Canada Gazette, Part I, Volume 152, Number 50: Regulations Amending the Great Lakes Pilotage Tariff Regulations
December 15, 2018
Statutory authority
Pilotage Act
Sponsoring agency
Great Lakes Pilotage Authority
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The current tariff rates imposed by the Great Lakes Pilotage Authority (the Authority) are not sufficient for the Authority to continue to be financially self-sustaining. In addition, the Standing Joint Committee for the Scrutiny of Regulations (SJCSR) has identified a need to amend the Great Lakes Pilotage Tariff Regulations (the Regulations) in order to clarify how the charges for a cancelled sail and a cancelled order are calculated.
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. Subsection 33(3) of the Pilotage Act (the Act) enables the Authority to prescribe fair and reasonable tariffs for pilotage services in a manner that generates revenues sufficient to operate on a financially self-sustaining basis.
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 2017, the Authority's 2009 accumulated deficit level of $5.5 million had been reduced to $0.8 million. The proposed tariff amendments would allow the Authority to eliminate its accumulated deficit by the end of 2019, and to eliminate financial cross-subsidization between pilotage districts.
Objectives
The proposed amendments would address the following issues:
- To levy tariffs that are fair and reasonable to remain financially self-sufficient;
- To continue to recruit and train apprentice pilots;
- To continue to enlist services from the service provider between the St. Lambert and Beauharnois Locks;
- To increase the basic charge in a way that addresses inflation and the exchange rate for pilotage services in Detroit;
- To clarify the intent of the Regulations pertaining to cancellation fees as requested by the SJCSR.
- To ensure consistency with definitions found in the Great Lakes Pilotage Regulations; and
- To ensure consistency with the definitions found in the Public Ports and Public Port Facilities Regulations.
Description
| Cornwall District | 3.95% |
|---|---|
| International District No. 1 | 3.95% |
| Lake Ontario District | 3.95% |
| International District No. 2 | 3.95% |
| International District No. 3 | 3.95% |
Based on the anticipated increase in demand for pilotage services, the Authority is proposing the tariff adjustments above in order to offset its expenditures while maintaining an efficient and reliable service (i.e. 99.9% incident-free assignment results).
- 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 associated costs would require that the current 5.0% "apprentice pilot training surcharge" expiring December 31, 2019, be extended until December 31, 2020.
- The Authority is proposing to adjust the pilot transfer fee for all vessels transiting through the St. Lambert and Beauharnois Locks. This adjustment will cover the fee charged by the service provider who facilitates the pilot transfer. The Authority is proposing to increase the fee from $131 to $135 per pilot transfer through these locks.
- The Authority proposes to adjust its basic charge in Schedule 1, subsection 1(7) from $250 to $325 to address inflation and the exchange rate.
- The Authority proposes amendments to Schedule 1, section 5, and Schedule 2, section 4 in order to clarify the intent of the Regulations. These amendments are in response to concerns identified by the SJCSR with regards to how the cancellation charges are explained in the Regulations. The proposed amendments are intended to articulate more clearly the formula used to calculate the charges, thereby eliminating any possibility of misinterpretation.
- The Authority proposes that definitions in the Regulations reference the definitions provided in the Great Lakes Pilotage Regulations to ensure no inconsistencies arise when amendments to the Great Lakes Pilotage Regulations go forward.
- The Authority proposes that the definition of the "Port of Churchill" used in the Regulations match the definition used in the Public Ports and Public Port Facilities Regulations.
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 to enlist pilotage services from the Authority while transiting the Great Lakes system. The Federation represents approximately 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 (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% of the Authority's clientele.
The Authority consulted with the Federation several times throughout 2018. The Federation has agreed to support the proposed tariff increases and changes to other fees and charges for 2019. All stakeholders are aware that the Authority must respect its objective to remain financially self-sufficient.
Modern treaty obligations and Indigenous engagement and consultations
The proposed Regulation presents no new impacts on modern treaty obligations and/or indigenous engagement and consultation.
Instrument choice
There are no links between the proposal and other policy instruments. The proposed adjustments to tariffs, fees, and charges would not introduce any legal risks. There are no privacy considerations associated with the proposal, as no new information regarding individuals or companies would be collected or disseminated by the Authority.
Regulatory analysis
Benefits and costs
All costs of the proposal would be borne by users of the Authority's pilotage services (i.e. industry). The annualized average expected cost to industry would be $1.5 million. Expected benefits for the proposal (mainly increased safety and efficiency) are difficult to quantify and have therefore been expressed qualitatively. Expected benefits and costs of the proposal are as follows:
| 2019 (Base Year) |
2020 | 2021-2028 | Total (Present Value, 2019-2028) |
Annualized Average | |
|---|---|---|---|---|---|
| A. Quantified impacts to industry (in millions, Can$, 2018 price level) Benefits |
|||||
| Qualitative only (see part B) | — | — | — | — | — |
| Costs | |||||
| Increase general tariffs in all districts | 1.1 | 1.1 | 1.1 | 8.26 | 1.18 |
| Extend apprentice training surcharge | — | 1.5 | — | 1.40 | 0.20 |
| Increase charge for pilot change at locks | 0.0075 | 0.0075 | 0.0075 | 0.06 | 0.01 |
| Increase basic charge (Detroit) | 0.04 | 0.04 | 0.04 | 0.3 | 0.04 |
| Total | 1.15 | 2.35 | 1.35 | 10.02 | 1.43 |
| Net benefits | −10.02 | −1.43 | |||
B. Qualified impacts (in non-$) Positive impacts |
|||||
| Increase general tariffs in all districts | Enabling the Authority to achieve financial self-sufficiency. | ||||
| Extend apprentice training surcharge | Reducing delays from pilot shortages while maintaining safety through higher-than-average apprentice recruitment and training. | ||||
| Increase charge for pilot change at locks | Ensure that safe pilot transfers are conducted. | ||||
| Increase basic charge (Detroit) | Enabling the Authority to achieve cost recovery. | ||||
Note: Quantified impacts are calculated over a 10-year period (2019–2028) using an 8% discount rate.
Note: 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; therefore, it is assumed that traffic will not reduce in any significant manner after these tariff increases are implemented.
Small business lens
Small businesses do not make up the majority of the Authority's clientele (i.e. foreign shippers), and the majority of shippers considered small businesses choose to hire pilotage certificate holders instead of pilots. Therefore, the proportion of shippers that fall into the small business category is not significant enough to reach the threshold for consideration.
"One-for-One" Rule
The proposal seeks to increase tariffs, fees, and charges for pilotage services. All administrative systems are already in place to execute these changes; therefore, no incremental administrative burden would be borne on industry, and the "One-for-One" Rule would not apply.
Regulatory cooperation and alignment
The proposal is not part of a formal regulatory cooperation initiative; however, 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 this proposal. The proposed amendments put forward tariffs that are considered to be fair and reasonable for the purpose of delivering safe and efficient pilotage services.
Implementation, compliance and enforcement, and service standards
Implementation
The proposed tariffs, if approved, would be available online on the Department of Justice website and would be published on the Authority's website. The new Regulations would come into force on the date on which they are registered.
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. This proposal is expected to produce no change to these compliance and enforcement mechanisms.
Contact
Robert F. Lemire
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
PROPOSED REGULATORY TEXT
Notice is given, pursuant to subsection 34(1) footnote a of the Pilotage Act 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 footnote c of the Canada Transportation Act 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) footnote e of the Pilotage Act footnote b.
Cornwall, December 3, 2018
Robert F. Lemire
Chief Executive Officer
Great Lakes Pilotage Authority
Regulations Amending the Great Lakes Pilotage Tariff Regulations
Amendments
1 (1) The definitions breadth, Cornwall District, depth, length and movage in subsection 2(1) of the Great Lakes Pilotage Tariff Regulations footnote 1 are replaced by the following:
breadth has the same meaning as in section 2 of the Great Lakes Pilotage Regulations; (largeur)
Cornwall District has the same meaning as in paragraph 3(a) of the Great Lakes Pilotage Regulations; (circonscription de Cornwall)
depth has the same meaning as in section 2 of the Great Lakes Pilotage Regulations; (creux)
length has the same meaning as in section 2 of the Great Lakes Pilotage Regulations; (longueur)
movage has the same meaning as in section 2 of the Great Lakes Pilotage Regulations; (déplacement)
(2) Paragraph 2(2)(a) of the Regulations 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
(3) Section 2 of the Regulations is amended by adding the following after subsection (2):
(3) For the purposes of these Regulations, every reference to "the Port of Churchill" is a reference to "all the navigable waters, including any foreshore, commencing at the northern extremity of Eskimo Point and running on a course due north to a point distant five nautical miles from the northernmost extremity of Eskimo Point; thence, on the circumference of a circle with the said northernmost extremity as a centre, easterly and southerly to the shore of Hudson Bay at the high-water mark; thence, following the said high-water mark westerly to Cape Merry; thence, following the high-water mark on the eastern shore of the Churchill River upstream as far as the tide ebbs and flows; thence, across the Churchill River to its western shore; thence, northerly and following the high-water mark downstream to the point at Old Fort Prince of Wales and across to Eskimo Point and to the place of beginning."
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, 2020.
3 (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 $22.50 for each kilometre ($36.21 for each statute mile), plus $483 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 $1,057 and $4,643, respectively.
(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,595.
(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 $70.72 for each kilometre ($113.81 for each statute mile), plus $423 for each lock transited, with a minimum charge of $1,415.
| Item | Column 2 Basic Charge ($) | |
|---|---|---|
| 1 | (a) | 2,610 |
| (b) | 2,610 | |
| 2 | 2,790 | |
| 3 | 1,648 | |
| 4 | 4,853 | |
| 5 | 2,790 | |
| 6 | 2,019 | |
| 7 | 5,626 | |
| 8 | 3,623 | |
| 9 | 2,790 | |
| 10 | 1,648 | |
| 11 | 3,652 | |
| 12 | 3,652 | |
| 13 | 2,835 | |
| 14 | 1,648 | |
| 15 | 2,019 | |
| Item | Column 2 Basic Charge ($) |
|---|---|
| 1 | 3,852 |
| 2 | 3,226 |
| 3 | 1,450 |
| 4 | 1,450 |
(4) Subsection 1(7) of Schedule 1 to the Regulations is replaced by the following:
(7) An additional charge of $325 is payable for each embarkation or disembarkation of a licensed pilot at the Detroit pilot boat.
| Item | Column 2 Basic Charge ($) |
|
|---|---|---|
| 1 | (a) | 1,227 |
| (b) | 1,074 | |
| (c) | 774 | |
| 2 | (a) | 1,168 |
| (b) | 826 | |
| (c) | 741 | |
(6) 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 $2,111.
(7) 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 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 $99 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 $2,376.
(8) 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 $99 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 $2,376.
(9) Section 5 of Schedule 1 to the Regulations is replaced by the following:
5 (1) The following charges are payable each time there is a cancelled order:
- (a) a basic charge of $2,051;
- (b) a basic charge of $99 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
- (c) in the case of a cancelled order that occurs after a pilot reports for duty at a designated boarding point, a basic charge in an amount equal to the sum of
- (i) the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point, and
- (ii) the travel and other reasonable expenses incurred by the pilot in travelling from the designated boarding point back to their home base.
(2) The following charges are payable each time there is a cancelled sail:
- (a) a basic charge of $2,051; and
- (b) a basic charge in an amount equal to the sum of the following, if the owner, master or agent of the ship did not communicate to the Authority, before the cancelled sail, that they wanted to retain the pilot:
- (i) the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point, and
- (ii) the travel and other reasonable expenses incurred by the pilot in travelling from the designated boarding point back to their home base.
(3) A new request for the same pilotage services will be deemed to be made and accepted at the time of a cancelled sail, if the owner, master or agent of the ship communicates to the Authority, before the cancelled sail, that they want to retain the pilot, and additional basic charges shall be payable in respect of the new request as determined in accordance with the following:
- (a) subsection (1), if the new request results in a cancelled order; and
- (b) subsection (2), if the new request results in a cancelled sail.
(4) For the purposes of calculating additional charges under paragraph (3)(a), the reference to "between the time that the pilot reports for duty at the designated boarding point and the time of the cancellation" in paragraph (1)(b) shall be read as "between the time of the new request referred to in subsection (3) and the time of the cancellation".
(5) For the purposes of subsections (2) and (3), in the case of a cancelled sail resulting from a new request referred to in subsection (3), the reference to "after a pilot reports for duty at a designated boarding point" in paragraph 2(2)(b) shall be read as "after the new request referred to in subsection 5(3) of Schedule 1".
(10) 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 $589 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 $589 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), there must be a charge in an amount equal to reasonable 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.
(11) 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 $3,710 is payable.
| Item | Column 2 Basic Charge ($) |
|---|---|
| 1 | 5,694 |
| 2 | 27.04 for each kilometre (43.51 for each statute mile), plus 728 for each lock transited |
| 3 | 1,020 |
| 4 | 2,193 |
| Item | Column 3 Minimum Basic Charge ($) |
|---|---|
| 2 | 1,465 |
(3) Subsection 1(2) of Schedule 2 to the Regulations is replaced by the following:
(2) An additional charge of $135 is payable for each change of pilot at the St. Lambert or Beauharnois Lock.
(4) 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 the pilot's assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $190 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 $4,560.
(5) 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 $190 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 $4,560.
(6) Section 4 of Schedule 2 to the Regulations is replaced by the following:
4 (1) The following charges are payable each time there is a cancelled order:
- (a) a basic charge of $2,170;
- (b) a basic charge of $190 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
- (c) in the case of a cancelled order that occurs after a pilot reports for duty at a designated boarding point, a basic charge in an amount equal to the sum of
- (i) the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point, and
- (ii) the travel and other reasonable expenses incurred by the pilot in travelling from the designated boarding point back to their home base.
(2) The following charges are payable each time there is a cancelled sail:
- (a) a basic charge of $2,170; and
- (b) a basic charge in an amount equal to the sum of the following, if the owner, master or agent of the ship did not communicate to the Authority, before the cancelled sail, that they wanted to retain the pilot:
- (i) the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point, and
- (ii) the travel and other reasonable expenses incurred by the pilot in travelling from the designated boarding point back to their home base.
(3) A new request for the same pilotage services will be deemed to be made and accepted at the time of a cancelled sail, if the owner, master or agent of the ship communicates to the Authority, before the cancelled sail, that they want to retain the pilot, and additional basic charges shall be payable in respect of the new request as determined in accordance with the following:
- (a) subsection (1), if the new request results in a cancelled order; and
- (b) subsection (2), if the new request results in a cancelled sail.
(4) For the purposes of calculating additional charges under paragraph (3)(a), the reference to "between the time that the pilot reports for duty at the designated boarding point and the time of cancellation" in paragraph (1)(b) shall be read as "between the time of the new request referred to in subsection (3) and the time of cancellation".
(5) For the purposes of subsections (2) and (3), in the case of a cancelled sail resulting from a new request referred to in subsection (3), the reference to "after a pilot reports for duty at a designated boarding point" in paragraph 2(2)(b) shall be read as "after the new request referred to in subsection 4(3) of Schedule 2".
(7) 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 $3,710 is payable.
Coming into Force
5 These Regulations come into force on the day on which they are registered.