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Marine Pilotage

Potential Amendments To The Pilotage Act

Stakeholder Consultations Report February & March, 2007

Michael Turner & Jacques Clavelle

Summary

In 2002 an arbitrator awarded a large fees increase to the Mid St. Lawrence Pilots Corporation. Shortly after, the tariff requested by the Laurentian Pilotage Authority (LPA) to help pay for the fees increase, was turned down by the CTA.  This has made it impossible for the LPA to be financially self-sufficient, a legislated requirement for Canadian Pilotage Authorities under the Pilotage Act (the Act).  The Governor in Council agreed to overturn the CTA decision and approve the LPA tariff. Transport Canada was then directed to take any necessary steps to prevent a recurrence of this situation.

In January 2007, Transport Canada proposed four amendments to the Act in a discussion paper circulated to stakeholders, with a request for feedback or alternatives that might meet the same goals — namely making it easier for Pilotage Authorities to pay their own way. They stressed that the amendments were administrative in nature, concerning governance of the Pilotage Authorities, and would not affect safety or the environment.

Transport Canada then contracted Michael Turner of System Strategies and Jacques Clavelle, an independent management consultant, to ask marine community stakeholders across the four pilotage regions what they thought about these amendments  — and report on their findings.

They formed a consultation team with Ms. Julie Bedard and Captain David Avey of Transport Canada, Marine Safety acting as observers.  The consultation team visited eight cities over three weeks, to meet with interested groups or persons. One part of the team went to St. John’s, Newfoundland; Halifax, Nova Scotia; Montreal, Quebec; and Quebec City, Quebec. The other part of the team went to Vancouver, British Columbia; Prince Rupert, British Columbia; and Oakville, Ontario. Mr. Turner and Mr. Clavelle then co-chaired final sessions in Ottawa.

In addition to the public sessions, stakeholders could meet privately with consultation team members at each location. Participants were also invited to provide further input in written form to the team or to the Transport Canada project manager in Ottawa.

The proposed amendments, in summary form, are as follows:

  • Amendments to subsection 15.2(1) would give arbitrators more freedom when dealing with contract disputes between a pilot corporation and a Pilotage Authority. For example, they could accept elements of each party’s proposal, rather than having to accept or reject everything in a party’s offer. Arbitrators could also be required to consider the approved Corporate Plan of the Authority, requirements of the Financial Administration Act and current industry economic conditions.
  • Amendments to subsection 34(2) and possibly 34(4) would transfer the responsibility to investigate tariff objections from the CTA to the Department, under the Canada Gazette 30 day prepublication review process, or clearly define “public interest” for the CTA.
  • Amendments to subsection 15(2) would permit Pilotage Authorities to hire both pilot corporations and employee pilots at the same time for the same pilotage area, if required.
  • Amendments to subsection 21(1) would remove the Minister’s obligation to investigate Pilotage Authorities’ objections to regulatory proposals under subsections 20(1) (a) & (f), which establish compulsory pilotage areas and prescribe the qualifications for pilot licenses or certificates.

Views

As might be expected, the proposed changes have created much debate.  Differences of opinion exist by stakeholder group as well as by region.

Many supporters see the amendments as a first step towards larger, badly needed, reforms to correct what they see as long standing problems in the system.  They want a broader approach — not limited to the narrow financial and management challenges of the LPA and ask that immediate attention be given to reducing LPA costs while improving service.

On the other hand, opponents believe that the national system of marine pilotage is being put at risk by amendments that are intended to solve a very local problem, but may create serious unintended results in other regions. Other groups, while recognizing the necessity for action to address the LPA problems, argued for only the absolute minimum amendments necessary to resolve the LPA financial situation without putting at risk the successful application of the Act in other areas. 

By Region:

The West Coast

Stakeholders feel that the Act can work in other regions as well as it does in theirs, if all parties were to follow their “full engagement model” — a set of practices that ensure close co-operation between all parties. Pilots, foreign flag users of their services, the broader marine industry, along with the Authority work together as one industry, in a spirit of openness and transparency.

They have found that Final Offer Selection works well if used seldom and applied correctly; and both parties work towards achieving a realistic agreement. They see no advantage, and many potential disadvantages, to having corporation and employee pilots working in the same area. All parties believe that the subsection 34(2) tariff objections review by the CTA and subsection 21(1) regulatory objection review by the Minister should remain, as a part of the checks and balances needed to manage a regulated monopoly.

The East Coast

Many different views exist among stakeholders from the East Coast, St. Lawrence, and Great Lakes. The same is true within the marine industry itself.

Most costs and pilotage assignments for the Eastern half of Canada are for foreign flag vessels, which are represented by the Shipping Federation of Canada (SFC). SFC is generally pleased with the present level of service in Atlantic Canada and the Great Lakes, and find The Act’s regulatory and appeal processes effective. However, they are very concerned with the continually rising costs and what they see as inadequate service levels on the St. Lawrence system.  In their regional submissions, they:

  • Support amendments that would give arbitrators more choices during Final Offer Selection.
  • Support guidance from the Authority Corporate Plan.
  • Support, in principle, allowing Authorities to hire employee pilots for the same areas where there are already contracts with the pilot corporations.
  • Oppose any weakening of the role of the CTA in hearing tariff appeals.
  • Oppose requiring the Minister to investigate regulatory appeals related to declaration or alteration of compulsory pilotage areas or pilot qualifications.

The SFC modified the position it had taken during the regional meetings, as outlined below.

By Stakeholder Group:

None of the pilot organizations and corporations support the amendments.

The Shipping Federation of Canada (SFC) was the only group to change its original position.  At the last session, in Ottawa, the SFC said that they see the need to find common ground where the urgent problems of the LPA can be addressed, while avoiding side effects or collateral damage to unaffected stakeholders. They put forward a modified approach that recognizes the need:

  • For quick action to solve LPA financial problems and repair its relationship with the District I pilots.
  • To address the concerns raised within other regions, over the medium term.

In its closing presentation, the Federation suggests immediately introducing amendments that address LPA financial viability that would keep but improve the Final Offer Selection Process, followed at a later date by a more extensive review of the Act, which would focus on governance, service levels and other areas for improvement. 

Domestic shipowners and their representatives hold a different view. They see more flexibility for arbitrators and hiring employee pilots in areas already served by pilot corporations as a good start, but believe the proposed amendments aren’t enough. They argue that the Act is overdue for a complete overhaul. Some want a much stronger role for the CTA, with more regulations subject to appeal to the Minister.

Domestic operators provided suggestions for a revised Pilotage Act which include:

  • Making pilotage optional for Canadian vessels that meet certain safety standards.
  • Commercializing pilotage operations along the Seaway model.
  • Separating pilotage operations from safety regulations, with the latter to be the responsibility of Transport Canada.
  • Changing the makeup of Authorities’ Boards of Directors, including how they are selected.

In Eastern Canada, two environmental groups expressed concerned that the proposed amendments might reduce opportunities for public input or objection and weaken present levels of safety. One group sees the need to modify the system of arbitration as well as the process for objecting to tariff increases.

The views of the Pilotage Authorities have been conveyed to the Department. They also provided useful information, along with their views on the proposals, to the consultation teams at the closed sessions.

Full Report

The full report provides a summary of the consultation methodology and organizes the views and positions of each party that appeared at the public consultation meetings by type of stakeholder. 



The following document is available for downloading or viewing:

Full Report PDF Version (343 Ko)

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Date modified:
2010-01-14