SASKATOON – The people who run the St. Lawrence Seaway are dealing with an unusual dilemma.
How are they going to spend their profits?
The St. Lawrence Seaway Authority earned net income of $15.5 million last year, the first time in 11 years the agency has produced a positive bottom line.
“It’s a problem that we find quite pleasant and we wish we had more years like that,” said spokesperson Jim Campbell.
He said the agency is still in the process of setting spending priorities for 1996-97, but a sizable portion of the available funds will be spent on maintaining and improving the Seaway’s physical plant.
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“We are attempting to be fairly aggressive with our maintenance program so we can keep the system efficient and up to speed for the needs of the customers, who are being more and more demanding,” he said.
“They want to get their ships through as efficiently and safely as possible and that all costs money to keep the system up to their expectations.”
The $15.5 million profit represents a big turnaround from the previous year’s loss of $6.1 million. The last time the seaway turned a profit was 1983-84, with an earning of $95,000. In the 10 years since then, losses have totalled $74.4 million.
In its annual report for the year ended March 31, the authority said the financial turnaround was due to a big increase in traffic through the inland waterway system, as well as continuing cost-cutting efforts.
Revenue from tolls was $76 million, up from $59.3 million the year before. While tolls were unchanged, the amount of cargo moved through the system in the 1994 season was 22 percent higher at 38.4 million tonnes on the Montreal-Lake Ontario section and 39.7 million tonnes on the Welland Canal.
More of other commodities
Canadian grain traffic was up 27 percent to 8.1 million tonnes while U.S. grain was up 16 percent to 5.5 million tonnes. Shipments were also up for other bulk commodities like iron ore (up 45 percent), steel (up 117 percent), coal, coke, salt, potash and petroleum products.
A total of 2,857 vessels traveled through the Montreal-Lake Ontario section of the seaway during the 269 days it was open to navigation, well above the 2,305 trips the previous year. On the Welland Canal, the number of trips was up by 451 to 3,378.
In the annual report, the seaway authority said cargo movements will likely be lower in 1995 due to an anticipated slowdown in the North American economy, which will reduce demand for imported steel.
Canadian grain movements are expected to remain close to 1994 levels, although the Aug. 1 changes in rail freight rates for grain and the end of seaway freight pooling have created an air of uncertainty.
“We’re still unsure how that Aug. 1 change is going to affect the system,” said Campbell. “We’ve been doing extremely well with both Canadian and U.S. grain and we’re kind of hoping that will at least level off and continue.”
Meanwhile, the agency is devoting some of its energies to providing information to a group of seaway users who are talking with the federal government about taking over the day-to-day operations of the seaway.
Major shipping companies
The consortium includes major shipping companies, steel makers and grain handlers Cargill Ltd. and James Richardson and Sons Ltd.
Federal transport minister Doug Young has said Ottawa wants to reform and commercialize maritime transportation, similar to the changes made in the aviation and rail sectors.
While no formal proposal has been made, reports indicate the federal government would retain ownership of the locks and canals that make up the seaway and continue to be responsible for major capital projects.
Campbell said the seaway authority is a “neutral third party” in the discussions between the consortium and the government and has taken no position on whether the changes being discussed would be good or bad for the system.
“A proposal hasn’t really been established yet,” he said.
