The Standing Senate Committee on Transport and Communications

has the honour to present its

SEVENTH REPORT

Your Committee, to which was referred Bill C-3, An Act to amend the Canada Shipping Act, the Canada Shipping Act 2001, the Canada National Marine Conservation Areas Act and the Oceans Act has, in obedience to the Order of Reference of Thursday, April 14, 2005, examined the said Bill and now reports the same without amendment.  Your Committee appends to this report certain observations relating to the Bill.

Respectfully submitted,

JOAN FRASER
Chair

Observations to the Seventh Report of the Standing Senate Committee on Transport and Communications

(Bill C-3)

Your Committee endorses the purpose of Bill C-3, An Act to amend the Canada Shipping Act, the Canada Shipping Act, 2001, the Canada National Marine Conservation Areas Act and the Oceans Act, which is to reflect changes made through an Order in Council, enabled by the Public Service Rearrangement and Transfer of Duties Act, on 12 December 2003.  Members wish, however, to acknowledge the concerns that were expressed by some witnesses regarding two aspects of marine policy:  the unchecked authority of the Department of Fisheries and Oceans to set marine navigation service fees (MNSF) and the application of the MNSF in the North.

In 1996-1997, the MNSF were introduced to cover a portion of the cost of navigation services provided to commercial shipping by the Canadian Coast Guard.  The witnesses were troubled that the Bill allows the Canadian Coast Guard to continue to set the level of the MNSF.  They felt strongly that, considering that the Canadian Coast Guard is dependent on MNSF revenues, there should be checks and balances in the fee-setting process.  When your Committee presented this issue to the Minister of Transport, it was pleased to hear that he thought the matter worthy of serious consideration.  The Minister of Transport undertook to discuss the matter with the Minister of Fisheries and Oceans and to report the results of these discussions to the Committee within the shortest possible delay. 

Secondly, while the policy governing the application of the MNSF applies equally to all regions north of 60 degrees latitude, some witnesses noted that, due to the logistical realities of re-supply to the North, the burden of the MNSF is heavier on commercial shipping to the eastern Arctic ports than to the western Arctic ports.  The witnesses explained that commercial shipping to the western Arctic qualifies for an exemption that applies to vessels calling at northern ports without calling at or departing from a southern port.  This is because cargoes bound for western Arctic ports are transported from the south by rail to a northern port and then loaded onto ship to other northern ports in the western Arctic.  The witnesses stated that eastern Arctic commercial shipping does not qualify for an exemption under the current policy because cargoes bound for ports in this region are loaded onto ships in the Montreal area.  Therefore, although the MNSF policy was constructed to take into account the socio-economic conditions of the North as a whole, consumers of Nunavut and Nunavik face prices that include an additional premium for the MNSF but consumers in the western regions do not, according to the witnesses.

Your Committee supports the Bill, but it also urges the department responsible for developing MNSF policy to revisit it to take into account the distribution of the burden of the MNSF in the North to include James Bay, Ungava Bay and the entirety of Hudson Bay among the regions that qualify for an exemption.  Your Committee would support a more equitable application of MNSF policy that gives consideration to the differing logistical realities for re-supply between the eastern and western Arctic.