Vol. 139, No. 41 — October 8, 2005

Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996

Statutory authority

Pilotage Act

Sponsoring agency

Atlantic Pilotage Authority

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

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. The Authority prescribes tariffs of pilotage charges that are fair and 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 (CTA) and its customers, the Authority strives to be self-sufficient on a port-by-port basis, as well as for the Authority as a whole. The Authority is consequently amending tariff charges for 2006 in nine compulsory pilotage areas: Saint John, N.B., Restigouche, N.B., Halifax, N.S., Sydney, N.S., Bras d'Or, N.S., St. John's, N.L., Holyrood, N.L., Humber Arm, N.L., and Bay of Exploits, N.L. All other tariff charges in the remaining compulsory and non-compulsory pilotage areas will remain unchanged at this time.

The Authority has been affected by modest declines in activity and revenue in some major ports. At the same time, the cost of providing a pilotage service has increased, particularly the cost of maintaining pilot boat services. As a result, the Authority is projecting a loss for the 2005 fiscal year, and without tariff increases, a further loss would occur in 2006. The increases in tariff are intended to allow the Authority to remain financially self-sufficient. The proposed tariff increases will also offset inflationary pressures, will provide funding for an increase in pilot resources in some ports, and will avoid cross-subsidization among ports. The Authority continues to address concerns expressed by customers, and has adopted a new method for the allocation of administrative overhead among ports. This new method, which uses the working hours of employee pilots as a cost driver, has been supported by our customers as a fair method of distribution.

The amendments constitute an increase in charges for nine compulsory pilotage areas effective January 1, 2006. The tariff increases are applied to those areas that are operating at a loss or have a marginal profit margin.

Alternatives

Two alternatives were considered in determining tariff charges required by the Authority.

The Authority could have maintained tariffs at the status quo. This alternative would have resulted in the Authority remaining in a loss position and would not have been conducive to the goal of self-sufficiency. The ports that remained profitable would have been cross-subsidizing other ports. The Authority rejected this alternative because an increase in tariff charges is necessary to reflect the actual costs for pilotage services being performed, to ensure that the Authority maintains its financial self-sufficiency, and to avoid cross-subsidization among ports.

The Authority could have reduced costs by decreasing the number of pilots employed in those areas affected by the proposed increase or by attempting to reduce the cost of maintaining or contracting pilot boats. The Authority has endeavoured to keep costs to the minimum consistent with maintaining a safe and effective service. Further reductions in costs could be achieved by reducing the number of pilots available in those areas that are in an operational loss position. Any attempt to reduce the maintenance or contracting costs of pilot boats could impact on the safety and reliability of pilot boat service. Such alternatives would reduce the quality of service provided by the Authority. Therefore, these alternatives would be unacceptable to both the Authority and its clients. The Authority's clients have requested increased personnel resources to reduce delays in service and the Authority has worked diligently to meet this request. The Authority has also worked closely with its customers and employees to ensure that pilot boat service remains safe and efficient in all ports served. The current contingent of pilots in these ports is the minimum necessary to provide the service considering the physical size of the territory covered, the level of traffic in the ports, and the necessity to have coverage for illnesses and vacations.

Benefits and costs

The proposed tariff rate increases are intended to eliminate cross-subsidization among ports and to provide funding for an increased pilot work force in some ports. Customers in all areas will find comfort in the reduction and eventual elimination of cross-subsidization.

The Authority is increasing manpower in Saint John and is also upgrading the pilot boat service in the port. The proposed amendments are intended to provide the required revenue to support these improvements in service. In Restigouche, the Authority has faced an erosion of pilotage assignments over several years and is operating at the minimum number of pilots necessary to provide the service in this port.

The vessel traffic in the port of Halifax has declined by more than 20 percent since 2002; however, Halifax remains the busiest port served by the Authority and requires the current pilot strength to meet demand. Halifax has also been in a loss position for several years, and the proposed tariff increases are intended to be a step toward restoring the port to financial health. The customers of the port have expressed their opinion in opposition of cross-subsidization many times, and the proposed increases will assist in redressing the recent situation of Halifax being subsidized by other ports. In Sydney and Bras d'Or, the tariff increases are intended to offset losses and to help fund an increase in pilots required for the Cape Breton region to meet a projected increase in demand.

In Newfoundland and Labrador, the Bay of Exploits continues to see a decline in traffic, with 2005 having approximately 40 percent fewer assignments than occurred in 2001. There are two pilots in the area who are also cross-licensed to serve Humber Arm and Stephenville. Due to the large geographic area covered by the pilots, it is difficult to reduce the numbers below the current level. The district is also facing considerable uncertainty due to the proposed closure of the primary industry in Stephenville. The proposed increase is necessary to provide the current level of service to our customers in the Bay of Exploits. The situation in Humber Arm has improved in recent years, but a modest increase is required to address inflationary pressures. In St. John's and Holyrood, the customers will benefit from the addition of an extra pilot within the district to help alleviate some pilot shortages experienced in recent years. The unit charges and basic charge are to remain at the current level in St. John's. This will mean that the growing cruise ship sector and other large ship operators will not face increases in tariff in this port in spite of the increased level of service. However, pilotage service is being provided to many smaller vessels for which the tariff charged does not cover the cost. The Authority is proposing the adoption of a minimum charge of $650 per assignment in St. John's and Holyrood similar to the minimum charge levied in Halifax ($645) and Saint John ($655). In Holyrood, the Authority has witnessed a reduction in assignments resulting in a loss position in the port. Even though this port has a similar cost structure as the port of St. John's and is served by the same pilots, the tariffs charged in Holyrood do not reflect this commonality. The Authority proposes harmonizing the rates in Holyrood with those in St. John's, including the minimum charge. This will mean an increase in unit charges in Holyrood and a decrease in basic charge.

The proposed tariff rates will increase the cost of a pilotage assignment for an average-sized vessel in each port that has a tariff increase by the following amounts and percentages (average-sized vessel based on activity in each port for the period of January 1 to July 31, 2005):

Area	Increase in Dollars	Percentage Increase
Saint John	$49	4.0%
Restigouche	$281	10.0%
Halifax	$80	7.5%
Sydney	$111	8.0%
Bras d'Or	$183	10.0%
Humber Arm	$38	3.0%
Bay of Exploits	$114	8.0%

In St. John's, the unit and basic charge will remain at the status quo, while a minimum charge of $650 will be implemented. For larger ships, this will mean that there is no increase whatsoever, while smaller vessels may have significant increases. Holyrood will have a reduction in basic charge from $361 to $357 and an increase in unit charge from $2.58 to $3.50 to harmonize rates with St. John's.

It is projected that the proposed increases in tariff will result in an overall increase of 4.25 percent in pilotage revenues for the Authority.

In accordance with the 1999 Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a strategic environmental assessment (SEA) of this amendment was conducted, in the form of a preliminary scan. The SEA concluded that the amendment is not likely to have important environmental implications.

Consultation

Consultation in various forms has taken place with the parties affected by these proposed amendments. The parties consulted include the Shipping Federation of Canada, the Canadian Shipowners Association, the Halifax Pilotage Committee, the Saint John Pilotage Committee, shipping lines, and local port agents and users. The consultation took the form of several meetings and 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 users, the Authority provided an analysis of the situation and solicited responses.

The response of those consulted has varied, but the majority of our customers accept that the increases are fair and reasonable.

Compliance and enforcement

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 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, (902) 426-2550 (telephone), (902) 426-4004 (fax).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act, that the Atlantic Pilotage Authority proposes, pursuant to subsection 33(1) of that Act, to make the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996.

Interested persons who have reason to believe that any charge in the proposed Regulations is prejudicial to the public interest, including, without limiting the generality thereof, the public interest that is consistent with the national transportation policy set out in section 5 of the Canada Transportation Act (see footnote b), may file a notice of objection setting out the grounds therefor with the Canadian Transportation Agency within 30 days after the date of publication of this notice. All such notices 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.

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any notices for which there is consent to disclosure for the purposes of that Act.

September 27, 2005

CAPTAIN R. ANTHONY MCGUINNESS 
Chief Executive Officer 
Atlantic Pilotage Authority 

REGULATIONS AMENDING THE ATLANTIC PILOTAGE TARIFF REGULATIONS, 1996

AMENDMENTS

1. The portion of items 2 and 3 of Schedule 2 to the Atlantic Pilotage Tariff Regulations, 1996 (see footnote 1) in columns 3 and 4 is replaced by the following:

Item	Column 3 Unit Charge ($)	Column 4 Basic Charge ($)
2.	6.05	730.00
3.	6.19	471.00

2. The portion of item 4 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:

Item	Column 2 Minimum Charge ($)	Column 3 Unit Charge ($)	Column 4 Basic Charge ($)
4.	650.00	3.50	357.00

3. The portion of item 5 of Schedule 2 to the Regulations in columns 3 and 4 is replaced by the following:

Item	Column 3 Unit Charge ($)	Column 4 Basic Charge ($)
5.	6.37	470.00

4. The portion of item 8 of Schedule 2 to the Regulations in column 2 is replaced by the following:

Item	Column 2 Minimum Charge ($)
8.	650.00

5. The portion of items 10 to 12 of Schedule 2 to the Regulations in columns 3 and 4 is replaced by the following:

Item	Column 3 Unit Charge ($)	Column 4 Basic Charge ($)
10.	3.21	538.00
11.	2.32	392.00
12.	2.32	392.00

6. The portion of item 14 of Schedule 2 to the Regulations in columns 2 to 4 is replaced by the following:

Item	Column 2 Minimum Charge ($)	Column 3 Unit Charge ($)	Column 4 Basic Charge ($)
14.	645.00	1.83	429.00

7. The portion of item 1 of Schedule 3 to the Regulations in columns 4 and 5 is replaced by the following:

Item	Column 4 Unit Charge ($)	Column 5 Basic Charge ($)
1.	4.64	784.00

8. The portion of items 2 and 3 of Schedule 4 to the Regulations in column 2 is replaced by the following:

Item	Column 2 Flat Charge ($)
2.	602.00
3.	584.00

9. The portion of item 4 of Schedule 4 to the Regulations in columns 2 to 7 is replaced by the following:

Item	Column 2 Flat Charge ($)	Column 3 Minimum Charge ($)	Column 4 Unit Charge, No Pilot Boat Used ($)	Column 5 Basic Charge, No Pilot Boat Used ($)	Column 6 Unit Charge, Pilot Boat Used ($)	Column 7 Basic Charge, Pilot Boat Used ($)
4.	n/a	585.00	2.80	285.00	3.15	321.00

10. The portion of item 5 of Schedule 4 to the Regulations in column 2 is replaced by the following:

Item	Column 2 Flat Charge ($)
5.	642.00

11. The portion of item 8 of Schedule 4 to the Regulations in column 3 is replaced by the following:

Item	Column 3 Minimum Charge ($)
8.	585.00

12. The portion of item 9 of Schedule 4 to the Regulations in column 1 is amended by replacing the term "Nfld." with the term "Nfld. & Lab.".

13. The portion of items 10 to 12 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:

Item	Column 3 Minimum Charge ($)	Column 4 Unit Charge, No Pilot Boat Used ($)	Column 5 Basic Charge, No Pilot Boat Used ($)	Column 6 Unit Charge, Pilot Boat Used ($)	Column 7 Basic Charge, Pilot Boat Used ($)
10.	538.00	2.57	430.00	2.88	484.00
11.	422.00	1.74	294.00	1.97	333.00
12.	422.00	1.74	294.00	1.97	333.00

14. The portion of item 14 of Schedule 4 to the Regulations in columns 3 to 7 is replaced by the following:

Item	Column 3 Minimum Charge ($)	Column 4 Unit Charge, No Pilot Boat Used ($)	Column 5 Basic Charge, No Pilot Boat Used ($)	Column 6 Unit Charge, Pilot Boat Used ($)	Column 7 Basic Charge, Pilot Boat Used ($)
14.	581.00	1.46	343.00	1.65	386.00

15. The portion of items 1 and 2 of Schedule 5 to the Regulations in columns 4 to 6 is replaced by the following:

Item	Column 4 Minimum Charge ($)	Column 5 Unit Charge ($)	Column 6 Basic Charge ($)
1.	655.00	2.56	369.00
2.	655.00	0.77	110.00

16. The portion of item 3 of Schedule 5 to the Regulations in columns 2 is replaced by the following:

Item	Column 2 Flat Charge ($)
3.	745.00

17. The portion of items 4 to 7 of Schedule 5 to the Regulations in columns 4 to 6 is replaced by the following:

Item	Column 4 Minimum Charge ($)	Column 5 Unit Charge ($)	Column 6 Basic Charge ($)
4.	590.00	1.92	277.00
5.	590.00	2.05	295.00
6.	590.00	1.54	222.00
7.	590.00	1.02	148.00

COMING INTO FORCE

18. These Regulations come into force on January 1, 2006.

[41-1-o]

Footnote a

S.C. 1998, c. 10, s. 150

Footnote b

S.C. 1996, c. 10

Footnote 1

SOR/95-586

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with extensible hypertext markup language (XHTML 1.0 Strict).