Shippers look for transparency after review of Canada’s Pilotage ActAug 31, 2018 04:17 PM
Courtesy Pacific Pilotage Authority/Isabelle Forget
Pacific Pilot Two heads for the Pacific Pilotage Authority’s station at Odgen Point in Victoria, British Columbia. While acknowledging the exemplary safety record of marine pilots in Canada, the federal government says the monopoly structure for services “has drawn criticism from industry users, especially since pilotage is mandatory and shippers are responsible for the costs of pilotage through tariffs.”
Ship operators didn’t get all of their wishes granted when former Canadian Coast Guard Commissioner Marc Gregoire published his recommendations on the country’s Pilotage Act. But Chamber of Marine Commerce (CMC) President Bruce Burrows believes Gregoire incorporated many of his organization’s key proposals.
Canada’s Pilotage Act has existed since 1972, with services managed by four regional pilotage authorities. Critics claim that restrictive hiring practices, lack of standardized regulation and inconsistencies in operational protocols across the four authorities create a costly system that lacks transparency.
When a vessel needs a pilot, shipping companies can expect the associated costs to make up 10 percent of all expenses for a Great Lakes voyage, according to Burrows.
While the CMC hoped for full amalgamation of pilotage authorities, Gregoire only recommended that Canada’s minister of transport look into combining the Great Lakes and Laurentian groups. But shipping industry leaders see hope in other areas of Gregoire’s review, which was commissioned by the federal government in May 2017 and released in April this year.
Each authority currently has a regional monopoly on pilotage services, and much of the labor these government organizations use comes from contracts with pilotage corporations.
“Having pilot corporations give the service to the authority brings a monopoly inside a monopoly, and that’s what we think should be questioned,” said Marc Gagnon, director of government affairs and regulatory compliance for Fednav, a dry-bulk shipping company based in Montreal.
In his report, Gregoire suggested pilotage authorities should use the work force configuration that meets their needs, whether it means contracting with corporations or hiring employees in-house.
He also showed a willingness to enhance financial disclosure and reporting. Shipping companies want greater accountability on the part of pilotage corporations.
“They need to be more transparent. We need to know what is in the contracts between the corporations and the authorities,” Gagnon said.
Gregoire acknowledged in his review that the authorities’ status as both regulator and service provider creates the potential for conflicts of interest. The CMC supports the idea of giving regulatory authority to Transport Canada, although Burrows acknowledged that centralization could bring challenges.
“You want to make sure that there’s no conflict between what the authorities have left to do and what Transport Canada will be doing, so you want a clear delineation of responsibilities,” he said.
Burrows also acknowledged that Transport Canada likely would need to expand its staff in order to effectively regulate.
Although most nations have a centralized body governing pilotage, too much standardization could de-emphasize the significant regional challenges Canada’s ports present to vessel operators, said Kevin Obermeyer, president of the Pacific Pilotage Authority.
“There’s no way that you can have the same practices and procedures for a pilotage operation into the Port of Vancouver compared to the Port of Halifax,” he said. “Each area is very local and very specific.”
Above all, stakeholders said standardization must maintain the system’s 99.9 percent safety rate — one aspect of pilotage that all involved care deeply about.
Burrows welcomed the review’s recommendation for a nationwide extension of the Great Lakes certification program that allows qualified captains to pilot their own ships, as long as such an initiative has consistent training standards to ensure that safety doesn’t suffer.
If introduced correctly, new technologies can maintain safety standards while also reducing labor costs. Burrows said “smart” navigation eventually could eliminate the need to use two pilots — a necessary safety precaution in certain situations.
Although a revised Pilotage Act could offer shipping companies many ways to save money, Gagnon stressed that it was not the primary objective.
“We have a very safe system,” he said. “The main goal is to have a safer service than we have, because safety is number one for government and for us.”