The Canadian Transportation Agency has turned down a proposal to increase pilotage fees on the St. Lawrence River.
The increase would have seen pilotage fees for vessels, including grain boats, travelling between Montreal and Quebec City rise by 9.5 percent over the next 21/2 years.
The CTA did not provide reasons for its Oct. 14 decision. An agency spokesperson said they would be released within the next few weeks.
Companies that own and operate vessels on the Great Lakes-St. Lawrence system welcomed the decision.
“It was definitely cause for some celebration,” said Donald Morrison, president of the Canadian Shipowners’ Association.
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The CTA’s decision could be appealed to the federal cabinet.
Morrison said the decision sends a message to the federal government to deal with pilotage issues, which have been a costly thorn in the shipping industry’s side for years.
“It’s a mess and somebody’s got to do something about it.”
Vessel operators pay pilotage fees for the assistance of professional pilots in traversing sections of the St. Lawrence Seaway. Pilotage is mandatory for all vessels travelling through two sections of the St. Lawrence River east of Montreal. It is also mandatory for foreign-owned vessels on the Great Lakes.
The fees are part of the total cost of moving grain through the eastern waterway and eventually work their way back to primary producers, including grain farmers.
The Laurentian Pilotage Authority, or LPA, requested the increase in March, to be effective July 1, 2005. It said the tariff hike was necessary to cover the costs of an arbitrator’s decision, supported by the Federal Court, awarding higher pay rates to pilots, including retroactive pay and interest.
The application for an increase was opposed by a number of shipping organizations, which launched an appeal to the CTA.
Morrison acknowledged that the LPA is in a bind, having been ordered by the courts to make significant back-payments to pilots.
But he said it’s up to the federal government to deal with the authority’s deficit, adding that shippers shouldn’t be expected to pay for a financial problem they didn’t create.
“The LPA is a public institution that the government is responsible for and the authority shouldn’t be allowed to bleed industry dry to pay for its inefficiencies,” he said. “My concern is to protect my members from these usurious rates.”
Domestic ship owners pay about $8 million a year in pilotage fees in the Laurentian region, while foreign-owned vessels pay around $17 million.
A spokesperson for the Shipping Federation of Canada, which represents foreign lines sailing the St. Lawrence, said ship owners have faced a series of pilotage fee increases in recent years, while service deteriorated and the LPA’s deficit increased.
He said the agency has to cut costs in recognition of the competitive pressures facing the shipping lines.
