintenance (see text box). As part of the transfer agreement,
the corporation assumed risks relating to cost and the federal
government assumed risks relating to revenue.
One of the cornerstones of the Seaway agreement is a five-year
business planning cycle. The first plan, now in effect, sets
specific targets for operating and asset renewal costs, as well
as anticipated revenues for the next five years.
Traffic in 1998
The total value of the 51.1 million tonnes of combinedNote 6 cargo transported
along the Seaway for the 1998 season was estimated at $7.5 billion,
a 4.4 per cent increase in volume over the 49.0 million tonnes
of traffic handled in 1997.
The main commodities moved along the Seaway are grain, iron
ore, coal, other bulk and steel. They generally account for over
70 per cent of total cargoes. The success of the 1998 navigation
season can be attributed to a substantial increase (more than
37 per cent) in shipments of general cargo, which includes
steel slabs and other steel products, mostly from Europe.
US grain movements also increased because of their link to steel
imports (as a backhaul cargo). Movements of iron ore,
coal and other bulk cargo, however, remained steady during 1998.
As shown in Table 10-18, total traffic on the Montreal-Lake
Ontario (MLO) section of the Seaway increased by about 6.4 per
cent to 39.2 million tonnes, while total traffic on the Welland
Canal section decreased by 0.6 per cent to 40.7 million tonnes.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e18.GIF)
There were 4,366 vessel transits in 1998, including 64 vessels
that came into the system for the first time. The number of ocean
vessel transits through the system grew by 28 per cent over 1997,
from 1,122 to 1,438, corresponding to the high level of steel
imports through the Seaway system in 1998.
Preliminary Data for 1999Note 7
Cargo volume for the combined Welland Canal and Montreal-Lake
Ontario sections of the system was about 47.6 million tonnes,
or seven per cent lower than in 1998, largely because of reduced
demand for steel imports.
In 1999, Canadian grain shipments increased by 7.6 per cent
on the Montreal-Lake Ontario section and 2.7 per cent on
the Welland Canal over 1998, to 6.0 and 5.8 million tonnes, respectively.
American grain traffic also increased, by 5.5 per cent to
5.7 million tonnes on the Montreal-Lake Ontario section and
by 3.8 per cent to 5.7 million tonnes on the Welland
Canal section. Total grain traffic increased by 5.7 per cent
on the Montreal- Lake Ontario section and by 2.5 per cent on the Welland
Canal in 1999.
Iron ore shipments on the Montreal-Lake Ontario section were
down only slightly to 10.0 million tonnes, while shipments on
the Welland Canal section decreased 15.4 per cent to 5.3 million
tonnes. This reflects a greater reliance by Canadian steel mills
on iron ore originating from Quebec-Labrador.
THE MANAGEMENT, OPERATION AND MAINTENANCE AGREEMENT
BETWEEN THE GOVERNMENT OF CANADA AND THE ST. LAWRENCE SEAWAY
MANAGEMENT CORPORATION |
The St. Lawrence Seaway Management Corporation was mandated
to manage, operate and maintain the Seaway in accordance with
a Management, Operation and Maintenance Agreement that requires
the corporation to submit five-year business plans throughout
the term of the agreement to the Minister of Transport. The business
plan includes anticipated revenues and operating costs and an
"Asset Renewal Plan." The corporation is authorized
to charge tolls and other revenues to finance the operation and
maintenance of the Seaway, and to recover from the Government
of Canada such additional funds to eliminate operating deficits
when required, in accordance with the terms of the agreement.
The agreement also provides for the formation of a "Capital
Committee" made up of two representatives of the corporation
and two representatives of the Crown. They will review the annual
plan for the capital, maintenance and asset replacement requirements
of the assets under the administration of the corporation and
determine, if it is appropriate, whether any changes are warranted.
The corporation must meet cost targets for operations and
asset renewal budgets, which have been negotiated with the government,
as well as implement a two per cent annual toll increase for
each of the first five years. If the corporation fails to meet
cost targets, penalties in the form of higher toll increases
may be imposed. If the corporation achieves better results than
those required in the contract, it may increase tolls less than
the base amount, or introduce an incentive toll program after
year three.
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Coal traffic remained close to its 1998 level. Traffic on the
Welland Canal decreased by 1.3 per cent to 4.2 million tonnes.
On the Montreal-Lake Ontario section, coal traffic recovered somewhat
to 266,000 tonnes. In 1998, coal movements to New Brunswick
facilities were lost to a South American source, resulting
in a 343,000 tonne, or 64.2 per cent, decrease to 191,000 tonnes.
In 1999, general cargo traffic, largely iron and steel products,
on the Montreal-Lake Ontario section registered a substantial
decrease of 2.5 million tonnes, or 36.3 per cent, for a total
of 4.3 million tonnes. General cargo traffic on the Welland Canal
section registered a decrease of two million tonnes, or 37.7
per cent, for a total of 3.3 million tonnes. After a record
year in 1998, the drop can be explained by a sharp decrease in
imports of iron and steel products in 1999 as the US and Canada
acted to curb alleged dumping of steel, as well as by large surpluses
built up by US and Canadian importers.
Table 10-19 shows commodity movements on the St. Lawrence Seaway
from 1990 to 1998.
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Rates and Tariffs
In keeping with the terms of an agreement negotiated with Seaway
users, a two per cent toll increase for the Canadian
section of the Seaway was implemented on June 1, 1998.
This was the first increase since 1993. A further two per
cent toll increase was implemented in 1999.
As part of this commercialization agreement, a two per cent
annual toll increase with no discounts/ reductions was negotiated
for 1998, 1999 and 2000. However, the agreement obliges the St.
Lawrence Seaway Management Corporation to increase tolls beyond
the two per cent level if it cannot achieve the cost targets
set out in the business plan. Because the successful 1998 season
allowed the corporation to meet and even exceed their targets,
the toll increase for 2000 will remain at two per cent. In
years four and five of the plan, toll discounts/reductions will
be allowed if the corporation continues to exceed the business
plan requirements.
Financial Profile
As a consequence of the transfer of the management of the
Seaway to the corporation on October 1, 1998, the financial
statements from October 1, 1998, to March 31, 1999, reflect
only three months of operating revenues (October to December,
as the Seaway closes for the months of January through March)
and six months of expenses (October 1, 1998, to March 31, 1999).
These expenses include the winter works program comprising the asset
renewal and most of the major maintenance costs. Therefore, the
financial results for the first six months of the corporation's
existence are not representative of a full year's operation of
the Seaway and are therefore not presented in this report. Furthermore,
the financial results of the corporation will not be comparable
to previous years' financial statements, as they exclude the revenues
and expenses pertaining to the non-navigational assets, the income
taxes relating to the St. Lawrence Seaway Authority, amortization
expenses, as well as other expenses that are treated differently.
Table 10-20 shows the financial performance of the St. Lawrence
Seaway from 1988/89 to 1997/98.
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Marine Pilotage
Legislative Framework
The Pilotage Act of 1972, as amended in 1998 by the Canada
Marine Act, governs marine pilotage in Canada. Under this Act,
four regional pilotage authorities were established -- Atlantic
(APA), Laurentian (LPA), Great Lakes (GLPA) and Pacific (PPA).
Each authority is mandated to provide safe and efficient
pilotage services that respond to the particular requirements
of its traffic, as well as to the varied geography and climatic
conditions of the waterways concerned. Although they are not considered
agents of the Crown, all authorities report directly to the Minister
of Transport.
Ministerial Review of Outstanding Pilotage Issues
In August 1998, the Minister of Transport asked the Canadian
Transportation Agency (CTA) to conduct a forward-looking examination
of the marine pilotage system in Canada (see boxed text).
The agency's report and the Minister's response were jointly
tabled in Parliament in late November 1999. The four pilotage
authorities have been asked to submit an implementation
plan for the recommendations by May 2000.
THE CANADIAN TRANSPORTATION AGENCY'S
MARINE PILOTAGE REVIEW |
Section 157 of the Canada Marine Act (CMA), which came
into force on October 1, 1998, contains a provision that amended
the Pilotage Act of 1972 by adding a requirement for the Minister
of Transport to further review the pilotage system. In keeping
with this legislation, the Minister asked the Canadian Transportation
Agency to conduct a review of the pilotage system in August 1998.
The impetus for this review stemmed from the 1995 National Marine
Policy, which recognized a need to further analyse some of the
outstanding issues within the pilotage regime.
The review covered five distinct subject areas:
- pilot certification process for masters and officers
- training and licensing requirements for pilots
- compulsory pilotage area designations
- dispute resolution mechanisms
- financial self-sufficiency and cost-reduction measures.
The agency's final report, submitted to the Minister on September 1,
1999, contained 21 recommendations, with which Transport Canada
concurs in principle.
The following recommendations apply to all pilotage authorities:
- identify, through consultation by each authority, any compulsory
areas that justify a reexamination of the designation, based
on a risk assessment and the conduct of a review every five years;
- maintain a case-by-case assessment of waivers' requests to
compulsory pilotage and reasons for denial;
- maintain the current regional system for training and licensing
pilots;
- report on the pool of qualified candidates in annual reports,
including identifying any problems and corrective measures to
address them;
- develop, through consultation, and implement a fair and reasonable
system for assessing pilots' competence and quality of service;
- examine regularly all aspects of each authority's operations
to improve efficiencies and further reduce costs;
- maintain the Act as it relates to the composition of boards
of directors (i.e. no changes);
- plan regular consultations with interested parties on financial,
operational and planning issues that affect such parties;
- establish a system for early release of practical information
about minor incidents;
- establish a structured methodology for handling complaints,
ensuring timely feedback about the outcome or the action taken
to the complainant; and
- submit a plan to the Minister of Transport, within six months
of tabling of the report, that sets out in order of priority
the proposed implementation and anticipated completion date of
all the Canadian Transportation Agency's recommendations.
The recommendations which apply to specific pilotage authorities
have to do with a number of matters such as the development of
material relevant for certification purposes and a description
of certification exam expectations; a risk-based assessment
to determine double pilotage requirements; a risk-based assessment
of vessel-size limit and the types of vessels subject to compulsory
pilotage; amendment of an authority's regulations for exempting
vessels from compulsory pilotage; adding a provision allowing
for the revocation of an exemption from compulsory pilotage.
|
Financial and Operating Performance
In 1999, pilotage revenues, on a nationwide basis, once again
exceeded expenditures. As shown in Table 10-21, three of the four
pilotage authorities managed to return modest surpluses, while
the Great Lakes Authority's loss was covered by its retained earnings.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e21.GIF)
The results for 1999 represent a continuation of the trend toward
positive net incomes over the last few years. Financial results
for each authority from 1995 to 1999 are shown in Table 10-22.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e22.GIF)
Total revenues have risen only slightly, while expenses have
generally kept pace with inflation over the five-year period.
Nevertheless, Figure 10-9 shows clearly the trend toward improved
bottom lines for pilotage authorities.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99f10e09.GIF)
To measure efficiency of pilotage services, the average number
of assignments per pilot is commonly used. Based on this
measure, efficiency has increased between 1995 and 1999 by 3.1
per cent.
Table 10-23 shows the number of assignments for each pilotage
authority and the total for all authorities between 1995 and 1999.
The variations among the authorities and the fluctuations over
the period are in response to traffic levels. Overall, total assignments
have grown by 9.4 per cent since 1995.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e23.GIF)
Canadian Coast Guard
Responsibilities
The Canadian Coast Guard's (CCG) mission is to ensure safe
and environmentally responsible use of Canada's waters; support
understanding and management of ocean resources; facilitate the
use of Canada's waters for shipping, recreation and fishing;
and provide marine expertise in support of Canada's domestic and
international interests.
The Coast Guard has undergone major restructuring over the
past several years as it merged with the Department of Fisheries
and Oceans (DFO). In keeping with this new partnership and with
its main role of ensuring safe and environmentally responsible
use of Canada's waterways, the Coast Guard works with its counterparts
in the DFO sector to advance the department's oceans mandate.
The Coast Guard is divided into five business lines that cover
all five regions of DFO. These five lines include: marine navigation
services; marine communications and traffic services; icebreaking
operations; rescue, safety and environmental response activities;
and fleet management.
Under these business lines, the Coast Guard delivers a wide
range of marine programs, policies and services that encompass
several sectors within the marine community: commercial shipping
interests, recreational boaters, the fishing industry, ferry services,
tug and barge re-supply operations in the North, cruise lines,
private-sector shippers, and provincial, municipal and territorial
governments, as well as federal government departments.
In addition, the Coast Guard serves the general public through
its role in protecting their interest in preserving ecosystems,
ensuring water supplies remain unpolluted by oil and chemical
spills, and protecting recreational resources.
The Department of Fisheries and Oceans has two key result commitments:
the conservation and biological sustainability of fisheries resources,
marine and freshwater habitats and a protected environment; and
the provision of safe, efficient and accessible waterways and
harbours. The Coast Guard's contributions to these commitments
are found in each of its business lines. These include such areas
as response to marine oil emergencies, efficient and effective
aids to navigation infrastructure, annual deliveries by ship to
northern settlements and military sites, and client and public
awareness of programs and policies.
Marine Navigation Services
The Coast Guard's Marine Navigation Services (MNS) group provides,
operates and maintains a system of navigational aids that include
262 automated light stations, 52 of which are staffed; 5 LORAN
C communication stations; 18 Differential Global Positioning System
(DGPS) transmitter sites; more than 6,000 land-based fixed marine
aids; and more than 13,000 floating aids. In addition, the group
develops and maintains waterways, ensures the public's right to
navigation is protected, and protects the environment. These responsibilities
are in keeping with the Department of Fisheries and Oceans' commitment
to safe, efficient and accessible waterways.
The Marine Navigation Services division will continue with
and move forward on a number of activities in support of its mission,
including continuing to modernize aids to navigation through several
initiatives. One of these is the complete implementation of a
full DGPS by the spring of 2000. In addition, the division will
continue to modernize, maintain, implement and upgrade information
systems such as national databases on the use of Canadian
waterways, the Aids Program Information System (APIS), the Marine
Aids Costing Model (SRAN) and the Navigable Waters Database
System. Marine Navigation Services will also pursue amendments
to the Navigable Waters Protection Act.
Marine Communication and Traffic Services
Marine Communication and Traffic Services provides distress
and safety communications and co-ordination; vessel screening
to prevent entry of unsafe vessels into Canadian waters; regulation
of vessel traffic movements; and management of an integrated system
of marine information and public correspondence services. In addition
to ensuring safe marine navigation, Marine Communication and Traffic
Services supports economic activities by optimizing traffic movements
and port efficiency, and facilitating industry ship/shore communications.
All of these functions are derived from a regulatory framework
that is based primarily on the Canada Shipping Act and
the Safety of Life at Sea Convention.
The group's supporting infrastructure includes staffed communications
centres and remote transmitter and receiver sites.
By the nature of its operations, Marine Communication and Traffic
Services is a key element of the national movement toward sustainable
development for oceans and marine resources. It fully supports
Oceans Strategy by exploring ways to improve the monitoring
and management of protected marine areas.
The group is also improving its surveillance capability by
developing implementation strategies for universal Automatic Identification
Systems (AIS) technology, a leading-edge marine navigation technology
that offers both mariners and competent authorities a more
efficient and cost-effective means of service delivery. This group
also improves communications capability by continuing the implementation
of the Global Maritime Distress Safety System (GMDSS), as
well as continually reviewing infrastructure to provide possibilities
for further efficiencies through the application of technological changes.
Icebreaking Operations
Icebreaking operations include such activities as providing
icebreaking escorts, channel maintenance, flood control,
harbour breakouts, and ice-routing and information services for
marine traffic navigating through or around ice-covered waters.
This business line also co-ordinates the movement of cargo for
the annual re-supply of northern settlements and military sites
using contracted commercial carriers.
The Icebreaking Program has moved from its traditional role
of providing a wide range of free services to a more client-focused,
demand-driven service role that reflects recent downsizing activities.
Commercial users now pay a percentage of the allocated costs
in the form of an icebreaking service fee. The program's challenge
in providing these services is to match the ice season and client
requirements with service capacity on a year-to-year basis so
that resources are used efficiently.
The program also maintains international expertise and recognition
through its involvement with the US Coast Guard, North Atlantic
Ice Patrol and other governments involved in icebreaking. It has
also strengthened its alliance with Transport Canada's Marine
Safety Branch for the Harmonization of Polar Ship Rules,
to protect Canada's position and take a proactive role in forums
dealing with ice operations or ships operating in ice-covered
water. An economic study on the benefits of icebreaking services
continues; preliminary results indicate that benefits far outweigh
the costs of the service.
Rescue, Safety and Environmental Response
The objective of the Rescue, Safety and Environmental Response
(RSER) group is to save lives and protect the marine environment.
The group provides maritime search and rescue (SAR) services,
and environmental response and departmental national emergency
preparedness. It also promotes boating safety to the public through
prevention and regulation. The group's supporting infrastructure
includes search and rescue stations with in-shore rescue boats,
as well as several spill-response equipment depots.
This group implemented a number of major new measures to improve
boating safety in 1999. These include ensuring mandatory operator
competency, age and horsepower restrictions, and modernizing small
vessel regulations; and improving the effectiveness of oil spill
preparedness and response regime through a review of the regime's
regulations, standards and guidelines. In addition, the group
continued to develop a hazardous and noxious substances response
regime for Canada by maintaining consultations with major stakeholders
and providing an effective maritime search and rescue service
through quality initiatives and enhanced evaluations.
Fleet Management
The goal of the Fleet Management group is to provide a safe,
efficient and cost-effective sea and air fleet and the related
services necessary to support Department of Fisheries and Oceans
program activities, as well as improve client satisfaction. In
keeping with this goal, the Fleet Management group acquires, maintains
and schedules the department's sea and air fleets in support of
the following program areas: Marine Navigation Services; Marine
Communications and Traffic Services; Icebreaking Operations; Rescue,
Safety and Environmental Response; Fisheries Management; and Fisheries
and Oceans Science and Hydrography. The funding to crew and operate
the fleet is provided by the particular program areas. Fleet Management
also arranges for any necessary increase in fleet capabilities
by co-ordinating with other government departments and the private
sector to provide additional sea and air support to the programs.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e24.GIF)
Fleet Management is in the process of moving toward a base-fleet
concept in which an established minimum number of vessels would
deliver the program requirements and provide a stable base for
financial, operational and human resource planning. The group
is also continuing to implement the fleet safety management
system to meet the standards of the International Management (ISM)
Code for the Safe Operation of Ships. Future plans for the group
include implementing a costing model to give managers and clients
a true understanding of the cost of fleet operations.
Financial Performance
Through a combination of efficiency measures and reduced operations,
resulting in lower expenses, the Coast Guard has permanently
reduced its net expenditures on the services described above by
$140 million, or 30 per cent, over the four-year period
ending 1998/99. Table 10-25 shows the Coast Guard's financial
results for its five major business lines from 1995/96 to 1999/2000.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e25.GIF)
The Coast Guard has implemented user fees for some programs
to obtain a fair contribution from users for programs from which
they directly benefit. The Marine Navigation Services Fee was
first introduced in June 1996. It offsets, on average, 27 per
cent of the full costs of providing marine navigational services
to the commercial shipping industry.
In September 1997, a Maintenance Dredging Services Tonnage
Fee for the St. Lawrence Ship Channel was introduced. This fee
is only an interim measure to cover the total costs incurred by
the Coast Guard to provide these dredging services. The Coast
Guard is currently working with representatives of the marine
transportation industry to arrive at a long-term arrangement,
including the possibility of transferring responsibility for these
dredging services to industry.
On December 4, 1998, the Minister of Fisheries and Oceans outlined
elements for a revised Icebreaking Services Fee (ISF) proposal
that would generate $6.65 million annually plus administrative
costs. The proposal is built around a transit-based icebreaking
fee that will be uniformly applied to each transit to, from or
within the ice zone during the ice season. Table 10-26 shows
the breakdown of the Coast Guard's revenues and expenditures by
its five main business lines for the fiscal year 1999/2000.
![](/web/20060212084209im_/https://www.tc.gc.ca/pol/en/Report/anre1999/graphics/chap10/99t10e26.GIF)
Marine Transportation Infrastructure
- Appendix 10-1 Personal Expenditures
on Transportation, 1998
NOTES
3
In subsequent annual reports, the information presented here will
be reported by Canada Port Authorities (CPAs). Given that the
most recent year for which the information is reported in this
report is 1998, and that most CPAs were created in 1999, a breakdown
by CPA will be presented in Transport Canada's 2000 annual report.
4
As of 1995, all harbour commissions operated on a calendar-year
basis (January to December). Prior to this, the Toronto Harbour
Commission operated on a fiscal-year basis (April to March).
5
Tonnage statistics include cargoes moved across private facilities
within Transport Canada public harbours.
6
Combined for Montreal-Lake Ontario and Welland Canal sections.
7
Year-to-date data to the end of November 1999
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