8 MARINE TRANSPORTATION

MARINE PILOTAGE

In Canada, regional pilotage authorities direct and control navigation and/or ship handling of vessels through coastal and inland waterways in a safe and efficient manner. Each authority responds to the particular requirements of marine traffic and to the geographic and climatic conditions of the waterways in its region. There are four regional pilotage authorities in Canada: Atlantic (APA), Laurentian (LPA), Great Lakes (GLPA) and Pacific (PPA).

Source: Pilotage Authorities' draft Annual Reports

In 2004, the LPA, GLPA and PPA each experienced a deficit. This resulted in a combined loss for the four pilotage authorities of just over $5 million, following a positive balance in 2003. The LPA suffered a loss due to an unfavourable service contract awarded by an arbitrator. The GLPA also lost money due to traffic reduction and the unfavourable rate of exchange between the Canadian and U.S. dollars. The PPA late tariff implementation resulted in a $599,000 shortfall. The APA maintained a net income for the third year in a row. Table 8-6 shows the financial results for the four pilotage authorities in 2004.

Based on the average number of assignments per pilot, the efficiency of pilotage services generally increased between 2003 and 2004. The variations between the authorities and from year to year are related to traffic levels. Assignments for the APA, LPA and PPA have increased, but have decreased for the GLPA. Overall, there were slightly more assignments in 2004 than in 2003.

Table 8-7 shows the number of assignments for each pilotage authority and the total for all pilotage authorities in 2004. For information on other years, see Table A8-8 in the Addendum.

Source: Pilotage Authorities' 2004 draft annual reports

CANADIAN COAST GUARD

The Canadian Coast Guard (CCG) is an integral part of the Department of Fisheries and Oceans. The CCG ensures the safe and environmentally responsible use of Canada's waters. It does so through six major sub-activities: aids and waterways services; marine communications and traffic services; icebreaking services; search and rescue services; environmental response services; and fleet services. These sub-activities encompass a variety of marine programs and services. They also benefit a broad cross-section of marine clients, including commercial shipping interests, recreational boaters, the fishing industry, and provincial, municipal and territorial governments, as well as other federal government departments and marine associations.

The CCG's Aids and Waterways Services (AWS) provides safe, efficient and accessible waterways through the operation and maintenance of a system of navigational aids for mariners. It also provides waterway development and maintenance services to ensure safe and environmentally compliant channels for commercial navigation.

All Marine Communications and Traffic Services (MCTS) functions are based on regulations pursuant mainly to the Canada Shipping Act and the Safety of Life at Sea Convention. MCTS provides distress and safety communications and coordination; screens vessels to prevent unsafe vessels from entering Canadian waters; regulates vessel traffic movements; and manages an integrated system of marine information and public correspondence services. Along with ensuring safe marine navigation, MCTS also supports economic activities by optimizing traffic movements and port efficiency, and facilitating industry ship–shore communications.

Under its MCTS functions, the Coast Guard has developed installation strategies for an Automatic Identification System (AIS). This leading-edge marine navigation technology allows the Coast Guard to identify and track vessels approaching and operating in Canadian waters in "near real-time."

Following the events of September 11, 2001, the Canadian and U.S. coast guards established an advance notification requirement for vessels entering Canadian/American waters. This allows both countries to enhance public safety, security and the uninterrupted flow of commerce. Vessels over 300 gross tonnage inbound to Canadian waters must file an Offshore Advance Report with Canadian authorities 96 hours before entering Canadian waters from seaward.

The Icebreaking Services provides icebreaking operations, including route assistance, flood control, harbour breakouts, Northern resupply and, with the presence of icebreakers in the North, maintenance of Canada's sovereignty. The Icebreaking Services also offers ice-routing and information services such as ice reconnaissance and an ice operations centre for tasking icebreakers and ice routing advice. All of these activities are for marine traffic navigating through or around icecovered waters and for the general public. Under its icebreaking activities, the CCG provides a wide range of client-focused, demand-driven services under which commercial users pay a percentage of allocated costs in the form of an icebreaking service fee.

The Search and Rescue Services (SAR) provides a search and rescue function to save and protect lives in the maritime environment within the Canadian SAR area of responsibility. A SAR service is defined as the performance of distress monitoring, communication, coordination, and search and rescue activities through the use of public and private resources.

The Environmental Response Services (ER) protects the marine environment and related interests through preparedness and monitoring and by responding to marine pollution incidents in waters under Canadian jurisdiction. The Coast Guard serves the general public through its role in preserving ecosystems, ensuring that water supplies remain unpolluted by oil and chemical spills, and protecting recreational resources.

In 2004, the focus was on the creation of the Canadian Coast Guard as a Special Operating Agency (SOA). Although effective as of December 12, 2003, the steps to implement the change needed to be defined and a framework document developed and approved by Treasury Board. The change was implemented on April 1, 2005. In addition, the transfer of responsibilities for marine safety and security policies to Transport Canada, achieved through an Order in Council, had a significant impact on how the Coast Guard was to conduct its remaining services.

Another of the Coast Guard's functions is to acquire, maintain and schedule Fisheries and Oceans Canada's (DFO) fleet and the equipment needed for delivering core marine services to Canadians. This includes dealing with such matters as fleet operational requirements and planning; vessel resource allocation; resource utilization and redeployment; fleet management support; related management information systems; vessel crewing; fleet performance management and costing systems; and management roles and accountabilities. Physical assets of the Canadian Coast Guard are valued at approximately $5 billion. The CCG Technical Program will ensure that these assets are capable, reliable and available to carry out the Coast Guard's vision and mission.

Over the past several years, the CCG has introduced three commercial user fees: the marine navigation service fee, in June 1996; the transit-based icebreaking services fee, in 1998; and the maintenance dredging services tonnage fee, in September 1997. For more information on the CCG functions, visit www.ccg-gcc.gc.ca.

Financial Profile

Table 8-8 shows the Coast Guard's financial results for the previous four fiscal years. Results for 2004/05 reflect forecast expenditures to fiscal year-end and will not be finalized until the end of the fiscal year.

1. Figures are significantly different from last year's Annual Report because last year's forecast included expenditures later allocated to Science & C&P for the public accounts. An estimate of this allocation for 2004/2005 has been removed from the Coast Guard's Period 9 gross forecast. Present figures do not include the Coast Guard College.
2. Figures include amounts related to the Coast Guard College, which was transferred to the Coast Guard as of April 1, 2004.

Source: Department of Fisheries and Oceans

In compliance with the Government of Canada's cost recovery policy, the Coast Guard began several years ago to recover part of the costs it incurs in providing services to industry.

• In June 1996, the CCG introduced the Marine Navigation Services Fee, which was targeted to collect $27.7 million annually, including administrative costs.
• In 1998, the CCG introduced a transit-based Icebreaking Services Fee, which was targeted to collect $13.8 million annually, including administrative costs.
• The Maintenance Dredging Services Tonnage Fee, established in September 1997, was originally intended as an interim measure to cover the full costs incurred by the CCG in providing maintenance dredging services in the St. Lawrence Ship Channel. The Coast Guard continues to work with representatives from the commercial marine transportation industry to arrive at a long-term arrangement, inducing the transfer of responsibilities to industry for these dredging services.

Table 8-9 shows the Coast Guard's revenues and expenditures by its main sub-activities for fiscal year 2004/05. Both revenues and expenditures are forecasts only and will not be finalized until the end of the fiscal year.

Note: AWS: Aids and Waterways Services; MCTS: Marine Communication and Traffic Services; ICE: Icebreaking Services; SAR: Search and Rescue Services; ER: Environmental Response Services; Fleet: Fleet Management Services.

Source: Fisheries and Oceans Canada

ST. LAWRENCE SEAWAY

The St. Lawrence Seaway is a unique inland waterway that extends into the industrial heartland of North America and serves 15 major international ports and some 50 regional ports on both sides of the Canada–United States border.

The Seaway includes two main sections; the Montreal–Lake Ontario (MLO) section and the Welland Canal section. The MLO section runs from Montreal to Lake Ontario and encompasses seven locks over 300 kilometres, five in Canada and two in the United States. The Welland Canal section joins Lake Ontario to Lake Erie and contains eight locks over 42 kilometres, all in Canada.

The locks, and the channels that connect them, accommodate vessels up to 225.5 metres long, 23.8 metres wide and 8 metres in draft. Combined, these 15 locks gradually raise vessels 183.2 metres above sea level, the height of a 60-storey building.

The St. Lawrence Seaway Management Corporation (SLSMC) is responsible for managing, operating and maintaining the navigational aspects of the Canadian portion of the Seaway. The SLSMC was established as a not-for-profit corporation by Seaway users and other interested parties. It assumed management of the Canadian Seaway on October 1, 1998, under a long-term agreement with the federal government pursuant to the Canada Marine Act. The SLSMC is authorized to charge tolls and generate other revenues to finance the operation and maintenance of the Seaway and to recover additional funds from the federal government to eliminate operating deficits when required.

The year 2004 marked the 46th shipping season for the Seaway and the seventh full year of management by the SLSMC. During the 2004 season, estimated combined traffic on the two sections of the Seaway was approximately 43.5 million tonnes, 5.3 per cent higher than in 2003. At 10.5 million tonnes, iron ore was again the main commodity shipped, despite dropping two per cent from 2003. Grain also experienced a slight drop (3.4 per cent) in volume carried, at 9.3 million tonnes. Significant gains were made in the movement of general cargo, principally iron and steel, and in other bulk cargo associated with the steel industry, such as coke and iron ore. Benefitting from the strength of the steel industry at home and the need for imported steel from abroad, overall volumes of general cargo totalled 4.3 million tonnes, up 67 per cent, while other bulk cargo totalled 15.2 million tonnes, up 9.4 per cent. Tables 8-10 and 8-11 show cargo movements and traffic by commodity, respectively, for 2003 and 2004. For a longer time series, see tables A8-9 and A8-10 in the Addendum.

RATES AND TARIFFS

The SLSMC implemented a two per cent cargo toll and ship charge increase for the 2004 navigation season in both sections of the Canadian Seaway. This increase is in accordance with the management agreement between the SLSMC and the federal government, which stipulates annual tariff increases based on the lesser of the annual average percentage change in the Consumer Price Index or two per cent.

1 2004 figures are estimated.

Source: St. Lawrence Seaway Management Corporation

Note: Combined traffic in the two sections of the Seaway.
1 2004 figures are estimated.

Source: St. Lawrence Seaway Management Corporation

FINANCIAL PROFILE

In fiscal year 2003/04 ¹ Seaway revenues from tolls and other sources totalled $66.6 million, down slightly from $66.8 million in 2002/03. Toll revenues fell 1.3 per cent to $62.7 million, from $63.5 million in 2002/03, reflecting reduced tonnage in steel and steel slab imports into North America.

Seaway operating expenses for 2003/04, related to the management and operation of the Seaway infrastructure, totalled $59.2 million, up from $58.4 million the previous fiscal year. Salaries, wages and benefits accounted for the major part of this total. Expenditures for the asset renewal program, representing the cost of maintenance and major repairs of lock, canals, bridges, buildings and other infrastructure assets, totalled $24.3 million, up from $22.9 million the previous fiscal year.

Table 8-12 shows the financial performance of the St. Lawrence Seaway from 2001/02 to 2003/04.

1. 1 April 1 to March 31.
2. 2 Following contribution from Capital Trust Fund.

Source: St. Lawrence Seaway Management Corporation

¹ Tolls in fiscal year 2003/04 are for traffic in the 2003 navigation season. Back to text

Major Events in 2004

Infrastructure

Marine Pilotage

Industry Structure

Passenger Transportation

Freight Transportation