Canada Gazette, Part I, Volume 152, Number 45: Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996
November 10, 2018
Statutory authority
Pilotage Act
Sponsoring agency
Atlantic Pilotage Authority
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The Atlantic Pilotage Authority (the Authority) is expected to ensure each of its 17 ports is financially self-sufficient. Given current and projected traffic volumes and vessel configurations, previously approved tariff rate increases for 4 ports in 2019 are expected to be unreasonably high. Alternatively, current tariff rates for 10 additional ports are expected to be too low by 2020. In addition, tariff adjustments are required to address other capital or operational needs and improve efficiency.
Background
The Atlantic Pilotage Authority is responsible for administering a safe and efficient pilotage service within the Canadian waters in and around the Atlantic Provinces. The Authority prescribes tariffs for pilotage services that are fair and reasonable and consistent with generating revenues sufficient to permit the Authority to operate on a self-sustaining financial basis. The Authority is responsible for 17 compulsory pilotage areas, and the tariff revisions contained herein are intended to maintain port-by-port self-sufficiency (i.e. no cross-subsidization) as per a 1995 decision by the Canadian Transportation Agency.
Objectives
The objective of the proposed amendments is to enable the Authority to meet its mandate to operate a safe and efficient pilotage service within the Atlantic region, while achieving financial self-sufficiency of individual ports (i.e. avoiding cross-subsidization).
Description
The proposed changes are as follows:
- Reductions to approved tariff increases in four ports coming into force on February 1, 2019: Strait of Canso, Pugwash, Placentia Bay, and Miramichi.
- Introduction of additional charges in two ports coming into force on February 1, 2019: pilot boat charge for Miramichi, and fuel charge for St. John's.
- Establishment of a "thru trip" rate in 2019 for the compulsory areas of Bay of Exploits, Holyrood, Humber Arm, Placentia Bay, St. John's, Stephenville, Sydney, Halifax, Pugwash, and Charlottetown that will come into force on February 1, 2019.
- Increase of port-by-port tariffs for one-way trips, thru trips, and moveages in 10 ports, effective January 1, 2020.
| Port | Tariff Increase | Port | Tariff Increase |
|---|---|---|---|
| (i) Bay of Exploits, N.L. | 3.00% | (vi) Halifax, N.S. | 2.50% |
| (ii) Humber Arm, N.L. | 3.00% | (vii) Sydney, N.S. | 2.50% |
| (iii) Pugwash, N.S. | 3.00% | (viii) Saint John, N.B. | 2.50% |
| (iv) St. John's, N.L. | 2.50% | (ix) Confederation Bridge, P.E.I. | 2.00% |
| (v) Holyrood, N.L. | 2.50% | (x) Placentia Bay, N.L. | 2.00% |
"One-for-One" Rule
The "One-for-One" Rule does not apply to these proposed amendments, as there is no change in administrative costs or burden to business.
Small business lens
The small business lens would not apply to the proposed amendments given that the annual cost impact is expected to be well under $1 million. Regardless, the costs to small businesses are not disproportionately high, as the vast majority of the Authority's users are not classified as small businesses.
Consultation
Consultations in various forms took place with the affected parties throughout 2018. Formal consultation sessions were held in Halifax, N.S. (May 7 and August 16, 2018), Port Hawkesbury, N.S. (May 16 and August 20, 2018), Saint John, N.B. (May 8 and August 17, 2018), and St. John's, N.L. (May 15 and August 22, 2018). Participation varied in each port depending upon the makeup of local industry, but generally included shipowners and operators, agents, facility management, port authorities, and other stakeholders. Separate consultation sessions with the Shipping Federation of Canada, which represents foreign vessels and accounts for 77–79% of the Authority's activity and revenue, were held in Halifax, N.S. (May 29, 2018) and Montréal, Que. (August 27, 2018). In addition to these formal consultation sessions, the Authority engaged stakeholders through other formats, including written, in-person, and telephone communications with individuals and groups.
Alternatives to tariff increases were presented, where applicable, and feedback from participants was encouraged. For various ports and districts, the alternative to increased tariff rates would be a reduction in pilot numbers or availability. Stakeholders have consistently indicated that their primary concerns are about service levels, and have requested that the number of pilots be increased in some areas, and maintained in others, so that pilot availability is not compromised. The proposed amendments would address these concerns. Stakeholders have expressed their support for the proposed amendments.
Rationale
1. Reductions to approved tariff increases in four ports in 2019
The approved rate increases were originally forecasted using 2016 data and 2017 forecasts. Given actual levels of traffic in 2017 and so far in 2018, the Authority believes that the approved increases can be lowered to provide industry with tariffs that are fair and reasonable, while still maintaining port-by-port financial self-sustainability.
- Strait of Canso. Due to an increase in larger vessels calling in the Strait of Canso, the Authority is proposing to reduce the tariffs in Canso. The additional revenues gained by the arrival of these larger vessels will provide sufficient revenues for Canso without the higher tariffs. This proposed change would save users $70,000 in 2019.
- Pugwash. The projected activity in the area allows the port to be financially self-sufficient without the approved 2019 increase. This proposed change would save the users in the area $3,500 in 2019.
- Placentia Bay. Due to an increase in tanker traffic from greater activity at the Come-by-Chance oil refinery, and the Whiffen Head transshipment terminal receiving oil from the Hebron field, the Authority is proposing to reduce the tariffs in Placentia Bay. The additional revenues gained by the increased activity will provide sufficient revenues for Placentia Bay at a lower tariff rate. This proposed change would save users $330,000 in 2019.
- Miramichi. With the additional pilot boat charge (described in item 2 below), the minimum charge in the area can be lowered to offset much of this new charge. The minimum charge would be reduced by $200 and will save the users an estimated $4,000 in 2019.
2. Additional charges in two ports in 2019
- Pilot boat charge for Miramichi. This proposed charge is meant to make it more appealing for licensed pilots and pilot boat contractors to operate in this area. It also makes the tariff calculation consistent with other smaller ports that use entrepreneurial pilots. Currently, pilots in this area have been absorbing the cost of hiring a pilot boat and operator. Moving forward, however, this practice is not considered sustainable when trying to attract new pilots to operate in this area. The cost to industry from the introduction of a pilot boat charge is estimated to be $5,500 annually, but would be mostly offset by the proposed tariff reduction in the area.
- Fuel charge for St. John's. The Authority has entered into a new pilot boat service contract for the port, but fuel costs are now being absorbed by the Authority. This proposed charge would allow for a direct recovery of these costs and would be based on the prices actually paid. The cost to industry from the introduction of a fuel charge is estimated to be $30,000 annually.
3. "Thru trip" rate across several ports in 2019
- Establish a "thru trip" rate for the Bay of Exploits, Holyrood, Humber Arm, Placentia Bay, St. John's, Stephenville, Sydney, Halifax, Pugwash, and Charlottetown. On occasion, a vessel will enter a compulsory pilotage area without being able to dock or anchor and must then leave the area. Currently, in most cases, these customers are charged for two trips, an arrival and a departure. This does not accurately reflect the costs to provide this transit. Establishing a "thru trip" charge for these areas would lower the cost to users when these rare occurrences take place. The amount saved would be area-dependent, but the user would save the approximate cost of a one-way trip for each of these continuous movements though a pilotage area.
4. Tariff increases in 10 ports, effective January 1, 2020
Some of the same ports that are receiving a tariff decrease in 2019 are scheduled to receive a tariff increase in 2020. This is because without the decrease in 2019, the tariffs in these ports would be considered unreasonably high in comparison to recent increases in traffic. While the tariff decreases adjust for this additional traffic, future years (2020 onward) still require tariff increases to capture inflation and other strategic investments.
- Bay of Exploits, N.L. Activity in the Bay of Exploits has fallen by over 40% since 2014. The area had under 100 assignments per year, and in 2017, generated $238,000 in revenue. The proposed amendments would increase the tariff by 3% in 2020 and deliver a break-even result by the end of 2020. This would result in costs to industry of $8,000 beginning in 2020, and a corresponding increase in Authority revenue.
- Humber Arm, N.L. Humber Arm has between 180 and 200 assignments per year and generated $588,000 in revenues in 2017. The area has been impacted by an increase in pilot boat costs as the regular vessel that served the port for many years had to be replaced with a newer vessel in 2017. For 2020, the tariff would be increased by 3% to achieve a break-even result. This would result in costs to industry of $10,000 beginning in 2020, and a corresponding increase in Authority revenue.
- Pugwash, N.S. The Port of Pugwash has 80 to 100 assignments per year, and in 2017, generated revenues of $71,000. As previously noted, there would be a reduction in the approved tariff increase for 2019 based on recent increases in traffic. In 2020, the regular tariff would be increased by 3% to support entrepreneurial pilots by increasing their remuneration. This would result in costs to industry of $2,000 beginning in 2020, and a corresponding increase in Authority revenue.
- St. John's, N.L. Activity in the port has been between 550 and 700 assignments per year, and in 2017, generated revenues of $1,582,000. The traffic levels 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. Due to the increase in certificated masters, pilotage assignments have declined in 2018 and are expected to remain low for the area for the foreseeable future. A new pilot boat contract is expected to be in place for 2019, which would include the provision of a new pilot boat for the port. Accordingly, the Authority is proposing a tariff that would increase pilotage revenue in the port by 2.5% in 2020. This increase would result in costs to industry of $35,000 beginning in 2020, and a corresponding increase in Authority revenue.
- Holyrood, N.L. The port in the Eastern Newfoundland 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 and produced $104,000 in revenue in 2017. The port has the same tariff rates as St. John's as they closely share the same resources. As for St. John's, the Authority is proposing a tariff that would increase pilotage revenue in the port by 2.5% in 2020. This increase would result in costs to industry of $2,300 beginning in 2020, and a corresponding increase in Authority revenue.
- Halifax, N.S. This major port has had an increase in container vessels, vehicle carriers, and cruise traffic in recent years. Assignments in the area have been between 2 600 and 3 000 annually and generated $6,905,000 in revenue in 2017. The Authority added two additional pilot boats to its company-wide fleet in 2017, with these latest acquisitions stationed in Halifax. These vessels are six to seven years old and will be able to service the port for years to come. The Authority has invested significantly in these newer vessels and carries debt for their acquisition. The Authority is also adding pilots to the port in anticipation for planned retirements and increased shipping activity. Due to the increase in costs associated with the additional pilot recruitment, the Authority is proposing a 2.5% increase in 2020. This increase would result in costs to industry of $170,000 beginning in 2020, and a corresponding increase in Authority revenue.
- Sydney, N.S. For Sydney, the area has had between 314 and 434 annual assignments, with the fluctuation due primarily to cruise traffic. In 2017, the port generated $1,470,000 in revenues for the Authority. As with other ports on the east coast, Sydney has had a large increase in cruise activity, with the expectation of continued growth. Two identical Breau boats have been deployed to the area to provide better service, redundancy, and reliability. However, stationing multiple vessels in the area is costlier to operate. The Authority is proposing a tariff that would increase pilotage revenue in the port by 2.5% in 2020. This increase would result in costs to industry of $36,000 beginning in 2020, and a corresponding increase in Authority revenue.
- Saint John, N.B. The port of Saint John is considered one of four major ports for the Authority. The area has between 1 600 and 1 800 pilotage assignments annually and generated $5,051,000 in revenue in 2017. The Authority has deployed two newer vessels in the port, five and six years of age. The Authority is also preparing for pilot retirements by continuing to add to its pilot workforce. The Authority is proposing a tariff that would increase pilotage revenue in the port by 2.5% in 2020. The proposed tariff increase would support the costs associated with the newer pilot boats and additional pilots, and would represent a cost to industry of $130,000 beginning in 2020 and a corresponding increase in Authority revenue.
- Confederation Bridge, P.E.I. Confederation Bridge is an area that is serviced by entrepreneurial pilots and a pilot boat operator. There are approximately 120 assignments annually in the area, and in 2017, it produced $172,000 in revenue. The Authority has had difficulty recruiting pilots to the area due to the lower level of activity and the relatively low tariff. To help attract and retain service providers, the Authority is implementing a tariff increase of 2% in 2020. This area has a flat charge for pilot services when a pilot boat is not used, and a higher charge for the services of the pilot and pilot boat. This increase would result in costs to industry of $3,500 beginning in 2020, and a corresponding increase in Authority revenue.
- Placentia Bay, N.L. Activity in this major port is between 900 and 1 110 assignments annually and produced $6,770,000 in revenues in 2017. The Authority has invested significantly in pilot boats for the area and carries debt for their acquisition. The Authority is planning for capital asset replacement in the area and must accumulate funds for this purpose. After reducing the tariff in 2019 to reset revenue levels based on the new traffic mix in the area, the Authority is proposing an inflationary tariff that would increase pilotage revenue in the port by 2.0% in 2020. This increase would result in costs to industry of $135,000 beginning in 2020, and a corresponding increase in Authority revenue.
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. This proposal is expected to produce no change to these compliance and enforcement mechanisms.
Contact
Captain Sean Griffiths
Chief Executive Officer
Atlantic Pilotage Authority
TD Tower, Suite 1801
1791 Barrington Street
Halifax, Nova Scotia
B3J 3K9
Telephone: 902-426-2550
Fax: 902-426-4004
PROPOSED REGULATORY TEXT
Notice is given, pursuant to subsection 34(1) footnote a of the Pilotage Act 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 footnote c of the Canada Transportation Act 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) footnote e of the Pilotage Act footnote f.
Halifax, October 30, 2018
Captain Sean Griffiths
Chief Executive Officer
Atlantic Pilotage Authority
Regulations Amending the Atlantic Pilotage Tariff Regulations, 1996
Amendments
1 (1) Subsection 14(5) of the Atlantic Pilotage Tariff Regulations, 1996 footnote 1 is amended by striking out "and" at the end of paragraph (b), by adding "and" at the end of paragraph (c) and by adding the following after paragraph (c):
- (d) Miramichi, New Brunswick, at any time during the year.
(2) Subsection 14(6) of the Regulations is amended by striking out "and" at the end of paragraph (b), by adding "and" at the end of paragraph (c) and by adding the following after paragraph (c):
- (d) Miramichi, New Brunswick, at any time during the year.
| Item | Column 2 Minimum Charge ($) |
|---|---|
| 1 | 1,800.00 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 3 | 2,568.00 | 13.17 | 1,251.00 |
| 4 | 2,353.00 | 7.45 | 759.00 |
| 5 | 2,596.00 | 11.09 | 1,298.00 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 6 | 3,201.00 | 5.64 | 2,415.00 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 6 | 3,265.00 | 5.75 | 2,463.00 |
| Item | Column 6 Budgeted Fuel Consumption (litres) |
|---|---|
| 7 | 80 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 7 | 2,353.00 | 7.45 | 759.00 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 9 | 2,535.00 | 7.37 | 1,235.00 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 11 | 1,709.00 | 4.60 | 1,247.00 |
| Item | Column 2 Minimum |
Column 3 Unit Charge |
Column 4 Basic |
|---|---|---|---|
| 12 | 1,665.00 | 2.92 | 749.00 |
| Item | Column 3 Unit Charge |
Column 4 Basic Charge ($) |
|---|---|---|
| 13 | 5.43 | 460.00 |
| Item | Column 3 Unit Charge |
Column 4 Basic Charge ($) |
|---|---|---|
| 13 | 5.59 | 474.00 |
| Item | Column 1 Compulsory Pilotage Area |
Column 2 Flat Charge, No Pilot Boat Used ($) |
Column 3 Flat Charge, Pilot Boat Used ($) |
Column 4 Unit Charge |
Column 5 Basic Charge ($) |
Column 6 Budgeted Fuel Consumption (litres) |
|---|---|---|---|---|---|---|
| 1 | Miramichi, N.B. | n/a | n/a | 6.06 | 543.00 | n/a |
| 2 | Restigouche (Zone A, Dalhousie and Zone B, Campbellton), N.B. | n/a | n/a | 8.98 | 2,100.00 | n/a |
| 3 | Bay of Exploits (Botwood and Lewisporte), N.L. | n/a | n/a | 12.79 | 1,215.00 | n/a |
| 4 | Holyrood, N.L. | n/a | n/a | 7.27 | 740.00 | n/a |
| 5 | Humber Arm, N.L. | n/a | n/a | 10.77 | 1,260.00 | n/a |
| 6 | Placentia Bay, N.L. | n/a | n/a | 5.64 | 2,415.00 | 600 |
| 7 | St. John's, N.L. | n/a | n/a | 7.27 | 740.00 | 80 |
| 8 | Stephenville, N.L. | n/a | n/a | 11.71 | 1,112.00 | n/a |
| 9 | Cape Breton (Zone A, Sydney), N.S. | n/a | n/a | 7.19 | 1,205.00 | 108 |
| 10 | Cape Breton (Zone B, Bras d'Or Lake), N.S. |
n/a | n/a | 10.95 | 1,761.00 | 108 |
| 11 | Cape Breton (Zone C, Strait of Canso), N.S. |
n/a | 1,985.00 | n/a | n/a | 290 |
| 12 | Halifax, N.S. | n/a | n/a | 2.85 | 731.00 | 130 |
| 13 | Pugwash, N.S. | n/a | n/a | 5.43 | 460.00 | n/a |
| 14 | Charlottetown, P.E.I. | n/a | n/a | 3.56 | 362.00 | n/a |
| 15 | Confederation Bridge, P.E.I. | 735.00 | 1,575.00 | n/a | n/a | n/a |
| Item | Column 4 Unit Charge |
Column 5 Basic Charge ($) |
|---|---|---|
| 3 | 13.17 | 1,251.00 |
| 4 | 7.45 | 759.00 |
| 5 | 11.09 | 1,298.00 |
| 6 | 5.75 | 2,463.00 |
| 7 | 7.45 | 759.00 |
| Item | Column 4 Unit Charge |
Column 5 Basic Charge ($) |
|---|---|---|
| 9 | 7.37 | 1,235.00 |
| Item | Column 4 Unit Charge |
Column 5 Basic Charge ($) |
|---|---|---|
| 12 | 2.92 | 749.00 |
| 13 | 5.59 | 474.00 |
| Item | Column 2 Flat Charge, |
Column 3 Flat Charge, |
|---|---|---|
| 15 | 750.00 | 1,607.00 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, |
Column 7 Basic Charge, |
|---|---|---|---|---|---|
| 3 | 2,311.00 | 10.54 | 1,004.00 | 11.86 | 1,129.00 |
| 4 | 2,118.00 | 5.96 | 607.00 | 6.71 | 683.00 |
| 5 | 2,336.00 | 8.88 | 1,037.00 | 9.99 | 1,168.00 |
| Item | Column 3 Minimum |
Column 4 Unit Charge, No Pilot Boat Used |
Column 5 Basic Charge, |
|---|---|---|---|
| 6(a) | 1,600.00 | 2.82 | 1,208.00 |
| Item | Column 3 Minimum |
Column 4 Unit Charge, |
Column 5 Basic Charge, |
|---|---|---|---|
| 6(a) | 1,632.00 | 2.88 | 1,232.00 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 6(b) | 2,880.00 | 4.51 | 1,932.00 | 5.07 | 2,174.00 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 6(b) | 2,938.00 | 4.60 | 1,971.00 | 5.17 | 2,217.00 |
| Item | Column 9 Budgeted Fuel Consumption (litres) |
|---|---|
| 7 | 80 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 7 | 2,118.00 | 5.96 | 607.00 | 6.71 | 683.00 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 9 | 2,281.00 | 5.87 | 988.00 | 6.62 | 1,113.00 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, No Pilot Boat Used ($) |
Column 6 Unit Charge, |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 11 | 1,538.00 | 3.69 | 998.00 | 4.14 | 1,123.00 |
| Item | Column 3 Minimum Charge ($) |
Column 4 Unit Charge, |
Column 5 Basic Charge, |
Column 6 Unit Charge, |
Column 7 Basic Charge, Pilot Boat Used ($) |
|---|---|---|---|---|---|
| 12 | 1,499.00 | 2.34 | 599.00 | 2.63 | 674.00 |
| Item | Column 2 Flat Charge ($) |
|---|---|
| 13 | 496.00 |
| Item | Column 2 Flat Charge ($) |
|---|---|
| 13 | 511.00 |
| Item | Column 3 Minimum |
Column 4 Unit Charge |
Column 5 Basic Charge ($) |
|---|---|---|---|
| 1 | 1,818.00 | 4.72 | 1,018.00 |
| 2 | 1,635.00 | 4.26 | 916.00 |
| 3 | 1,635.00 | 3.77 | 814.00 |
| Item | Column 2 Flat Charge ($) |
|---|---|
| 4 | 1,370.00 |
Coming into Force
24 (1) Subject to subsection (2), these Regulations come into force on February 1, 2019, but if they are registered after that day, they come into force on the day on which they are registered.
(2) Section 3, subsections 4(2) and 5(2), sections 6 and 8, subsection 9(2), sections 11 to 15, subsections 16(2), 16(4) and 17(2), sections 18 and 20, subsection 21(2), and sections 22 and 23 come into force on January 1, 2020.