Vol. 137, No. 1 — January 1, 2003

Registration
SOR/2003-9 12 December, 2002

PILOTAGE ACT

Regulations Amending the Laurentian Pilotage Tariff Regulations

RESOLUTION

The Laurentian Pilotage Authority hereby makes the annexed Regulations Amending the Laurentian Pilotage Tariff Regulations, dated December 5, 2002.

P.C. 2002-2195 12 December, 2002

Whereas the Laurentian Pilotage Authority, pursuant to subsection 34(1) (see footnote a)  of the Pilotage Act, published in the Canada Gazette, Part I, on July 6, 2002, a copy of the proposed Regulations Amending the Laurentian Pilotage Tariff Regulations;

Whereas three notices of objection to the proposed Regulations were filed with the Canadian Transportation Agency, and the Agency, pursuant to subsection 34(4) (see footnote b)  of that Act, has investigated the proposed charges and, pursuant to subsection 35(1) (see footnote c)  of that Act, made, in its Decision No. 645-W-2002 dated November 29, 2002, a recommendation to the Laurentian Pilotage Authority;

And whereas the Laurentian Pilotage Authority, by resolution of December 5, 2002, made the Regulations in accordance with the recommendation of the Canadian Transportation Agency;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 33(1) of the Pilotage Act, hereby approves the annexed Regulations Amending the Laurentian Pilotage Tariff Regulations.

REGULATIONS AMENDING THE LAURENTIAN PILOTAGE TARIFF REGULATIONS

AMENDMENTS

1. The heading "Pilotage Charges for the Years 2001 and 2002" before section 2 of the Laurentian Pilotage Tariff Regulations (see footnote 1)  is repealed.

2. The portion of subsection 2(1) of the Regulations before paragraph (a) is replaced by the following:

2. (1) A pilotage charge payable to the Authority for a pilotage service set out in column 1 of Schedule 2 in the District set out in column 2 of that Schedule is calculated based on the information provided on the pilotage service form under subsection 7(1) and is equal to the sum of the following:

3. Schedules 2 and 3 to the Regulations are replaced by the following:

SCHEDULE 2 (definition "time factor" in section 1, and sections 2 and 9)

PILOTAGE CHARGES

Item	Column 1 Pilotage Service	Column 2 District	Column 3 Basic Charge ($)	Column 4 Charge per Unit ($)	Column 5 Charge per Time Factor ($)	Column 6 Charge per Hour or Part of an Hour ($)	Column 7 Minimum Charge ($)	Column 8 Maximum Charge ($)
1.	Trip	1	N/A	29.38	14.47	N/A	751.60	N/A
		2	N/A	18.59	10.69	N/A	621.52	N/A
2.	Movage	1, 1-1 or 2	338.17	11.13	N/A	N/A	751.60	N/A
3.	Anchorage during a trip or a movage	1, 1-1 or 2	261.49	2.81	N/A	N/A	N/A	N/A
4.	Docking of a ship at a wharf or pier at the end of a trip	1 or 2	200.13	2.07	N/A	N/A	N/A	389.14
5.	Request by a master, owner or agent of a ship for a pilot designated by the Corporation to perform a docking or undocking	2	338.17	7.65	N/A	N/A	621.52	N/A
6.	Detention of a pilot at a pilot boarding station or on board ship	1, 1-1 or 2	N/A	N/A	N/A	0.00 for first half hour, 77.99 for first hour, including the first half hour, and 77.99 for each subsequent hour	N/A	935.81 per 24-hour period
7.	Ship movements required for adjusting a ship's compasses	1, 1-1 or 2	338.17	11.13	N/A	N/A	N/A	N/A
8.	Trip or movage of a dead ship	1, 1-1 or 2	1.5 times the pilotage charges set out in items 1 to 7	N/A	N/A	N/A	N/A	N/A
9.	Cancellation of a request for pilotage services if the pilot reports for pilotage duty	1, 1-1 or 2	299.96	N/A	N/A	0.00 for the first hour, 155.98 for the second hour including the first hour, and 77.99 for each subsequent hour1	N/A	935.81 per 24-hour period
10.	A pilot is carried on a ship beyond the district for which the pilot is licenced	1, 1-1 or 2	N/A	N/A	N/A	77.99	N/A	935.81 per 24-hour period
11.	Except in the case of emergency, a master, owner or agent of a ship, after filing a notice required by section 8 or 9 of the Laurentian Pilotage Authority Regulations, makes a request that the movage or departure occur at a time before that set out in the notice	1, 1-1 or 2	1,745.59	N/A	N/A	N/A	N/A	N/A

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¹ The number of chargeable hours of service is calculated from the later of the time for which the pilotage services are requested and the time the pilot reports for pilotage duty until the time of cancellation

 

4. The Regulations are amended by replacing the expression "Schedule 2 or 3" with the expression "Schedule 2" wherever it occurs in the following provisions:

• (a) the definition "time factor" in section 1;
  (b) subsection 2(2); and
  (c) the portion of section 9 before paragraph (a).

COMING INTO FORCE

5. These Regulations come into force on January 1, 2003.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The Laurentian Pilotage Authority ("Authority") is responsible for administering, in the interests of safety, an efficient pilotage service within Canadian waters in and around the Province of Quebec, north of the northern entrance to St. Lambert Lock, except the waters of Chaleur Bay south of Cap d'Espoir. Section 33 of the Pilotage Act ("Act") allows the Authority to prescribe tariffs of pilotage charges that are fair and reasonable, and that permit the Authority to operate on a self-sustaining financial basis.

The tariff amendment proposed by the Authority and published in the Canada Gazette, Part I, on July 6, 2002 provided for a general increase in pilotage charges of 3.95 per cent to take effect on January 1, 2003. However, following hearings held by the Canadian Transportation Agency ("CTA") on November 4, 5 and 6, 2002, the CTA decided that a 3.95 per cent increase was not in the public interest and should not be implemented. It recommended an increase of 2.5 per cent. Subsection 35(1) of the Act provides that, when the CTA makes a recommendation, the pilotage authority "shall govern itself accordingly". Therefore, the Authority made the attached regulations.

The 2.5 per cent increase in pilotage charges will result in a smaller increase in revenues than originally budgeted and it is the Authority's view that it does not adequately take into account loan repayments, the increased costs of negotiated pilotage contracts and the projected rate of inflation. To comply with the requirement set out in subsection 33(3) of the Act that a pilotage authority operate on a self-sustaining financial basis, the Authority will have to borrow to cover the shortfall, thus placing itself in the position of requiring larger tariff increases in the future.

Alternatives

Administrative, operational and financial costs have been reduced where feasible and kept to the minimum consistent with maintaining a safe and effective pilotage service.

Benefits and Costs

The tariff increase for the year 2003 will generate additional revenue estimated at $951,000. This represents an increase in the pilotage charges of approximately $138 per trip for a ship transiting the St. Lawrence River between the pilot boarding stations at Les Escoumins and Montreal, i.e., 262 nautical miles.

A tariff increase must be in place on January 1, 2003 to meet anticipated costs for 2003. The 2.5 per cent tariff increase as recommended by the CTA will provide a measure of increased revenue to meet these needs in part but certain expenses that could affect the quality of services provided may be reduced.

Consultation

The Authority held meetings with the three main marine industry groups during May 2002 concerning the rate of increase for pilotage tariffs originally proposed for 2003 and 2004. The industry indicated to the Authority that it could not accept subsequent tariff increases or any increase in excess of the cost of living index, which stands at approximately 2.4 per cent this year over last year, in view of substantial decreases in maritime transport activity.

The Authority is required by the Pilotage Act to be financially self-sustaining. It is evident that a tariff increase limited to 2.4 per cent will not achieve the legal requirement, bearing in mind that the last year in effect of the service contracts with the pilot groups provides for a 3 per cent increase in their fees. Since the Authority faced a significant accumulated debt when the self-sufficiency requirement was imposed by the Act, and bearing in mind the subsequent reimbursement of the loans, it is not possible for the Authority to maintain a cash flow, thus requiring bank loans.

Following the pre-publication of this amendment in the Canada Gazette, Part I, on July 6, 2002, three notices of objection were filed with the CTA by three users groups, namely, the Canadian Shipowners Association (CSA), the Chamber of Maritime Commerce (CMC) and the Shipping Federation of Canada (SFC). The objectors contended among other things as follows:

•  The repeated annual rate increases above inflation are prejudicial to the ability of shippers to compete effectively with other modes of transportation and other suppliers of cargoes.

•  Shipping costs have become increasingly more expensive and detrimental to the waterway's shipper and carrier community.

•  The Authority has not fully considered all opportunities to offset the costs associated with delivering pilotage services on the St. Lawrence River.

•  The Authority's tariff increase proposal is not in the public interest, because it does not represent a fair and reasonable tariff of pilotage charges and would result in an unjustified increase in the cost of transportation.

Pursuant to the section 35 of the Pilotage Act, the CTA conducted an investigation into the proposed tariff increase. The Agency rendered its decision on November 29, 2002, which was no later than 120 days after receiving the objections.

Should the tariff not be implemented as planned on January 1, 2003, the Authority is likely to suffer financial losses for which it will have to borrow, because it does not have any cash flow.

Although the CTA's recommendation is lower than anticipated by the Authority, the Authority has no option but to comply with the Agency's decision. The Authority decided not to apply to vary or appeal the decision because of the delays that might be incurred. The Authority will try to reduce its expenses by an amount equal to the shortfall.

Compliance and Enforcement

Section 45 of the Pilotage Act provides the 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 provides for penalties if the regulations are contravened. These include fines of up to $5,000.

Contact

Mr. Jean-Claude Michaud

Chief Executive Officer

Laurentian Pilotage Authority

715 Victoria Square, 6th Floor

Montreal, Quebec

H2Y 2H7

Telephone: (514) 283-6320

FAX: (514) 496-2409

Footnote a 

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

Footnote b 

S.C. 1996, c. 10, s. 251(2)

Footnote c 

S.C. 1998, c. 10, s. 151

Footnote 1

SOR/2001-84

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