News Release Archive
TRANSPORTATION/COMMUNICATIONS--MARINE SERVICES FEE PROPOSAL ----------------------------------------------------------------- Transportation and Communications Minister Richie Mann has expressed Nova Scotia's guarded support for the Canadian Coast Guard's new Fee Proposal for Navigational Aids. "While we are disappointed the Coast Guard has still not adopted a true user-pay approach, we recognize an effort has been made in that direction," Mr. Mann said in a letter to federal Minister of Fisheries and Oceans, Fred Mifflin. Mr. Mann said that while Nova Scotia is prepared to accept the general direction outlined in the Coast Guard's revised fee proposal of Mar. 15, 1996, "there is still a need for certain changes to address the concerns of some sectors of the shipping industry and the need for refinement in the proposal prior to year two." Mann's letter specifically outlines the following concerns: * an independent outside party undertake a review of the Coast Guard's cost allocations and any cost recovery proposals followed by recommendations to the federal government * the Coast Guard provide detailed cost allocation information to all interested stakeholders as soon as possible so meaningful recommendations can be made for refinements in the second year of the new fee proposal * the possibility of a differentiated rate, based upon cargo type, be explored again * ice-breaking charges should be introduced simultaneously with fees for navigational aids to allow all affected parties to be aware of the overall implications of the Coast Guard's cost recovery plan * Nova Scotia interests be represented on the federal Marine Advisory Board. In his letter, Mr. Mann also requested Mr. Mifflin meet as soon as possible with a small Nova Scotia delegation to allow for a first hand understanding of the issues. A copy of the letter is as follows: Honourable Fred Mifflin Minister of Fisheries and Oceans 200 Kent Street Ottawa, Ontario K1A 0E6 Dear Admiral Mifflin: Re: Canadian Coast Guard - Marine Services Fee for Aids to Navigation As you are aware, on March 15, 1996, CCG Commissioner John Thomas released a new Marine Services Fee Proposal for Aids to Navigation. Subsequently, on March 20, 1996, Mr. Thomas met with interested Atlantic area government officials and industry representatives in two separate meetings in Dartmouth. I would like to express Nova Scotia's guarded support for the direction of the CCG Marine Services Fee Proposal of March 15, 1996, subject to some specific concerns and variations that I will discuss further, and subject to other legitimate refinements being made prior to year two. While we are disappointed that the Coast Guard has still not adopted a true user-pay approach, we recognize that CCG has made an effort to address many different perspectives on this issue in attempting to ensure that a fair and reasonable user pay system is put in place. Although we are prepared to accept the general direction outlined in this proposal, it is not without very serious reservations, and the need for certain changes to address the concerns of some sectors of the shipping industry. More specifically, I offer the following comments and concerns for your consideration: 1) We reiterate our recommendation that an independent outside party undertake a review of CCG cost allocations and, more specifically, this cost recovery proposal and any cost recovery proposal advanced for ice breaking charges, with a view toward making appropriate recommendations to the federal government for future action. 2) I would remind you of your commitment to the Premier to meet with Honourable Robbie Harrison and I, along with a small delegation of Nova Scotia stakeholders, to get a first hand understanding of our perspective on this issue. It is my view that such a meeting is still very important, and my office will be in touch in the near future to try and arrange for a suitable time and venue for such a meeting. 3) We believe that there is inadequate recognition of "East Inland's" share of navaid costs in "our" region (to account for in-transit traffic en route to the St. Lawrence and Great Lakes using navaids whose total costs are being attributed to our region - VTS and other navaids at Port-aux-Basques, Loran-C, ECAREG, landfall lights, etc. are only some obvious examples, but there are undoubtedly others as well). CCG should undertake to provide detailed cost allocation information to all interested stakeholders as soon as possible, so that we are in a position to make meaningful recommendations for second year refinements. 4) We believe that "bulk" users remain very seriously disadvantaged by this proposal. At the March 20 meeting, Commissioner Thomas indicated that a 50,000 tonne "cap" could be reintroduced in this region to address this concern. While this might provide some redress for large, liquid bulk shippers (i.e. oil), it may not adequately address the serious transshipment issue at facilities such as Statia Terminals. Furthermore, there remain shippers of gypsum, salt, coal, aggregate, and other commodities who are competing in international markets but who cannot benefit from this "cap" due to the individual size of shipments. In this regard, perhaps the possibility of a differentiated rate based upon cargo type should be explored once again. Regardless of the specific solutions that might be advanced, we believe it is incumbent upon the Coast Guard to work directly with the affected user groups in this region to ensure that a realistic "balance" is struck. Obviously, while some rates may have to be adjusted upward in certain areas (or flat minimum fees might be introduced), I think all users will agree with the basic proposition that it is in no one's best interest to encourage a situation where this cargo will be unable to move (ultimately, should this occur, the rates of other shippers would have to eventually increase anyway - to compensate for the lower overall volumes shipped. In addition, there would be obvious damage to the national and regional economies). 5) We remain disappointed that CCG has not yet advanced any specific proposal with respect to ice breaking. As we have stated on numerous occasions, we believe ice breaking charges should be introduced simultaneously with navaid charges so that all affected parties are aware of the overall implications of CCG cost recovery. We note that the Coast Guard is committed to raising $27 million of its $60 million recovery target by year four from ice breaking. We also note that the present navaids charge is intended to raise $28.1 million over a full one-year period, which we believe leaves little scope for increased navaid rates in future, given that navaids are only required to contribute $33 million of the total $60 million by year four. You can be assured that we will continue to keep abreast of any developments in this area. 6) We have noted Commissioner Thomas's commitment to broader representation on the Marine Advisory Board, which has been the author of so many of the problems the federal government has encountered on this issue. As indicated in recent correspondence, I believe meaningful representation from both the Port of Halifax and other Nova Scotia interests would ensure that the Board has the benefit of a national perspective. I urge Commissioner Thomas to act quickly to redress this lack of national input. By copy of this letter, I am making Nova Scotia's views known directly to Commissioner Thomas. I thank both Commissioner Thomas and you for your diligent work on this issue. I trust the Coast Guard will give meaningful consideration to the suggestions contained in this letter, and I look forward to providing further comment as developments warrant. Yours sincerely, Richie Mann, Minister of Transportation and Communications -30- Contact: Public Affairs and Communications 902-424-8687 jlw Mar. 22, 1996 5:20 p.m.