FOPO Committee Report
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STANDING COMMITTEE ON FISHERIES AND OCEANS |
House of Commons Chambre des communes OTTAWA, CANADA K1A 0A6 |
COMITÉ PERMANENT DES |
April 22, 1996
The Honourable Fred Mifflin, P.C.
Minister of Fisheries and Oceans
Room 207, Confederation Building
House of Commons
Ottawa, Ontario
K1A 0A6
Dear Sir:
The Standing Committee on Fisheries and Oceans has completed its hearings on the Marine Services Fees and is pleased to present you with its report.
The Committee has listened carefully to the testimony of witnesses from the commercial shipping industry. The Committee feels that it is good public policy that those who benefit specifically from government goods and services should be asked to pay a fair share of the cost of providing them. The objective is to promote equity by shifting the financial burden from taxpayers generally to those who benefit most directly. While the Committee is sensitive to the concerns expressed regarding the potential negative effects on business and employment, the Committee is also aware that it has a responsibility to the Canadian taxpayer who, up until now, has been paying for the full cost of services provided to the commercial shipping industry. While we acknowledge that many of the presenters suggested a moratorium, we note that virtually all of the participants in our hearings agreed in principle with the concept of cost recovery. We agree with the principle of cost recovery, but we also believe that it is now time to go beyond principle and put this concept into practice.
In this context, we feel that the phased introduction of Marine Services Fees planned by the Coast Guard represents a balanced approach and we note that, at the initial level of $20 million in the 1996-97 fiscal year, the rate of cost recovery represents only approximately 10% of the current cost of services to the commercial shipping industry provided to the industry by the Canadian Coast Guard through taxpayers’ contributions. We believe that, at this level, the risk of serious harm to industry is minimal and that to postpone introduction of the fees would only serve to reduce the incentive for the Coast Guard and the commercial shipping industry to proceed expeditiously with the badly needed rationalization of Coast Guard services. We appreciate the concerns of the shipping industry with respect to the impact of fees and we would be uncomfortable with the introduction of any further fee increases until an independent, thorough, in-depth analysis of the cumulative impact of all fees facing the industry has been completed and the Coast Guard, the industry and an appropriate committee of Parliament have had a reasonable time to review the results of the analysis.
We are fully in agreement with the position that many of the Coast Guards aids to navigation are currently in excess of what is required by the commercial shipping sector and that this trend toward obsolescence of certain existing navigational aids will continue as new technology such as the Differential Global Positioning System becomes universally adopted. We also agree that many specific aids such as buoys could be more cost-effectively maintained by the private sector. However, determination of the required level of aids to navigation should not be driven by commercial interests alone and therefore we see the Coast Guard as continuing to play an essential role in ensuring the safety of marine traffic.
The Standing Committee on Fisheries and Oceans therefore recommends:
That Coast Guard be authorized to recover $20 million in the 1996-97 fiscal year through fees for aids to navigation commencing June 1, 1996 as planned;
that the Coast Guard undertake to commission an independent and thorough socio-economic impact analysis of the cumulative effect of all marine-related fees and initiatives on the commercial shipping industry and dependent industries and regions;
that this study be completed and a reasonable period of time be allowed for review by both the Coast Guard and the industry before ice breaking or other increases of the Marine Services Fee are introduced;
that the study be reviewed by an appropriate committee of Parliament;
that the marine shipping industry be invited to participate in the development of the terms of reference for this study and that the industry be asked to contribute financially to, consistent with the funding formula in the terms of reference, and to participate in the study;
that the Coast Guard, in conjunction with the commercial shipping industry, assess the level of services that are required for the safe and efficient transit of ships and ensure that only those services that are required by the commercial shipping sector will be paid for by the commercial shipping sector;
that the Coast Guard, in conjunction with the industry, investigate the least expensive and most cost-effective means of delivering these services, including the option of privatization and that, within each region, consideration be given to developing port-specific incentives to reduce costs;
that the Coast Guard continue to work with the ensure that the cost recovery formula remains fair and equitable and, as far as practicable, establishes a close link between the services used and the level of fees charged but which does not unduly penalize any segment of the industry or region of the country;
that the Coast Guard, with the Marine Advisory Board and industry stakeholder groups in each region, report on progress on these initiatives every three months starting June 1, 1996; and,
that the Standing Committee on Fisheries and Oceans adopt for itself a monitoring role to oversee progress on these initiatives at regular intervals.
I trust that you will find this report useful in advance of your decision on the implementation of the Marine Services Fee.
Yours sincerely,
Joe McGuire, M.P.
Chair,
House of Commons Standing
Committee on Fisheries and Oceans