New Icebreaking Fees Unfair to N.S.

Increasing icebreaking subsidies is a significant backward step and should not proceed, says Transportation and Public Works Minister Clifford Huskilson.

In a strongly worded response to the federal Fisheries Minister David Anderson, Mr. Huskilson said the Canadian Coast Guard's recently revised fees for icebreaking services is tilting the playing field against Nova Scotia.

"Nova Scotia has consistently supported fair, equitable and reasonable cost-recovery measures from users of coast guard navigational aids and icebreaking services," Minister Huskilson said. "This announcement tilts the balance against Nova Scotia's ports that require little or no icebreaking. It's a continuation of direct taxpayer subsidies for Central Canadian shipping interests that use the St. Lawrence River to reach inland ports."

For several years, shipping lines have been required to pay the coast guard for the use of navigational aids. This fee produces annual revenues of $27 million and represents about 31 per cent of the coast guard's direct cost of operating navigational aids.

In contrast, icebreaking fees that were to begin later this month would have recovered $13.3 million annually from shipping lines, or about 17.5 per cent of the actual cost. The Dec. 4 announcement of revised fees amounts to a $7-million subsidy. Under the new arrangement, the federal government would recover less than nine per cent of the cost of icebreaking from private shipping lines using the service.

"Most Nova Scotia ports don't require icebreaking, but this natural advantage is offset by our distance from inland North American markets," said Mr. Huskilson. "This decision denies Nova Scotia ports a fair opportunity to grow and prosper. Subsidies upset the natural order of things. The federal minister is trying to make the river flow uphill."

Goods moving through Nova Scotia ports to inland destinations like Toronto, Montreal and Chicago travel mainly by rail from Nova Scotia. Mr. Huskilson said rail connection between Nova Scotia and Central Canada is not subsidized, whereas under the latest plan, St. Lawrence River ports would continue to enjoy a substantial competitive advantage through taxpayer-subsidized icebreaking services.

"Mr. Anderson's backpedalling on icebreaking fees continues the artificial distortion of fair competition among Canadian ports and is contrary to Canada's long-term interests," said Mr. Huskilson. "The federal minister should reverse his decision for the benefit of fair competition and the responsible use of Canadian taxpayers' money."