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Vol. 141, No. 8 — February 24, 2007 Regulations Amending the Great Lakes Pilotage Tariff RegulationsStatutory authority Pilotage Act Sponsoring agency Great Lakes Pilotage Authority REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Description The Great Lakes Pilotage Authority (the Authority) is responsible for administrating, in the interests of safety, an efficient pilotage service within Canadian waters in the province of Quebec, south of the northern entrance to the Saint-Lambert Lock, and in and around the provinces of Ontario and Manitoba. Section 33 of the Pilotage Act (the Act) requires 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 addition, in accordance with subsection 20(1) of the Act, the Authority may, with the approval of the Governor in Council, make regulations necessary for the attainment of its objectives, inter alia, the conditions under which a ship shall have a licensed pilot on board and the prescribing of the minimum number of licensed pilots that shall be on board a ship at any time. In 2006, the Government of Canada approved a line of credit so that the Authority could operate during the winter months when navigation is suspended in the Great Lakes. This short-term borrowing was approved by the Government on the premise that the Authority find a means of reducing its reliance on external financing. The Authority anticipated that it would require $2.0 million to cover its expenses during this period but, in fact, was able to limit its borrowing to $1.8 million. Following consultation with its Board and the marine industry on developing a structured plan to eliminate its debt, the Authority consequently implemented a temporary 2% surcharge on all of its pilotage invoices during 2006 to increase its cash flow and reduce its reliance on borrowing. At the close of the 2006 navigational season, the Authority had derived a modest financial surplus that was applied to its line of credit; nevertheless, in 2007, the Authority will require to borrow $1.4 million. Following a review of the situation, the Authority's Board supported an extension of the 2% surcharge for a further year and stated that it will wish to re-examine the Authority's financial position at the close of 2007 to decide on the future of the surcharge. In addition, the Authority proposes to address the issue of "slow-moving vessels." These vessels have not been a major concern in the past; however, the development of the tug/barge industry has substantially increased, contributing to the number of slow-moving vessels within the area, and this is liable to grow in the future. Currently, 35 vessels per year are categorized as slow-moving vessels. In certain cases, some tug/barge units may hinder the passage of other vessels that are capable of proceeding at appropriate, safe seaway speeds. It should be noted that it normally takes an upbound vessel approximately 11 hours to transit District No. 1 and 10.5 hours for a downbound vessel. In the case of an upbound slow-moving tug/barge unit, however, it could take in excess of 13 hours to transit the District which gives concern to the question of pilot fatigue. The subject of slow-moving vessels is incorporated within the existing Collective Agreement between District No. 1 pilots and the Authority (the Agreement). For the purpose of the Agreement, a slow-moving vessel is defined as a vessel that is not capable of exceeding an average speed of 9.8 knots over the bottom. For upbound and downbound vessels, their speed is determined between fixed Calling-In Points, and any vessels taking longer than the stipulated times are regarded as slow-moving vessels. Currently, when there is an exchange of pilots at Iroquois Lock due to a vessel being identified as a slow-moving vessel, each pilot is credited with one assignment as per the Agreement. This means that each slow-moving vessel costs the Authority two pilotage assignments while it was only charging shipowners for one pilotage assignment, thereby creating a fiscal imbalance to the Authority's detriment. It is therefore necessary that the Authority take appropriate action to ensure that it operates on a self-sustaining financial basis that is both fair and reasonable. To meet this objective, the Authority proposes to amend the Great Lakes Pilotage Tariff Regulations to double the basic pilotage charges for slow-moving vessels transiting District No. 1. It should be noted, however, that the doubling of basic pilotage charges does not apply in respect of a ship that is required to exchange pilots at Iroquois Lock because it was slowed down by ice, weather or traffic. In addition, it will be necessary to amend the Great Lakes Pilotage Regulations to give effect to the criteria for exchanging pilots at Iroquois Lock, and it is also proposed that the French version of these Regulations be amended to correct the spelling of "Grands Lacs." Alternatives Since the Authority is in a deficit situation and must reduce its reliance on external financing, a status quo position is not an acceptable option. An extension of the temporary 2% surcharge for a further year will continue to support the Authority's efforts to reduce its reliance on external borrowing and enhance its return to financial self-sufficiency. In addition, it is necessary to increase the basic pilotage charges for slow-moving vessels to reflect the actual costs of providing this service while continuing to ensure a safe and efficient pilotage service in accordance with the requirements of the Act. Benefits and costs An extension of the 2% surcharge for a further year is consistent with the Authority's assurance to reduce its reliance on borrowing. It is anticipated that the amendment will generate annual revenue of approximately $340,000. The surcharge is beneficial in that it will demonstrate the Authority's commitment to reduce its deficit and continue to operate on a self-sustaining financial basis. The amendment relating to slow-moving vessels is beneficial in that it clarifies when a vessel is a slow-moving vessel and addresses a potential hazard to safety due to pilot fatigue. It is anticipated that the amendment will generate annual revenue of approximately $98,000 that will also assist in reducing the Authority's deficit. In accordance with the 1999 Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a Strategic Environmental Assessment (SEA) of this amendment was conducted, in the form of a preliminary scan. The SEA concluded that the amendment is not likely to have important environmental implications. Consultation On October 5, 2006, the Authority met with its Board to discuss its financial position in light of current and projected traffic levels. It was anticipated that the revenues generated from the 2% surcharge and the modest surplus in revenue due to the increase in traffic levels would assist the Authority in repaying a portion of its debt. The Board consequently recommended that the surcharge be extended for another year to further reduce the Authority's reliance on borrowing. The subject of slow-moving vessels was also discussed, and the Board supported an amendment to address this issue. The Authority also met with representatives of the Shipping Federation of Canada in November and December 2006 to present its financial position and discuss traffic levels and the issue of slow-moving vessels in District No. 1. After considerable debate on the topics, there was general agreement to extend the 2% surcharge for a further year and that the regulations be amended to address the issue of slow-moving vessels. The Authority also communicated, in writing, with the Canadian Shipowners Association, the Chamber of Maritime Commerce and other relevant stakeholders on December 19, 2006, advising them of the proposed amendments relating to the surcharge and slow-moving vessels and inviting their comments. No responses were received to the Authority's correspondence. 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. 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 (fax). 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. 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. Cornwall, February 15, 2007
ROBERT F. LEMIRE REGULATIONS AMENDING THE GREAT LAKES PILOTAGE TARIFF REGULATIONS AMENDMENTS 1. Section 4 of the Great Lakes Pilotage Tariff Regulations (see footnote 1) is replaced by the following: 4. A surcharge of 2% is payable until December 31, 2007 on each pilotage charge payable under section 3 for a pilotage service provided in accordance with any of Schedules I to III. 2. Schedule I to the Regulations is amended by adding the following after section 6: Slow-moving Ships 6.1 (1) If a ship exchanges pilots in accordance with subsection 8.1(1) of the Great Lakes Pilotage Regulations, the basic charges set out in this Schedule shall be multiplied in accordance with section 6. (2) If a ship that is required to exchange pilots under subsection 8.1(1) of the Great Lakes Pilotage Regulations does not do so because no licensed pilots are available for an exchange, the basic charges set out in this Schedule shall be doubled. (3) Subsections (1) and (2) do not apply in respect of a ship that is required to exchange pilots under subsection 8.1(1) of the Great Lakes Pilotage Regulations because the ship was slowed down by ice, weather or traffic. COMING INTO FORCE 3. These Regulations come into force on the day on which they are registered. [8-1-o] S.C. 1998, c. 10, s. 150 S.C. 1996, c. 10 SOR/84-253; SOR/96-409 |
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