ARCHIVED — Vol. 147, No. 7 — February 16, 2013

Regulations Amending the Great Lakes Pilotage Tariff Regulations

Statutory authority

Pilotage Act

Sponsoring agency

Great Lakes Pilotage Authority

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue

The Great Lakes Pilotage Authority (the Authority) has an accumulated deficit of $2.7 million as at December 31, 2012. The Office of the Auditor General, in its Special Examination Report of April 2008, recommended that the Authority take measures to eliminate its accumulated deficit and be financially self-sufficient. The Authority has taken many steps since 2008 to control costs and increase revenues. However, a further tariff amendment is necessary.

Background

The Authority, a Crown corporation listed in Part Ⅰ of Schedule III to the Financial Administration Act, was established in February 1972 pursuant to the Pilotage Act (the Act). The Authority is required by subsection 33(3) of the Act to fix pilotage charges that are fair and reasonable to permit the Authority to operate on a self-sustaining financial basis.

Objectives

The objective of the proposed amendments to the Great Lakes Pilotage Tariff Regulations (the Regulations) is to ensure that the Authority’s revenues from pilotage tariffs offset the anticipated increase in operating costs in 2013 and 2014 and to eliminate the accumulated deficit by the end of 2015 while the Authority continues to operate, maintain and administer, in the interests of safety, an efficient pilotage service with the Great Lakes region.

Description

The Authority proposes an overall tariff increase of 2.5% in 2013 and another 2.5% in 2014 to its general tariff for all of the pilotage charges on its pilotage assignments in all of its six districts.

The Authority proposes to maintain for 2013 and 2014 the temporary tariff surcharge at 12%, the same rate as 2012. This temporary tariff surcharge will be in effect until December 31, 2014. In light of the current traffic in 2012 and discussions held with its users, both agreed that there will be no change in temporary tariff surcharge for 2013 and 2014.

The propose tariff amendments would be done in the following manner:

— in 2013, the overall tariff increase of 2.5% will be done by amending tariffs in the pilotage districts as per the following:

  • Cornwall district: 3% increase

  • International district No. 1: 1% increase

  • Lake Ontario district: 2.5% increase

  • International district No. 2: 3.5% increase

  • International district No. 3: 2.5% increase

  • Port of Churchill: no increase

— in 2014, the equivalent of a 2.5% general increase in its pilotage charges in all of its pilotage districts.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal.

Consultation

The Authority’s major stakeholder is the Shipping Federation of Canada (the Federation), which represents the owners/ operators of foreign-flag ships that operate within the Great Lakes system and are required to use the services of Authority pilots while transiting these waters. These foreign-flag ships represent 85% of the Authority’s business. The Authority met twice with the Federation on September 5 and November 13, 2012. The following items were discussed: traffic, pilot numbers, service levels and tariff adjustments for the coming years.

The remaining 15% of the Authority’s business pertains to the Canadian domestic fleet represented by the Canadian Shipowners Association (the Association). The Association represents approximately 70 Canadian-flag ships and most of these ships do not use the services of Authority pilots since at least one of their regular crew members is the holder of a Great Lakes pilotage certificate. Approximately 10 ships within the domestic fleet, however, are Canadian tankers that employ the services of a pilot when transiting certain districts within the Authority’s jurisdiction or when the ship/cargo charterers require the ship to utilize the services of a pilot. The Authority met the Association on December 3, 2012, to discuss this tariff proposal and other matters.

The Authority also met the Chamber of Marine Commerce (the Chamber) on December 12, 2012, to discuss this tariff proposal and other matters. The Chamber is the voice of the commercial marine industry in the Great Lakes.

All stakeholders (i.e. the Federation, the Association and the Chamber) indicated that they were supportive of this tariff adjustment.

Rationale

The Authority determined the necessary tariff adjustments after examining its six districts to ensure that all districts are financially self-sufficient and that cross-subsidization between districts is reduced or eliminated. This increase would offset operating expense increases that the Authority is planning to incur in 2013 and 2014 and generate operating surpluses in both years.

In 2012, the Authority has settled collective agreements with its pilots that will yield an average wage increase of 2.5% per year over the next five years. Pilot wages related expenses represent 75% of the Authority’s total operating expenses. This proposed tariff increase for 2013 and 2014 was discussed with its users and they are comfortable with it.

The Authority’s proposed overall increase in its general tariff of 2.5% in 2013 and 2.5% in 2014 and also the proposal to maintain the temporary tariff surcharge of 12% until December 31, 2014, is in line with its 2013–2017 Corporate Plan objective to eliminate its accumulated deficit by the end of 2015.

The revenue generated from the proposed amendments would be beneficial in that it would enhance the Authority’s ability to operate on a self-sustaining financial basis that is both fair and reasonable, while reducing its accumulated deficit in accordance with the Office of the Auditor General’s Special Examination Report of April 2008. These proposed amendments would also be beneficial in that the Authority could continue to provide a safe and efficient pilotage service in accordance with the requirements of the Act. Based on 2013 and 2014 traffic projections, the proposed tariff increase of 2.5% for each year should generate $490K in 2013 and a further $490K in 2014 for a total increase of $980K from 2012 levels. The 12% temporary tariff surcharge should generate $2 million of revenue per year to the Authority.

For an average-sized ship transiting the Seaway between Montréal and Thunder Bay, the current pilotage charge in 2012 was $35,200 for a one-way trip. Should these proposed amendments be approved, the pilotage charge in 2013 would be $36,100 and $37,000 in 2014 (approximately $2.00 a ton) for a one-way trip. For a round trip, the above charges are doubled. In future years, the overall pilotage charge to the user would decrease as the proposed temporary surcharge will expire on December 31, 2014.

There are presently fewer than 20 companies operating foreign-flag ships within the Great Lakes that must employ Authority pilots. For a foreign-flag ship transiting these waters, its pilotage costs represent approximately 3.5% of its total operating costs. With the adjustment in pilotage costs attributed to the two proposed amendments, it is estimated that its total pilotage costs would remain at approximately 3.5% of the ship’s total operating costs.

In certain districts within the Authority’s jurisdiction, pilotage is shared equally between Canadian and U.S. pilots on a rotational basis. The Authority and its U.S. counterpart regularly exchange information concerning pilotage rates. In 2013, the U.S. pilotage authority intends to increase its tariff rates by a bit more than the cost of living and if this occurs, the U.S. rates would be similar to those in Canada, based on parity of the dollar. The U.S. Authority 2013 tariff structure has not yet been finalized.

Implementation, enforcement and service standards

Section 45 of the 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 Act stipulates that every person who fails to comply with Part 1 of the Act, other than section 15.3, or with the Regulations, is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Contact

Mr. Robert F. Lemire
Chief Executive Officer
Great Lakes Pilotage Authority
P.O. Box 95
Cornwall, Ontario
K6H 5R9
Telephone: 613-933-2991
Fax: 613-932-3793

PROPOSED REGULATORY TEXT

Notice is given, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act (see footnote b), that the Great Lakes Pilotage Authority, pursuant to subsection 33(1) of that Act, proposes to make the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations.

Interested persons who have reason to believe that any charge in the proposed Regulations is prejudicial to the public interest, including the public interest that is consistent with the national transportation policy set out in section 5 (see footnote c) of the Canada Transportation Act (see footnote d), may file a notice of objection setting out the grounds for the objection with the Canadian Transportation Agency within 30 days after the date of publication of this notice. The notice of objection must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be sent to the Canadian Transportation Agency, Ottawa, Ontario K1A 0N9. The notice of objection must also be filed with the Minister of Transport and the Great Lakes Pilotage Authority in accordance with subsection 34(3) (see footnote e) of the Pilotage Act (see footnote f).

Cornwall, February 5, 2013

ROBERT F. LEMIRE
Chief Executive Officer
Great Lakes Pilotage Authority

REGULATIONS AMENDING THE GREAT LAKES PILOTAGE TARIFF REGULATIONS

AMENDMENTS

1. Section 4 of the Great Lakes Pilotage Tariff Regulations (see footnote 1) is replaced by the following:

4. A surcharge of 12% is payable until December 31, 2014 on each pilotage charge payable under section 3 for a pilotage service provided in accordance with any of Schedules 1 to 3.

2. (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 $17.31 for each kilometre ($28.81 for each statute mile), plus $384 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 $841 and $3,694, respectively.

(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,268.

(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 $54 for each kilometre ($88.34 for each statute mile), plus $329 for each lock transited, with a minimum charge of $1,099.

(2) 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 $17.74 for each kilometre ($29.53 for each statute mile), plus $394 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 $862 and $3,786, respectively.

(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,300.

(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 $55 for each kilometre ($90.55 for each statute mile), plus $337 for each lock transited, with a minimum charge of $1,126.

(3) 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)

2,026

(b)

2,026

2.

2,166

3.

1,278

4.

3,767

5.

2,166

6.

1,568

7.

4,367

8.

2,812

9.

2,166

10.

1,278

11.

2,834

12.

2,834

13.

2,200

14.

1,278

15.

1,568

(4) 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)

2,077

(b)

2,077

2.

2,220

3.

1,310

4.

3,861

5.

2,220

6.

1,607

7.

4,476

8.

2,882

9.

2,220

10.

1,310

11.

2,905

12.

2,905

13.

2,255

14.

1,310

15.

1,607

(5) 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

Basic Charge ($)

1.

2,864

2.

2,399

3.

1,078

4.

1,078

(6) 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

Basic Charge ($)

1.

2,936

2.

2,459

3.

1,105

4.

1,105

3. (1) The portion of items 1 and 2 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)

947

(b)

833

(c)

576

2.

 

(a)

902

(b)

642

(c)

551

(2) The portion of items 1 and 2 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)

971

(b)

854

(c)

590

2.

 

(a)

925

(b)

658

(c)

565

(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 $1,638.

(4) 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 $1,679.

4. (1) 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 after the end of the pilot’s assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $76 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,824.

(2) 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 after the end of the pilot’s assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $78 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,872.

5. (1) 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 $76 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 $1,824.

(2) 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 $78 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 $1,872.

6. (1) Subsections 5(1) to (3) of Schedule 1 to the Regulations are replaced by the following:

5. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,584 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $76 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $1,824.

(2) Subsections 5(1) to (3) of Schedule 1 to the Regulations are replaced by the following:

5. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,624 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $78 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $1,872.

7. (1) Subsections 8(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

8. (1) If a pilot is unable to board a ship at the normal 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 $456 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the normal 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 $456 is payable for each 24-hour period or part of a 24-hour period before the pilot’s return to the place where the pilot normally would have disembarked.

(2) Subsections 8(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

8. (1) If a pilot is unable to board a ship at the normal 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 $467 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the normal 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 $467 is payable for each 24-hour period or part of a 24-hour period before the pilot’s return to the place where the pilot normally would have disembarked.

8. (1) The portion of items 1 to 4 of the table to section 1 of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:

Item

Column 2


Basic Charge ($)

Column 3

Minimum Basic
Charge ($)

1.

4,335

N/A

2.

19.90 for each kilometre (33.12 for each statute mile), plus 553 for each lock transited

1,115

3.

777

N/A

4.

1,669

N/A

(2) The portion of items 1 to 4 of the table to section 1 of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:

Item

Column 2


Basic Charge ($)

Column 3

Minimum Basic
Charge ($)

1.

4,443

N/A

2.

20.40 for each kilometre (33.95 for each statute mile), plus 567 for each lock transited

1,143

3.

796

N/A

4.

1,711

N/A

9. (1) 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 after the end of the pilot’s assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $145 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,480.

(2) 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 after the end of the pilot’s assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $149 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,576.

10. (1) 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 $145 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 $3,480.

(2) 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 $149 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 $3,576.

11. (1) Subsections 4(1) to (3) of Schedule 2 to the Regulations are replaced by the following:

4. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,653 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $145 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of the cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $3,480.

(2) Subsections 4(1) to (3) of Schedule 2 to the Regulations are replaced by the following:

4. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,694 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $149 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of the cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $3,576.

12. The portion of items 1 and 2 of the table to section 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

1,545

2.

1,079

COMING INTO FORCE

13. (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.

(2) Subsections 2(2), (4) and (6), 3(2) and (4), 4(2), 5(2), 6(2), 7(2), 8(2), 9(2), 10(2) and 11(2) and section 12 come into force on January 1, 2014.

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