10
TRANSPORTATION INFRASTRUCTURE
Marine Transportation Infrastructure
Ports
Canada's major ports are vital links in the national transportation
system: they supplement the railways and roads that serve Canadians
travelling for business or pleasure, and are essential for transporting
the nation's goods for export or import. The infrastructure that
supports these ports includes marine terminals that contain a
variety of facilities and organizations related to the loading
and unloading of vessels berthed at the wharf. Port authorities
operate some of these marine terminals, but often they are owned
and operated by independent companies that rent space from the
port.
The Port System
Under the National Marine Policy announced in December 1995,
Canada's ports system has undergone reorganization aimed at instilling
commercial discipline in port operations. The federal government
has moved out of the direct operation of ports, giving local users
more say in the port services they pay for and receive. The National
Marine Policy was implemented under the Canada Marine Act
(CMA), which received Royal Assent on June 11, 1998. The policy
calls for three categories of ports:
- Canada Port Authorities
- regional/local ports
- remote ports.
The Canada Marine Act has created a National Ports System
made up of independently managed Canada Port Authorities (CPAs).
The authorities are considered self-sufficient ports that are
critical to domestic and international trade. They include former
Ports Canada local port corporations, most of the former Canada
Ports Corporation's major divisional ports, and most former harbour
commissions.
To date, 17 of the 18 ports designated to become Canada Port
Authorities have received their CPA status through the issuance
of letters patent, and their boards of directors have been established.
The implementation dates were as follows:
- Halifax, Montreal and Vancouver on March 1, 1999
- Fraser River, Prince Rupert, Quebec, Saguenay, Saint John,
Sept-Îles, St. John's and Trois-Rivières on May
1, 1999
- Toronto on June 8, 1999
- Nanaimo, North Fraser, Port Alberni, Thunder Bay and Windsor
on July 1, 1999.
Canada Port Authority status for the Port of Hamilton, the
last remaining port to be designated as a CPA, will be established
once it completes the letters patent process, expected in the
spring of 2001. In addition to the original 18 ports listed in
the Canada Marine Act, Transport Canada received applications
for CPA status from two additional ports: the Port of Belledune,
a former divisional port of the Canada Ports Corporation; and
the Oshawa Harbour Commission. The Minister granted the Belledune
Port Authority Canada Port Authority status, through the issuance
of letters patent, on March 29, 2000, and has approved the initiation
of the CPA implementation process for the Oshawa Harbour Commission.
It is expected that Oshawa will complete the letters patent process
and receive Canada Port Authority status in early 2001.
The Canada Port Authorities include 11 of the 14 ports formerly
defined as Ports Canada, and seven of the nine ports formerly
defined as Harbour Commissions. Table 10-8 summarizes the status
of these major ports and the date the CPA was created.
Transport Canada is monitoring the compliance of CPAs with
the Canada Marine Act and their respective letters patent.
The Canada Ports Corporation was dissolved on November 1, 2000.
During the implementation phase, it was kept open with minimal
staff to ensure that all ports had been transferred. The Port
of Prescott was transferred to the Township of Edwardsburgh on
October 11, 2000, and Ridley Terminals Incorporated became
a parent Crown corporation on November 1, 2000, upon
the dissolution of the Canada Ports Corporation.
On March 1, 1999, Part II of the Canada Marine Act came
into force for existing public ports. Under the National Marine
Policy, the majority of ports under the control and administration
of Transport Canada were designated as regional/local. These ports
range from operations that support significant local and regional
commercial activity to very small facilities with little or no
commercial traffic.
Whether a port supports an isolated community or several large
industries, Transport Canada's operational role is normally limited
to enforcing regulations regarding public port and public port
facility use, monitoring port operations, and collecting user
fees. Services such as cargo handling are supplied by the private
sector.
Transport Canada began commercializing its public ports before
the introduction of the Canada Marine Act, as legislative
authority was not required for this process to begin. Under the
National Marine Policy, regional/local ports are being transferred
to other federal departments or to provincial governments, municipal
authorities, community organizations or private interests over
a six-year period ending in 2001/02. Public ports are also being
deproclaimed once Transport Canada has relinquished the last of
its ownership interests, including the harbour beds as appropriate,
to a new owner. Once the public port or public port facilities
have been deproclaimed, Transport Canada no longer has the authority
to regulate activities in these waters. For this reason, federally
appointed harbour masters, whose prime responsibilities are to
administer public port regulations, are being removed once the
ports are deproclaimed.
As of December 31, 2000, 382 of the 549 public ports and public
port facilities under Transport Canada's control and administration
have been transferred, deproclaimed, demolished, or have had the
department's interests terminated.
Table 10-9 summarizes the changes that have taken place in
responsibility for ports operations since 1996.
As of December 31, 2000, a total of 167 regional/local and
remote ports and port facilities remain under Transport Canada
control. An additional 15 sites remain where the public port has
not yet been deproclaimed because the harbour bed has not yet
been divested. Table 10-10 summarizes the regional distribution
of the ports administered by Transport Canada from 1995 to 2000.
Of the 155 public ports and public port facilities transferred
to date, 39 sites were transferred to provincial governments,
64 to other federal departments, and 52 to local interests. As
previously mentioned, 15 of these 155 sites have yet to have
their public port status deproclaimed.
Since the start of the program, 255 public ports have been
deproclaimed overall. Of these, 26 harbours were found during
subsequent archival research and are therefore not included in
the original 549 port sites identified in the National Marine
Policy. In addition, 18 of these public ports were adjacent to
port facilities that had already been transferred.
Transport Canada is monitoring local port entities for compliance
with the terms and conditions of any contributions that may have
been received by these entities.
The federal government will continue to maintain remote ports
that serve the basic transportation needs of isolated communities,
unless local interests express a willingness to assume ownership
of such port facilities. In 2000, one remote port in British Columbia
was transferred to a local interest group, bringing the total
number of remote ports transferred to 27. Also in 2000, the Port
of Cap-aux-Meules, Quebec, was changed from a regional/local port
to a remote port following a review of the port facility's classification
under the terms of the National Marine Policy. As a result, Transport
Canada continues to administer 34 remote ports nationwide (10 in Quebec,
three in Ontario, one in Manitoba, and 20 in British Columbia).
Table 10-11 shows the divestiture status of regional/local
and remote ports as well as the number of ports remaining on a
regional basis.
As Transport Canada relinquishes its ownership interests in
public ports and public port facilities, a growing number of "other"
ports are being operated by provincial or municipal governments
and private interests. At the end of 2000, there were 133 other
ports, including 64 private, 40 provincial and 29 municipal ports.
These include sites such as Port Cartier, Quebec, and Nanticoke,
Ontario, used to ship large volumes of cargo, and Quyon, Quebec,
which is used for an interprovincial ferry service on the Ottawa
River.
Financial Performance
Audited financial statements for 2000 are not yet available.
As a result, the following results for 1999 are provided for the
17 ports designated as Canada Port Authorities as of December
31, 1999.
Table 10-12 shows revenues, expenses and some key ratios for
Canada Port Authorities in 1999. In that year, the CPAs posted
total revenues of $240 million, with a net income of $36 million
and an operating cash flow of $57.7 million. Among the 17
designated Canada Port Authorities, Vancouver and Montreal accounted
for over 56 per cent of the total revenues generated. Four Canada
Port Authorities accounted for 64 per cent of total cargo, by
volume, handled by CPAs: Vancouver handled 34 per cent,
while Montreal, Saint John and Sept-Îles each handled 10
per cent.
The overall operating ratio for the Canada Port Authorities
was approximately 88 per cent in 1999, with the individual ratios
ranging from 58 to 142 per cent. Except for Sept-Îles (58
per cent) and Vancouver (71 per cent), ratios for all
other Canada Port Authorities were above 80 per cent.
The return on assets for the Canada Port Authorities was 3.3
per cent in 1999. Windsor (25 per cent) had the highest return
on assets, followed by Saguenay (20 per cent) and Trois-Rivières
(15 per cent).
Table 10-13 shows revenues, expenses and incomes for all the
Harbour Commissions and Ports Canada ports for the 1995-1998 period,
while 1999 data reflects all ports that have Canada Port Authority
status as of December 31, 1999.
At first glance, the figures in Table 10-13 indicate that the
total revenues decreased in 1999 from $287 million to $240 million.
It is important to note, however, that the 1999 revenues do not
include the six major ports that were not considered Canada Port
Authorities as of December 31, 1999. Table 10-14 compares revenues,
expenses, and net income for 1998 and 1999. It includes only those
Ports Canada ports and Harbour Commissions that were Canada Port
Authorities as of December 31, 1999.
In comparing the same ports from 1998 to 1999, revenues increased
from $234 million to $240 million, or approximately 2.5 per cent.
Nine of the 17 Canada Port Authorities reported an increase in
revenues ranging from $0.1 to $3.7 million. Fraser River and Vancouver
reported the highest increases, at $3.7 million (32 per cent)
and $3.4 million (five per cent), respectively.
According to Table 10-13, it would also appear that in 1999,
expenditures decreased by approximately 6.5 per cent;
however, the expenses for 1998 included all Ports Canada and Harbour
Commissions expenses. Upon further analysis, expenditures for
the same ports indicate that expenses have increased slightly,
from $194 million in 1998 to $212 million in 1999. Montreal
expenses increased from $50.4 million to $57.7 million (14.5 per
cent), while Fraser River expenses increased from $10.2 million
to $14.3 million (40 per cent). Twelve of the 17 Canada Port Authorities
recorded increases in expenditures that ranged from $0.1 to $7.3
million, and four reported decreases between $0.4 and $0.8 million.
Operating expenditures at Port Alberni remained constant at $3.2
million over the two-year period.
Net income for the major ports that obtained Canada Port Authority
status as of December 31, 1999, has increased significantly, from
$18.4 million in 1998 to $36 million in 1999, an increase
of approximately 96 per cent.
Tonnage for the Canada Port Authority ports in 1999 compared
with the tonnage for the same major ports in 1998 indicates a
decrease from 207.3 million tonnes to 204.9 million tonnes. Based
on this tonnage, the revenue per tonne increased from $1.13 in
1998 to $1.17 in 1999, while expenses per tonne increased from
$0.94 to $1.03.
Transport Canada Ports
Ten per cent of the ports remaining under Transport Canada's
control generated 73 per cent of the total revenues in 1999/2000.
As shown in Table 10-15, revenues have fluctuated year over year,
because of numerous factors, including tariff increases implemented
in 1995 and 1996, a reduction in the number of Transport Canada
ports as a result of divestiture, and various utilization factors
of Transport Canada's ports and port facilities.
For fiscal year 1999/2000, gross revenues at the remaining
facilities were $19 million, while expenses were $26.2 million.
This left an operating revenue shortfall of $7.1 million and an
operating ratio of 137 per cent. Capital expenditures for the
year were $7.6 million. An additional $16.6 million in grants
and contributions was expended during fiscal year 1999/2000 for
costs related to transfers associated with port divestitures.
Since the National Marine Policy came into effect, maintenance
expenditures have been reduced to a minimum in anticipation of
regional/local port divestiture. Because of divestiture delays,
however, some unforeseen maintenance expenses and capital expenditures
were incurred in order to maintain safety standards. This had
the effect of increasing expenses in 1999/2000. In some cases,
capital projects were carried out in remote sites for which Transport
Canada will continue to maintain full responsibility. A few port
transfers of substantial value were concluded during this reporting
period accounting for the increase in grants and contributions.
Between 1995 and 1999, revenues per tonne increased from $0.22
to $0.29, or by approximately 32 per cent, while expenses per
tonneNote
4 over the five-year period have remained relatively
stable, decreasing from $0.43 per tonne in 1995 to $0.40
per tonne in 1999.
Table 10-15 summarizes the financial details of ports and harbours
remaining under Transport Canada's control from 1995/96 to 1999/2000.
Port Traffic
The following preliminary data shows the traffic at some Canada
Port Authorities in 2000:
- Halifax: 13.9 million tonnes; 138,000 cruise ship passengers
- Montreal: 20.4 million tonnes; 25,200 cruise ship passengers
- Prince Rupert: 7.6 million tonnes
- Quebec: 16.3 million tonnes
- Saguenay: 0.401 million tonnes
- Saint John: 19.7 million tonnes
- Sept-Îles: 21.1 million tonnes
- Thunder Bay: almost 8.9 million tonnes
- Toronto: two million tonnes
- Vancouver: 69.8 million tonnes; 1.1 million cruise ship passengers
- Windsor: 5.4 million tonnes
Based on preliminary data provided by Statistics Canada (available
only up to 1999), Canada's ports handled 386.9 million tonnes
of cargo in 1999, an increase of approximately three per cent
over 1998.
Figure 10-5 shows traffic shares by port groups in 1999, based
upon port classification as of December 31, 1999.
Traffic data presented for 1999 is based upon port classification
as of December 31, 1999, while 1998 traffic data has been restated
to reflect the change of former Canada Port Corporation ports
and Harbour Commissions ports to Canada Port Authority status
in 1999.
In 1999, Canada Port Authorities handled the largest amount
of traffic, with a 53 per cent share of the total. The four ports
still classified as divisional ports of the Canada Ports Corporation
or as Harbour Commissions as of December 31, 1999, transported
four per cent of the total, while another 17 per cent of cargo
was moved through Transport Canada facilities. The remaining 26
per cent was handled by other facilities, including those managed
privately and those managed by or on behalf of the Department
of Fisheries and Oceans and provincial and municipal governments.
Calculating 1998 traffic for Canada Port Authorities and comparing
that with 1999 totals shows a decrease from 207.3 million tonnes
to approximately 205 million tonnes, a decrease of approximately
one per cent. As a result of 34 divestiture transactions
completed in 1999, the total tonnage that moved across Transport
Canada public ports and public port facilities decreased by 17
per cent. This, coupled with a former Canada Ports Corporation
port (Port Colborne, Ontario) being transferred to a new entity,
resulted in a significant increase of traffic moving over other
ports.
At those declared public ports where Transport Canada has no
facilities and cargo is transported across private wharves, cargo
shipped totalled 16.3 million tonnes, or 25 per cent of the
total traffic handled by Transport Canada ports. Approximately
102 million tonnes of cargo crossed "other" ports. In
this category, Port Cartier, Quebec, with approximately 19.9 million
tonnes, handled the most cargo, followed by Nanticoke, Ontario,
which carried 12.3 million tonnes. The balance was carried by
the remaining 110 other ports that reported cargo tonnage to Statistics
Canada.
Table 10-16 compares details of tonnage handled in Canada's
port system.
Small Craft Harbours
During 2000, the Small Craft Harbours (SCH) program of the
Department of Fisheries and Oceans (DFO) continued to make progress
toward divesting derelict/ low-activity fishing harbours and recreational
harbours from its inventory. At the end of this exercise, all
recreational harbours will have been transferred and the number
of fishing harbours under DFO/SCH responsibility reduced to fewer
than 750.
Fishing harbours
Since the late 1980s, the SCH has supported the creation of
local Harbour Authorities to take over management of commercial
fishing harbour facilities in their communities. Harbour Authorities
are local non-profit organizations made up of fishers and other
harbour users, to which SCH leases the management of the harbour.
The Harbour Authorities provide services, maintain the facilities,
and manage the harbour operations on a day-to-day basis. As of
January 3, 2001, Harbour Authorities managed 604 sites across
the country, representing close to 80 per cent of the SCH program's
target. Fishing harbours not able to generate the community interest
necessary to form and manage a Harbour Authority will be disposed
of or, if necessary, demolished. Such harbours are usually low- or
no-activity sites and have negligible impact on the commercial
fishing industry.
Table 10-17 shows the fishing harbours remaining in the Small
Craft Harbours portfolio as of January 3, 2001, by region and
type of management.
Recreational harbours
The Small Craft Harbours program is committed to the divestiture
of all recreational harbours in its inventory and has achieved
71 per cent of its target since 1994-95, with 599 recreational
harbour sites transferred, or in the final stage of divestiture.
Recipients are mainly municipalities, local non-profit organizations,
First Nations or other federal departments. In Ontario and Quebec,
the main recipients of SCH federal recreational harbours are municipalities.
The disposal strategy adopted by SCH complies with the Program
Transfer Flexibilities approved by Treasury Board in 1995. Disposals
done under this program (i.e. for a $1.00 consideration)
have conditions, including a requirement to maintain public access
for at least five years. Recreational harbours are offered to
potential recipients in a preset order of priority: other federal
departments first; provinces, municipalities, local non-profit
associations or First Nations second; and the private sector through
a tendering process last. Prior to transfer, SCH conducts an environmental
assessment of the site and completes any necessary repairs to
ensure that the facilities are transferred in a safe and reasonable
condition. In the absence of a public body interested in acquiring
the facilities, they are offered at market value. Should there
be no private interest in the facilities, they are demolished.
The recreational harbour divestiture program is expected to continue
for several more years.
Tables 10-18 to 10-20 summarize, by region, the status of the
Small Craft Harbours recreational harbour divestiture program,
recipients of harbours divested, and type of management of the remaining
harbour sites in the SCH inventory.
As a result of its Harbour Authority and Disposal Programs,
Small Craft Harbours revenues for 2000/01 from leases, licences,
and berthage and wharfage are projected to be 33 per cent less
than in 1999/2000. The largest decrease is expected in Ontario,
for the second consecutive year, with revenue declining by $548,140,
or 36 per cent. Close to 94 per cent of the 2000/01 budget is
allocated to harbour repairs, while salaries and contributions
make up 5.8 and 0.3 per cent of the budget, respectively.
St. Lawrence Seaway
A shared responsibility between Canada and the United States,
the St. Lawrence Seaway is a unique inland waterway, extending
into the industrial heartland of North America and serving 15
major international ports and some 50 regional ports on both sides
of the Canada-US border.
The Seaway locks (15 in total) connect the shipping channel
in two major sections: Montreal-Lake Ontario and the Welland Canal.
Between Montreal and Lake Erie, the locks lift vessels up to the
height of a 60-storey building above sea level. The Montreal-Lake
Ontario section has seven locks - five Canadian and
two American. The Welland Canal links Lake Ontario and Lake Erie
with a series of eight locks. The locks and channels are capable
of accommodating vessels 225.5 metres long, 23.8 metres
in beam and eight metres in draft. Figure 10-6 shows the St. Lawrence
Seaway System.
Second Year Under New Management
In 2000, the Canadian Seaway saw its second full year of management
by the St. Lawrence Seaway Management Corporation (SLSMC). The
SLSMC began operations of the Canadian portion of the St. Lawrence
Seaway on October 1, 1998, following the successful negotiation
of a management contract with the federal government pursuant
to Part 3 of the Canada Marine Act. This agreement is in
force until March 31, 2018.
Responsible for managing, operating and maintaining the Seaway,
the SLSMC must submit a five-year business plan, throughout the
term of the agreement, to the Minister of Transport. The plan
includes anticipated revenues and operating and asset renewal
costs. The corporation is required to charge tolls and generate
other revenues to finance the operation and maintenance of the
Seaway. For its ports, the federal government is required to provide
financial assistance to eliminate operating deficits, if they
arise.
North Channel Bridge and the All-Canadian Seaway Option
In 2000, the Minister of Transport announced that an "all-Canadian
Seaway" option is no longer required and that the Federal
Bridge Corporation Limited is free to begin developing options
to replace the high-level bridge at Cornwall. The announcement
marked an end to the government's commitment to an all-Canadian
Seaway option, which dates back to the 1950s.
During the 1950s, the Seaway project went ahead after receiving
support from both Canada and the United States. At the time, however,
Canadian interests were concerned about the US commitment to the
project; therefore, the federal government decided to retain the
option to construct the Seaway as a solely Canadian project at
some point in the future. For this reason, the Cornwall Seaway
International Bridge was built to Seaway height over the Cornwall
Canal, which would have been the routing of an all-Canadian Seaway.
A review of the long-term maintenance strategy for the North
Channel portion of the crossing concluded that the cost of major
maintenance on the 40-year-old bridge could be as much as double
the cost of constructing a new low-level bridge.
Traffic
In the 2000 season, combined traffic on the two sections of
the Seaway was down by over one million tonnes from 1999 levels
to 46.5 million tonnes (based on preliminary traffic data). This
was due largely to lower grain traffic through the system. This
decrease in grain was partly offset by an increase in general
cargo traffic (primarily iron and steel products) over 1999 levels.
The 1999 navigation season extended for 270 days, with 24-hour
navigation of the system beginning on April 1, 1999, and
the last ships exiting St. Lambert Lock and the Welland Canal
on December 25, 1999.
Traffic decreased slightly from 1998 levels, returning to 1997
levels. While US grain exports increased, activity in the steel
industry decreased. Combined Seaway traffic for both major sections
totalled 47.86 million tonnes, a decrease of 5.2 per cent from
the 1998 total of 50.51 million tonnes. Traffic decreased
by about 7.2 per cent to 36.5 million tonnes on the
Montreal-Lake Ontario section, and by 7.9 per cent to 37.4
million tonnes on the Welland Canal.
Vessel transits on the Montreal-Lake Ontario section in 1999
were nearly identical to 1998, 3,141 vessel transits compared
with 3,158, respectively. On the Welland Canal section, vessel
transits increased to 3,626, 199 more than in 1998.
Table 10-21 shows the volume of cargo movements on both major
sections of the Seaway from 1990 to 2000.
Highlights of Traffic by Commodity for 1999
Grain
Once again, Canadian grain traffic was below average levels,
while US grain shipments increased. Grain traffic totalled 13.6
million tonnes on the Montreal-Lake Ontario section, a 4.5 per
cent increase over 1998, and 13.5 million tonnes on the Welland
Canal, a 2.6 per cent increase.
Iron Ore
Iron ore shipments totalled 10.69 million tonnes on the Montreal-Lake
Ontario section, a 3.8 per cent decrease from 1998, and 5.82 million
tonnes on the Welland Canal section, a 10.6 per cent decrease.
These shifts reflect a greater reliance by Canadian steel mills
on iron ore originating from Quebec-Labrador.
Coal
Fewer shipments of coal were recorded on the Welland Canal,
due to lower demand from Ontario Hydro and the Hamilton steel
mills. Traffic amounted to 4.52 million tonnes, a 2.4
per cent decrease from 1998. On the Montreal-Lake Ontario section,
coal traffic increased because of additional shipments to industries
along the St. Lawrence. Total traffic was 266,000 tonnes, an increase
of 35.2 per cent.
Other Bulk Commodities
For other bulk commodities, there was an overall decrease in
shipments of major commodities (coke, petroleum, stone, cement,
chemicals). On the Montreal-Lake Ontario section, 7.23 million
tonnes were carried, a decrease of 8.8 per cent from 1998. On
the Welland Canal, 10.06 million tonnes were carried, a decrease
of 7.4 per cent.
Table 10-22 shows Seaway traffic by commodity from 1993 to
2000.
Rates and Tariffs
In keeping with the agreement negotiated with Seaway users,
a two per cent toll increase for the Canadian section of the Seaway
was implemented in 2000. Similar increases were implemented during
the 1998 and 1999 seasons. The 1998 increase was the first increase
since 1993.
These two per cent annual toll increases, with no discounts
or reductions, were negotiated for 1998, 1999 and 2000 as part
of the Seaway commercialization agreement. Had the St. Lawrence
Seaway Management Corporation been unable to achieve the cost
targets set out in its business plan, however, it would have been
required to increase the tolls beyond the two per cent level.
This was not necessary, however, because the successful 1998 and
1999 seasons allowed SLSMC to meet and even exceed targets. Years
four and five of the plan (2001 and 2002) may even see toll discounts
or reductions if the corporation continues to exceed the business
plan requirements.
Financial Profile
Revenues for 1999/2000 amounted to $76 million, an improvement
of over $3.5 million from the estimate in SLSMC's business plan,
but on target with its operating budget. Revenues were down from
the 1998/99 fiscal year, which generated $83.9 million. However,
1998/99 was also a landmark year, earning the highest toll revenue
in Seaway history. In 1999/2000, the revenues derived from ship
transits amounted to $73.2 million, a decrease of $6.1 million
from the previous year. This decline was largely the result of
a 35 per cent reduction in general cargo tonnage for iron and
steel. The revenue from other navigation activities and licence
fees totalled $1.7 million in 1999/2000. Expenses include
the winter works program, such as asset renewal and major
maintenance.
The corporation's financial results are not compared with previous
years' financial statements from the St. Lawrence Seaway
Authority, which exclude the revenues and expenses pertaining
to the non-navigational assets, the income taxes relating to the
St. Lawrence Seaway Authority, amortization expenses, and other
expenses that are treated differently.
Table 10-23 provides the financial results of the St. Lawrence
Seaway.
Maintenance Activities
As part of the commercialization agreement, the SLSMC is responsible
for asset renewal, which budgets $126 million in infrastructure
maintenance and capital expenditures over the five years of the
business plan. The actual expenditure for the 1999/2000 fiscal
year was $23,357,000. During the first two years of the business
plan, the SLSMC spent $49 million on infrastructure, or 39 per
cent of the overall allocation.
While the SLSMC manages asset renewal, the Capital Committee
which is made up of two members from Transport Canada and two
members of the corporation's board, is responsible for approving
the asset renewal budget. The committee approves changes to the
plan as required, as well as the plan for the next fiscal year.
Marine Pilotage
Legislative Framework
The Pilotage Act of 1972, as amended in 1998 by the
Canada Marine Act, governs marine pilotage in Canada. Under
this Act, four regional pilotage authorities were established
- Atlantic (APA), Laurentian (LPA), Great Lakes (GLPA) and
Pacific (PPA). Each authority is mandated to provide safe and
efficient pilotage services that respond to the particular requirements
of its traffic, as well as to the varied geography and climatic
conditions of the waterways concerned. Although they are not considered
agents of the Crown, all authorities report directly to the Minister
of Transport.
Financial and Operating Performance
In 2000, pilotage revenues, on a nationwide basis, did not
exceed expenditures. As shown in Table 10-24, only one of the
four pilotage authorities, the Atlantic Pilotage Authority, managed
to return modest surpluses.
The results for 2000 represent a shift from the trend toward
positive net incomes over the last few years. Financial results
for each authority from 1996 to 2000 are shown in Table 10-25.
Total revenues have risen less than expenses. In 2000, expenses
increased by more than inflation. Nevertheless, Figure 10-7 shows
clearly the trend toward improved bottom lines for pilotage authorities
up until 2000.
To measure efficiency of pilotage services, the average number
of assignments per pilot is commonly used. Based on this measure,
efficiency increased between 1996 and 1998 but declined in both
1999 and 2000.
Table 10-26 shows the number of assignments for each pilotage
authority and the total for all authorities between 1996 and 2000.
The variations among the authorities and the fluctuations over
the period are in response to traffic levels. Overall, total assignments
have grown by 10.3 per cent since 1996.
Canadian Coast Guard
Responsibilities
The Canadian Coast Guard's mission is fourfold: ensure safe
and environmentally responsible use of Canada's waters; support
understanding and management of ocean resources; facilitate the
use of Canadian waters for shipping, recreation and fishing; and
provide marine expertise in support of Canada's domestic and international
interests. The Coast Guard also advances the oceans mandate both
through its internal partnership with its Department of Fisheries
and Oceans' (DFO) sector counterparts and through its primary
role of ensuring safe and environmentally responsible use of Canada's
waterways.
The Coast Guard's five business lines - marine navigation services;
marine communications and traffic services; icebreaking operations;
rescue, safety and environmental response; and fleet management
- are delivered across DFO's five regions. These business lines
cover a range of marine programs, policies and services that deal
with a broad cross-section of clients within the marine community,
including commercial shipping interests, recreational boaters,
the fishing industry, ferry services, tug and barge resupply operations
in the North, cruise lines, private-sector shippers, and provincial,
municipal and territorial governments as well as federal government
departments. The Coast Guard also 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.
The Department of Fisheries and Oceans has two key result commitments:
- the conservation and biological sustainability of fisheries
resources, marine and freshwater habitats, and a protected environment;
and
- the provision of safe, efficient and accessible waterways
and harbours.
The Coast Guard's contributions to these commitments are found
in each of its business lines in such areas as response to marine
oil emergencies, efficient and effective aids to navigation infrastructure,
annual deliveries by ship to northern settlements and military
sites, and client and public awareness of programs and policies.
Marine Navigation Services
The overall objective of the Coast Guard's Marine Navigation
Services (MNS) business line is to provide safe, efficient and
accessible waterways. In keeping with this commitment, the Marine
Navigation Services provides, operates and maintains a system
of navigational aids; ensures waterways are safely designed and
maintained; provides navigation safety information to mariners;
ensures protection of the public right to navigation; and protects
the environment.
The Marine Navigation Services navigational infrastructure
consists of 262 automated light stations, 52 of which are
staffed; five LORAN C communication stations; 20 Differential
Global Positioning System (DGPS) transmitter sites; and over 6,000
land-based fixed marine aids and more than 12,000 floating aids.
During 2000, the Marine Navigation Services continued to move
forward on a number of activities in support of its mission. It
continued to modernize navigational aids, for example, through
several initiatives, including the complete implementation of
a full DGPS in the spring of 2000. It also continued to modernize,
maintain, implement and upgrade information systems such as the
national databases on the use of Canadian waterways, the Aids
Program Information System (APIS), the Marine Aids Costing Model
(SRAN), and the Navigable Waters Database System. The Marine Navigation
Services also continued to pursue amendments to the Navigable
Waters Protection Act.
Marine Communication and Traffic Services
All the functions of the Marine Communication and Traffic Services
(MCTS) are derived from a regulatory framework based primarily
on the Canada Shipping Act and the Safety of Life at Sea
Convention. Marine Communication and Traffic Services provide
distress and safety communications and co-ordination; vessel screening
to prevent entry of unsafe vessels into Canadian waters; regulation
of vessel traffic movements; and management of an integrated system
of marine information and public correspondence services. Along
with ensuring safe marine navigation, the Marine Communication
and Traffic Services also support economic activities by optimizing
traffic movements and port efficiency, and facilitating industry
ship/shore communications.
The Marine Communications and Traffic Services group is supported
by an infrastructure that includes staffed communications centres
and remote transmitter and receiver sites.
This business line is a core element of the national movement
toward sustainable development for oceans and marine resources.
As such, it fully supports the Oceans Strategy by looking for
ways to improve the monitoring and management of marine protected
areas.
The Marine Communication and Traffic Services group is also
working to improve its surveillance capability by developing implementation
strategies for universal Automatic Identification Systems (AIS)
- a leading-edge marine navigation technology that provides mariners
and competent authorities with a more efficient and cost-effective
means of service delivery. To improve its communications capability,
the MCTS is continuing to implement the Global Maritime Distress
Safety System (GMDSS), and review infrastructure to find further
efficiencies through the application of technological changes.
Icebreaking Operations
Activities under the Icebreaking Operations business line include
providing icebreaking escorts, channel maintenance, flood control,
harbour breakouts, and ice-routing and information services for
marine traffic navigating through or around ice-covered waters.
It also co-ordinates the movement of cargo for the annual resupply
of northern settlements and military sites using contracted commercial
carriers.
Traditionally, the icebreaking program has provided a wide
range of free services; over the past several years, however,
it has moved to a more client-focused, demand-driven service that
reflects recent downsizing activities. Commercial users now pay
a percentage of the allocated costs in the form of an icebreaking
service fee.
During 2000, Icebreaking Operations continued to work with
the US Coast Guard, the North Atlantic Ice Patrol and other governments
involved with icebreaking activities to maintain international
expertise and recognition. It also continued to strengthen its
collaboration with Transport Canada's Marine Safety Branch for
the Harmonization of Polar Ship Rules to protect Canada's position
and take a proactive role in forums dealing with icebreaking operations
or ships operating in ice-covered waters. Preliminary results
of an economic study on the benefits of icebreaking services indicate
that benefits far surpass the costs of providing this service.
Rescue, Safety and Environmental Response
The Rescue, Safety and Environmental Response (RSER) business
line encompasses the following major activities: marine search
and rescue (SAR); environmental response and departmental national
emergency preparedness; and the promotion of boating safety to
the marine public through prevention and regulation. Its main
objective is to save lives and protect the marine environment.
RSER supporting infrastructure includes SAR stations with in-shore
rescue boats and several spill-response equipment depots.
This business line moved forward on a number of fronts in 2000,
including implementing major new regulating measures to improve
boating safety. In particular, these measures covered mandatory
operator competency; age and horsepower restrictions; and modernization
of small vessel regulations. The group also worked to improve
the effectiveness of the oil spill preparedness and response regime
by reviewing regulations, standards and guidelines.
The Rescue, Safety and Environmental Response division continued
to develop a Canadian hazardous and noxious substances response
regime by maintaining the consultation process with major stakeholders
and providing an effective maritime search and rescue service
through quality and enhanced evaluation initiatives.
Fleet Management
The Fleet Management business line supports all Department
of Fisheries and Oceans performance commitments. Its goal is to
provide a safe, efficient and cost-effective sea and air fleet
and the related services necessary to support DFO's program delivery,
as well as improve client satisfaction.
To support this commitment, the Fleet Management group acquires,
maintains and schedules DFO's vessel and air fleets in support
of the following program areas: Marine Navigation Services; Icebreaking
Operations; Rescue, Safety and Environmental Response; Fisheries
Management; and Fisheries and Oceans Science and Hydrography.
These program areas provide the funding to crew and operate the
fleet. Fleet Management also arranges for any required increase
in fleet capabilities by arranging for other government departments
and the private sector to provide additional sea and air support
to the programs.
Fleet Management activities in 2000 included a move toward
a base-fleet concept in which an established minimum number of
vessels deliver the program requirements and provide a stable
base for financial, operational and human resource planning. In
addition, the group continued to implement the fleet safety management
system to the standards of the International Management Code for
the Safe Operation of Ships (ISM Code) and a costing model to
give managers and clients a true understanding of the cost of
fleet operations.
Table 10-27 lists the vessel, aircraft and facility assets
held by the Canadian Coast Guard in 2000.
Financial Situation - Canadian Coast Guard
Through a combination of efficiency measures and reduced operations,
the Coast Guard has permanently reduced its net expenditures on
all these services. These reductions have lowered expenses by
$140 million, or 30 per cent, over the four-year period ending
1998/99.
Table 10-28 shows the Coast Guard's financial results for its
five major business lines for the last four fiscal years. Results
for 2000/01 reflect forecasted expenditures to fiscal year-end
and will not be finalized until the end of the fiscal year.
To obtain a fair contribution from users for programs from
which they directly benefit, the Coast Guard has implemented user
fees for some programs. The Marine Navigation Services Fee, for
example, was introduced in June 1996. It generates $28.1 million
annually, including administration costs.
The Maintenance Dredging Services Tonnage Fee for the St. Lawrence
Ship Channel, which came into effect in September 1997, is only
an interim measure to cover the total costs incurred by the Coast
Guard to provide these maintenance dredging services. The Coast
Guard is continuing to work with representatives of the commercial
marine transportation industry to arrive at a long-term arrangement,
including discussions regarding the transfer of responsibilities
to industry for these dredging services.
On December 4, 1998, the Minister of Fisheries and Oceans proposed
changes to the Icebreaking Services Fee that would generate $6.9
million annually, including administrative costs. The proposal
is built around a transit-based ice-breaking fee that would be
uniformly applied to each transit to, from or within the ice zone
during the ice season.
Table 10-29 shows a breakdown of the Coast Guard's revenues
and expenditures by its five main business lines for fiscal year
2000/01.
Marine Transportation Infrastructure
Appendix 10-1 Airports Capital
Assistance Program - Projects Approved in 2000
NOTES:
4
Tonnage statistics include cargos moved across private facilities
within Transport Canada public harbours.
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