Vol. 145, No. 5 — March 2, 2011

Registration

SOR/2011-46 February 17, 2011

PILOTAGE ACT

ARCHIVED — Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996

P.C. 2011-244 February 17, 2011

RESOLUTION

Whereas the Atlantic Pilotage Authority, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act (see footnote b), published a copy of the proposed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996, in the annexed form, in the Canada Gazette, Part I, on November 27, 2010;

Therefore, the Atlantic Pilotage Authority, pursuant to subsection 33(1) of the Pilotage Act (voir référence c), hereby makes the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996.

Halifax, January 4, 2011

CAPTAIN R. A. MCGUINNESS
Chief Executive Officer
Atlantic Pilotage Authority

His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 33(1) of the Pilotage Act (see footnote d), hereby approves the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996, made by the Atlantic Pilotage Authority.

REGULATIONS AMENDING THE ATLANTIC PILOTAGE TARIFF REGULATIONS, 1996

AMENDMENTS

1. Section 4.1 of the Atlantic Pilotage Tariff Regulations, 1996 (see footnote 1) is replaced by the following:

4.1 In addition to the charges payable under section 4, a pilot boat replacement surcharge is payable until December 31, 2011 in accordance with Schedules 2, 4 and 5.

2. Clause 5(b)(ii)(A) of the Regulations is replaced by the following:

(A) the greater of the product obtained by multiplying the pilotage unit by the unit charge set out in column 3 of that item, and the product obtained by multiplying the gross tonnage by a tonnage charge of $0.01375 per gross ton, and

3. Subclause 8(b)(ii)(B)(I) of the Regulations is replaced by the following:

(I) the greater of the product obtained by multiplying the pilotage unit by the unit charge set out in column 4 of that item, and the product obtained by multiplying the gross tonnage by a tonnage charge of $0.01375 per gross ton, and

4. The portion of item 9 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:


Item

Column 2
Minimum Charge ($)

Column 3
Unit Charge ($)

Column 4
Basic Charge ($)

9.

1,811.00

5.26

883.00

5. The portion of items 11 and 12 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:


Item

Column 2
Minimum Charge ($)

Column 3
Unit Charge ($)

Column 4
Basic Charge ($)

11.

1,230.00

3.05

986.00

12.

1,181.00

2.25

477.00

6. The portion of item 2 of Schedule 3 to the Regulations in column 3 is replaced by the following:


Item

Column 3
Flat Charge, Pilot Boat Used ($)

2.

1,516.00

7. The portion of item 9 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:



Item

Column 3

Minimum Charge ($)

Column 4
Unit Charge, No Pilot Boat Used ($)

Column 5
Basic Charge, No Pilot Boat Used ($)

Column 6
Unit Charge, Pilot Boat Used ($)

Column 7
Basic Charge, Pilot Boat Used ($)

9.

1,630.00

4.21

706.00

4.73

795.00

8. The portion of items 11 and 12 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:



Item

Column 3

Minimum Charge ($)

Column 4
Unit Charge, No Pilot Boat Used ($)

Column 5
Basic Charge, No Pilot Boat Used ($)

Column 6
Unit Charge, Pilot Boat Used ($)

Column 7
Basic Charge, Pilot Boat Used ($)

11.

1,107.00

2.44

789.00

2.75

887.00

12.

1,063.00

1.80

382.00

2.03

429.00

9. Schedule 5 to the Regulations is replaced by the Schedule 5 set out in the schedule to these Regulations.

COMING INTO FORCE

10. These Regulations come into force on the day on which they are registered.

SCHEDULE
(Section 9)

SCHEDULE 5
(Sections 4.1 and 8)

SAINT JOHN COMPULSORY PILOTAGE AREA — TRIPS AND MOVAGES



Item

Column 1

Trip or Movage

Column 2

Flat Charge ($)

Column 3

Minimum Charge ($)

Column 4

Unit Charge ($)

Column 5

Basic Charge ($)

Column 6
Pilot Boat Replacement Surcharge ($)

Column 7
Average Fuel Consumption (litres)

1.

One-way trip

n/a

1,071.00

3.36

483.00

100.00

75

2.

Movage with pilot boat

n/a

964.00

3.02

435.00

100.00

75

3.

Movage without pilot boat

n/a

964.00

2.69

386.00

n/a

n/a

4.

Trip through

918.00

n/a

n/a

n/a

100.00

n/a

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

The Atlantic Pilotage Authority (the Authority) is responsible for administering, in the interests of safety, an efficient pilotage service within the Canadian waters in and around the Atlantic Provinces. As required by the Pilotage Act, the Authority prescribes tariffs of pilotage charges that are fair and reasonable and consistent with providing revenues sufficient to permit the Authority to operate on a self-sustaining financial basis. In accordance with recommendations from the Canadian Transportation Agency (the CTA) and its customers, the Authority strives to be financially self-sufficient on a port-by-port basis, as well as for the Authority as a whole. The Authority is responsible for 17 compulsory pilotage areas, and additional non-compulsory areas in which a pilot may be provided at the request of a ship.

The compulsory pilotage area of the Strait of Canso has had declining traffic levels over several years. This area has been hurt by the economic slowdown and has had its traffic fall from a recent high of 1 485 assignments in 2007 to where the Authority is projecting 1 146 assignments in 2010, leading to a decline in revenue for the Authority. The Authority has consulted with the customers in this port regarding staffing levels and they have demanded service levels not be reduced.

In the ports of Halifax and Saint John, the Authority has invested heavily to meet the demands of customers regarding adequate service levels. Pilot numbers have been increased in both of these ports recently and construction on a new pilot boat for each port is scheduled to begin in 2011. The port of Sydney has two older Authority-owned pilot boats in the port that will be absorbing higher amortization costs due to the requirement that the Authority implement International Financial Reporting Standards in 2011.

The pre-publication of this amendment in the Canada Gazette, Part I, included a tariff increase for Placentia Bay, Newfoundland and Labrador. The Authority has withdrawn this increase because of better financial results in the area than anticipated.

The tariff adjustments are intended to allow the Authority to reduce the risk of cross-subsidizations among ports by reducing the risk of losses, offsetting inflationary pressures, offsetting the increased costs of capital in some ports, and providing funding to maintain or increase pilot resources.

The objective of this regulatory amendment is to increase pilotage charges in certain compulsory areas in order to

  • maintain the ability of the Authority to meet its mandate to operate, in the interest of safety, an efficient pilotage service within the Atlantic region;
  • help ensure the long-term financial self-sustainability of the Authority as a whole;
  • help ensure the long-term financial self-sustainability of each port individually; and
  • be mindful of the economic realities of the region by ensuring that the tariff increases are within the ability of the shipping industry to absorb while allowing the ports to remain competitive.

Description and rationale

Compulsory Ports Regular Tariffs

The Regulations will increase pilotage tariffs by the following percentages:

Halifax 5.0%

Sydney 5.0%

Strait of Canso 2.5%

Saint John 2.0%

The pilotage tariffs in the remaining 13 compulsory areas will remain at their current levels.

New pilot boat surcharge

The original concept of the new pilot boat surcharge was that it would remain in place until the new vessels were complete and being put into service. This was originally scheduled to be in 2010, but delays due to the finances of the Authority have pushed this date back to late in 2011 or early 2012. After consultation with the customers in both Halifax and Saint John, they have agreed that the surcharge should be extended to December 31, 2011, instead of expiring on June 30, 2011.

Gross tonnage charge

The gross tonnage charge was established for 2010 as the Authority continued its initiative to address inequities that have developed over time in the tariff system. As new generations of ships are built, some of the traditional measurements no longer give a fair representation of the capacity of the ship to earn revenue. The Authority amended its variable charge to have the greater of the unit charge or the gross tonnage charge apply to all ships. By basing the variable charge on a formula that considers the greater of the unit charge or a gross tonnage charge, the Authority is addressing anomalies in how newer vessels are measured. The Authority has consulted with industry regarding this charge. As a direct result of this consultation, the gross tonnage charge is being implemented in three stages. This amendment represents the second stage of implementation, and will increase the gross tonnage charge from $0.01000 per gross tonne to $0.01375. While the charge applies to all ships in compulsory areas, the level of this charge will still be at a rate such that it will only affect a small number of vessels in Halifax and Saint John.

Summary

The following table indicates the current charges and the amendments:

Basic Charge

Unit Charge

Minimum Charge

Cancellation Charge

Estimated Fuel Charge*

Cost for an average ship**

Strait of Canso, NS

2010

$962

$2.98

$1,200

$900

$ n/a

$2,644

2011

$986

$3.05

$1,230

$900

$ n/a

$2,707

**Based on a ship of 564.4 units for Strait of Canso

Halifax, NS

2010

$454

$2.14

$1,125

$454

$98

$1,485

2011

$477

$2.25

$1,181

$477

$100

$1,558

*The 2011 fuel charge is based on the 2010 average fuel price of $0.77 and 130 litres per trip

** Based on a ship of 436 units for Halifax

Saint John, NB

2010

$474

$3.29

$1,050

$474

$68

$1,744

2011

$483

$3.36

$1,071

$483

$73

$1,783

*The 2011 fuel charge is based on the 2010 average fuel price of $0.97 and 75 litres per trip

** Based on a ship of 365.25 units for Saint John

Sydney, NS

2010

$841

$5.01

$1,725

$841

$ n/a

$3,014

2011

$883

$5.26

$1,811

$883

$ n/a

$3,164

** Based on a ship of 433.72 units for Sydney
The temporary pilot boat replacement surcharge will remain in place in Halifax and Saint John until December 31st, 2011.

The gross tonnage charge will be increased from $0.01 to $0.01375.

Consultation

Consultation in various forms has taken place with the parties affected by these amendments. The parties consulted include the Shipping Federation of Canada, which represents foreign vessels and accounts for 70%–75% of the Authority’s activity and revenue, and the Canadian Shipowners Association. Local committees representing stakeholders in each of the three provinces affected were also consulted extensively. The consultation took the form of meetings, as well as written, personal, and telephone communications with individuals. Alternatives to tariff increases were presented, where applicable, and participation from the attendees was encouraged. When meeting with customers, the Authority provided an analysis of the situation and solicited responses.

Stakeholders have consistently expressed that they would not like to see service levels reduced, and the majority of our customers accept that the increases are fair and reasonable.

These amendments were pre-published in the CanadaGazette, Part I, on November 27, 2010, to provide interested persons with the opportunity to make comments or to file a notice of objection with the Canadian Transportation Agency (CTA) as allowed by subsection 34(2) of the Pilotage Act. No comments were received and no notices of objection were filed.

Implementation, enforcement and service standards

Section 45 of the Pilotage Act provides an enforcement mechanism for these Regulations in that a Pilotage Authority can inform a customs officer at any port in Canada to withhold clearance from any ship for which pilotage charges are outstanding and unpaid. Section 48 of the Pilotage Act stipulates that every person who fails to comply with the Act or Regulations is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Contact

Captain R. A. McGuinness
Chief Executive Officer
Atlantic Pilotage Authority
Cogswell Tower, Suite 910
2000 Barrington Street
Halifax, Nova Scotia
B3J 3K1
Telephone: 902-426-2550
Fax: 902-426-4004

Footnote a
S.C. 1998, c. 10, s. 150

Footnote b
R.S., c. P-14

Footnote c
R.S., c. P-14

Footnote d
R.S., c. P-14

Footnote 1
SOR/95-586