Dear Member,
Please see below summary of the 2022 Pilotage Service Charges for the four Pilotage Authorities which the Pilotage Committee has been diligently reviewing.
| General Service Charge | Other | Transport Canada Administration Fee | Effective Date | |
| APA | 2.78% Overall | 4% Deficit Surcharge | $37 (New) | January 1, 2023 |
| PPA | Pilotage Unit 10% Hours 10% Launch 10% Travel 8% |
$400 Temporary Surcharge | $85.90 (+45.2%) | January 1, 2023 |
| LPA | 5.48% Overall District 1 – 5% District 2 – 7.5 |
NA | $54.94 (+43.1%) | February 15, 2023 |
| GLPA | $2.5% (Proposed) | NA | $32 (+7%) | March 22, 2023 |
| USCG | 14% Overall (Proposed) | NA | NA | Opening of Seaway 2023 |
Atlantic Pilotage Authority
The APA have published an Announcement of Revised Service Charges which increase the overall fees by 2.78% effective January 1, 2023. The APA are projecting a profit of $1.69M for 2022 which includes $1.0M from their deficit recovery surcharge introduced in 2021. They are budgeting for a $1.7M profit again in 2023 which includes $1.1M revenue from the deficit recovery surcharge. The deficit surcharge is expected to be removed by 2024 or even 2023 if traffic levels permit. The Federation submitted comments to the APA reiterating our objection to the Transport Canada Administration fee which the APA nor Transport Canada have provided any transparency to the nature of the costs. To harmonize with the other Authorities, we requested the APA isolate this cost from their general charges, which the APA agreed and have incorporated a separate surcharge for 2023. Our comments also highlighted the APAs healthy financial reserve and urged them to coordinate with the other Authorities to develop standard principles around the definition of the appropriate level of reserve. The Pilotage Committee have reviewed these charges and recommend not to object to the CTA.
Pacific Pilotage Authority
The PPA have published an Announcement of Revised Service Charges which increase the fees by 10% and extend the $400 deficit recover surcharge another 12 months, effective January 1, 2023. As a reminder, the PPA lost in arbitration last year to the BC Coast Pilots (BCCP) in which the corporation was granted a CPI + 1 increase for 3 years followed by a CPI increase for the fourth and final year of the contract. The main driver of this increase is primarily the result of that arbitration award and the subsequent inflation. The PPA is projecting a loss of $542K in 2022 following a 2021 loss of $1.88M. The PPA remain very lean with cash estimated at $5.2M by the end of 2022 and a working capital ratio of 0.93. The Federation submitted comments to the PPA in response to their actual 10.5% proposal. Our comments focused on overly conservative traffic assumptions and inflation rates and requested them to revisit their assumptions. The PPA did agree to reduce the CPI, and thus their overall tariffs by 0.5% to 10%. The Pilotage Committee have reviewed these charges and recommend not to object to the CTA.
Laurentian Pilotage Authority
The LPA have published an Announcement of Pilotage Charges Revision increasing the overall fees by 5.48% effective February 15, 2023. The LPA are projecting to breakeven in 2022 and budgeting for a $1.5M profit in 2023 including a reserve of $5.9M. While the LPA remains in a very healthy financial position, the re-negotiation of their two service agreements will be critical as the large majority of their costs are for pilotage services paid to both corporations. The LPA are currently in arbitration with their District 2 pilots and the contract for the District 1 pilots expires in June 2023. The Federation submitted comments to the LPA recommending to delay the service charge adjustments until their key cost components are concluded. Alternately, we recommended a lower increase which would still provide them with a sufficient profit and adequate reserve given their regulated monopolistic position. The Pilotage Committee will continue to review these increases at the next Committee meeting.
Great Lakes Pilotage
The Pilotage Committee met recently with the GLPA prior to their posting the Notice of Proposed Pilotage Charges which will increase the charges by 2.5% overall effective March 22, 2023. Following the recent CTA award, the GLPA reported a $7.86M profit in 2021 ($5M under the objection from 2020 and only reported in 2021), and are forecasting another $1.1M profit for 2022, as assignments are up by 17%. The 2023 proposal is budgeted to provide for a profit of $828K and will result in an excessive working capital of $7.3M. The Pilotage Committee is reviewing this proposal and the Federation will be submitting comments by the January 21st deadline.
US Great Lakes Pilotage
The USCG proposed to adjust the US pilotage rates by 14% for 2023 resulting in increased pilotage of over $422K. The coalition of industry stakeholders issued joint comments focusing on the tariff setting methodology as part of the 5-year review of the tariff setting process. The submission focused on items such as target compensation, expense review, staffing models, etc. The Federation is waiting for the Final Rule to be issued in advance of the Seaway opening in March.
Please direct any questions to the undersigned.
Regards,
Director, Marine Operations