Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996: SOR/2020-57
Canada Gazette, Part II, Volume 154, Number 8
Registration
SOR/2020-57 March 25, 2020
PILOTAGE ACT
P.C. 2020-163 March 24, 2020
RESOLUTION
Whereas the Atlantic Pilotage Authority, pursuant to subsection 34(1) footnote a of the Pilotage Act footnote b, published a copy of the proposed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996, substantially in the annexed form, in the Canada Gazette, Part I, on December 14, 2019;
Therefore, the Atlantic Pilotage Authority, pursuant to subsection 33(1) of the Pilotage Act footnote b, makes the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996.
Halifax, February 20, 2020
Captain Sean Griffiths
Chief Executive Officer
Atlantic 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 b, 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 (1) Subsection 14(5) of the Atlantic Pilotage Tariff Regulations, 1996 footnote 1 is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):
- (e) Restigouche, New Brunswick, at any time during the year.
(2) Subsection 14(6) of the Regulations is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):
- (e) Restigouche, New Brunswick, at any time during the year.
2 The portion of subsection 23(1) of the Regulations before paragraph (a) is replaced by the following:
23 (1) When a pilot is transported to an area other than the one for which pilotage service is requested, a charge is payable as follows for the period commencing when the pilot begins to travel to the area for which pilotage service is requested and ending when the pilot begins to perform pilotage duties:
3 The portion of item 1 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:
| Item |
Column 2 |
Column 3 |
Column 4 |
|---|---|---|---|
1 |
1,836.00 |
6.18 |
554.00 |
4 (1) The portion of item 2 of Schedule 2 to the Regulations in column 2 is replaced by the following:
| Item |
Column 2 |
|---|---|
2 |
2,000.00 |
(2) The portion of item 2 of Schedule 2 to the Regulations in column 4 is replaced by the following:
| Item |
Column 4 |
|---|---|
2 |
1,000.00 |
5 The portion of items 3 to 9 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:
| Item |
Column 2 |
Column 3 |
Column 4 |
|---|---|---|---|
3 |
2,594.00 |
13.30 |
1,264.00 |
4 |
2,377.00 |
7.52 |
767.00 |
5 |
2,622.00 |
11.20 |
1,311.00 |
6 |
3,298.00 |
5.81 |
2,488.00 |
7 |
2,377.00 |
7.52 |
767.00 |
8 |
2,305.00 |
11.83 |
1,123.00 |
9 |
2,560.00 |
7.44 |
1,247.00 |
6 The portion of item 11 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:
| Item |
Column 2 |
Column 3 |
Column 4 |
|---|---|---|---|
11 |
1,760.00 |
4.74 |
1,284.00 |
7 (1) The portion of item 12 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:
| Item |
Column 2 |
Column 3 |
Column 4 |
|---|---|---|---|
12 |
1,682.00 |
2.95 |
756.00 |
(2) The portion of item 12 of Schedule 2 to the Regulations in column 6 is replaced by the following:
| Item |
Column 6 |
|---|---|
12 |
140 |
8 The portion of item 1 of Schedule 3 to the Regulations in columns 4 and 5 is replaced by the following:
| Item |
Column 4 |
Column 5 |
|---|---|---|
1 |
6.18 |
554.00 |
9 The portion of item 2 of Schedule 3 to the Regulations in column 5 is replaced by the following:
| Item |
Column 5 |
|---|---|
2 |
1,000.00 |
10 The portion of items 3 to 9 of Schedule 3 to the Regulations in columns 4 and 5 is replaced by the following:
| Item |
Column 4 |
Column 5 |
|---|---|---|
3 |
13.30 |
1,264.00 |
4 |
7.52 |
767.00 |
5 |
11.20 |
1,311.00 |
6 |
5.81 |
2,488.00 |
7 |
7.52 |
767.00 |
8 |
11.83 |
1,123.00 |
9 |
7.44 |
1,247.00 |
11 The portion of item 11 of Schedule 3 to the Regulations in column 3 is replaced by the following:
| Item |
Column 3 |
|---|---|
11 |
2,041.00 |
12 (1) The portion of item 12 of Schedule 3 to the Regulations in columns 4 and 5 is replaced by the following:
| Item |
Column 4 |
Column 5 |
|---|---|---|
12 |
2.95 |
756.00 |
(2) The portion of item 12 of Schedule 3 to the Regulations in column 6 is replaced by the following:
| Item |
Column 6 |
|---|---|
12 |
140 |
13 The portion of item 1 of Schedule 4 to the Regulations in column 2 is replaced by the following:
| Item |
Column 2 Flat Charge ($) |
|---|---|
1 |
610.00 |
14 (1) The portion of item 2 of Schedule 4 to the Regulations in column 3 is replaced by the following:
| Item |
Column 3 |
|---|---|
2 |
1,800.00 |
(2) The portion of item 2 of Schedule 4 to the Regulations in column 5 is replaced by the following:
| Item |
Column 5 |
|---|---|
2 |
800.00 |
(3) The portion of item 2 of Schedule 4 to the Regulations in column 7 is replaced by the following:
| Item |
Column 7 |
|---|---|
2 |
900.00 |
15 The portion of items 3 to 5 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|
3 |
2,334.00 |
10.65 |
1,014.00 |
11.98 |
1,140.00 |
4 |
2,139.00 |
6.02 |
613.00 |
6.78 |
690.00 |
5 |
2,359.00 |
8.97 |
1,047.00 |
10.09 |
1,180.00 |
16 (1) The portion of paragraph 6(a) of Schedule 4 to the Regulations in columns 3 to 5 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|
6(a) |
1,648.00 |
2.91 |
1,244.00 |
(2) The portion of paragraph 6(b) of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|
6(b) |
2,967.00 |
4.65 |
1,991.00 |
5.22 |
2,239.00 |
17 The portion of items 7 to 9 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|
7 |
2,139.00 |
6.02 |
613.00 |
6.78 |
690.00 |
8 |
2,075.00 |
9.46 |
898.00 |
10.66 |
1,010.00 |
9 |
2,304.00 |
5.93 |
998.00 |
6.69 |
1,124.00 |
18 The portion of item 11 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|
11 |
1,584.00 |
3.80 |
1,028.00 |
4.26 |
1,157.00 |
19 (1) The portion of item 12 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|
12 |
1,514.00 |
2.36 |
605.00 |
2.66 |
681.00 |
(2) The portion of item 12 of Schedule 4 to the Regulations in column 9 is replaced by the following:
| Item |
Column 9 |
|---|---|
12 |
140 |
20 The portion of items 1 and 2 of Schedule 5 to the Regulations in column 7 is replaced by the following:
| Item |
Column 7 |
|---|---|
1 |
110 |
2 |
110 |
21 The portion of items 1 to 3 of Schedule 5 to the Regulations in columns 3 to 5 is replaced by the following:
| Item |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|
1 |
1,836.00 |
4.77 |
1,028.00 |
2 |
1,651.00 |
4.30 |
925.00 |
3 |
1,651.00 |
3.81 |
822.00 |
22 (1) The portion of item 4 of Schedule 5 of the Regulations in column 2 is replaced by the following:
| Item |
Column 2 |
|---|---|
4 |
1,384.00 |
(2) The portion of item 4 of Schedule 5 to the Regulations in column 7 is replaced by the following:
| Item |
Column 7 |
|---|---|
4 |
110 |
Coming into Force
23 (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.
(2) Section 5, subsection 7(1), section 10, subsection 12(1), sections 15 to 17, subsection 19(1), section 21 and subsection 22(1) come into force on September 1, 2020.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
Given current and projected traffic volumes and vessel configurations, previously approved tariff rate increases for 11 ports in 2020 are expected to be too low and, in some cases, will not be considered fair and reasonable if adjustments are not made.
Background
The Authority is responsible for administering a safe and efficient pilotage service within the Canadian waters in and around the Atlantic provinces. The Authority prescribes tariffs for pilotage services that are fair and reasonable and consistent with generating revenues sufficient to permit the Authority to operate on a self-sustaining financial basis. The Authority is responsible for 17 compulsory pilotage areas, and the tariff revisions contained herein are intended to maintain port-by-port self-sufficiency (i.e. no cross-subsidization) as per a 1995 decision by the Canadian Transportation Agency (CTA).
Section 33 of the Pilotage Act (the Act) allows the Authority to make regulations prescribing tariffs that are fair and reasonable to permit the Authority to operate on a self-sustaining financial basis. The regulatory process ensures stakeholder consultation and transparency in tariffs setting. Therefore, the process is initiated many months before tariffs can come into force.
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.”
On January 27, 2020, the Authority received a letter from the Minister of Transport indicating the amount they will be required to pay 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 1% tariff increases to September 1, 2020, in order to ensure that the amendment remains fair and reasonable and still generates the revenues necessary to pay the charge.
Objective
The objective of the amendments is to enable the Authority to meet its mandate to operate a safe and efficient pilotage service within the Atlantic region, while achieving financial self-sufficiency of individual ports (i.e. avoiding cross-subsidization).
Description
The following changes will come into force on the date these amendments are registered:
- 1. Reduce the tariff in Restigouche, N.B., effective on the day these amendments are registered.
- 2. Introduce an additional pilot boat charge in Restigouche, N.B., coming into force on the day these amendments are registered.
- 3. Indicate in the Regulations an increase in fuel consumption for the pilot boats in Halifax, N.S., and Saint John, N.B. The fuel consumption amounts stated in the Regulations are used to calculate the pilot boat fuel charges. The addition of two jet boats and the resulting changes in boat deployment in each of these areas has increased full consumption and related costs for the average assignment. The increased fuel consumption in the Regulations will increase the fuel charge revenue per assignment for these two ports, effective the day on which these amendments are registered.
- 4. Change the description for “in-transit charges” to mirror the language that describes “overcarriage charges,” coming into force on the day these amendments are registered.
- 5. Increase tariffs for one-way trips, through trips, and moveages in the Strait of Canso, N.S. (3.00% increase), and Miramichi, N.B. (2.00% increase), coming into force on the day these amendments are registered.
The following will come into force on September 1, 2020:
- 6. Increase port-by-port tariffs for one-way trips, through trips, and moveages in nine ports:
| Port |
Tariff Increase |
|---|---|
i. Placentia Bay, N.L. |
1.00% |
ii. Sydney, N.S. |
1.00% |
iii. Humber Arm, N.L. |
1.00% |
iv. Saint John, N.B. |
1.00% |
v. Bay of Exploits, N.L. |
1.00% |
vi. St. John’s, N.L. |
1.00% |
vii. Halifax, N.S. |
1.00% |
viii. Holyrood, N.L. |
1.00% |
ix. Stephenville, N.L. |
1.00% |
Regulatory development
Consultation
Consultations in various forms took place with the affected parties throughout 2019. Formal consultation sessions were held in Halifax, N.S. (May 3 and August 13, 2019), Port Hawkesbury, N.S. (May 15 and August 14, 2019), Saint John, N.B. (May 9 and August 15, 2019), St. John’s, N.L. (May 1 and August 19, 2019), and Corner Brook, N.L. (August 20, 2019). Participation varied in each port depending upon the makeup of local industry, but generally included ship-owners and operators, agents, facility management, port authorities, and other stakeholders.
Separate consultation sessions were held in Montréal, Quebec, with the Shipping Federation of Canada, which represents foreign vessels and accounts for 77–79% of the Authority’s activity and revenue (May 22 and September 9, 2019).
In addition to these formal consultation sessions, the Authority engaged stakeholders through other formats, including written, in-person, and telephone communications with individuals and groups.
As required under subsection 34(1) of the Act, these amendments were published in the Canada Gazette, Part I, on December 14, 2019, 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 January 10, 2020, as per subsection 34(2) of the Act, the Shipping Federation of Canada filed an objection to the Authority’s proposed tariff amendments, specifically, the amendment that would cover costs associated with the obligations under section 37.1 of the Act, believing it 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 have to pay under section 37.1, for the 2020–2021 period. This amount is lower than previously anticipated. As a result, the Authority has chosen to delay the coming into force date of the 1% tariff increase to September 1, 2020, in order to ensure that the amendment remains fair and reasonable.
While the Authority acknowledges the concerns of the industry, 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 1% increase 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 amendments are necessary and 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, analysis was undertaken to determine whether the Regulations are 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 are identified.
Instrument choice
The Authority considered a number of regulatory and non-regulatory options before proposing the present tariff amendment. Alternatives to tariff increases were presented, where applicable, and feedback from participants was encouraged. For various ports and districts, the alternative to increased tariff rates would have been a reduction in pilot numbers or availability. Stakeholders have consistently indicated that their primary concerns are with service levels and have requested that the number of pilots be increased in some areas, and maintained in others, so that pilot availability is not compromised. The amendments will address these concerns.
Regulatory analysis
Benefits and costs
A cost-benefit analysis was conducted to determine the impact of the tariff rate increase. It covers a 10-year period starting in the first year of the increase (2020 to 2029). According to the analysis, the increase in the rates for pilotage services will generate additional average annual revenues of $298,900 (in constant 2020 dollars) over the next 10 years and a total equivalent cost for the industry. Traffic volumes have steadily increased over the past few years. Although continued growth is expected, the Authority estimates that traffic in the next year will not see a significant increase. As a result, this calculation is based on the assumption of no significant increase in traffic. Higher pilotage tariff rates will ensure the financial self-sustainability of the Authority as well as the uninterrupted provision of efficient and timely pilotage services.
An increase in pilotage tariff rates will lead to higher operating costs for the shipping industry. It will have no significant effect on the competitiveness of the shipping industry, on vessel traffic or on vessel destinations.
Cost-benefit statement
| Discount rate: 7% |
Base Year 2020 |
2020 |
2021 |
Final Year 2029 |
Total (PV) |
Average |
|---|---|---|---|---|---|---|
Costs |
$172,000 |
$313,000 |
$313,000 |
$313,000 |
$2,066,605 |
$298,900 |
Net benefits |
— |
— |
||||
| Shipping industry | Safe, efficient and timely pilotage services in navigable waters within the Authority’s jurisdiction. |
|---|---|
| Atlantic Pilotage Authority | The Authority’s financial self-sufficiency, activities are maintained as well as sustainability of assets. |
| Canadians | Safe shipping in the Atlantic Pilotage Area. Sustainability of the Atlantic Pilotage Authority will prevent layoffs and the associated consequences of unemployment. |
| Canadian importers and exporters | Potential for the shipping industry to pass on the cost of the increased tariff rate to importers and exporters in the Atlantic Pilotage Area. |
Small business lens
The small business lens does not apply, as there are no associated impacts on small businesses.
One-for-one rule
The one-for-one rule does not apply to these amendments, as there is no change in administrative costs to or burden on business.
Regulatory cooperation and alignment
The amendments are not part of a formal regulatory cooperation initiative.
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.
Rationale
- 1. Reductions to tariff in Restigouche, N.B., in 2020:
- With the additional pilot boat charge (described in item 2 below), the basic charge and minimum charge in the area will be lowered to offset much of this new charge.
- 2. Pilot boat charge for Restigouche, N.B.:
- This charge is meant to make it more appealing for licensed pilots and pilot boat contractors to operate in these areas, as this charge will cover the cost of hiring a pilot boat and operator in the compulsory port of Restigouche. It also makes the tariff calculation consistent with those of other smaller ports that use entrepreneurial pilots. Currently, entrepreneurial pilots in this area have been absorbing the cost of hiring a pilot boat and operator. Moving forward, however, this practice is not considered sustainable when trying to attract new pilots to operate in this area.
- 3. Increases in budgeted fuel consumption in two ports in 2020:
- In Halifax, N.S., the budgeted fuel consumption was based on pilot boats that are no longer servicing the port on a regular basis. These vessels were replaced by two jet boats that use more fuel per assignment. The budgeted fuel consumption is used in a formula captured in the Authority’s tariff regulations to calculate the fuel charge for a port. Based on recent consumption, the budgeted fuel consumption will be increased by 10 L per assignment.
- In Saint John, N.B., the budgeted fuel consumption was based on an allocation of pilot boats that is no longer applicable, as a second newer vessel was deployed to the area. The budgeted fuel consumption is used in a formula captured in the Authority’s tariff regulations to calculate the fuel charge for a port. Based on recent consumption, the budgeted fuel consumption will be increased by 10 L per assignment.
- 4. Change the description for in-transit charges to mirror the language that describes overcarriage charges:
- In the winter, especially, it is becoming more common for pilots to have to join vessels in their previous port of call in order to be on board when the vessel reaches the pilotage area. Currently, there is no charge recovery for the time it takes for the pilot to travel to these areas to meet the vessels. This is unlike the overcarriage language, where there is cost recovery for the entire time a pilot is required to travel outside of their pilotage area. Therefore, the Authority is proposing that the description of in-transit charges be changed to include the travel time it takes a pilot to meet the vessel outside the pilotage area and the travel time on the vessel until their services are needed for the arrival at the compulsory port. This change will not increase revenues significantly, but will be beneficial to attracting new pilots to operate in ports serviced by entrepreneurial pilots.
- 5. Tariff increases in two ports, effective the date of registration:
- Strait of Canso: The Authority is implementing a tariff that will increase pilotage revenue in the port by 3% in 2020 due to inflationary pressures.
- Miramichi, N.B.: The Authority has had difficulty recruiting entrepreneurial pilots to the area due to the lower level of activity and the relatively low tariff. To help attract and retain service providers, the Authority is implementing an inflationary tariff increase of 2% in 2020.
- 6. Tariff increases in nine ports, effective September 1, 2020:
- 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 indicating the amount they will be required to pay to Transport Canada in 2020–2021 for the cost of administering the Act. As a result of new costs associated with the administration of the Pilotage Act, the Authority is proposing an additional 1% tariff increase in 2020 for the following ports: Placentia Bay, N.L.; Sydney, N.S.; Humber Arm, N.L.; Saint John, N.B.; Bay of Exploits, N.L.; St. John’s, N.L.; Halifax, N.S.: Holyrood, N.L.; and Stephenville, N.L. This increase is being implemented in order to cover the costs to administer the Pilotage Act.
Implementation and compliance and enforcement
Implementation
The amended tariffs will be published in the Atlantic Pilotage Tariff Regulations, 1996, and on the Authority’s website. Also, the amended tariffs will come into force on the date of registration, with the exception of the 1% tariff increases in nine ports, which will come into force on September 1, 2020.
Compliance and enforcement
The Pilotage Act provides an enforcement mechanism 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
Captain Sean Griffiths
Chief Executive Officer
Atlantic Pilotage Authority
1791 Barrington Street, TD Tower, Suite 1801
Halifax, Nova Scotia
B3J 3K9
Telephone: 902‑426‑2550
Fax: 902‑426‑4004