Vol. 138, No. 15 — April 10, 2004

Regulations Amending the Great Lakes Pilotage Tariff Regulations

Statutory Authority

Pilotage Act

Sponsoring Agency

Great Lakes Pilotage Authority

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The Great Lakes Pilotage Authority (the Authority) is responsible for administering, in the interests of safety, an efficient pilotage service within Canadian waters in the Province of Quebec, south of the northern entrance to Saint-Lambert Lock, and in and around the provinces of Ontario and Manitoba.

Section 33 of the Pilotage Act (the Act) allows the Authority to prescribe tariffs of pilotage charges that are fair and reasonable, and that permit the Authority to operate on a self-sustaining financial basis.

In the fall of 2003, the Authority had anticipated a loss of $1.8 million based on the continuing reduction in traffic levels. This would have completely depleted the Authority's surplus funds. The Authority consequently decided to implement an 8-percent tariff increase to support its efforts for maintaining fiscal self-sufficiency and to break even in 2004. The 8-percent tariff increase, when combined with previous increases starting in February 2002, reflected a 15-percent increase during the period 1994 to 2003 when inflation totalled 22 percent.

In December 2003, when the navigational season concluded, the Authority had in fact lost $2.6 million, $800,000 more than had originally been anticipated, due to a greater reduction in traffic levels than had been expected. This necessitated withdrawing $800,000 from the Authority's reserves set aside to meet the costs associated with employee retirements. To support its efforts towards operating on a self-sustaining financial basis, it is necessary that the Great Lakes Pilotage Tariff Regulations be amended to reflect an additional 7-percent increase in the Authority's pilotage charges in 2004. This will cover the actual loss incurred by the Authority at the end of the 2003 navigational season and allow it to attain a break-even position at the close of the 2004 navigational season.

The proposed 7-percent tariff increase, when combined with the previous tariff increases starting in February 2002, will reflect a 22-percent increase during the period 1994 to 2003. This will equate to the total inflationary rate of 22 percent during the same period. Taking into account this proposed tariff increase, the Authority will, at last, be in a financially stable position where its successive tariff increases since February 2002 have finally caught up with inflation over the past ten years.

With respect to a vessel making a round trip between Saint-Lambert Lock (Montréal) and Thunder Bay, the net effect of the 7-percent increase averages out to an overall increase of $3,110 or 14˘ per tonne of cargo carried on the round trip.

Alternatives

The Authority is required to provide a safe and efficient pilotage service to ensure navigational safety and protection of the marine environment. Costs have been kept to the minimum consistent with providing a safe and efficient service. Further reductions in operating costs are not an alternative since this would reduce the quality of service provided by the Authority.

A retention of the existing tariff rates was an option. The Authority, however, rejected the status quo position since its surplus funds are totally depleted and it had to withdraw $800,000 from its reserves set aside for employee retirements to cover ongoing operating expenses. It is therefore necessary that the Authority increase its tariff charges to reflect the actual costs of providing the various pilotage services and ensure a break-even position at the close of the 2004 navigational season.

The proposed amendment will support the Authority's efforts to ensure financial self-sufficiency while providing a safe and efficient pilotage service in accordance with the requirements of the Act.

Benefits and costs

The proposed 7-percent increase is consistent with the current costs of providing pilotage services. It is anticipated that the proposed amendment will generate an annual increase in revenue of approximately $800,000 which should replenish the funds withdrawn from its reserves set aside for employee retirements.

This tariff charge is beneficial in that it will ensure the continued efficiency of the pilotage services while maintaining the present level of pilot numbers. In addition, this increase will enhance the Authority's ability to operate on a self-sustaining financial basis that is both fair and reasonable.

In accordance with the 1999 Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, and the Transport Canada Policy Statement on Strategic Environmental Assessment, a strategic environmental assessment (SEA) of this proposal was conducted, in the form of a Preliminary Scan. The SEA concluded that the proposal does not have any impact on the environment.

Consultation

On February 13, 2004, the Authority consulted with the Shipping Federation of Canada (SFC), which represents approximately 95 percent of the users affected by the tariff increase. The Authority also communicated with the Canadian Shipowners Association (CSA), which represents the remaining 5 percent of users. These Canadian users are primarily tanker operators. The tariff increases are generally passed on to the charterers of these vessels. In addition, the Authority sent letters to all its stakeholders advising them of the proposed tariff increases and inviting their comments.

During the meeting with the SFC, the Authority elaborated on its current financial situation caused by the 30-percent decline in traffic levels over the past four years. It also stressed the need to close the percentage gap between its successive tariff increases since February 2002 and the cumulative rate of inflation over the past ten years. During the period 1994 to 2003, the Authority's combined tariff increases reflected a 15-percent increase which was significantly below the 22-percent inflation rate for the same period. The proposed 7-percent tariff increase will enable the Authority to catch up with the 22-percent inflation rate over the past ten years. The Authority also advised SFC members that it will maintain the present number of pilots in order to preserve the current level of service for its clients.

In response to the Authority's proposed tariff increase to attain a break-even position by the end of the 2004 navigational season, several SFC members expressed their concerns about the increase while other members had no comment.

Based on its current financial position, the Authority has no recourse but to increase its pilotage charges by an overall 7 percent to assist it in achieving a break-even position at the close of the year as required by the Act.

Compliance and enforcement

Section 45 of the Act provides the enforcement mechanism for these Regulations in that a pilotage authority can inform a customs officer at any port in Canada to withhold clearance from any ship for which pilotage charges are outstanding and unpaid.

Section 48 of the Act stipulates that every person who fails to comply with the Act or Regulations is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Contact

Mr. R. F. Lemire, Chief Executive Officer, Great Lakes Pilotage Authority, P.O. Box 95, Cornwall, Ontario K6H 5R9, (613) 933-2991 (telephone), (613) 932-3793 (facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act, that the Great Lakes Pilotage Authority proposes, pursuant to subsection 33(1) of that Act, to make the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations.

Interested persons who have reason to believe that any charge in the proposed Regulations is prejudicial to the public interest, including, without limiting the generality thereof, the public interest that is consistent with the national transportation policy set out in section 5 of the Canada Transportation Act (see footnote b), may file a notice of objection setting out the grounds therefor with the Canadian Transportation Agency within 30 days after the date of publication of this notice. The notice of objection should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Canadian Transportation Agency, Ottawa, Ontario K1A 0N9.

Cornwall, March 30, 2004

ROBERT LEMIRE
Chief Executive Officer
Great Lakes Pilotage Authority

REGULATIONS AMENDING THE GREAT LAKES
PILOTAGE TARIFF REGULATIONS

AMENDMENTS

1. Subparagraph 3(1)(c)(ii) of the French version of the Great Lakes Pilotage Tariff Regulations (see footnote 1) is replaced by the following:

(ii) le droit à payer établi à l'annexe I à l'égard de ce service, multiplié par le taux de conversion de la monnaie applicable au mois où le service a été rendu;

2. The heading "DROITS DE PILOTAGE EXIGIBLES POUR LES ZONES AUTRES QUE LA CIRCONSCRIPTION DE CORNWALL ET LE PORT DE CHURCHILL (MANITOBA)" of Schedule I to the French version of the Regulations is replaced by the following:

DROITS DE PILOTAGE À PAYER POUR LES ZONES
AUTRES QUE LA CIRCONSCRIPTION DE CORNWALL
ET LE PORT DE CHURCHILL (MANITOBA)

3. (1) Subsections 1(1) to (4) of Schedule I to the Regulations are replaced by the following:

1. (1) Subject to subsection (2), the basic charge for a passage, other than a movage, through International District No. 1 or any part thereof and its contiguous waters is $8.75 for each kilometre ($14.56 for each statute mile), plus $194 for each lock transited.

(2) The minimum and maximum basic charges for a through trip through International District No. 1 and its contiguous waters are $426 and $1,867, respectively.

(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $640.

(4) If a ship, during its passage through the Welland Canal, docks or undocks for any reason other than instructions given by The St. Lawrence Seaway Management Corporation, the basic charge is $41 for each kilometre ($67.41 for each statute mile), plus $251 for each lock transited, with a minimum charge of $838.

(2) The portion of items 1 to 15 of the table to subsection 1(5) of Schedule I to the Regulations in column 2 is replaced by the following:

(3) The portion of items 1 to 4 of the table to subsection 1(6) of Schedule I to the Regulations in column 2 is replaced by the following:

4. (1) The portion of items 1 and 2 of the table to subsection 2(1) of Schedule I to the Regulations in column 2 is replaced by the following:

(2) The portion of subsection 2(2) of Schedule I to the French version of the Regulations before paragraph (a) is replaced by the following:

(2) Lorsqu'un navire, ayant à son bord un pilote, franchit directement les eaux non désignées et les eaux limitrophes du lac Érié entre le haut-fond Southeast et Port Colborne, les droits de base visés au paragraphe (1) ne sont à payer que si, selon le cas :

(3) Subsection 2(3) of Schedule I to the Regulations is replaced by the following:

(3) The basic charge for pilotage services consisting of a lockage and a movage between Buffalo and any point on the Niagara River below the Black Rock Lock is $784.

5. (1) Subsections 3(1) and (2) of Schedule I to the Regulations are replaced by the following:

3. (1) Subject to subsections (2) and (3), if, for the convenience of a ship, a pilot is detained after the end of the pilot's assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $57 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge under subsection (1) for any 24-hour period is $900.

(2) The portion of subsection 3(3) of the French version of Schedule I to the Regulations before paragraph (a) is replaced by the following:

(3) Aucun droit de base pour la retenue du pilote n'est à payer aux termes du présent article durant une interruption de la traversée du navire :

6. Section 4 of Schedule I to the Regulations is replaced by the following:

4. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $57 is payable for each hour or part of an hour, including the first hour of that delay.

(2) The maximum basic charge under subsection (1) for any 24-hour period is $900.

7. (1) Subsections 5(1) to (3) of Schedule I to the Regulations are replaced by the following:

5. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, the basic charge is $1,208.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $57 is payable for each hour or part of an hour, including the first hour, between the time the pilot reports and the time of cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $900.

(2) Subsection 5(4) of the French version of Schedule I to the Regulations is replaced by the following:

(4) Lorsqu'une demande de services de pilotage est annulée après que le pilote a quitté son poste de travail pour se rendre au point d'embarquement désigné, est à payer, en plus de tout autre droit de base imposé en application du présent article, un droit égal aux frais de déplacement et autres frais raisonnables engagés par le pilote pour se rendre de son poste de travail au point d'embarquement et en revenir.

8. (1) Subsections 7(1) and (2) of Schedule I to the Regulations are replaced by the following:

7. (1) If a pilot is unable to board a ship at the normal boarding point and, to board it, must travel beyond the area for which the pilot's services are requested, the basic charge of $349 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the normal boarding point.

(2) If a pilot is carried on a ship beyond the area for which the pilot's services are requested, the basic charge of $349 is payable for each 24-hour period or part of a 24-hour period before the pilot is returned to the place where the pilot normally would have disembarked.

(2) Subsection 7(3) of the French version of Schedule I to the Regulations is replaced by the following:

(3) Outre les droits de base visés aux paragraphes (1) et (2), est à payer un droit égal aux frais de déplacement et autres frais raisonnables engagés par le pilote comme conséquence directe de son obligation de se rendre à un endroit autre que le point habituel d'embarquement ou de débarquement ou d'en revenir.

9. The heading "DROITS DE PILOTAGE EXIGIBLES POUR LA CIRCONSCRIPTION DE CORNWALL" of Schedule II to the French version of the Regulations is replaced by the following:

DROITS DE PILOTAGE À PAYER POUR LA CIRCONSCRIPTION DE CORNWALL

10. The portion of items 1 to 4 of the table to section 1 of Schedule II to the Regulations in columns 2 and 3 is replaced by the following:

11. (1) Subsections 4(1) and (2) of Schedule II to the Regulations are replaced by the following:

4. (1) Subject to subsections (2) and (3), if, for the convenience of a ship, a pilot is detained after the end of the pilot's assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $106 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,629.

(2) Subsection 4(3) of the French version of Schedule II to the Regulations is replaced by the following:

(3) Aucun droit de base n'est à payer aux termes du présent article pour la retenue du pilote durant une interruption de la traversée du navire qui est causée par l'état des glaces, le mauvais temps ou le trafic, sauf durant la période commençant le 1^er décembre et se terminant le 8 avril suivant.

12. Section 5 of Schedule II to the Regulations is replaced by the following:

5. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, the basic charge payable for each hour or part of an hour, including the first hour, of that delay is $106.

(2) The maximum basic charge under subsection (1) for any 24-hour period is $1,629.

13. (1) Subsections 6(1) to (3) of Schedule II to the Regulations are replaced by the following:

6. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, the basic charge is $1,208.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge prescribed in subsection (1), the basic charge payable for each hour or part of an hour, including the first hour, between the time the pilot reports and the time of the cancellation is $106.

(3) The maximum basic charge under subsection (2) for any 24-hour period is $1,629.

(2) Subsection 6(4) of the French version of Schedule II to the Regulations is replaced by the following:

(4) Lorsqu'une demande de services de pilotage est annulée après que le pilote a quitté son poste de travail pour se rendre au point d'embarquement désigné, est à payer, en plus de tout droit de base imposé en application du présent article, un droit égal aux frais de déplacement et autres frais raisonnables engagés par le pilote pour se rendre de son poste de travail au point d'embarquement et en revenir.

14. The heading "DROITS DE PILOTAGE EXIGIBLES POUR LE PORT DE CHURCHILL (MANITOBA)" of Schedule III to the French version of the Regulations is replaced by the following:

DROITS DE PILOTAGE À PAYER POUR LE
PORT DE CHURCHILL (MANITOBA)

15. The portion of items 1 and 2 of the table to section 1 of Schedule III to the Regulations in column 2 is replaced by the following:

16. The portion of section 2 of the French version of Schedule III to the Regulations before paragraph (a) is replaced by the following:

2. Les droits de base à payer pour tout service rendu avant le 20 juillet ou après le 31 octobre d'une année correspondent à la somme des montants suivants :

COMING INTO FORCE

17. These Regulations come into force on the day on which they are registered.

[15-1-o]

Footnote a

S.C. 1998, c. 10, s. 150

Footnote b

S.C. 1996, c. 10

Footnote 1

SOR/84-253; SOR/96-409

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