Canada Gazette, Part I, Volume 150, Number 49: Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996
December 3, 2016
Statutory authority
Pilotage Act
Sponsoring agency
Atlantic Pilotage Authority
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Executive summary
Issues: After analyzing projections for coming years, and consulting with industry, the Atlantic Pilotage Authority (the Authority) has determined that 13 of the 17 compulsory ports would require tariff adjustments to remain financially self-sufficient on a port-by-port basis and provide the service levels required by industry, without cross-subsidization.
The Authority has also determined that tariff increases are required for non-compulsory areas to encourage pilots to be licensed for the areas and to be willing to do these assignments when industry requests them.
Description: The Authority is publishing a two-stage tariff adjustment, with the first stage taking effect in 2017 and the second stage taking effect in 2018. The rates are set on a port-by-port basis, with 13 compulsory ports affected in 2017 and 11 affected in 2018. Tariffs for other non-compulsory areas are also being increased in each year. Combined, the changes are estimated to increase the overall tariff rates by 4.12% in 2017 and by 3.33% in 2018.
Cost-benefit statement: The cost-benefit analysis indicates that the present value of the costs to the marine transport industry as a result of the changes will be $12.8 million over a period of 10 years. This is equivalent to the present value of revenues received by the Authority.
The increase in pilotage tariffs would ensure the financial viability of the Authority, while it invests in additional pilot boats and recruits additional pilots. These investments, and the regular business of the Authority, are in support of providing uninterrupted service while protecting the health and safety of the Authority's employees.
“One-for-One” Rule and small business lens: The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business. The small business lens does not apply to these amendments.
Background
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. As required by the Pilotage Act, the Authority prescribes 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.
Issues
In accordance with recommendations from the Canadian Transportation Agency (the CTA) and its customers, the Authority strives to be financially self-sufficient on a port-by-port basis, as well as for the Authority as a whole. After analyzing projections for coming years, and consulting with industry, the Authority has determined that 13 of the 17 compulsory ports would require tariff adjustments to remain financially self-sufficient on a port-by-port basis and provide the service levels required by industry, without cross-subsidization.
The Authority has also determined that tariff adjustments are required for non-compulsory areas to increase the likelihood that pilots are available to the customers when requested. The changes to the non-compulsory rates do not have a significant effect on the Authority's finances, but are meant to encourage pilots to be licensed for the areas and to be willing to do these assignments when industry requests them.
Objectives
The objective of this proposed regulatory amendment is to increase pilotage charges in 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;
- encourage pilots to be licensed for the compulsory and non-compulsory areas that are serviced by entrepreneurial pilots so that the Authority can provide the services when requested by industry; 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
Compulsory ports regular tariffs in the Atlantic Pilotage Tariff Regulations, 1996
The Authority is publishing a two-stage tariff adjustment, with the first stage taking effect in 2017 and the second stage taking effect in 2018.
The following tariff amendment is effective January 1, 2017, or if it is later, on the day on which the Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996 (the Regulations) are registered:
This proposed tariff amendment would increase all of the charges related to one-way trips, trips through, and movages with the tariff increase being as follows for the ports below:
Saint John 8.00%
Bay of Exploits 6.00%
Stephenville 6.00%
Halifax 5.00%
Bras d'Or Lake 5.00%
Strait of Canso 5.00%
Placentia Bay 4.00%
St. John's 4.00%
Holyrood 4.00%
Sydney 3.00%
The Authority will also be adjusting the tariffs in the compulsory ports of Humber Arm and Miramichi, and for pilotage at the Confederation Bridge. For Humber Arm, the charges related to a one-way trip will be adjusted with increases to the minimum charge of $240, from $1,960 to $2,200, and to the basic charge of $243, from $757 to $1,000. The movage charges will increase by corresponding amounts. A minimum charge will be established for Miramichi of $2,000 per assignment. The flat charges for the Confederation Bridge will be increased by $100 per assignment, to $600 when no pilot boat is used, and $1,400 when a pilot boat is used.
The primary pilot boat being used in the areas of Sydney and Bras d'Or is now a larger twin-engine vessel than that previously used. This vessel provides more manoeuvrability and speed, but uses more fuel than the previous vessel. For these two areas, the Authority is proposing to indicate the budgeted fuel usage in the tariff regulations, which will have the effect of adding a fuel charge to each assignment in which a pilot boat is used based on the budgeted usage and the actual average fuel price in the last complete month for which the Authority has received invoices. The budgeted fuel usage per assignment is 108 L. Based on recent prices, this would amount to approximately $70 per assignment in which a pilot boat is used.
The tariff applicable to any port or harbour area that is a non-compulsory pilotage area will be adjusted to increase each of the minimum charge, unit charge and movage charge by 5.00%.
The following tariff amendment will be effective January 1, 2018:
This proposed tariff amendment would increase all of the charges related to one-way trips, trips through, and movages with the tariff increase being as follows for the ports below:
Bay of Exploits 6.00%
Stephenville 6.00%
Bras d'Or Lake 5.00%
Strait of Canso 5.00%
Saint John 4.00%
Halifax 3.00%
Sydney 3.00%
Placentia Bay 3.00%
St. John's 3.00%
Holyrood 3.00%
The Authority will also be adjusting the tariffs in the compulsory ports of Humber Arm and for the Confederation Bridge. For Humber Arm, the charges related to a one-way trip will be adjusted with increases to the minimum charge of $200, from $2,200 to $2,400, and to the basic charge of $200, from $1,000 to $1,200. The movage charges will increase by corresponding amounts. The flat charges for the Confederation Bridge will be increased by $100 per assignment to $700 when no pilot boat is used, and $1,500 when a pilot boat is used.
The tariff applicable to any port or harbour area that is a non-compulsory pilotage area will be adjusted to increase each of the minimum charge, unit charge and movage charge by 5.00%.
Benefits and costs
In developing forecasts of future activity in each port, the actual traffic for the past 12-month period is used as a base. This base is then adjusted as information from customers, media reports, port publications, and economic forecasts is received. Consideration is also given to expected new pilotage certificates that may be issued for the period under examination. The expected number and size of vessels in the upcoming years is then forecast.
A cost-benefit analysis was conducted to determine the impact of the fee increase. The analysis covered a period of 10 years from the date of entry into force, i.e. from 2017 to the end of 2026. It is estimated that the increase in the rates for pilotage services will generate additional revenues of $1.8 million per year on average over the next 10 years and a total cost in present value of $13.5 million using a 7% discount rate, under the assumption of no annual increase of the traffic in the navigable waters within the jurisdiction of the Atlantic Pilotage Authority.
The rise in pilotage tariffs would increase the operating costs of the maritime transport industry. This increase is equivalent to the additional revenue of $1.8 million a year and is relatively low in all of the operating costs of the industry.
The increase in pilotage tariffs would ensure the financial viability of the Authority, while it invests in additional pilot boats and recruits additional pilots. These investments, and the regular business of the Authority, are in support of providing uninterrupted service while protecting the health and safety of the Authority's employees.
The estimated costs and benefits, and a list of qualitative impacts of this increase in the rates of pilotage services, can be found in the following statement of the costs and benefits.
| 2017 | 2018 | 2026 | Total (Present Value) | Annualized Average | |
|---|---|---|---|---|---|
| A. Quantified impacts (in Can$, 2016 price level / constant dollars) | |||||
| Benefits (Atlantic Pilotage Authority) | 981,841 | 1,923,903 | 1,923,903 | 13,516,516 | 1,829,697 |
| Costs (shipping industry) | (981,841) | (1,923,903) | (1,923,903) | (13,516,516) | (1,829,697) |
| Net benefits | — | — | — | — | — |
| B. Quantified impacts in non-$ (e.g. from a risk assessment) | |||||
| Positive impacts | — | — | — | — | — |
| Negative impacts | — | — | — | — | — |
| C. Qualitative impacts | |||||
| Shipping industry | Timely and effective pilotage services in the navigable waters within the jurisdiction of the Atlantic Pilotage Authority. This regulatory amendment is to cover the costs associated with additional pilot boats and additional pilots, which are meant to improve service and reduce the possibility of service delays. | ||||
| Atlantic Pilotage Authority | Financial sustainability of the Authority and increased safety of its workforce. The increases are meant to keep the Authority viable and able to fulfill its mandate. The additional pilot boats will improve the number of safe platforms the Authority has for pilot transfers. | ||||
| Canadian population | The Authority contributes to the safe and efficient movement of goods and people for Canadians, while protecting the environment from harm. The economic benefits of the services provided are difficult to measure as the benefit derived by users is primarily preventative. Pilotage plays a key role in ensuring that there are no ship source environmental disasters in Canadian waters. The Authority's effectiveness is dependent on the ability to fulfill its mandate, which this regulatory amendment allows. | ||||
| Importers and exporters | Possibility that the maritime transport industry may carry the cost of the increase in the tariff on importers and exporters of the Laurentian pilotage area. However, it is estimated that the rate increase is a very small part of the overall costs of the shipping industry and the pass-on cost will be negligible. | ||||
Atlantic Pilotage Authority and suppliers
The net present value of the benefit for the Atlantic Pilotage Authority and its suppliers is estimated at $13.5 million over a period of 10 years. This would ensure that the Authority will be able to fulfill its mission, to deliver safe, effective and self-sustaining marine pilotage services in Atlantic Canada. It will allow the Authority to continue with its pilot boat replacement while ensuring there is adequate pilot strength to provide the service.
Shipping industry
There will be an increased cost to the marine transport industry equal to the new present value of $13.5 million. It is possible that the maritime transport industry will pass this cost on to oil refinery operators, importers, and exporters.
It is expected that the increase in tariffs would ensure the provision of timely and effective pilotage services, while minimizing the cost of delays, to the maritime transport industry. It would also provide security in the navigable waters within the jurisdiction of the Administration.
“One-for-One” Rule
The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.
Small business lens
The small business lens does not apply to these amendments.
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, which represents foreign vessels and accounts for 77–79% of the Authority's activity and revenue. Local committees representing stakeholders in Halifax, Saint John, St. John's, Placentia Bay, and Cape Breton were also consulted extensively, including presentations made by the Authority in May and August of 2016. Meetings were held on the following dates in each area:
Halifax, N.S.: May 9 and August 16
Cape Breton, N.S. (Canso, Sydney, and Bras d'Or): May 18 and August 17
Saint John, N.B.: May 16 and August 25
St. John's, N.L.: May 25 and August 23
Placentia Bay (Arnold's Cove), N.L.: May 25 and August 23
Shipping Federation of Canada: May 31 in Halifax and August 30 in Montréal
Participation varies in each port depending upon the nature of the industry, but participants generally include shipowners and operators, agents, facility management, port authorities, and other stakeholders.
The consultation took the form of the above-noted meetings, as well as written, personal, and telephone communications with individuals and groups. Alternatives to tariff increases were presented, where applicable, and participation from the attendees was encouraged. For various ports and districts, an alternative to increased tariff rates would be a reduction in pilot strength. The parties affected have always expressed that their primary concerns are with service levels. They have requested that the number of pilots be increased in some areas, and maintained in others, so that pilot availability is not compromised. When meeting with customers, the Authority provided an analysis of the situation and solicited responses. Based on the consultation, the structure of the proposal has been amended in response to industry concerns. Every indication was given that the adjustments were accepted as fair and reasonable.
Rationale
The Authority continues to invest in its service with the addition of newer pilot boats and additional pilots. Two pilot boats are being added to the fleet that are less than 10 years of age. They will replace vessels that are 40 years old, in Halifax, N.S., and 33 years old, in Saint John, N.B. The replacement of the older vessels is essential to maintaining the service in these major ports while providing a safe platform for the transfer of pilots. The reassignment of vessels in the ports will allow similar (or “sister”) vessels to be deployed in Halifax, Saint John, Sydney, and Placentia Bay. Having sister vessels in each port will allow for better allocation of spare equipment and streamlined maintenance scheduling. With sister vessels, the workload will be more evenly shared between boats as both will be operated in a similar manner. This will avoid the tendency to overuse the newer, more modern vessels when the alternative is a much older design. The increased labour force is to address service levels and prepare for pending retirements. Without the proposed increases, losses of $389,000 for 2017 and $1 million for 2018 would be incurred. The proposed increases would provide an estimated profit of 2.2% of revenue for 2017 and 3.4% of revenue for 2018. Throughout this statement, revenues from the temporary surcharge implemented in 2016 have been excluded from the results.
The Authority absorbed losses throughout the region in 2014 and 2015, which decreased the cash reserves of the Authority. A 36-month surcharge was implemented to recover these losses and is subject to an annual review. Based on the Authority's financial position in 2016, the surcharge is still deemed to be required. It will be reviewed in August 2017 to determine whether it is still required.
Saint John, N.B.
For Saint John, it was announced early in 2016 that PotashCorp would be suspending its potash operation in the nearby Sussex area indefinitely. The Authority had been anticipating that increased production from the new potash mine would be shipped through Saint John, providing increased traffic for many years to come.
The Authority is adding two additional pilot boats to its company-wide fleet for 2017. This will add a second, newer vessel to service Saint John, which will then have two modern sister pilot vessels under 10 years of age. These two vessels will be able to provide safe, reliable service to the port for years to come. In preparation for retirements, the Authority is continuing to add to the pilot strength. The Authority has developed an operating budget for 2018 that includes an additional pilot to replace a pilot scheduled to retire.
Based on this budget, with the newer vessel added to the port in 2017 and an additional pilot added in 2018, the Authority is proposing an 8% increase in 2017 and a 4% increase for 2018. These rate increases will be applied to each of the flat, basic, unit, and minimum charges. Without these increases, the Authority anticipates a loss of 5% for the port in 2017 and a loss of 9% in 2018. The proposed increase would provide an estimated profit of approximately 2% in 2017 and approximately 2% in 2018. However, should the Energy East Pipeline be developed, the positive impact on the port would be very significant, so the Authority is awaiting the Government's decision. The increases proposed would put an adequate return within reach for 2019 when the surcharge is removed. The Authority has invested significantly in new vessels and carries debt for their acquisition.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Saint John | Revenues | 4,465,383 | 4,746,730 | 4,465,383 | 4,986,648 |
| Profit (loss) | (199,780) | 81,568 | (408,941) | 112,324 | |
Halifax
The number of masters who have certificates to pilot their own vessels in the area has increased and resulted in the loss of some smaller-revenue assignments for the Authority. As mentioned above, the Authority is adding two additional pilot boats to its company-wide fleet for 2017. This will add a second, newer vessel to service Halifax, which will then also have two pilot vessels under 10 years of age that will be able to service the port for years to come.
Based on this budget containing the change in pilot boats for the port in 2017, the Authority is proposing a 5% increase in 2017 and a 3% increase for 2018. These rate increases will be applied to each of the basic, unit, and minimum charges. Without these increases, the Authority anticipates a profit of 2% for the port in 2017 and a loss of 1% in 2018. The proposed increase would provide an estimated profit of approximately 5% in 2017 and approximately 6% in 2018. This rate of return is adequate to meet the long-term requirements for the area, where the Authority has invested significantly in new vessels and carries debt for their acquisition.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Halifax | Revenues | 6,250,003 | 6,485,319 | 6,264,861 | 6,745,542 |
| Profit (loss) | 116,158 | 351,834 | (73,401) | 407,280 | |
Cape Breton district
This district contains three compulsory ports: the Strait of Canso, Bras d'Or Lake, and the port of Sydney. The district utilizes a pool of pilots, each of whom is capable of providing service to any of the three ports. Operating as a district is advantageous to the individual ports, as they can draw on resources from the pool to cover peak periods. An individual port that is not part of a district would have to carry more pilots to cover for these periods at an increased cost to industry. The total costs of the pilots in a district are allocated to the individual ports based on the total time pilots spend working in each port.
The traffic levels in the Strait of Canso have been volatile since it lost a significant amount of business in 2011. The area has a transshipment terminal that supplies refineries along the eastern seaboard of the United States. With no new refineries being developed and demand for petroleum products declining, the transshipment terminal has been relying more and more on a few major customers. Sydney activity also changes considerably from year to year, as cruise traffic can shift annually.
After allowing the pilot strength in the area to be reduced by 30% from 2011 levels, the Authority realized that pilots would need to be added to maintain service levels to the satisfaction of their customers. The pilot strength was increased in 2014 and service levels greatly improved.
Without these tariff increases in the district, the Authority anticipates a loss in Cape Breton of 6% in 2017 and a loss of 8% in 2018. The proposed increase would leave the district with a 2% loss in 2017 and put it in a break-even position for 2018.
Bras d'Or
The port in the district with the least activity is Bras d'Or. The activity in the port has declined, as the primary business in this area is the shipment of gypsum from Little Narrows. This business has been impacted by the adoption of synthetic gypsum as an alternative to their core product. Early in 2016, it was announced that Little Narrows would not have any mining or shipping activity for the year. This leaves very little activity in the area. The Authority is proposing a 5% increase for the area in each year that would be applied to the flat, basic, unit, and minimum charges. This area is also serviced by the Sydney pilot boats and would have the fuel charge added based on 108 L per assignment. These increases are expected to leave the area in a loss position but would position it to rebound should the gypsum mines resume production.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Bras d'Or | Revenues | 21,623 | 23,263 | 21,623 | 24,313 |
| Profit (loss) | (12,973) | (11,333) | (10,761) | (8,071) | |
Strait of Canso
With the loss of activity in Bras d'Or, Canso will absorb more of the cost burden for the district. For the compulsory pilotage area of the Strait of Canso, the Authority has seen significant volatility in the area. This area has been negatively affected by a reduction in a coal transshipment operation that had provided significant activity and revenues to the port. The port was budgeted for a loss in 2016, in spite of a tariff increase, as the Authority has attempted to offset this lost revenue. Operating budgets have been prepared, adjusting for the new traffic mix and the increased allocation of costs. The Authority is increasing the tariff charge by 5.0% in 2017 and by 5.0% in 2018. These increases will be applied to the flat, basic, unit, and minimum charges. These increases are expected to return the port to a break-even position for 2018 and would put it on track to achieve an adequate return in 2019, when the surcharge ends.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Strait of Canso | Revenues | 2,391,090 | 2,485,848 | 2,391,738 | 2,617,493 |
| Profit (loss) | (180,841) | (86,083) | (227,829) | (2,104) | |
Sydney
For Sydney, the area has seen a decline in activity with a slower cruise season than in previous years. The cruise ship traffic is expected to increase in 2017, which will have a positive impact on the port. When the two new pilot boats are obtained in 2016, the Authority plans to deploy two pilot boats to Sydney that are faster and more manoeuvrable than the previous single-engine boat. Having two sister vessels in Sydney will improve the reliability of the pilot boat service and provide the advantages with maintenance, as noted for other ports. These vessels are costlier to operate and the Authority will be adding a fuel charge based on 108 L per assignment to cover the cost of fuel. This area is also affected by the lost activity in the district, leaving it to absorb increased pilot costs as well as an increased portion of the pilot boat costs that had been shared with Bras d'Or. Two pilots have been moved from Canso to Sydney, which will provide travel expense savings for the users in the area. The Authority is proposing a tariff that would increase pilotage revenue in the port by 3% in 2017 and another 3% in 2018. This increase is required as the costs allocated to the area have increased. The Authority would be increasing the basic, unit, and minimum charges by these amounts. These increases are expected to result in a profit of approximately 2% for each of 2017 and 2018 for the area.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Sydney | Revenues | 1,171,497 | 1,225,363 | 1,199,257 | 1,268,491 |
| Profit (loss) | (25,276) | 28,589 | (43,072) | 26,162 | |
Eastern Newfoundland district
This district of Eastern Newfoundland is comprised of three compulsory ports: St. John's, Placentia Bay, and Holyrood. Like the other districts, they utilize a pool of pilots, each of whom is capable of providing service to any of the three ports. The individual ports take advantage of this structure, as each of them can draw on resources from the pool to cover peak periods. An individual port that is not part of a district would have to carry more pilots to cover for these periods at an increased cost to industry. As stated above, the pilots in a district are allocated to the individual ports based on the pilotage requirements in each port.
Providing a quality service in this district is very challenging due to the length of pilotage in an area like Placentia Bay, the variance in the number of assignments from one day to the next, and the extreme weather patterns that occur in the area. When analyzing the service levels with the customers, and in response to their desire for a reduction in interruptions, it was decided that the Authority would target an increase in pilot numbers from 11 to 14 for the district. This increased staffing will be completed in 2017 with the addition of the final apprentice pilot planned at this time.
Without these increases, the Authority anticipates a profit in the Eastern Newfoundland district of less than 1% in 2017 and a loss of 1% in 2018. The proposed increase would result in a 3% profit in 2017 and a 5% profit for 2018 for the district.
St. John's
For St. John's, the Authority is proposing a tariff that would increase pilotage revenue in the port by 4% in 2017 and by 3% in 2018. These increases are required as the trainee pilots move up in class and operating costs increase. The Authority would be increasing the basic, unit, and minimum charges by the proposed tariffs. These increases are expected to maintain the profit level of the port at 3% in 2017 and 4% in 2018. These returns are sufficient to meet the long-term needs for the area, where the Authority has dealt with large variances in activity.
The traffic levels in St. John's have large fluctuations, as traffic may spike for short periods and then subside. Business can come to the port on short-term contracts, while regular callers tend to apply for pilotage certificates. The Authority has to be able to provide service during these peak periods while minimizing financial losses during the down periods. The recent increases and targeted profits are intended to cover the additional costs of improved service and allow the Authority to offset projected losses during down years.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| St. John's | Revenues | 1,337,420 | 1,383,506 | 1,338,125 | 1,430,839 |
| Profit (loss) | 5,863 | 47,478 | (15,106) | 59,148 | |
Holyrood
The port in the district with the least activity is Holyrood. In recent years, the activity in the port has ranged from a high of 39 assignments to a low of 23 assignments. The port has the same tariff rates as St. John's, as they closely share the same resources. Like St. John's, the Authority is proposing a tariff that would increase pilotage revenue in the port by 4% in 2017 and by 3% in 2018. These increases are required as the trainee pilots move up in class and operating costs increase. The Authority would be increasing the basic, unit, and minimum charges by the proposed tariffs.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Holyrood | Revenues | 89,147 | 91,737 | 89,235 | 95,269 |
| Profit (loss) | (8,893) | (6,303) | (13,369) | (7,335) | |
Placentia Bay
Placentia Bay is the port in the district with the most activity. The Authority is proposing a tariff that would increase pilotage revenue in the port by 4% in 2017 and by 3% in 2018. The Authority was asked to address service concerns in the area and has responded by increasing pilot numbers in the district. These tariff increases are required as the trainee pilots move up in class and operating costs increase. The Authority would be increasing the basic, unit, and minimum charges by the proposed tariffs. These increases are expected to maintain the profit level of the port at 4% in 2017 and 5% in 2018. This rate of return is sufficient to meet the long-term requirements of the area, where the Authority has invested significantly in new vessels and carries debt for their acquisition.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Placentia Bay | Revenues | 6,001,860 | 6,177,448 | 6,004,880 | 6,386,847 |
| Profit (loss) | 41,633 | 217,221 | (57,827) | 324,139 | |
Central/Western Newfoundland district
Similar to the other districts, Central/Western Newfoundland encompasses three ports, Humber Arm, Bay of Exploits and Stephenville, which share pilot resources. This district has had a dramatic decrease in assignments due to the decline of the paper industry over the years, and activity has continued to fall. The compulsory ports in this district are served by a complement of three pilots. Due to the large geographic area covered by the pilots (more than 400 km from one extremity to the other), it is impossible to reduce the number of pilots below the current level without significantly impacting service levels.
Without these increases, the Authority anticipates a loss in the Central/Western Newfoundland district of 16% in 2017 and a loss of 19% in 2018. The proposed increase would leave the district with a 9% loss in 2017 and a 4% loss for 2018.
Humber Arm
Humber Arm has been affected by a decrease in activity, while pilot boat costs have increased. Due to ice conditions in the port, assignments during the winter months require a more robust vessel to break the ice and transport the pilot. The contracted cost of both the regular and winter vessels has increased to a point where the current tariff, at the reduced level of activity, is not sufficient. This tariff change will increase the basic and minimum charges to better reflect the cost of the pilot boat services. For 2017, the basic charge will be increased to $1,000 and the minimum charge will be increased to $2,200. For 2018, the basic charge will be increased to $1,200 and the minimum charge will be increased to $2,400. These increases are expected to leave the area in a loss position as the Authority moves towards an adequate return for the area over several years.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Humber Arm | Revenues | 414,731 | 445,982 | 414,731 | 486,105 |
| Profit (loss) | (102,807) | (71,557) | (116,796) | (45,422) | |
Bay of Exploits
Activity in the Bay of Exploits has fallen by more than 25% since 2014. The Authority is increasing the tariff by 6% in 2017 and by 6% in 2018, and will be increasing the basic, unit, and minimum charges by the proposed tariffs. These increases are expected to deliver a break-even result in each of these years and put the area on track to achieve an adequate return in 2019 when the surcharge stops.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Bay of Exploits | Revenues | 306,725 | 323,700 | 307,686 | 343,685 |
| Profit (loss) | (15,539) | 1,436 | (23,759) | 12,240 | |
Stephenville
Stephenville is the port in the district with very little activity. The Authority is increasing the tariff by 6% in 2017 and by 6% in 2018, and will be increasing the basic, unit, and minimum charges by the proposed tariffs. These increases are expected to deliver a break-even result in each of these years and put the area on track to achieve an adequate return in 2019 when the surcharge stops.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Stephenville | Revenues | 39,947 | 42,010 | 39,947 | 44,196 |
| Profit (loss) | (3,519) | (1,456) | (3,567) | 682 | |
Miramichi
The tariff for the Miramichi district has not been altered in 20 years. The pilots in this area are not employees, and they receive a share of the tariff as payment for their services. Because the rates have been stagnant for 20 years, it is becoming difficult to attract mariners to train as pilots for the compulsory area. Unlike almost every other area, there was never a minimum charge developed for Miramichi. There is currently only one primary customer in the area. The Authority has consulted with this customer and reached an agreement to implement a minimum charge of $2,000 per assignment, beginning in 2017. This is expected to make recruitment of future pilots more effective.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Miramichi | Revenues | 15,800 | 26,717 | 15,800 | 26,717 |
| Profit (loss) | (858) | 780 | (837) | 801 | |
Confederation Bridge
Similar to Miramichi, the Authority is recruiting new pilots to replace a retiring contract pilot for the area. In an attempt to attract additional pilots to train to provide the service in the compulsory area, the Authority is increasing the flat charge meant to cover the cost of the pilot by $100 per assignment. Therefore, the Flat Charge, No Pilot Boat Used, and the Flat Charge, Pilot Boat Used, will both increase by $100 effective in 2017, and by another $100 effective in 2018.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Confederation Bridge | Revenues | 143,720 | 150,665 | 143,817 | 158,053 |
| Profit (loss) | (9,654) | (8,613) | (10,124) | (7,988) | |
Non-compulsory areas
Users in non-compulsory areas are not required to take a pilot, but the Authority attempts to have pilots licensed and available for when they are requested. Pilots in these areas are compensated at a percentage of the pilotage revenues. The Authority is increasing these tariffs by 5% in 2017 and by an additional 5% in 2018. The increase will be applied to the minimum, unit, and movage Charges. These increases are intended to ensure that there are pilots willing to do the assignments when desired by a customer.
| 2017 | 2018 | ||||
|---|---|---|---|---|---|
| Without Increase | With Increase | Without Increase | With Increase | ||
| Non-compulsory | Revenues | 265,901 | 279,196 | 265,901 | 293,156 |
| Profit (loss) | 5,203 | 6,300 | 5,203 | 6,700 | |
Summary
The following tables indicate the current charges for a one-way trip and the amendments in the compulsory tariffs. The tables do not include the 1.5% surcharge.
| Basic Charge | Unit Charge | Minimum Charge | Cancellation Charge | Estimated Fuel Charge* | Cost for an Average Size Ship** | ||
|---|---|---|---|---|---|---|---|
| Halifax, N.S. | 2016 | $666 | $2.60 | $1,479 | $666 | $91 | $2,036 |
| 2017 | $699 | $2.73 | $1,553 | $699 | $91 | $2,133 | |
| 2018 | $720 | $2.81 | $1,600 | $720 | $91 | $2,195 | |
| * The fuel charge is based on the latest 2016 average fuel price of $0.698 and 130 litres per trip. | |||||||
| ** Based on a ship of 492 units for Halifax. | |||||||
| Strait of Canso, N.S. | 2016 | $1,153 | 4.26 | $1,580 | $900 | $187 | $3,381 |
| 2017 | $1,211 | 4.47 | $1,659 | $900 | $187 | $3,540 | |
| 2018 | $1,271 | 4.70 | $1,742 | $900 | $187 | $3,708 | |
| * The fuel charge is based on the latest 2016 average fuel price of $0.644 and 290 litres per trip. | |||||||
| **Based on a ship of 475 units for the Strait of Canso. | |||||||
| Placentia Bay, N.L. | 2016 | $2,315 | $5.41 | $3,068 | $900 | $414 | $6,294 |
| 2017 | $2,408 | $5.63 | $3,191 | $900 | $414 | $6,529 | |
| 2018 | $2,480 | $5.80 | $3,286 | $900 | $414 | $6,713 | |
| * The fuel charge is based on the latest 2016 average fuel price of $0.690 and 600 litres per trip. | |||||||
| ** Based on a ship of 659 units for Placentia Bay. | |||||||
| Saint John, N.B. | 2016 | $858 | $3.98 | $1,533 | $858 | $90 | $2,500 |
| 2017 | $ 927 | $4.30 | $1,656 | $927 | $90 | $2,693 | |
| 2018 | $964 | $4.47 | $1,722 | $964 | $90 | $2,797 | |
| * The fuel charge is based on the 2016 latest average fuel price of $0.901 and 100 litres per trip. | |||||||
| ** Based on a ship of 390 units for Saint John. | |||||||
| Basic Charge | Unit Charge | Minimum Charge | Cancellation Charge | Estimated Fuel Charge* | Cost for an Average Size Ship** | ||
|---|---|---|---|---|---|---|---|
| Sydney, N.S. | 2016 | $1,103 | $6.58 | $2,263 | $900 | $ - | $3,149 |
| 2017 | $1,136 | $6.78 | $2,331 | $900 | $70 | $3,314 | |
| 2018 | $1,170 | $6.98 | $2,401 | $900 | $70 | $3,411 | |
| * The fuel charge is based on the latest 2016 average fuel price of $0.644 and 108 litres per trip. | |||||||
| ** Based on a ship of 311 units for Sydney. | |||||||
| Bras D'Or, N.S. | 2016 | $1,882 | $11.69 | $2,641 | $900 | $ - | $4,606 |
| 2017 | $1,976 | $12.27 | $2,773 | $900 | $70 | $4,906 | |
| 2018 | $ 2,075 | $12.89 | $2,912 | $900 | $70 | $5,148 | |
| * The fuel charge is based on the latest 2016 average fuel price of $0.644 and 108 litres per trip. | |||||||
| ** Based on a ship of 233 units for Bras D'Or. | |||||||
| St. John's, N.L. | 2016 | $671 | $6.59 | $2,081 | $671 | $ - | $2,081 |
| 2017 | $698 | $6.85 | $2,164 | $698 | $ - | $2,164 | |
| 2018 | $719 | $7.06 | $2,229 | $719 | $ - | $2,229 | |
| ** Based on a ship of 108 units for St. John's. | |||||||
| Holyrood, N.L. | 2016 | $671 | $6.59 | $2,081 | $671 | $ - | $2,661 |
| 2017 | $698 | $6.85 | $2,164 | $698 | $ - | $2,768 | |
| 2018 | $719 | $7.06 | $2,229 | $719 | $ - | $2,851 | |
| ** Based on a ship of 302 units for Holyrood. | |||||||
| Bay of Exploits, NL | 2016 | $1,011 | $10.64 | $2,074 | $900 | $ - | $2,384 |
| 2017 | $1,072 | $11.28 | $2,198 | $900 | $ - | $2,527 | |
| 2018 | $1,136 | $11.96 | $2,330 | $900 | $ - | $2,678 | |
| ** Based on a ship of 129 units for the Bay of Exploits. | |||||||
| Humber Arm, N.L. | 2016 | $757 | $10.26 | $1,960 | $757 | $ - | $2,491 |
| 2017 | $1,000 | $10.26 | $2,200 | $900 | $ - | $2,734 | |
| 2018 | $1,200 | $10.26 | $2,400 | $900 | $ - | $2,934 | |
| ** Based on a ship of 169 units for Humber Arm. | |||||||
| Stephenville, N.L. | 2016 | $925 | $9.74 | $1,898 | $900 | $ - | $1,889 |
| 2017 | $981 | $10.32 | $2,012 | $900 | $ - | $2,003 | |
| 2018 | $1,039 | $10.94 | $2,133 | $900 | $ - | $2,123 | |
| ** Based on a ship of 99 units for Stephenville. | |||||||
| Miramichi, N.B. | 2016 | $543 | $6.06 | $ - | $543 | $ - | $1,040 |
| 2017 | $543 | $6.06 | $2,000 | $543 | $ - | $2,000 | |
| ** Based on a ship of 82 units for Miramichi. | |||||||
| Other non-compulsory areas | 2016 | $ - | $4.02 | $469 | $469 | $ - | $1,146 |
| 2017 | $ - | $4.22 | $492 | $492 | $ - | $1,203 | |
| 2018 | $ - | $4.43 | $517 | $517 | $ - | $1,263 | |
| ** Based on a ship of 285 units for the non-compulsory areas. | |||||||
| Flat Charge No Boat | Flat Charge With Boat | Cancellation Charge | estimated fuel charge | Cost for an Average Size Ship** | ||
|---|---|---|---|---|---|---|
| Confederation Bridge, P.E.I. | 2016 | $ 500 | $ 1,300 | $ 500 | $ - | $ 1,300 |
| 2017 | $ 600 | $ 1,400 | $ 600 | $ - | $ 1,400 | |
| 2018 | $ 700 | $ 1,500 | $ 700 | $ - | $ 1,500 | |
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 $5,000.
Contact
Captain Sean Griffiths
Chief Executive Officer
Atlantic Pilotage Authority
Cogswell Tower, Suite 910
2000 Barrington Street
Halifax, Nova Scotia
B3J 3K1
Telephone: 902-426-2550
Fax: 902-426-4004
PROPOSED REGULATORY TEXT
Notice is given, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act (see footnote b), that the Atlantic Pilotage Authority, pursuant to subsection 33(1) of that Act, proposes to make the annexed Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996.
Interested persons who have reason to believe that any charge in the proposed Regulations is prejudicial to the public interest, including the public interest that is consistent with the national transportation policy set out in section 5 (see footnote c) of the Canada Transportation Act (see footnote d) may file a notice of objection setting out the grounds for the objection with the Canadian Transportation Agency within 30 days after the date of publication of this notice. The notice of objection must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Canadian Transportation Agency, Ottawa, Ontario K1A 0N9. The notice of objection must also be filed with the Minister of Transport and the Atlantic Pilotage Authority in accordance with subsection 34(3) (see footnote e) of the Pilotage Act (see footnote f).
Halifax, November 18, 2016
Captain Sean Griffiths
Chief Executive Officer, Atlantic Pilotage Authority
Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996
Amendments
| Item | Column 2 Minimum Charge ($) |
|---|---|
| 1 | 2,000.00 |
| Item | Column 2 Minimum Charge ($) |
Column 3 Unit Charge ($/pilotage unit) |
Column 4 Basic Charge ($) |
Column 5 Pilot Boat Replacement Surcharge ($) |
Column 6 Budgeted Fuel Consumption (litres) |
|---|---|---|---|---|---|
| 3 | 2,198.00 | 11.28 | 1,072.00 | n/a | n/a |
| 4 | 2,164.00 | 6.85 | 698.00 | n/a | n/a |
| 5 | 2,200.00 | 10.26 | 1,000.00 | n/a | n/a |
| 6 | 3,191.00 | 5.63 | 2,408.00 | n/a | 600 |
| 7 | 2,164.00 | 6.85 | 698.00 | n/a | n/a |
| 8 | 2,012.00 | 10.32 | 981.00 | n/a | n/a |
| 9 | 2,331.00 | 6.78 | 1,136.00 | n/a | 108 |
| 10 | 2,773.00 | 12.27 | 1,976.00 | n/a | 108 |
| 11 | 1,659.00 | 4.47 | 1,211.00 | n/a | 290 |
| 12 | 1,553.00 | 2.73 | 699.00 | n/a | 130 |
| Item | Column 2 Minimum Charge ($) |
Column 3 Unit Charge |
Column 4 Basic Charge ($) |
|---|---|---|---|
| 3 | 2,330.00 | 11.96 | 1,136.00 |
| 4 | 2,229.00 | 7.06 | 719.00 |
| 5 | 2,400.00 | 10.26 | 1,200.00 |
| 6 | 3,286.00 | 5.80 | 2,480.00 |
| 7 | 2,229.00 | 7.06 | 719.00 |
| 8 | 2,133.00 | 10,94 | 1,039.00 |
| 9 | 2,401.00 | 6.98 | 1,170.00 |
| 10 | 2,912.00 | 12.89 | 2,075.00 |
| 11 | 1,742.00 | 4.70 | 1,271.00 |
| 12 | 1,600.00 | 2.81 | 720.00 |
| Item | Column 2 Flat Charge, No Pilot Boat Used ($) |
Column 3 Flat Charge, Pilot Boat Used ($) |
Column 4 Unit Charge ($/pilotage unit) |
Column 5 Basic Charge ($) |
Column 6 Budgeted Fuel Consumption (litres) |
|---|---|---|---|---|---|
| 1 | n/a | n/a | 10.12 | 1,629.00 | 108 |
| 2 | n/a | 1,927.00 | n/a | n/a | 290 |
| 3 | 600.00 | 1,400.00 | n/a | n/a | n/a |
| Item | Column 2 Flat Charge, No Pilot Boat Used ($) |
Column 3 Flat Charge, Pilot Boat Used ($) |
Column 4 Unit Charge ($/pilotage unit) |
Column 5 Basic Charge ($) |
|---|---|---|---|---|
| 1 | n/a | n/a | 10.63 | 1,710.00 |
| 2 | n/a | 2,023.00 | n/a | n/a |
| 3 | 700.00 | 1,500.00 | n/a | n/a |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, No Pilot Boat Used ($/pilotage unit) |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, Pilot Boat Used ($/pilotage unit) |
Column 7 Basic Charge, Pilot Boat Used ($) |
Column 8 Pilot Boat Replacement Surcharge ($) |
Column 9 Budgeted Fuel Consumption (litres) |
|---|---|---|---|---|---|---|---|
| 3 | 1,978.00 | 9.02 | 858.00 | 10.15 | 965.00 | n/a | n/a |
| 4 | 1,948.00 | 5.48 | 558.00 | 6.17 | 628.00 | n/a | n/a |
| 5 | 1,980.00 | 8.21 | 800.00 | 9.24 | 900.00 | n/a | n/a |
| 6 | 1,596.00 | 2.82 | 1,204.00 | n/a | n/a | n/a | n/a |
| 2,872.00 | 4.50 | 1,926.00 | 5.07 | 2,167.00 | n/a | 600 | |
| 7 | 1,948.00 | 5.48 | 558.00 | 6.17 | 628.00 | n/a | n/a |
| 8 | 1,811.00 | 8.26 | 785.00 | 9.29 | 883.00 | n/a | n/a |
| 9 | 2,098.00 | 5.42 | 909.00 | 6.10 | 1,022.00 | n/a | 108 |
| 10 | 2,496.00 | 9.82 | 1,581.00 | 11.04 | 1,778.00 | n/a | 108 |
| 11 | 1,493.00 | 3.58 | 969.00 | 4.02 | 1,090.00 | n/a | 290 |
| 12 | 1,398.00 | 2.18 | 559.00 | 2.46 | 629.00 | n/a | 130 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, No Pilot Boat Used ($/pilotage unit) |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, Pilot Boat Used ($/pilotage unit) |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 3 | 2,097.00 | 9.57 | 909.00 | 10.76 | 1,022.00 |
| 4 | 2,006.00 | 5.65 | 575.00 | 6.35 | 647.00 |
| 5 | 2,160.00 | 8.21 | 960.00 | 9.24 | 1,080.00 |
| 6 | 1,643.00 | 2.90 | 1,240.00 | n/a | n/a |
| 2,957.00 | 4.64 | 1,984.00 | 5.22 | 2,232.00 | |
| 7 | 2,006.00 | 5.65 | 575.00 | 6.35 | 647.00 |
| 8 | 1,920.00 | 8.75 | 831.00 | 9.85 | 935.00 |
| 9 | 2,161.00 | 5.58 | 936.00 | 6.28 | 1,053.00 |
| 10 | 2,621.00 | 10.31 | 1,660.00 | 11.60 | 1,868.00 |
| 11 | 1,568.00 | 3.76 | 1,017.00 | 4.23 | 1,144.00 |
| 12 | 1,440.00 | 2.25 | 576.00 | 2.53 | 648.00 |
| Item | Column 2 Flat Charge ($) |
Column 3 Minimum Charge ($) |
Column 4 Unit Charge ($/pilotage unit) |
Column 5 Basic Charge ($) |
|---|---|---|---|---|
| 1 | n/a | 1,656.00 | 4.30 | 927.00 |
| 2 | n/a | 1,490.00 | 3.87 | 834.00 |
| 3 | n/a | 1,490.00 | 3.44 | 742.00 |
| 4 | 1,248.00 | n/a | n/a | n/a |
| Item | Column 2 Flat Charge ($) |
Column 3 Minimum Charge ($) |
Column 4 Unit Charge ($/pilotage unit) |
Column 5 Basic Charge ($) |
|---|---|---|---|---|
| 1 | n/a | 1,722.00 | 4.47 | 964.00 |
| 2 | n/a | 1,550.00 | 4.02 | 868.00 |
| 3 | n/a | 1,550.00 | 3.58 | 771.00 |
| 4 | 1,298.00 | n/a | n/a | n/a |
| Item | Column 2 Minimum Charge, One-way Trip ($) |
Column 3 Unit Charge, One-way Trip ($/pilotage unit) |
Column 4 Movage Charge ($) |
|---|---|---|---|
| 1 | 492.00 | 4.22 | 306.00 |
| Item | Column 2 Minimum Charge, One-way Trip ($) |
Column 3 Unit Charge, One-way Trip ($/pilotage unit) |
Column 4 Movage |
|---|---|---|---|
| 1 | 517.00 | 4.43 | 321.00 |
Coming into Force
12 (1) Subject to subsection (2), these Regulations come into force on January 1, 2017, but if they are registered after that day, they come into force on the day on which they are registered.
(2) Sections 3, 5, 7, 9 and 11 come into force on January 1, 2018.
[49-1-o]