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Vol. 139, No. 10 — March 5, 2005 Regulations Amending the Laurentian Pilotage Tariff RegulationsStatutory authority Pilotage Act Sponsoring agency Laurentian Pilotage Authority REGULATORY IMPACT (This statement is not part of the Regulations.) Description The Laurentian Pilotage Authority (the Authority) is responsible for administering, in the interest of safety, an efficient pilotage service within Canadian waters in and around the Province of Quebec, north of the northern entrance to Saint-Lambert Lock, except the waters of Chaleur Bay south of Cap d'Espoir. The Authority also prescribes tariffs of pilotage charges that are fair, reasonable and sufficient to permit the Authority to operate on a self-sustaining financial basis. The tariff amendments proposed by these Regulations are necessary for the Authority to meet the increase in fees that must be paid to Pilotes du Saint-Laurent Central inc., the Authority's pilotage service supplier between Saint-Lambert Lock and Québec, as a result of an arbitrator's decision that was confirmed by the Federal Court of Canada on October 1, 2004. This increase is 5 percent in addition to the one originally budgeted by the Authority and which took effect on July 1, 2002. The financial impact resulting from the Federal Court Order is twofold. First, the Authority must meet a 5 percent general increase in pilotage fees, which requires 93 percent of the revenue generated by the tariff. The Authority must therefore increase its tariff accordingly for services rendered in District No. 1 between Saint-Lambert Lock and Québec. Second, the Authority must pay Pilotes du Saint-Laurent Central inc. an accumulated amount equal to 5 percent on all pilotage services that were rendered by this corporation since July 1, 2002, until the coming into force of the 5 percent recurring general increase. This debt could amount, in capital and interest, to approximately $4,000,000, which the Authority will borrow and repay within 36 months. In order to do this, the Authority must temporarily increase its tariff by 4.9 percent for the district between Saint-Lambert Lock and Québec, until complete repayment. Consequently, this surcharge will be included in the tariff as a temporary measure. Alternatives As soon as it appeared that it was no longer in the interest of the Authority and of its users to maintain the litigation in respect of the arbitrator's decision, the Authority considered various alternatives to meet this increase in pilotage fees, for the future and for the accumulated amounts. After having considered negotiating various financial terms with Pilotes du Saint-Laurent Central inc., it was decided that it would be preferable to borrow the required amount from a financial institution at a lesser cost. After considering various alternatives regarding the terms of payments for this loan, the Authority chose a 36-month term. However, this loan is subject to government approval. Because the Authority has no accumulated surplus and that its operations ratio has been approximately 1.00 percent for the past several years, it has no resources allowing it to repay, even in part, the debt created by the 5 percent increase to cover the arbitrator's decision. For the year 2005, for example, the Authority anticipates a deficit of $725,000, even with the estimated reduction in costs. Benefits and costs The general 5 percent tariff increase in District No. 1 will generate, from July 1, 2005, an amount of $742,000 for 2005 and $1,302,000 for 2006. However, 93 percent of this revenue will be turned over to Pilotes du Saint-Laurent Central inc. The temporary surcharge of 4.9 percent will generate revenues of $756,000 during a six-month period in 2005 and $1,390,000 in 2006. These amounts will be entirely used for the repayment of the $4,316,000 debt, which includes the amount of the loan plus financing costs, until complete repayment in 2008. The surcharge will then cease to apply. During the period where they will both apply, these increases will represent a raise in pilotage charges of approximately $375 per trip for a ship transiting the Saint-Lawrence River between the pilot boarding stations at Saint-Lambert and Québec, that is 140 nautical miles. The average duration of such trip is 11.1 hours. The average supplementary cost per pilotage mile will be $2.68. This tariff increase is necessary to cover all costs generated by the Federal Court Order. This initiative will ensure the continued efficiency and safety of the pilotage service and, at the same time, its financial autonomy. 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 During the month of October 2004, the Authority held a meeting with the main pilotage service user groups concerning the consequences and the possible alternatives with regard to the Federal Court Order. Although they understand that the Authority is subjected to restraints beyond its control, the main user groups' representatives indicated that they will object to the tariff increases deriving from this situation because of the financial impact. In spite of the comments resulting from this consultation, the Authority has no other choice but to comply with the Federal Court Order and pay the amounts involved. Compliance and enforcement Section 45 of the Pilotage Act provides the enforcement mechanism for these Regulations; it states that no customs officer at any port in Canada shall grant a clearance to a ship if the officer is informed by an Authority that pilotage charges in respect of the ship are outstanding and unpaid. Section 48 of the Pilotage Act provides a penalty of up to $5,000 if the Regulations are contravened. Mr. Jean-Claude Michaud, Chief Executive Officer, Laurentian Pilotage Authority, 555 René-Lévesque Boulevard W, Suite 1501, Montréal (Quebec) H2Z 1B1, (514) 283-6320 (telephone), (514) 496-2409 (facsimile). Notice is hereby given, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act, that the Laurentian Pilotage Authority proposes, pursuant to subsection 33(1) of that Act, to make the annexed Regulations Amending the Laurentian 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. Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act. Ottawa, February 18, 2005 JEAN-CLAUDE MICHAUD REGULATIONS AMENDING THE LAURENTIAN PILOTAGE TARIFF REGULATIONS AMENDMENTS 1. The Laurentian Pilotage Tariff Regulations (see footnote 1) are amended by adding the following after Section 6: TEMPORARY SURCHARGE 6.1 A surcharge of 4.9 per cent is payable on each pilotage charge payable under section 2 for a pilotage service provided in District No. 1 until the proceeds of the surcharge total $4,316,000. 2. Schedule 2 to the Regulations is replaced by the following: SCHEDULE 2 PILOTAGE CHARGES
COMING INTO FORCE 3. These Regulations come into force on July 1, 2005. [10-1-o] S.C. 1998, c. 10, s. 150 S.C. 1996, c. 10 SOR/2001-84 The number of chargeable hours of service is calculated from the later of the time for which the pilotage services are requested and the time the pilot reports for pilotage duty until the time of cancellation The number of chargeable hours of service is calculated from the later of the time for which the pilotage services are requested and the time the pilot reports for pilotage duty until the time of cancellation |
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