Vol. 146, No. 6 — March 14, 2012
Registration
SOR/2012-29 March 2, 2012
PILOTAGE ACT
Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996
P.C. 2012-222 March 1, 2012
RESOLUTION
Whereas the Atlantic Pilotage Authority, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act (see footnote b), published a copy of the proposed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996, in the annexed form, in the Canada Gazette, Part Ⅰ, on November 19, 2011;
Therefore, the Atlantic Pilotage Authority, pursuant to subsection 33(1) of the Pilotage Act (see footnote c), hereby makes the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996.
Halifax, December 21, 2011
CAPTAIN R. A. MCGUINNESS
Chief Executive Officer
Atlantic Pilotage Authority
His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 33(1) of the Pilotage Act (see footnote d), hereby approves the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996, made by the Atlantic Pilotage Authority.
REGULATIONS AMENDING THE ATLANTIC
PILOTAGE TARIFF REGULATIONS, 1996
AMENDMENTS
1. The heading before section 4.1 and sections 4.1 to 8 of the Atlantic Pilotage Tariff Regulations, 1996 (see footnote 1) are replaced by the following:
COMPULSORY PILOTAGE AREAS — ONE-WAY TRIPS
5. The charge for a ship, other than a dead ship or an oil rig, for a one-way trip in a compulsory pilotage area set out in column 1 of an item of Schedule 2 is the sum of X and the greater of Y and Z
where
X = a fuel charge determined by the following formula:
AFP × BFC
where
AFP = the average price, in dollars per litre, for fuel for the pilot boat used in the compulsory pilotage area, based on invoices received by the Authority for fuel supplied to the pilot boat in the calendar month that is two months before the month in which the one-way trip is undertaken, and
BFC = the budgeted fuel consumption set out in column 6 of that item, or 0 if “n/a” is set out in column 6 of that item;
Y = the minimum charge set out in column 2 of that item; and
Z = the amount determined by the following formula:
(the greater of (PU × UC) and (GT × TC)) + BC
where
PU = the pilotage unit,
UC = the unit charge set out in column 3 of that item,
GT = the gross tonnage,
TC = the tonnage charge of $0.015 per gross ton, and
BC = the basic charge set out in column 4 of that item.
COMPULSORY PILOTAGE AREAS — TRIPS THROUGH
6. (1) If a pilot boat is not used, the charge for a ship, other than a dead ship or an oil rig, for a trip through a compulsory pilotage area set out in column 1 of an item of Schedule 3 is the flat charge set out in column 2 of that item or, if “n/a” is set out in column 2 of that item, the amount determined by the following formula:
(PU × UC) + BC
where
PU = the pilotage unit;
UC = the unit charge set out in column 4 of that item; and
BC = the basic charge set out in column 5 of that item.
(2) If a pilot boat is used, the charge for a ship, other than a dead ship or an oil rig, for a trip through a compulsory pilotage area set out in column 1 of an item of Schedule 3 is the sum of X and the greater of Y and Z
where
X = a fuel charge determined by the following formula:
AFP × BFC
where
AFP = the average price, in dollars per litre, for fuel for the pilot boat used in the compulsory pilotage area, based on invoices received by the Authority for fuel supplied to the pilot boat in the calendar month that is two months before the month in which the trip is undertaken, and
BFC = the budgeted fuel consumption set out in column 6 of that item, or 0 if “n/a” is set out in column 6 of that item;
Y = the flat charge set out in column 3 of the item; and
Z = the amount determined by the following formula:
(PU × UC) + BC
where
PU = the pilotage unit,
UC = the unit charge set out in column 4 of that item, and
BC = the basic charge set out in column 5 of that item.
COMPULSORY PILOTAGE AREAS — MOVAGES
7. The charge for a ship, other than a dead ship or an oil rig, for a movage in a compulsory pilotage area set out in column 1 of an item of Schedule 4 is the sum of X and the flat charge set out in column 2 of that item or, if “n/a” is set out in column 2 of that item, the sum of X and Y
where
X = a fuel surcharge determined by the following formula:
AFP × BFC
where
AFP = the average price, in dollars per litre, for fuel for the pilot boat used in the compulsory pilotage area, based on invoices received by the Authority for fuel supplied to the pilot boat in the calendar month that is two months before the month in which the movage is undertaken, and
BFC = the budgeted fuel consumption set out in column 9 of that item, or 0 if “n/a” is set out in column 9 of that item; and
Y = the greater of the minimum charge set out in column 3 of that item and the amount determined by the following formula:
(PU × UC) + BC + BR
where
PU = the pilotage unit,
UC = the unit charge set out in column 4 of that item if a pilot boat is not used or the unit charge set out in column 6 of that item if a pilot boat is used,
BC = the basic charge set out in column 5 of that item if a pilot boat is not used or the basic charge set out in column 7 of that item if a pilot boat is used, and
BR = the pilot boat replacement surcharge set out in column 8 of that item.
SAINT JOHN COMPULSORY PILOTAGE AREA
8. The charge for a ship, other than a dead ship or an oil rig, for a trip or movage that is in the Saint John compulsory pilotage area and is set out in column 1 of an item of Schedule 5 is the sum of X and the flat charge set out in column 2 of that item or, if “n/a” is set out in column 2 of that item, the sum of X and Y
where
X = a fuel surcharge determined by the following formula:
AFP × BFC
where
AFP = the average price, in dollars per litre, for fuel for the pilot boat used in the compulsory pilotage area, based on invoices received by the Authority for fuel supplied to the pilot boat in the calendar month that is two months before the month in which the trip or movage is undertaken, and
BFC = the budgeted fuel consumption set out in column 7 of that item, or 0 if “n/a” is set out in column 7 of that item; and
Y = the greater of the minimum charge set out in column 3 of that item and the amount determined by the following formula:
(the greater of (PU × UC) and (GT × TC)) + BC + BR
where
PU = the pilotage unit,
UC = the unit charge set out in column 4 of that item,
GT = the gross tonnage,
TC = the tonnage charge of $0.015 per gross ton,
BC = the basic charge set out in column 5 of that item, and
BR = the pilot boat replacement surcharge set out in column 6 of that item.
2. Section 28 of the Regulations and the heading before it are repealed.
3. Schedule 2 to the Regulations is amended by replacing “ (Sections 4.1, 5 and 14) ” after the heading “SCHEDULE 2” with “ (Sections 5 and 14) ”.
4. The heading “Unit Charge ($)” of column 3 of Schedule 2 to the Regulations is replaced by “Unit Charge ($/pilotage unit)”.
5. The heading “Average Fuel Consumption (litres)” of column 6 of Schedule 2 to the Regulations is replaced by “Budgeted Fuel Consumption (litres)”.
6. (1) The portion of item 9 of Schedule 2 to the Regulations in column 2 is replaced by the following:
Item |
Column 2 |
|---|---|
9. |
1,865.00 |
(2) The portion of item 9 of Schedule 2 to the Regulations in column 4 is replaced by the following:
Item |
Column 4 |
|---|---|
9. |
909.00 |
7. (1) The portion of item 11 of Schedule 2 to the Regulations in column 2 is replaced by the following:
Item |
Column 2 |
|---|---|
11. |
1,130.00 |
(2) The portion of item 11 of Schedule 2 to the Regulations in column 4 is replaced by the following:
Item |
Column 4 |
|---|---|
11. |
825.00 |
(3) The portion of item 11 of Schedule 2 to the Regulations in column 6 is replaced by the following:
Item |
Column 6 |
|---|---|
11. |
290 |
8. (1) The portion of item 12 of Schedule 2 to the Regulations in column 2 is replaced by the following:
Item |
Column 2 |
|---|---|
12. |
1,281.00 |
(2) The portion of item 12 of Schedule 2 to the Regulations in columns 4 and 5 is replaced by the following:
Item |
Column 4 |
Column 5 |
|---|---|---|
12. |
577.00 |
n/a |
9. Schedule 3 to the Regulations is replaced by the Schedule 3 set out in Schedule 1 to these Regulations.
10. Schedule 4 to the Regulations is amended by replacing “ (Sections 4.1 and 7) ” after the heading “SCHEDULE 4” with “ (Section 7) ”.
11. The heading “Unit Charge, No Pilot Boat Used ($)” of column 4 of Schedule 4 to the Regulations is replaced by “Unit Charge, No Pilot Boat Used ($/pilotage unit)”.
12. The heading “Unit Charge, Pilot Boat Used ($)” of column 6 of Schedule 4 to the Regulations is replaced by “Unit Charge, Pilot Boat Used ($/pilotage unit)”.
13. The heading “Average Fuel Consumption (litres)” of column 9 of Schedule 4 to the Regulations is replaced by “Budgeted Fuel Consumption (litres)”.
14. The portion of item 9 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:
Item |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|
9. |
1,679.00 |
4.34 |
727.00 |
4.88 |
818.00 |
15. (1) The portion of item 11 of Schedule 4 to the Regulations in column 3 is replaced by the following:
Item |
Column 3 |
|---|---|
11. |
1,017.00 |
(2) The portion of item 11 of Schedule 4 to the Regulations in column 5 is replaced by the following:
Item |
Column 5 |
|---|---|
11. |
660.00 |
(3) The portion of item 11 of Schedule 4 to the Regulations in column 7 is replaced by the following:
Item |
Column 7 |
|---|---|
11. |
743.00 |
(4) The portion of item 11 of Schedule 4 to the Regulations in column 9 is replaced by the following:
Item |
Column 9 |
|---|---|
11. |
290 |
16. (1) The portion of item 12 of Schedule 4 to the Regulations in column 3 is replaced by the following:
Item |
Column 3 |
|---|---|
12. |
1,153.00 |
(2) The portion of item 12 of Schedule 4 to the Regulations in column 5 is replaced by the following:
Item |
Column 5 |
|---|---|
12. |
462.00 |
(3) The portion of item 12 of Schedule 4 to the Regulations in columns 7 and 8 is replaced by the following:
Item |
Column 7 |
Column 8 |
|---|---|---|
12. |
519.00 |
n/a |
17. Schedule 5 to the Regulations is replaced by the Schedule 5 set out in Schedule 2 to these Regulations.
18. The heading “Unit Charge, One-way Trip ($)” of column 3 of Schedule 6 to the Regulations is replaced by “Unit Charge, One-way Trip ($/pilotage unit)”.
COMING INTO FORCE
19. These Regulations come into force on January 1, 2012, but if they are registered after that day, they come into force on the day on which they are registered.
SCHEDULE 1
(Section 9)
SCHEDULE 3
(Section 6)
COMPULSORY PILOTAGE AREAS — TRIPS THROUGH
Item |
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
|---|---|---|---|---|---|---|
1. |
Cape Breton (Zone B, Bras d’Or Lake), N.S. |
n/a |
n/a |
8.76 |
1,410.00 |
n/a |
2. |
Cape Breton (Zone C, Strait of Canso), N.S. |
n/a |
1,516.00 |
n/a |
n/a |
290 |
3. |
Confederation Bridge, P.E.I. |
500.00 |
1,300.00 |
n/a |
n/a |
n/a |
SCHEDULE 2
(Section 17)
SCHEDULE 5
(Section 8)
SAINT JOHN COMPULSORY PILOTAGE
AREA — TRIPS AND MOVAGES
Item |
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
|---|---|---|---|---|---|---|---|
1. |
One-way trip |
n/a |
1,171.00 |
3.36 |
583.00 |
n/a |
75 |
2. |
Movage with pilot boat |
n/a |
1,054.00 |
3.02 |
525.00 |
n/a |
75 |
3. |
Movage without pilot boat |
n/a |
1,054.00 |
2.69 |
466.00 |
n/a |
n/a |
4. |
Trip through |
1,018.00 |
n/a |
n/a |
n/a |
n/a |
n/a |
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issue and objectives
The Atlantic Pilotage Authority (the Authority) is responsible for administering, in the interests of safety, an efficient pilotage service within the Canadian waters in and around the Atlantic Provinces. In accordance with the Pilotage Act, the Authority is required to prescribe tariffs of pilotage charges that are fair, reasonable and consistent with providing revenues sufficient to permit the Authority to operate on a self-sustaining financial basis.
In accordance with recommendations from the Canadian Transportation Agency (the CTA), the Authority strives to be financially self-sufficient on a port-by-port basis, as well as for the Authority as a whole. The Authority is responsible for 17 compulsory pilotage areas, and the tariff revisions contained herein are intended to maintain area-by-area self-sufficiency. Five ports will be affected by the revisions, with no amendments for the other 12 compulsory ports or non-compulsory ports.
The overall annual increase in revenues from all measures is budgeted to be less than $320,000 annually, or a 1.4% increase.
The tariff adjustments are intended to allow the Authority to reduce the risk of cross-subsidizations among ports by reducing the risk of losses, offsetting inflationary pressures, offsetting the increased costs of capital in some ports, and providing funding to maintain pilot resources.
The objective of this regulatory amendment is to increase pilotage charges in certain compulsory areas in order to
- — maintain the ability of the Authority to meet its mandate to operate, in the interest of safety, an efficient pilotage service within the Atlantic region;
- — help ensure the long-term financial self-sustainability of the Authority as a whole;
- — help ensure the long-term financial self-sustainability of each port individually; and
- — be mindful of the economic realities of the region by ensuring that the tariff increases are within the ability of the shipping industry to absorb while allowing the ports to remain competitive.
Description and rationale
Compulsory ports regular tariffs
The amendment will result in an increase in revenue for the ports of the following percentages:
Halifax 2.0%
Sydney 3.0%
Strait of Canso 5.0%
Confederation Bridge 8.0%
Saint John 0.0%
The pilotage tariffs in the remaining 12 compulsory areas will remain at their current levels.
Halifax
The Authority is launching two new pilot boats in 2012, one each in the ports of Halifax, Nova Scotia, and Saint John, New Brunswick. During the design and initial construction of the boats, the customers in both ports agreed to pay a new pilot boat surcharge to provide funding for the project. The Authority advised the customers that there will be increased costs once the vessels were in service, and the customers accepted this because of the improvements in service reliability that new vessels will provide. The new vessels will have much higher amortization, insurance, and carrying costs, while some savings will be achieved in repair costs. The Authority developed an operating budget for each area to determine the level of the increased costs, and to determine the amount of the tariff adjustment that would be required to cover this increase. In Halifax, it was determined that $100 more per assignment on the basic charge will be required to offset these increased costs. At the same time, it was recognized that the pilot boat surcharge fulfilled its purpose of providing funding for the design and initial construction of the boat, and should be removed. Therefore, the $67 per assignment surcharge expired at the end of 2011. The net effect of these two initiatives is that an assignment will cost $33 more in 2012 than in 2011. Overall, the effect of these amendments will be a 2% increase in revenue in 2012 over 2011 for Halifax. Halifax is budgeted to provide about 25% of the Authority’s overall revenue in 2012.
Saint John
In Saint John, the Authority performed the same exercise of preparing an operating budget to determine the overall operating costs for 2012, including the increased costs related to the new pilot boats. Based on this analysis, it was determined that an increase of $100 in basic charge is required to cover the increased costs. The pilot boat surcharge has fulfilled its objective, and expired at the end of 2011. With the removal of the surcharge and increase in basic charge, the net effect for Saint John will be no increase in cost for a vessel in 2012 compared to the cost in 2011. Saint John is budgeted to provide about 16% of the Authority’s revenue in 2012.
Strait of Canso
For the compulsory pilotage area of the Strait of Canso, the pilot boat service contractor has been significantly impacted by rising fuel costs. The regulatory amendment will implement a fuel charge similar to that which is currently in place for the ports of Halifax, Saint John and Placentia Bay. The budgeted fuel consumption per assignment will be included in schedules 2, 3, and 4 of the Regulations, and the average fuel price will be determined based on the invoices received for fuel supplied in the calendar month that is two months before that in which the assignment is undertaken (for example, the average for August is used to determine the price for October). This new charge will be partially offset by a decrease in the basic charge of $161 and in the minimum charge of $100 per assignment. The net effect of this change is approximately a 5.0% increase in tariff based on 2011 average fuel prices. Should fuel fluctuate in price, the impact will be greater or less than this estimate. This means that the tariff charged will remain more in line with the actual cost of providing the service. The Strait of Canso is budgeted to provide about 15% of the Authority’s revenue in 2012.
Sydney
The port of Sydney, Nova Scotia, is facing inflationary cost increases without significant increases in traffic. The cost of providing the service was reviewed to determine whether efficiencies could be attained. The port operates as part of a district and therefore shares pilot costs with other ports. The pilot boat operation is also shared with another port, and is operated in a very efficient manner. In reviewing the operating statement for the port, it was apparent that a 3% increase in basic, unit and minimum charges was necessary to keep pace with inflationary pressures. The Authority is increasing tariff rates by 3% in the port. Sydney is budgeted to provide 3.8% of the Authority’s revenue in 2012.
Confederation Bridge
For the Confederation Bridge compulsory pilotage area, there has not been an increase in the pilot portion of the tariff since the area became compulsory in 1997. The pilots have, therefore, not received any increase in remuneration since the area became compulsory. Pilot boat costs have also been increasing in recent years, necessitating an increase in the pilot boat component. The tariff for 2012 will increase pilotage costs by $100 when a pilot boat is used in this area, with the flat charge with no pilot boat increasing by $50. Other tariff charges that apply to the area, such as overcarriage and in-transit charges, are not affected. The total impact for the area will be an 8% increase in pilotage revenues. This district contributes less than half of 1% of the Authority’s overall revenues.
Gross tonnage charge
The gross tonnage charge was established for 2010 as the Authority continued its initiative to address inequities that have developed over time in the tariff system. The Authority amended its variable charge to have the greater of the unit charge or gross tonnage charge applied to all ships. By basing the variable charge on a formula that considers the greater of the unit charge or gross tonnage charge, the Authority is addressing anomalies in how certain categories of vessels (primarily cruise ships, auto-carriers, and Roll On, Roll Off vessels) are measured. The Authority has consulted with industry regarding this charge and an agreement was made to increase the charge over time to more fully address the tariff discrepancies while cushioning the impact to the vessels affected. This amendment will increase the gross tonnage charge from 1.375 cents to 1.50 cents per gross ton. While the amendment applies to all ports with a variable charge, it will only affect a small number of vessels in Halifax and Saint John. Only those ports have the combination of vessel categories (as noted above) and lower unit rate that will occasionally cause the gross tonnage charge to be greater than the unit charge. In all other ports, the unit rate calculation on the projected vessel traffic is greater than the gross tonnage calculation. The amendment is expected to have a negligible impact overall, with a total increase in tariff of approximately $33,000, or an overall increase of 0.15%.
Summary
The following table indicates the current charges and the amendments:
Major Ports
location and date |
Basic Charge |
Unit Charge |
Minimum Charge |
Cancellation Charge |
Estimated Fuel Charge* |
New |
Cost |
|
|---|---|---|---|---|---|---|---|---|
Strait of Canso, N.S. |
2011 |
$986 |
$3.05 |
$1,230 |
$900 |
$ — |
$ — |
$2,707 |
2012 |
$825 |
$3.05 |
$1,130 |
$825 |
$290 |
$ — |
$2,836 |
|
* The 2012 fuel charge is based on the 2011 average fuel price of $1.00 and 290 L per trip. |
||||||||
** Based on a ship of 564.4 units for Strait of Canso. |
||||||||
Halifax, N.S. |
2011 |
$477 |
$2.25 |
$1,181 |
$477 |
$130 |
$67 |
$1,655 |
2012 |
$577 |
$2.25 |
$1,281 |
$577 |
$130 |
$ — |
$1,688 |
|
* The 2012 fuel charge is based on the 2011 average fuel price of $1.00 and 130 L per trip. |
||||||||
** Based on a ship of 436 units for Halifax. |
||||||||
Saint John, N.B. |
2011 |
$483 |
$3.36 |
$1,071 |
$483 |
$86 |
$100 |
$1,896 |
2012 |
$583 |
$3.36 |
$1,171 |
$583 |
$86 |
$ — |
$1,896 |
|
* The 2012 fuel charge is based on the 2011 average fuel price of $1.15 and 75 L per trip. |
||||||||
** Based on a ship of 365.25 units for Saint John. |
||||||||
Other Ports
location and date |
|
|
|
|
|
|
|---|---|---|---|---|---|---|
Sydney, N.S. |
2011 |
$883 |
$5.26 |
$1,811 |
$883 |
$3,164 |
2012 |
$909 |
$5.42 |
$1,865 |
$900 |
$3,260 |
|
* Based on a ship of 433.72 units for Sydney. |
||||||
location and date |
|
|
|
|---|---|---|---|
Confederation |
2011 |
$450 |
$1,200 |
2012 |
$500 |
$1,300 |
|
Gross tonnage charge will be increased from $0.01375 to $0.01500.
The Authority is going to test, and plans to adopt, technology to allow electronic source forms to be provided by pilots. This would make invoicing timelier and more accurate. To facilitate this change, section 28 of the Regulations (“Pilotage Card”) will be repealed. This section specifies the manner in which assignment information must be communicated to the Authority, and has been deemed unnecessary.
Consultation
Consultation in various forms has taken place with the parties affected by these amendments. The parties consulted include the Shipping Federation of Canada, which represents foreign vessels and accounts for 77–78% of the Authority’s activity and revenue, and the Canadian Shipowners Association. Local committees representing stakeholders in Halifax, Saint John, St. John’s, Placentia Bay, and Cape Breton were also consulted extensively. The consultation took the form of meetings, as well as written, personal, and telephone communications with individuals. Alternatives to tariff increases were presented, where applicable, and participation from the attendees was encouraged. When meeting with customers, the Authority provided an analysis of the situation and solicited responses.
The response of those consulted has been positive, with every indication that the increases are accepted as fair and reasonable.
These amendments were pre-published in the CanadaGazette, Part Ⅰ, on November 19, 2011, to provide interested persons with the opportunity to make comments or to file a notice of objection with the Canadian Transportation Agency (CTA) as allowed by subsection 34(2) of the Pilotage Act. No comments were received and no notices of objection were filed.
Strategic environmental analysis
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, and the Transport Canada Policy Statement on Strategic Environmental Assessment, the strategic environmental assessment (SEA) process was followed for this and a preliminary scan was completed. The preliminary scan concluded that the proposal is not likely to have important environmental effects. The scan took into account potential effects to the environmental goals and targets of the Federal Sustainable Development Strategy (FSDS).
Implementation, enforcement and service standards
Section 45 of the Pilotage Act provides an enforcement mechanism for these Regulations, in that a Pilotage Authority can inform a customs officer at any port in Canada to withhold clearance from any ship for which pilotage charges are outstanding and unpaid. Section 48 of the Pilotage Act stipulates that every person who fails to comply with the Act or Regulations is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.
Contact
Captain R. A. McGuinness
Chief Executive Officer
Atlantic Pilotage Authority
Cogswell Tower, Suite 910
2000 Barrington Street
Halifax, Nova Scotia
B3J 3K1
Telephone: 902-426-2550
Fax: 902-426-4004
Footnote a
S.C. 1998, c. 10, s. 150
Footnote b
R.S., c. P-14
Footnote c
R.S., c. P-14
Footnote d
R.S., c. P-14
Footnote 1
SOR/95-586