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Vol. 141, No. 35 — September 1, 2007 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. Over the past year, the Authority negotiated with its pilotage service providers, which enabled it to conduct an in-depth review of key financial and operational factors in its pilotage contracts. These five-year agreements reduce costs and improve the Authority's financial stability, namely by removing an inappropriate productivity factor clause. These new service contracts also address departmental requests made in June 2006. The winter night navigation rules have been amended so that all vessels with certain equipment can, with some exceptions, leave the wharf and travel at any time in the winter, whether they are up bound or down bound the St. Lawrence River. Progress has also been made in harmonizing the contracts of the two pilots corporations by eliminating the productivity clause that until recently was part of the Corporation of Mid-St. Lawrence River Pilots Inc. contract. These contracts also set out a pilotage charge increase corresponding with the Consumer Price Index (CPI). The service contracts also include new terms regarding payment for winter services before January 1 and after March 15. This means that users no longer have to pay for double pilotage in the pre- and post-winter periods, independently from the winter navigation period determined by the Authority pursuant to paragraph 35(1)(f) of the Laurentian Pilotage Authority Regulations. The compensation paid to pilotage corporations in this regard will now be subject to a 3.5% general tariff increase in 2008 in Districts Nos. 1 and 2. Overall, this entails a net reduction of $1.7 million for users, which is 44% of the double pilotage fees paid annually. This amendment is therefore very advantageous for the users and brings with it a significant improvement to the winter night navigation contract rules. At the same time, it increases the availability and productivity of pilots during high-traffic periods by avoiding automatically assigning a second pilot to all vessels. This approach will also reduce the number of apprentice pilots that need to be recruited by 30%. The Authority also proposes increasing its tariffs by 2.25% in 2008 to address the overall increase in service costs, corresponding with the CPI. At the same time, the temporary 4.9% supplementary charge for District No. 1 users, which was in place to repay the amounts due to the Corporation of Mid-St. Lawrence River Pilots Inc., will be eliminated around March 2008. This represents an annual reduction of $1.67 million. The Authority proposes immediately setting the 2009 and 2010 tariff increases at 2.25% and 1.00%, respectively. Since the Authority now has better control over its financial operations, it can better anticipate its future needs and can set increases over a longer period of time to enable users to better anticipate and plan their pilotage costs. The requested increase rates are lower than the forecast CPI for 2009 and 2010. Finally, the Authority would like to increase the minimum tariff generally charged to small vessels in order to reflect the costs associated with double pilotage for slow vessels. The tariffs for the services of a second pilot on vessels that will likely travel for 10 hours or more in District No. 1, or for 10 or more hours starting between 9:00 p.m. and 2:59 a.m. in District No. 2, will henceforth be integrated into the general tariff, without additional user fees. Since the new minimum tariff for small vessels corresponds with the costs of the services they receive, the proposed amendment is fairer for all users, without increasing the total cost to users who currently pay this minimum tariff. Alternatives The Authority's objective is to provide safe and efficient pilotage services at the minimum cost. For 2007, it once again successfully froze costs associated with pilot boats in certain regions and made cost reduction the priority in its negotiations for the renewal of pilotage corporation service contracts. From this perspective, the Authority assessed several scenarios that varied according to the number of years over which the tariff changes apply and how quickly the financial objectives have to be achieved. User consultations also influenced the scenarios assessed. Despite a greatly improved financial and operational context, the Authority must still deal with its financial situation by reducing its accumulated deficit, which was $7,823,425 on December 31, 2006. Moreover, for the second consecutive year, the Auditor General's report has drawn Parliament's attention to the Authority's deficit, in light of the financial self-sufficiency requirement set out in the Pilotage Act (the Act). Her report concluded that the Authority must continue to address its financial situation to ensure that it will continue to be able to fulfill its mandate. The Authority must also eliminate its current dependence on loans to pay for ongoing operations and create a $2 million financial reserve for this purpose, as instructed by the Minister of Transport, Infrastructure and Communities in a letter dated June 16, 2006. This reserve would eliminate the financing charges related to the Authority's line of credit as of the end of 2009. In light of these financial objectives, the status quo is not an acceptable option, and the proposed solution makes it possible to achieve the desired results. This solution directly reflects the actual costs of delivering pilotage services, since the amounts owing under the service contracts with the two pilotage corporations and under the collective agreement with Port of Montréal pilots account for approximately 85% of the Authority's expenditures. Benefits and costs The 3.5% tariff increase required as a result of the elimination of double pilotage charges in the pre- and post-winter periods will generate about $1,865,000 in revenues, but will entail an overall reduction of $1.7 million in the amount spent by users for this purpose. The additional 2.25% for 2008 will increase the Authority's revenues by $1,284,000. The increase will be $1,312,000 and $597,000 in 2009 and 2010, respectively. These increases will help reduce the Authority's accumulated deficit and, by 2009, will create the $2 million reserve needed to reduce financing charges and fulfill the financial self-sufficiency requirement. As a result of the proposed tariff changes, users will see an average net reduction of $16 per assignment in 2008. There will be an average increase of $56 and $26 per assignment in 2009 and 2010. Environmental impact In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, 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 The Authority regularly consults with users' associations, such as the Canadian Shipowners Association, the Shipping Federation of Canada and the St. Lawrence Shipoperators, and it even contacted a number of users directly regarding various financial, operational, and regulatory aspects. This proposed tariff specifically has been the subject of several user and association consultations, including a meeting held on June 27, 2007, with 11 user representatives. The Authority presented its financial objectives and plans for achieving them, including the most recent two-year tariff increase scenario. The participants agreed to a three-year tariff proposal, which resulted in the current regulatory amendment. Compliance and enforcement Section 45 of the Act provides the enforcement mechanism for the 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 Act provides a penalty of up to $5,000 if the Regulations are contravened.
Réjean Lanteigne
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. Montréal, August 22, 2007
RÉJEAN LANTEIGNE REGULATIONS AMENDING THE LAURENTIAN PILOTAGE TARIFF REGULATIONS AMENDMENTS 1. Subsections 2(3) and (4) of the Laurentian Pilotage Tariff Regulations (see footnote 1) are replaced by the following: (3) Subject to subsections (4) to (6) and section 4, a pilotage charge is multiplied by the number of pilots assigned to perform the pilotage service. (4) A pilotage charge is determined on the basis of the services of a single pilot in respect of the following pilotage services: (a) an anchoring; (b) a movage; (c) a docking; and (d) an undocking. (5) A pilotage charge is determined on the basis of the services of a single pilot if a second pilot is assigned for the sole purpose of responding to one of the following circumstances: (a) it is likely that the ship will be underway for more than 10 consecutive hours in District No. 1; (b) it is likely that the ship will be underway for more than 11 consecutive hours in District No. 2; and (c) the ship is underway in winter navigation conditions at any time during the period that starts on March 16 and ends on December 31. (6) A pilotage charge is determined on the basis of the services of a single pilot if (a) a second pilot is assigned for the sole reason that the ship will likely be underway for more than 10 consecutive hours in District No. 2; and (b) the second pilot is assigned to board the ship at any time during the period that starts at 21:00 and ends at 02:59. 2. Schedule 2 to the Regulations is replaced by the Schedule 2 set out in Schedule 1 to these Regulations. 3. Schedule 2 to the Regulations, as enacted by section 2, is replaced by the Schedule 2 set out in Schedule 2 to these Regulations. 4. Schedule 2 to the Regulations, as enacted by section 3, is replaced by the Schedule 2 set out in Schedule 3 to these Regulations. COMING INTO FORCE 5. (1) These Regulations, other than sections 3 and 4, come into force on January 1, 2008. (2) Section 3 comes into force on January 1, 2009. (3) Section 4 comes into force on January 1, 2010.
SCHEDULE 1
SCHEDULE 2 PILOTAGE CHARGES
1 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.
SCHEDULE 2
SCHEDULE 2 PILOTAGE CHARGES
1 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.
SCHEDULE 3
SCHEDULE 2 PILOTAGE CHARGES
1 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. [35-1-o] S.C. 1998, c. 10, s. 150 S.C. 1996, c. 10 SOR/2001-84
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