ARCHIVED — Vol. 146, No. 25 — June 23, 2012

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Regulations Amending the Pacific Pilotage Tariff Regulations

Statutory authority

Pilotage Act

Sponsoring agency

Pacific Pilotage Authority

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issue: The proposed regulatory amendments are intended to allow the Pacific Pilotage Authority (the Authority), a Crown corporation listed in Schedule III to the Financial Administration Act, to operate on a self-sustaining financial basis. Due to increased costs in 2012 and 2013 resulting from long-term contracts and collective agreements and general inflationary pressures, the Authority needs to amend the Pacific Pilotage Tariff Regulations (the Regulations) to ensure the revenue it receives from pilotage tariffs is sufficient to cover its costs of providing the pilotage services for its clients.

Description: The following amendments to the Regulations are proposed:

  • increase by 2.9% its general tariff for pilotage units and hours on October 1, 2012, and April 1, 2013;
  • increase by 2.5% its general tariff for transportation charges on October 1, 2012, and April 1, 2013;
  • increase by 1.5% its general tariff for pilot boat and helicopter charges on October 1, 2012, and 2.5% at April 1, 2013;
  • cancel the $180 charge per assignment covering Launch Replacement Fees on October 1, 2012;
  • cancel the $20 charge per assignment covering Portable Pilotage Units on October 1, 2012; and
  • initiate a fuel charge per assignment for the Pine Island launch station on October 1, 2012.

Cost-benefit statement: The cost-benefit analysis conducted for these proposed amendments indicates that the quantified increase in cost for the marine industry would be $21,000 in 2012 and $1,399,000 in 2013.

The main benefit of the proposed amendments is that the Authority would be enabled to continue to provide sustainable service to port users as a result of the increased revenues these fees will bring. Without the fee increases, the Authority would begin to operate in deficit and thus would need to reduce service levels in response. These services are beneficial in that they provide stakeholders with a safe, efficient and timely pilotage service that ensures protection of the public and its health, environmental and social concerns while taking into account weather conditions, currents, traffic conditions, protection of recreational boating and fishing, and tourism interests. As it is assumed that the tariff increases would not cause traffic to divert to other ports, the value of pilotage services is worth, at a minimum, the increased rates.

Business and consumer impacts: The proposed amendments would have a small impact on the costs to the shipping industry. It is assumed that the tariff increases would not likely cause traffic to divert to competitive ports, and that there is a possibility that minor cost increases could be passed on to Canadian importers, and then to consumers. It is expected that there would be no incremental impact on the administrative burden of stakeholders.

Domestic and international coordination and cooperation: These proposed amendments are not inconsistent, nor do they interfere with the action(s) planned by other government departments/agencies or another level of government.

Issue

The Authority is responsible for maintaining and administering, in the interests of safety, an efficient pilotage service within all Canadian waters in and around the province of British Columbia. This area covers all waters between Washington State in the south to Alaska in the north, including Vancouver Island and the Fraser River.

The proposed adjustments in the pilotage charges, which are consistent with the costs of providing the services, result from annual service and collective agreement contract adjustments for 2012 and 2013. The Authority is seeking to match the anticipated cost pressures and thus prevent bank borrowings to fund these costs, which would further incur interest charges.

Objectives

The objective of the proposed amendments to the Regulations is to allow the Authority, a Crown corporation listed in Schedule III to the Financial Administration Act, to operate on a self-sustaining financial basis as required by section 33 of the Pilotage Act. The proposed amendments are intended to ensure the Authority remains in a positive cash flow basis for the years of 2012 and 2013. The proposed amendments would cover the costs of pilotage services to its clients while the Authority continues to provide a safe and efficient pilotage service in accordance with the Pilotage Act.

Description

The Authority is proposing to increase by 2.9% its general tariff on October 1, 2012, and April 1, 2013, for the following pilotage charges:

  • pilotage assignments;
  • time charges for bridge watches and minimum charges; and
  • cancellation charges, out-of-region charges, delay charges, short order charges, hampered ship and remote port charges to ensure financial self-sufficiency in each individual area.

These proposed increases would match the payment increases that are currently committed to under labour and service agreements for the years 2012 and 2013. These agreements cover contract pilots and employee pilots.

The Authority is proposing to increase by 2.5% its general tariff on October 1, 2012, and April 1, 2013, for the transportation charges.

Transportation charges are forecast to increase for 2012 and 2013 in the annual range of 2.5% which is very close to the current consumer price index.

The Authority is proposing to increase by 1.5% on October 1, 2012, and 2.5% at April 1, 2013, its general tariff for the pilot boat and helicopter operating charges.

These proposed increases would match the labour cost increases negotiated for 2012 and 2013 covering pilot boat, dispatch and billing staff employees.

On October 1, 2012, the Authority is proposing to cancel a charge per assignment of $180 for the Launch Replacement Fee and the charge per assignment of $20 covering Portable Pilotage Units. On an average vessel inbound to Vancouver invoice of $3,700, this equates to a 5% reduction.

The Authority is also proposing to initiate a fuel charge per assignment for the Pine Island launch station. This charge is to be set monthly as it fluctuates with the price of fuel and is currently in the range of $319 per launch trip. The structure of this charge would be identical to the three other launch stations currently being charged.

These proposed adjustments would offset the increased costs in providing pilotage services and launch operations, thereby ensuring that the Authority would continue to operate on a self-sustaining financial basis. Also, a typographical error has been corrected in the French version of subsection 13.2(1) and the unnecessary columns in Schedule 7, along with sections 13 and 13.1, have been deleted.

Regulatory and non-regulatory options considered

The retention of the existing tariff rates was considered as a possible option. However, the Authority rejected this status quo alternative since the increase of tariff rates is necessary to reflect the actual costs for the various pilotage services provided to the industry. These proposed amendments would ensure that the Authority maintains its financial self-sufficiency.

Further reductions in operating costs are not deemed to be an alternative since it could reduce the quality of service provided. Approximately 75% of the Authority’s annual revenues are used to pay for pilot contracts, travel and dispatching expenses. Pilot boat operations, including employee salaries, repairs, fuel and contractor costs represent 12.5%. The remaining margin covers pilot training and administrative overhead expenses. The Authority has maintained its administrative expenses at the lowest possible level, in the range of 9% of annual revenues.

Benefits and costs

The Authority benefited from increased traffic levels in 2011 mainly due to Asian demand for commodities. The number of trips in 2011 exceeded that of 2010 by 7% and resulted in a financial surplus for the year. This has allowed the Authority to delay implementation of a 2012 tariff adjustment to October 1, 2012. This offers nine months of cost relief to customers as the adjustment would only be in effect for three months of the year. Additionally, the 2013 tariff adjustment is delayed to April 1, 2013, offering an additional three months of cost relief to customers. It should be noted that in each of these years — 2012 and 2013 — the Authority still has the cost pressures of a 4% contract increase due to its entrepreneur pilots, which was negotiated with the assistance of an arbitrator.

The cost assumptions shown in the table below are based on the Authority’s corporate plan traffic level projections for the years of 2012 and 2013.

Incremental impact on annual gross revenues

Year

2012

2013

2014

October-December

January-December (initial increase)

April-December (additional increase)

January-December (both increases combined)

Pilotage assignments

2.9% $325,000

2.9% $1,298,000

2.9% $1,002,000

$2,596,000

Time charges for bridge watches and minimum charges

2.9% Included above

2.9% Included above

2.9% Included above

Included above

Cancellation charges, out-of-region charges, delay charges, short order charges, hampered ship and remote port charges to ensure financial self-sufficiency in each individual area

2.9% Included above

2.9% Included above

2.9% Included above

Included above

Transportation charges

2.5% $38,000

2.5% $154,000

2.5% $118,000

$308,000

Pilot launch operating charges

1.5% $24,000

1.5% $98,000

2.5% $124,000

$261,000

Pine Island fuel charge

$10,000

$105,000

$105,000

Cancelling the Launch Replacement Fee

($338,000)

($1,350,000)

($1,350,000)

Cancelling the Portable Pilotage Unit Fee

($38,000)

($150,000)

($150,000)

Total impact on annual gross revenues in the year noted

$21,000

$1,399,000

$1,770,000

Average cost increase per trip based on 2012 corporate plan traffic budget

$2

$122

$154

The Authority proposes to cancel the charge per assignment covering Launch Replacement Fees (LRF) and Portable Pilotage Units (PPU). The LRF is currently charged at $180 per assignment and the PPU fee is charged at $20 per assignment. On an average invoice of $3,700 for a vessel inbound to Vancouver, these fees equate to a 5% reduction. Both of these charges were implemented in previous years with the full support of industry and on the understanding that they would be cancelled once the programs were fully funded.

In an average year, the LRF totals $1,350,000 and the PPU fee totals $150,000. In total, this amounts to a reduction in billings to industry of $1.5 million.

After including the cancelled charges, the Authority is forecasting an increase in revenues of $21,000 for 2012 and of $1,399,000 for 2013.

On an average invoice total of $3,700 per vessel, the 2012 increase will add $2 per trip from October 1, 2012, until December 31, 2012, and an average of $122 per trip for 2013.

Consultation

The Authority has committed to regular consultation with the Chamber of Shipping (CS), which represents the shipping community on the West Coast of British Columbia, along with other shipping community members, including North West and Canada Cruise Association, agents, terminal operators and shipowners. This consultation covers all aspects of the Authority’s operation, including financial, operational and regulatory matters.

The Authority consulted the CS on these proposed tariff increases on April 5, 2012. By way of a letter dated April 18, 2012, the CS indicated its support of this tariff increase.

Implementation, enforcement and service standards

Section 45 of the Act provides an enforcement mechanism for the Pacific Pilotage Tariff 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 Part Ⅰ of the Act (other than section 15.3) and some of its regulations is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. These existing mechanisms are expected to be sufficient for the implementation and enforcement of the amendments.

Contact

Kevin Obermeyer
President and Chief Executive Officer
Pacific Pilotage Authority
1130 West Pender Street, Suite 1000
Vancouver, British Columbia
V6E 4A4
Telephone: 604-666-6771
Fax: 604-666-1647
Email: oberkev@ppa.gc.ca

PROPOSED REGULATORY TEXT

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

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 Pacific Pilotage Authority in accordance with subsection 34(3) (see footnote e) of the Pilotage Act (see footnote f).

Ottawa, June 12, 2012

KEVIN OBERMEYER
President and Chief Executive Officer
Pacific Pilotage Authority

REGULATIONS AMENDING THE PACIFIC PILOTAGE TARIFF REGULATIONS

AMENDMENTS

1. (1) Paragraphs 6(2)(a) and (b) of the Pacific Pilotage Tariff Regulations (see footnote 1) are replaced by the following:

  • (a) $3.2750 multiplied by the pilotage unit, and

  • (b) $0.00957 multiplied by the gross tonnage of the ship.

(2) Paragraphs 6(2)(a) and (b) of the Regulations are replaced by the following:

  • (a) $3.3700 multiplied by the pilotage unit, and

  • (b) $0.00985 multiplied by the gross tonnage of the ship.

(3) Subsection 6(3) of the Regulations is replaced by the following:

(3) Subject to subsection (4), for an assignment to a tethered tanker ship with a deadweight tonnage (summer) that exceeds 39 999 metric tons, in any waters, the pilotage charge payable is $5.6297 multiplied by the pilotage unit.

(4) Subsection 6(3) of the Regulations is replaced by the following:

(3) Subject to subsection (4), for an assignment to a tethered tanker ship with a deadweight tonnage (summer) that exceeds 39 999 metric tons, in any waters, the pilotage charge payable is $5.7930 multiplied by the pilotage unit.

(5) Paragraphs 6(4)(a) and (b) of the Regulations are replaced by the following:

  • (a) $4.9125 multiplied by the pilotage unit, and

  • (b) $0.0144 multiplied by the gross tonnage of the ship.

(6) Paragraphs 6(4)(a) and (b) of the Regulations are replaced by the following:

  • (a) $5.0550 multiplied by the pilotage unit, and

  • (b) $0.0148 multiplied by the gross tonnage of the ship.

2. (1) Section 8 of the Regulations is replaced by the following:

8. Despite sections 6 and 7, the total charges payable under those sections in respect of a ship shall not be less than $872.29.

(2) Section 8 of the Regulations is replaced by the following:

8. Despite sections 6 and 7, the total charges payable under those sections in respect of a ship shall not be less than $897.59.

3. (1) Subsections 10(2) and (3) of the Regulations are replaced by the following:

(2) If a pilot embarks on or disembarks from a ship at Anacortes, Bellingham, Cherry Point or Ferndale, in the State of Washington, a charge of $1,683 per pilot is payable in addition to any other charges.

(3) If a pilot embarks on or disembarks from a ship at an out-of-Region location that is not listed in subsection (2), a charge of $2,244 per pilot is payable in addition to any other charges.

(2) Subsections 10(2) and (3) of the Regulations are replaced by the following:

(2) If a pilot embarks on or disembarks from a ship at Anacortes, Bellingham, Cherry Point or Ferndale, in the State of Washington, a charge of $1,732 per pilot is payable in addition to any other charges.

(3) If a pilot embarks on or disembarks from a ship at an out-of-Region location that is not listed in subsection (2), a charge of $2,309 per pilot is payable in addition to any other charges.

4. Sections 12 to 13.1 of the Regulations are replaced by the following:

12. On each occasion that a pilot boat or helicopter is used to embark or disembark a pilot at a location set out in column 1 of Schedule 7, the charge set out in column 2 is payable.

5. Subsection 13.2(2) of the French version of the Regulations is replaced by the following:

(2) Si la moyenne quotidienne du prix de gros (à la rampe) au litre du diesel à Vancouver (Colombie-Britannique) pour le 25e jour du mois précédent n’est pas affichée sur le site Internet, le prix de référence à utiliser correspond à la moyenne quotidienne du prix de gros (à la rampe) au litre du diesel à Vancouver (Colombie-Britannique), pour le dernier jour précédant le 25e jour du mois précédent, qui est affichée sur ce site Internet.

6. (1) Section 15 of the Regulations is replaced by the following:

15. (1) On each occasion that a pilotage order is initiated during the period that begins at 06:00 and ends at 17:59 with less than 10 hours’ notice for local assignments and less than 12 hours’ notice for all other assignments, a charge of $753.52 is payable in addition to any other charges.

(2) On each occasion that a pilotage order is initiated during the period that begins at 18:00 and ends at 05:59 with less than 10 hours’ notice for local assignments and less than 12 hours’ notice for all other assignments, a charge of $1,507.04 is payable in addition to any other charges.

(2) Section 15 of the Regulations is replaced by the following:

15. (1) On each occasion that a pilotage order is initiated during the period that begins at 06:00 and ends at 17:59 with less than 10 hours’ notice for local assignments and less than 12 hours’ notice for all other assignments, a charge of $775.36 is payable in addition to any other charges.

(2) On each occasion that a pilotage order is initiated during the period that begins at 18:00 and ends at 05:59 with less than 10 hours’ notice for local assignments and less than 12 hours’ notice for all other assignments, a charge of $1,550.72 is payable in addition to any other charges.

7. (1) Section 16 of the Regulations is replaced by the following:

16. On each occasion that the master or agent of a ship who initiates a pilotage order fails to inform the Authority that the ship is a hampered ship that may require a bridge watch exceeding eight consecutive hours, a charge of $1,416.42 is payable in addition to any other charges.

(2) Section 16 of the Regulations is replaced by the following:

16. On each occasion that the master or agent of a ship who initiates a pilotage order fails to inform the Authority that the ship is a hampered ship that may require a bridge watch exceeding eight consecutive hours, a charge of $1,457.50 is payable in addition to any other charges.

8. The Regulations are amended by adding the following after section 16:

REMOTE PORT CHARGES

9. (1) Section 17 of the Regulations is replaced by the following:

17. On each occasion that a pilotage order is initiated for any place other than a pilot boarding station, a charge of $4,892 per pilot is payable in addition to any other charges.

(2) Section 17 of the Regulations is replaced by the following:

17. On each occasion that a pilotage order is initiated for any place other than a pilot boarding station, a charge of $5,034 per pilot is payable in addition to any other charges.

10. (1) The portion of items 1 to 3 of Schedule 2 to the Regulations in column 3 is replaced by the following:

Item

Column 3

Amount ($)

1.

3.7530

2.

7.5060

3.

3.7530

(2) The portion of items 1 to 3 of Schedule 2 to the Regulations in column 3 is replaced by the following:

Item

Column 3

Amount ($)

1.

3.8618

2.

7.7236

3.

3.8618

11. (1) The portion of item 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Time Charge ($)

1.

188.38

(2) The portion of item 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Time Charge ($)

1.

193.84

12. (1) The portion of items 1 and 2 of Schedule 4 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Cancellation Charge ($)

1.

753.52

2.

188.38

(2) The portion of items 1 and 2 of Schedule 4 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Cancellation Charge ($)

1.

775.36

2.

193.84

13. (1) The portion of items 1 to 3 of Schedule 5 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Charge ($) (per hour or part of an hour)

1.

188.38

2.

188.38

3.

188.38

(2) The portion of items 1 to 3 of Schedule 5 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Charge ($) (per hour or part of an hour)

1.

193.84

2.

193.84

3.

193.84

14. (1) The portion of items 1 to 7 of Schedule 6 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Transportation Charges ($)

1.

156

2.

150

3.

1,548

4.

490

5.

490

6.

156

7.

4,895

(2) The portion of items 1 to 7 of Schedule 6 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Transportation Charges ($)

1.

160

2.

154

3.

1,587

4.

502

5.

502

6.

160

7.

5,017

15. Schedule 7 to the Regulations is replaced by the Schedule 7 set out in Schedule 1 to these Regulations.

16. The portion of items 1 and 2 of Schedule 7 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Charge ($)

1.

359

2.

1,436

17. The portion of items 4 to 6 of Schedule 7 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Charge ($)

4.

5,613

5.

3,696

6.

723

18. Schedule 8 to the Regulations is replaced by the Schedule 8 set out in Schedule 2 to these Regulations.

COMING INTO FORCE

19. (1) Subject to subsection (2), these Regulations come into force on October 1, 2012, but if they are registered after that day, they come into force on the day on which they are registered.

(2) Subsections 1(2), (4) and (6), 2(2), 3(2), 6(2), 7(2), 9(2), 10(2), 11(2), 12(2), 13(2) and 14(2) and sections 16 and 17 come into force on April 1, 2013.

SCHEDULE 1
(Section 15)

SCHEDULE 7
(Section 12)

PILOT BOAT AND HELICOPTER CHARGES

Item

Column 1

Location

Column 2

Charge ($)

1.

Brotchie Ledge

350

2.

Sand Heads

1,401

3.

Triple Islands

2,020

4.

Cape Beale

5,476

5.

Pine Island

3,606

6.

the entrance to Nanaimo Harbour

705

SCHEDULE 2
(Section 18)

SCHEDULE 8
(Subsection 13.2(1))

PILOT BOAT FUEL CHARGES

Item

Column 1


Wholesale (rack) price for diesel in Vancouver, British Columbia (cents per litre)

Column 2


Brotchie Ledge Charge ($)

Column 3


Sand Heads Charge ($)

Column 4


Triple Islands Charge ($)

Column 5



Pine Island Charge ($)

1.

up to 50.00

70

141

481

119

2.

50.01 to 60.00

78

160

546

159

3.

60.01 to 70.00

87

179

611

199

4.

70.01 to 80.00

95

198

676

239

5.

80.01 to 90.00

104

217

741

279

6.

90.01 to 100.00

112

236

806

319

7.

100.01 to 110.00

121

255

871

359

8.

110.01 to 120.00

129

274

936

399

9.

120.01 to 130.00

138

293

1,001

439

10.

130.01 to 140.00

146

312

1,066

479

11.

140.01 to 150.00

155

331

1,131

519

12.

150.01 to 160.00

163

350

1,196

559

13.

160.01 to 170.00

172

369

1,261

599

14.

170.01 to 180.00

180

388

1,326

639

15.

180.01 to 190.00

189

407

1,391

679

16.

190.01 to 200.00

197

426

1,456

719

17.

200.01 to 210.00

206

445

1,521

759

18.

over 210.00

214

464

1,586

799

[25-1-o]

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

Footnote b
R.S., c. P-14

Footnote c
S.C. 2007, c. 19, s. 2

Footnote d
S.C. 1996, c. 10

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

Footnote f
R.S., c. P-14

Footnote 1
SOR/85-583