Regulations Amending the Great Lakes Pilotage Tariff Regulations: SOR/2020-59
Canada Gazette, Part II, Volume 154, Number 8
Registration
SOR/2020-59 March 25, 2020
PILOTAGE ACT
P.C. 2020-165 March 24, 2020
RESOLUTION
Whereas the Great Lakes Pilotage Authority, pursuant to subsection 34(1) footnote a of the Pilotage Act footnote b, published a copy of the proposed Regulations Amending the Great Lakes Pilotage Tariff Regulations, substantially in the annexed form, in the Canada Gazette, Part I, on January 11, 2020;
Therefore, the Great Lakes Pilotage Authority, pursuant to subsection 33(1) of the Pilotage Act footnote c, makes the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations.
Cornwall, February 24, 2020
Michèle Bergevin
Chief Executive Officer Great Lakes Pilotage Authority
Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 33(1) of the Pilotage Act footnote d, approves the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations, made by the Great Lakes Pilotage Authority.
Regulations Amending the Great Lakes Pilotage Tariff Regulations
Amendments
1 (1) Paragraph 2(2)(a) of the English version of the Great Lakes Pilotage Tariff Regulations footnote 1 is replaced by the following:
- (a) there is a cancelled order when a request for pilotage services is cancelled by the owner, master or agent of the ship after the request was accepted; and
(2) Subsection 2(3) of the French version of the Regulations is replaced by the following:
(3) Pour l’application du présent règlement, la mention « port de Churchill » vaut mention de « toutes les eaux navigables et, le cas échéant, l’estran, commençant à l’extrémité nord d’Eskimo Point et suivant la direction nord (vrai) jusqu’à un point éloigné de cinq milles marins de l’extrémité la plus au nord d’Eskimo Point; de là, suivant la circonférence d’un cercle dont l’extrémité la plus au nord est le centre, vers l’est et vers le sud jusqu’à la rive de la baie d’Hudson à la ligne des hautes eaux; de là, suivant la ligne des hautes eaux vers l’ouest jusqu’au cap Merry; de là, en suivant la ligne des hautes eaux sur la rive est de la rivière Churchill et en amont jusqu’à la limite de la marée; de là, traversant la rivière Churchill jusqu’à la rive ouest; de là, continuant vers le nord et suivant la ligne des hautes eaux, en aval, jusqu’au point situé au Old Fort Prince of Wales, et rejoignant Eskimo Point et le point de départ ».
2 Section 4 of the Regulations is replaced by the following:
4 A surcharge of 5% for apprentice pilot training is payable on each pilotage charge payable under section 3 in accordance with Schedule 1 or 2 for a pilotage service provided on or before December 31, 2021.
3 Section 4 of the Regulations is replaced by the following:
Additional Charge for Administration of the Act
5 An additional charge of $25 is payable for each pilot assignment for the administration of the Pilotage Act.
4 (1) Subsections 1(1) to (4) of Schedule 1 to the Regulations are replaced by the following:
1 (1) Subject to subsection (2), the basic charge for a passage, other than a movage, through International District No. 1 or any part of it, and its contiguous waters, is $23.18 for each kilometre ($37.30 for each statute mile), plus $497 for each lock transited.
(2) The minimum and maximum basic charges for a through trip through International District No. 1 and its contiguous waters are $1,089 and $4,782, respectively.
(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,643.
(4) If a ship, during its passage through the Welland Canal, docks or undocks for any reason other than instructions given by the St. Lawrence Seaway Management Corporation, the basic charge is $72.84 for each kilometre ($117.22 for each statute mile), plus $436 for each lock transited, with a minimum charge of $1,457.
(2) The portion of items 1 to 15 of the table to subsection 1(5) of Schedule 1 to the Regulations in column 2 is replaced by the following:
| Item |
|
Column 2 Basic Charge ($) |
|---|---|---|
| 1 | (a) | 2,688 |
| (b) | 2,688 | |
| 2 | 2,874 | |
| 3 | 1,697 | |
| 4 | 4,999 | |
| 5 | 2,874 | |
| 6 | 2,080 | |
| 7 | 5,795 | |
| 8 | 3,732 | |
| 9 | 2,874 | |
| 10 | 1,697 | |
| 11 | 3,762 | |
| 12 | 3,762 | |
| 13 | 2,920 | |
| 14 | 1,697 | |
| 15 | 2,080 |
(3) The portion of items 1 to 4 of the table to subsection 1(6) of Schedule 1 to the Regulations in column 2 is replaced by the following:
| Item |
Column 2 |
|---|---|
| 1 | 3,968 |
| 2 | 3,323 |
| 3 | 1,494 |
| 4 | 1,494 |
(4) Section 1 of Schedule 1 to the Regulations is amended by adding the following after subsection (7):
(7.1) An additional charge of $325 is payable for each embarkation or disembarkation of a licensed pilot at the Cape Vincent pilot boat.
(5) Section 1 of Schedule 1 to the Regulations is amended by adding the following after subsection (8):
(9) An additional charge of $2,750 is payable for each time a pilot is retained on board a ship beyond the boarding point at the end of their assignment, so as to continue the voyage with a second consecutive assignment.
5 (1) The portion of item 1 of the table to subsection 2(1) of Schedule 1 to the Regulations in column 2 is replaced by the following:
| Item |
|
Column 2 Basic Charge ($) |
|---|---|---|
| 1 | (a) | 1,264 |
| (b) | 1,106 | |
| (c) | 797 |
(2) Item 2 of the table to subsection 2(1) of Schedule 1 to the Regulations is repealed.
(3) Subsection 2(3) of Schedule 1 to the Regulations is replaced by the following:
(3) The basic charge for pilotage services consisting of a lockage and a movage between Buffalo and any point on the Niagara River below the Black Rock Lock is $2,174.
(4) A basic charge of $1,200 is payable for each docking or undocking for the purpose of loading or unloading cargo, stores or bunker fuel or effecting repairs in a compulsory pilotage area in the Great Lakes region.
6 Subsections 3(1) and (2) of Schedule 1 to the Regulations are replaced by the following:
3 (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship at the end of their assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $102 is payable for each hour or part of an hour, including the first hour, that the pilot is detained.
(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $2,448.
7 Section 4 of Schedule 1 to the Regulations is replaced by the following:
4 (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $102 is payable for each hour or part of an hour of that delay, including the first hour.
(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $2,448.
8 (1) Paragraphs 5(1)(a) and (b) of Schedule 1 to the Regulations are replaced by the following:
- (a) a basic charge of $2,113;
- (b) a basic charge of $102 for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty at the designated boarding point and the time of the cancellation; and
(2) Paragraph 5(2)(a) of Schedule 1 to the Regulations is replaced by the following:
- (a) a basic charge of $2,113; and
9 Section 8 of Schedule 1 to the Regulations is replaced by the following:
8 (1) If a pilot is unable to board a ship at the designated boarding point and must, in order to board it, travel beyond the area for which the pilot’s services are requested, a basic charge of $607 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the designated boarding point.
(2) If a pilot is carried on a ship beyond the area for which the pilot’s services are requested, a basic charge of $607 is payable for each 24-hour period or part of a 24-hour period before the pilot’s return to the designated disembarkation point.
(3) In addition to the basic charges set out in subsections (1) and (2), a charge is payable in an amount equal to the sum of the travel and other expenses incurred by a pilot that are directly associated with the requirement to travel to or from a place other than the pilot’s designated boarding or disembarkation point.
10 Section 9 of Schedule 1 to the Regulations is replaced by the following:
9 If a request for pilotage services is made with less than 12 hours’ notice and those services are provided, an additional charge of $3,821 is payable.
Pilot Travel
10 (1) If a pilot must travel to embark on a ship at a location other than one of the designated boarding points at the extremities of a compulsory pilotage area in order to provide pilotage services
- (a) during the period beginning on January 1 and ending on March 21 of the same year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from their residence to the embarking location; or
- (b) at other times of the year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from their home base to the embarking location.
(2) If a pilot must disembark from a ship at a location other than one of the designated disembarkation points at the extremities of a compulsory pilotage area after providing pilotage services
- (a) during the period beginning on January 1 and ending on March 21 of the same year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from the disembarking location to their residence; or
- (b) at other times of the year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from the disembarking location to their home base.
11 (1) The portion of items 1 to 4 of the table to subsection 1(1) of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:
| Item |
Column 2 |
Column 3 |
|---|---|---|
| 1 | 5,865 | N/A |
| 2 | 27.85 for each kilometre (44.82 for each statute mile), plus 750 for each lock transited | 1,509 |
| 3 | 1,200 | N/A |
| 4 | 2,259 | N/A |
(2) Subsection 1(2) of Schedule 2 to the Regulations is replaced by the following:
(2) An additional charge of $137 is payable for each change of pilot at the St. Lambert or Beauharnois Lock.
12 Subsections 2(1) and (2) of Schedule 2 to the Regulations are replaced by the following:
2 (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship at the end of their assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $196 is payable for each hour or part of an hour, including the first hour, that the pilot is detained.
(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $4,704.
13 Section 3 of Schedule 2 to the Regulations is replaced by the following:
3 (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $196 is payable for each hour or part of an hour of that delay, including the first hour.
(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $4,704.
14 (1) Paragraphs 4(1)(a) and (b) of Schedule 2 to the Regulations are replaced by the following:
- (a) a basic charge of $2,235;
- (b) a basic charge of $196 for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty at the designated boarding point and the time of the cancellation; and
(2) Paragraph 4(2)(a) of Schedule 2 to the Regulations is replaced by the following:
- (a) a basic charge of $2,235; and
15 Section 6 of Schedule 2 to the Regulations is replaced by the following:
6 If a request for pilotage services is made with less than 12 hours’ notice and those services are provided, an additional charge of $3,821 is payable.
Pilot Travel
7 (1) If a pilot must travel to embark on a ship at a location other than one of the designated boarding points at the extremities of the Cornwall District in order to provide pilotage services
- (a) during the period beginning on January 1 and ending on March 21 of the same year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from their residence to the embarking location; or
- (b) at other times of the year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from their home base to the embarking location.
(2) If a pilot must disembark from a ship at a location other than one of the designated disembarkation points at the extremities of the Cornwall District after providing pilotage services
- (a) during the period beginning on January 1 and ending on March 21 of the same year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from the disembarking location to their residence; or
- (b) at other times of the year, a basic charge is payable in an amount equal to the sum of the reasonable travel and other expenses incurred by the pilot in travelling from the disembarking location to their home base.
16 Subsection 2(1) of Schedule 3 to the Regulations is replaced by the following:
2 (1) A basic charge of $1,310 is payable each time there is a cancelled order or cancelled sail.
Coming into Force
17 (1) These Regulations, except section 3, come into force on the day on which they are registered.
(2) Section 3 comes into force on July 1, 2020.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The current tariff rates imposed by the Authority are not sufficient for the Authority to be financially self- sustaining. In addition, the Office of the Auditor General of Canada has identified a need to amend the Regulations in order to formalize the long-standing industry-accepted practice of charging for pilot travel costs.
Background
The Authority is a Crown corporation whose mandate is to establish, operate, maintain, and administer a safe and efficient pilotage service in all Canadian waters subject to compulsory pilotage within the Great Lakes region. In accordance with the Pilotage Act (the Act), the Authority makes regulations prescribing fair and reasonable tariffs, at a level necessary for the Authority to be financially self-sustaining. The regulatory process ensures stakeholder consultation and transparency in tariff setting; therefore, the process is initiated many months before tariffs can come into force.
In its 2008 special examination report, the Auditor General required the Authority to take measures to eliminate its accumulated deficit and to become financially self-sustaining within a reasonable time frame. The Authority has taken several measures to control its operating and administration costs, and to increase revenues. By the end of 2018, the Authority’s 2009 accumulated deficit level of $5.5 million had been reduced to $0.5 million. However, the Authority is anticipating a $1.6 million loss for 2019. The tariff amendments allow the Authority to eliminate its accumulated deficit by the end of 2020 and position the Authority to establish a reserve fund so that future losses can be addressed without affecting the Authority’s financial self-sufficiency.
In 2019, following a review of the Act, amendments were tabled in Bill C-97 (Budget Implementation Act, 2019, No. 1), and received royal assent in June 2019. The coming into force of the amendments will occur over four orders in council, on dates set by the Governor in Council. In August 2019, the first of the amendments came into force, including section 37.1: “For the purpose of defraying the costs of the administration of this Act, including the development of regulations, and the enforcement of this Act, an Authority shall, on request, pay to the Minister an amount specified by the Minister in a time and manner specified by the Minister.”
The tariff amendments include provisions to address costs associated with the implementation of section 37.1 of the Act. On January 27, 2020, the Authority received a letter from the Minister of Transport indicating the amount they will be required to pay to Transport Canada in 2020–2021 for the costs of administering the Act. This amount was lower than previously anticipated, and, as a result, the Authority has changed the coming-into-force date for the Pilotage Act administration charge to ensure that the amendment remains fair and reasonable. In light of the process required to adjust tariff rates, it is necessary to implement the charge by July 1, 2020, in order to have sufficient revenue to pay the costs by the first quarter of 2021, as anticipated.
Also some of the amendments take into consideration recent recommendations from the Standing Joint Committee for the Scrutiny of Regulations (SJCSR) that the wording in certain provisions be clarified and corrected.
Objective
The amendments allow the Authority to
- 1. levy tariffs that are fair and reasonable to remain financially self-sufficient;
- 2. continue to recruit and train apprentice pilots;
- 3. fulfill obligations associated with the purchase of a pilot boat as per the terms of a Memorandum of Understanding (MOU) with the United States Coast Guard;
- 4. introduce a cost-recovery mechanism to recover incremental pilot compensation when pilots remain on vessels on overtime beyond their original assignment to reduce delays to vessels due to a shortage of pilots;
- 5. standardize the docking/undocking and stoppage charges in all districts as to generate sufficient charges to remain financially self-sufficient;
- 6. continue to enlist services from the service provider between the St. Lambert and the Beauharnois Locks;
- 7. formalize the recovery of pilot travel costs in the Regulations;
- 8. ensure greater clarity in provisions identified by the SJCSR; and
- 9. generate revenues to cover the new Pilotage Act administration charge, as set out in the new section 37.1 of the Act.
Description
The Authority is implementing the following changes, effective April 1, 2020:
- 1. Based on the anticipated increase in demand for pilotage services, the Authority is introducing a 3.0% increase for all rates, other than those specifically noted below.
- 2. Given that a relatively high number of apprentice pilots will need to be recruited and trained in the next five years due to imminent pilot retirements and increased current traffic demand, the Authority is extending the current 5.0% apprentice pilot training surcharge for an additional 12 months ending December 31, 2021.
- 3. The St. Lawrence Seaway Pilots Association (SSPA) provides the Authority with pilot boat services at the change point in Cape Vincent, New York, at no cost to the Authority as set out in the current MOU between the Authority and the U.S. Coast Guard. The SSPA has identified the need to procure a new pilot boat in order to better navigate under ice and wind conditions, and to help maintain a reliable and efficient pilotage service. The SSPA has estimated the cost of this procurement to be approximately US$1.7 million. The U.S. Coast Guard and the SSPA have met with their industry stakeholders to explain the need for a new pilot boat, and to discuss strategies to repay the financing costs. As per the MOU, the SSPA will recover a portion of the cost of purchasing the new pilot boat by charging the Authority for each assignment conducted in the Great Lakes region. Accordingly, the Authority is proposing to introduce a new corresponding pilot boat charge that would be removed once the costs have been recovered. The Authority is introducing a new pilot boat charge for all assignments at Cape Vincent, New York, in the amount of $325 per pilot transfer.
- 4. When compared with the traffic prior to 2014, traffic in the Great Lakes has increased in excess of 15%, and is being serviced by the same complement of pilots. To avoid costly vessel delays when replacement pilots are not immediately available, pilots are remaining on board the vessel on overtime to continue the transit. However, the current tariffs are not structured to recover the additional compensation due to the pilot on overtime. The Authority is introducing a $2,750 charge per assignment, to be applied when the pilot is not relieved and remains on board to continue the transit on overtime.
- 5. The charges for docking/undocking and stoppages are currently inconsistent or lacking in the current tariffs, although pilot compensation, under the most recent collective agreements, has been standardized across all districts. Therefore, the Authority is standardizing the rates for all docking/undocking and stoppages at $1,200, as well as introducing these charges for International District No. 1 and the Welland Canal, as well as the River Tour in International District No. 2.
- 6. The Authority is adjusting the pilot transfer fee for all vessels transiting through the St. Lambert and the Beauharnois Locks. This adjustment covers the fee charged by the service provider who facilitates the pilot transfer. The Authority is proposing to increase the fee from $135 to $137 per pilot transfer through these locks.
- 7. The Authority and its customers reached an agreement several years ago for the Authority to charge its customers for pilot travel costs when the pilot embarks or disembarks at a location that is other than the pilot change point at the extremities of the district. During the Authority’s 2018 financial audit by the Office of the Auditor General of Canada, it was recommended that the Authority formalize this arrangement in the Regulations.
- 8. The Authority will adjust the French text in the definition of “port of Churchill” to directly align with that used in the Public Ports and Public Port Facilities Regulations made under the Canada Marine Act. As well, the Authority will replace the words “reasonable travel and other expenses” with “travel and other reasonable expenses” for pilot travel associated with overcarriage.
The following change will come into effect on July 1, 2020:
- 9. The Authority is levying a flat charge in the amount of $25 per assignment.
Regulatory development
Consultation
The Authority’s principal stakeholder is the Shipping Federation of Canada (the Federation). The Federation represents the owners and operators of foreign-flagged ships that are required, by law, to enlist pilotage services from the Authority while transiting the Great Lakes system. The Federation represents approximately 80–85% of the Authority’s clientele. The other principal stakeholder of the Authority is the Chamber of Marine Commerce (the Chamber), which represents the owners and operators of Canadian-flagged ships. While the majority of Canadian-flagged ships do not enlist pilotage services from the Authority (as they elect to enlist services from pilotage certificate holders instead), approximately 10 of the Chamber’s 70 domestic ships are Canadian tankers that request the use of a pilot. The Chamber represents approximately 15–20% of the Authority’s clientele.
The Authority consulted with the Federation several times throughout 2019 as well as with the Chamber. All stakeholders are aware that the Authority must respect its objective to remain financially self-sufficient. It is worth noting that the Federation has publicly stated that all proposed pilotage tariffs are too costly to industry. Further, the Federation believes that the Authority should extend its accumulated deficit elimination strategy over another five years (or more) and does not see or agree with the urgency for the Authority to be financially self-sufficient by the end of fiscal year 2020. Despite this view on tariffs, the Federation has also voiced extreme criticisms regarding the high level of vessel delays due to pilot shortages.
As required under subsection 34(1) of the Act, these amendments were published in the Canada Gazette, Part I, on January 11, 2020, followed by a 30-day comment period to provide interested persons with the opportunity to make comments or to file a notice of objection with the Canadian Transportation Agency (CTA). On February 10, 2020, as per subsection 34(2) of the Act, the Federation filed an objection to the Authority’s proposed tariff amendments, believing them to be neither fair nor reasonable, as well as prejudicial to the public interest.
On January 27, 2020, the Authority received a letter from the Minister of Transport indicating the amount they will be required to pay, under section 37.1, for the 2020–2021 period. The amount is lower than previously anticipated. As a result, the Authority has chosen to delay the coming into force of the charge to July 1, 2020.
While the Authority acknowledges the concerns of the industry, the Authority has a duty to reassure the Canadian public that it is fiscally responsible with a duty to be financially self-sufficient. Extending the accumulated deficit over the next five years would impede the Authority’s ability to be financially self-sufficient and to develop a financial reserve policy to weather future financial uncertainties. With respect to the Pilotage Act administration charge, section 37.1 of the Act obliges the Authority to pay charges to the Minister of Transport to defray the costs of administering the Act. In light of the time it takes to adjust tariff rates through the regulatory process, the Authority has no choice but to move forward with the amendment in order to secure the revenue necessary to be able to pay the charges by the first quarter of 2021, as anticipated. Therefore, the Authority maintains its position that the tariff amendments are necessary and that it will proceed with advancing these amendments for Governor in Council approval. Once the CTA will have made a recommendation to the Authority, the Authority will govern itself accordingly.
Modern treaty obligations and Indigenous engagement and consultation
In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the amendments were likely to give rise to modern treaty obligations. This assessment examined the geographic scope and subject matter of the amendments in relation to modern treaties in effect, and after examination, no implications or impacts on modern treaties were identified.
Instrument choice
The Authority considered a number of regulatory and non-regulatory options before proposing the present tariff amendments. A priority for the Authority is to address the long-standing deficit through a combination of cost management and pilotage charges that are fair and reasonable. However, the Authority does not have a means of fixing pilotage charges through non-regulatory instruments, nor does it receive appropriations from Parliament that would allow it to cover its expenses. Therefore, the amendments to the Regulations were deemed to be the most appropriate instrument choice to recover the revenues necessary to deliver pilotage services on a financially self-sufficient basis.
Regulatory analysis
Benefits and costs
All costs of the amendments are borne by users of the Authority’s pilotage services (i.e. industry). The annualized average expected cost to industry would be $3.1 million. Expected benefits for the proposal (mainly increased safety and efficiency) are difficult to quantify and have therefore been expressed qualitatively. The expected benefits and costs of the amendments are outlined in the following tables.
Cost-benefit statement
| 2020 (Base Year) |
2021 |
2022–2029 |
Total |
Average |
|
|---|---|---|---|---|---|
Benefits |
|||||
Qualitative only (see part B) |
— |
— |
— |
— |
— |
Costs |
|||||
Increase general tariffs in all districts |
1.0 |
0.9 |
5.1 |
7.0 |
0.70 |
New pilot boat charge (Cape Vincent) |
0.4 |
0.4 |
1.6 |
2.4 |
0.24 |
New charge for pilots continuing a transit after the initial assignment |
3.8 |
2.9 |
6.3 |
13.0 |
1.3 |
Standardization of docking/undocking rates |
0.9 |
0.8 |
4.9 |
6.6 |
0.7 |
Increase charge for pilot change at locks |
0.004 |
0.003 |
0.015 |
0.022 |
0.002 |
New Pilotage Act administration charge |
0.1 |
0.2 |
1.2 |
1.6 |
0.2 |
Total |
6.2 |
5.2 |
19.1 |
30.5 |
3.1 |
Net benefits |
−30.5 |
−3.1 |
|||
| Positive impacts |
|
|---|---|
Increase general tariffs in all districts |
This allows for a greater number of pilots to properly service current demand, thus increasing safety by ensuring that pilots are able to comply with hours of rest requirements as set by Transport Canada. |
Extend apprentice training surcharge |
Revenue available to increase apprentice recruitment and training; more pilots available will minimize delays. |
New pilot boat charge (Cape Vincent) |
Vessel delays due to climate conditions are minimized (as the new boat would be better suited to work through ice) and the Authority is able to fulfill obligations with international partners. |
New charge for pilots continuing a transit after the initial assignment |
Vessel delays are minimized where pilots can be compensated for overtime when accepting a second consecutive assignment. |
Standardization of docking/undocking rates |
Only the customers directly affected pay charges instead of burdening all customers with higher general tariffs. |
Increase charge for pilot change at locks |
Increased revenues will improve pilot safety when pilot transfers are done at the locks by retaining the services currently necessary to transfer pilots at the locks. |
Formalize recovery of pilot travel costs in the Regulations |
Provide transparency around long-standing practice with the industry to recover pilot travel costs. |
New Pilotage Act administration charge |
Enable the Authority to recover costs associated with administering the amendments to the Pilotage Act. |
Notes:
- Quantified impacts are calculated over a 10-year period (2020–2029) using a 7% discount rate.
- Net benefits are estimated by running "before" and "after" scenarios, which compare the baseline against the proposed prices using average historic traffic data for each district. It is assumed that demand for pilotage services is inelastic; thus, it is assumed that traffic will not reduce in any significant manner after these tariff increases are implemented.
Small business lens
The small business lens does not apply, as there are no associated impacts on small businesses. The majority of the Authority’s clientele (i.e. foreign shippers) are not small businesses, and the majority of shippers considered small businesses choose to hire pilotage certificate holders instead of pilots. Vessels that use pilotage certificate holders are not subject to these amended tariffs.
One-for-one rule
The amendments increase tariffs, fees, and charges for pilotage services. All administrative systems are already in place to execute these changes; thus, no incremental administrative burden is imposed on industry and the one-for-one rule does not apply.
Regulatory cooperation and alignment
The amendments are not part of a formal regulatory cooperation initiative; however, the amendments are linked to international agreements and obligations with the United States through the MOU between the Authority and the U.S. Coast Guard. Given that the Authority conducts its operations in international waters, it works closely with its U.S. counterparts to align regulatory requirements, where possible and applicable.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for these amendments. The amendments put forward tariffs that are considered to be fair and reasonable for the purpose of delivering safe and efficient pilotage services.
Rationale
The Authority is working towards eliminating its accumulated deficit in an effort to maintain financial self-sufficiency. Based on the forecasted increase in traffic volume and the operational demands placed on the Authority, the amendments will allow the Authority to receive adequate revenues to offset its expenses, as well as eliminate its deficit by the end of 2020.
The Authority estimates that the Pilotage Act administration charge of $25 will allow it to recuperate enough revenue to cover the charges anticipated in accordance with section 37.1 of the Act, and expected to be paid to the Minister of Transport by the first quarter of 2021.
Implementation and compliance and enforcement
Implementation
The amended tariffs, will be available online on the Department of Justice website and published on the Authority’s website. The new Regulations come into force on April 1, 2020, with the exception of the Pilotage Act administration charge, which will come into force on July 1, 2020.
Compliance and enforcement
The Pilotage Act provides enforcement mechanisms for all regulations made by pilotage authorities. Pilotage authorities can inform a customs officer at any port in Canada to withhold clearance from any ship for which pilotage charges are outstanding and unpaid. Any 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. These amendments are not expected to produce any change to these compliance and enforcement mechanisms.
Contact
Michèle Bergevin
Chief Executive Officer
Great Lakes Pilotage Authority
202 Pitt Street, 2nd Floor
P.O. Box 95
Cornwall, Ontario
K6H 5R9
Telephone: 613‑933‑2991, ext. 205
Fax: 613‑932‑3793