Decision No. 445-W-1991

August 15, 1991

File No. M4255/L4

Docket No. 910288M

John Inglis carrying on business as Lake Athabasca Transport (hereinafter the applicant) has applied to the National Transportation Agency for a licence to operate the service set out in the title. The application was received on March 14, 1991 and was complete and ready for processing on May 13, 1991.

Notice of the application was published on April 10, 1991 in the newspaper of the area concerned and was posted at the post office of Fort MacKay and at the Fort MacKay Band Office. Copies of the notice were also sent to carriers authorized to provide northern marine resupply services and to others believed to be interested. Interventions opposing the granting of the application were filed with the Agency by A. Frame Contracting Ltd. (hereinafter AFCL) and Northern Transportation Company Limited (hereinafter NTCL). The applicant replied to the interventions. Twenty-one (21) letters of support were submitted with the application.

By letter dated June 7, 1991, the Agency advised the applicant of its determination pursuant to subsection 212(1) of the National Transportation Act, 1987 that it was not satisfied that the resupply service, for which application had been made, would not result in a significant instability in the level of services provided in the Lake Athabasca region. The reasons for the determination of the Agency are set out below.

The Agency has considered the application, the material in support thereof and the interventions referred to.

The determination of the Agency pursuant to subsection 212(1) of the National Transportation Act, 1987 is based on the material filed and the situation which existed on the date of issuance of the letter decision.

The Athabasca region was served during the 1990 season by AFCL and by Lake Athabasca Transport Ltd., which had maximum register tonnages of 2,655 tons and 240 tons respectively. Lake Athabasca Transport Ltd. subsequently applied to change its name to MacDonald Marine Transport Ltd. (hereinafter LATL/MacDonald). Both AFCL and LATL/MacDonald are authorized to serve, inter alia, all of the points proposed to be served by the applicant with the exception of Moose Island Landing.

The applicant forecasts moving 990 tons of freight on the system in 1991. Of this, 300 tons of construction equipment is forecast to be moved from Fort Chipewyan to Moose Island Landing; however, the letters of support are pro forma and do not specifically indicate usage of the proposed service to Moose Island. In addition to the movement of barge traffic to Moose Island during the summer, there is a winter road between Fort Chipewyan and Moose Island. With respect to Fort Fitzgerald, the applicant neither provides a forecast of tonnage to the point, nor does it provide any evidence indicating demand.

Although the letters of support provide some indication that there is demand in the Athabasca region (Fort Chipewyan) for a marine resupply carrier which can haul smaller loads of cargo on an as required basis, a review of the Athabasca system reveals that tonnages, excluding special projects, have steadily decreased since 1985. Moreover, a winter road connects Fort McMurray with Fort Chipewyan and air services are provided to and from Fort Chipewyan. Hence, there are alternative modes of transportation available for the movement of freight in the region over and above northern marine resupply services.

In its intervention opposing the application, AFCL submits that there is sufficient equipment available on the system to accommodate resupply requirements. AFCL also submits that, "Further licencing of less tonnage than sufficient to carry out the entire resupply service could result in an interruption of service if the viability of existing carriers is further threatened.". Moreover, in its intervention, NTCL indicates that the size of the market and cost factors in the Lake Athabasca system are such that only one carrier should be authorized in order to ensure economic viability. In its view, the lack of financial viability has caused instability and the granting of this application would create an oversupply of licensed carriers on the system.

The Agency has assessed the supply of and the demand for resupply services on the Lake Athabasca system.

The Agency notes that marine transportation incurs high fixed costs which must be recovered in the short shipping season, and that total tonnage, excluding special projects, has steadily decreased since 1985. In addition, there is no indication that new special projects, which would augment annual tonnages, are contemplated in the forthcoming shipping season. Moreover, in the years reviewed, existing carriers with the existing complement of equipment have been able to accommodate all traffic attributed to special projects in addition to normal traffic demand.

Following a thorough review of the supply of and demand for resupply services to the points requested, the Agency is of the view that there is no need for the resupply service proposed by the applicant.

Accordingly, the Agency is of the opinion that there is no need for the resupply service requested and that such a service would result in a significant decrease or instability in the level of resupply service provided to communities situated along the waters to which Part V of the National Transportation Act, 1987 applies. The application is hereby denied.