Regulations Amending the Great Lakes Pilotage Tariff Regulations: SOR/2019-56
Canada Gazette, Part II, Volume 153, Number 6
Registration
SOR/2019-56 March 4, 2019
PILOTAGE ACT
P.C. 2019-126 February 28, 2019
RESOLUTION
Whereas the Great Lakes Pilotage Authority, pursuant to subsection 34(1) footnote a of the Pilotage Act footnote b, published a copy of the proposed Regulations Amending the Great Lakes Pilotage Tariff Regulations, substantially in the annexed form, in the Canada Gazette, Part I, on December 15, 2018;
Therefore, the Great Lakes Pilotage Authority, pursuant to subsection 33(1) of the Pilotage Act footnote b, makes the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations.
Cornwall, January 25, 2019
Stéphane J. F. Bissonnette
Interim Chief Executive Officer
Great Lakes Pilotage Authority
Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 33(1) of the Pilotage Act footnote b, approves the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations, made by the Great Lakes Pilotage Authority.
Regulations Amending the Great Lakes Pilotage Tariff Regulations
Amendments
1 (1) 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) 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 $1,415.
(2) The portion of items 1 to 15 of the table to subsection 1(5) of Schedule 1 to the Regulations in column 2 is replaced by the following:
| Item |
Column 2 |
|
|---|---|---|
| 1 | (a) | 2,610 |
| (b) | 2,610 | |
| 2 | 2,790 | |
| 3 | 1,648 | |
| 4 | 4,853 | |
| 5 | 2,790 | |
| 6 | 2,019 | |
| 7 | 5,626 | |
| 8 | 3,623 | |
| 9 | 2,790 | |
| 10 | 1,648 | |
| 11 | 3,652 | |
| 12 | 3,652 | |
| 13 | 2,835 | |
| 14 | 1,648 | |
| 15 | 2,019 | |
(3) The portion of items 1 to 4 of the table to subsection 1(6) of Schedule 1 to the Regulations in column 2 is replaced by the following:
| Item | Column 2 Basic Charge ($) |
|---|---|
| 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 $325 is payable for each embarkation or disembarkation of a licensed pilot at the Detroit pilot boat.
4 (1) The portion of items 1 and 2 of the table to subsection 2(1) of Schedule 1 to the Regulations in column 2 is replaced by the following:
| Item | Column 2 Basic Charge ($) |
|
|---|---|---|
| 1 | (a) | 1,227 |
| (b) | 1,074 | |
| (c) | 774 | |
| 2 | (a) | 1,168 |
| (b) | 826 | |
| (c) | 741 | |
(2) 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.
5 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.
6 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.
7 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) if the cancelled order occurs after a pilot reports for duty at a designated boarding point, a basic charge in an amount equal to the sum of the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point and 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) 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, a basic charge in an amount equal to the sum of the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point and from the designated boarding point back to their home base.
(3) If the owner, master or agent of the ship communicates to the Authority before the cancelled sail that they want to retain the pilot, a new request for the same pilotage services is deemed to be made and accepted at the time of the cancelled sail and additional basic charges are payable in respect of the new request as determined in accordance with
- (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 basic 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) is to be read as “between the time that the new request referred to in subsection (3) is made and accepted and the time of the cancelled order”.
(5) For the purposes of subsections (2) and (3), in the case of a cancelled sail following 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) of these Regulations is to be read as “after the new request referred to in subsection 5(3) of Schedule 1 is made and accepted”.
8 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), a charge is payable 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.
9 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 $3,710 is payable.
10 (1) The portion of item 1 of the table to subsection 1(1) of Schedule 2 to the Regulations in column 2 is replaced by the following:
| Item | Column 2 |
|---|---|
| 1 | 5,694 |
(2) The portion of item 2 of the table to subsection 1(1) of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:
| Item | Column 2 Basic Charge ($) |
Column 3 Minimum Basic Charge ($) |
|---|---|---|
| 2 | 27.04 for each kilometre (43.51 for each statute mile), plus 728 for each lock transited | 1,465 |
(3) The portion of items 3 and 4 of the table to subsection 1(1) of Schedule 2 to the Regulations in column 2 is replaced by the following:
| Item | Column 2 Basic Charge ($) |
|---|---|
3 |
1,020 |
4 |
2,193 |
(4) 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.
11 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.
12 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.
13 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) if the cancelled order occurs after a pilot reports for duty at a designated boarding point, a basic charge in an amount equal to the sum of the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point and 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) 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, a basic charge in an amount equal to the sum of the travel and other reasonable expenses incurred by the pilot in travelling from their home base to the designated boarding point and from the designated boarding point back to their home base.
(3) If the owner, master or agent of the ship communicates to the Authority before the cancelled sail that they want to retain the pilot, a new request for the same pilotage services is deemed to be made and accepted at the time of the cancelled sail, and additional basic charges are payable in respect of the new request as determined in accordance with
- (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 that the new request referred to in subsection (3) is made and accepted and the time of the cancelled order”.
(5) For the purposes of subsections (2) and (3), in the case of a cancelled sail following 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) of these Regulations is to be read as “after the new request referred to in subsection 4(3) of Schedule 2 is made and accepted”.
14 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
15 These Regulations come into force on the day on which they are registered.
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) 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 tariff amendments will allow the Authority to eliminate its accumulated deficit by the end of 2019, and to eliminate financial cross-subsidization between pilotage districts.
Objectives
The amendments will enable the following:
- 1. To levy tariffs that are fair and reasonable to remain financially self-sufficient;
- 2. To continue to recruit and train apprentice pilots;
- 3. To continue to enlist services from the service provider between the St. Lambert and Beauharnois Locks;
- 4. To increase the basic charge in a way that addresses inflation and the exchange rate for pilotage services in Detroit;
- 5. To clarify the intent of the Regulations pertaining to cancellation fees as requested by the SJCSR;
- 6. To ensure consistency with definitions found in the Great Lakes Pilotage Regulations; and
- 7 To ensure consistency with the definitions found in the Public Ports and Public Port Facilities Regulations.
Description
- 1. Tariffs are being adjusted as follows:
District Tariffs 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 an anticipated increase in demand for pilotage services, the tariff adjustments, as indicated above, are necessary in order to offset expenditures while maintaining an efficient and reliable service (i.e. 99.9% incident-free assignment results).
- 2. Given that a relatively high number of apprentice pilots will need to be recruited and trained in the next five years due to imminent pilot retirements and increased demand for pilotage services, the current 5.0% “apprentice pilot training surcharge” expiring December 31, 2019, will be extended until December 31, 2020.
- 3. The pilot transfer fee for all vessels transiting through the St. Lambert and Beauharnois Locks will be increased from $131 to $135 per pilot transfer through these locks. This adjustment will cover the fee charged by the service provider who facilitates the pilot transfer.
- 4. The basic charge in Schedule 1, subsection 1(7) will be increased from $250 to $325 to address inflation and the exchange rate.
- 5. Schedule 1, section 5, and Schedule 2, section 4 are being amended in order to articulate more clearly the formula used to calculate cancellation charges, thereby minimizing the possibility of misinterpretation. These amendments are in response to concerns identified by the SJCSR that there was potential for misinterpretation.
- 6. The Authority is amending definitions in the Regulations to reference the definitions provided in the Great Lakes Pilotage Regulations; this approach should ensure no inconsistencies when amendments to the Great Lakes Pilotage Regulations go forward.
- 7. The Authority is amending the definition of the “Port of Churchill” used in the Regulations to 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 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.
As required under subsection 34(1) of the Pilotage Act, these amendments were published in the Canada Gazette, Part I, on December 15, 2018, 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. No comments were received and no notices of objection were filed.
Modern treaty obligations and Indigenous engagement and consultation
The Regulations present no new impacts on modern treaty obligations and/or Indigenous engagement and consultation.
Instrument choice
There are no links between the amendments and other policy instruments. The adjustments to tariffs, fees, and charges will not introduce any legal risks. There are no privacy considerations associated with the amendments, as no new information regarding individuals or companies will be collected or disseminated by the Authority.
Regulatory analysis
Benefits and costs
All costs resulting from these amendments will be borne by users of the Authority’s pilotage services (i.e. industry). The annualized average expected cost to industry will be $1.5 million per year. Expected benefits for the amendments (mainly increased safety and efficiency) are difficult to quantify and have therefore been expressed qualitatively. Expected benefits and costs of the amendment are as follows:
2019 |
2020 |
2021–2028 |
Total (Present Value, 2019–2028) |
Annualized Average |
|
A. Quantified impacts to industry (in millions, Can$, 2018 price level) |
|||||
Benefits |
|||||
Qualitative only |
— |
— |
— |
— |
— |
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 amendments seek 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 will be borne on industry, and the “One-for-One” Rule will not apply.
Regulatory cooperation and alignment
The amendments are not part of a formal regulatory cooperation initiative; however, given that the Authority conducts its operations in the Great Lakes, 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 (GBA+)
No gender-based analysis plus (GBA+) impacts have been identified for these amendments. The amendments put forward tariffs that are considered to be fair and reasonable for the purpose of delivering safe and efficient pilotage services.
Implementation, compliance and enforcement, and service standards
Implementation
The Regulations will be available online on the Department of Justice website and will be published on the Authority’s website. The Regulations will 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. These amendments are expected to produce no change to these compliance and enforcement mechanisms.
Contact
Stéphane Bissonnette
Interim 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. 207
Fax: 613‑932‑3793