Decision No. 561-W-1996

November 15, 1996

File No. W9125/G12/96-1

Waterways Transportation Services Corp. (hereinafter Waterways) has applied to the Minister of National Revenue for a licence to operate the service set out in the title. The matter was referred to the Canadian Transportation Agency (hereinafter the Agency) on September 6, 1996.

The Agency conducted a search of the relevant portion of the marine industry and received offers of vessels from Blouin Associés of Montréal (the "FAMILLE DUFOUR II", a Canadian built catamaran); from Groupe AML of Montréal (the "M/V MONTREAL O.N.") and from Lake Ontario Transit of Toronto ( an unnamed passenger ship). In addition, Shaker Marine of Toronto advised the Agency that it intended to introduce a new cross-lake ferry service with the "M/V MARINE COURIER" between ports all along the shore of Western Lake Ontario, including Toronto and St. Catharines.

On October 11, 1996, the Agency ruled that the vessel offered by Lake Ontario Transit would be disregarded due to the failure of Lake Ontario Transit to comply with an Agency directive to provide information.

Waterways filed comments on the offers of vessels on October 17, 1996. With respect to the "FAMILLE DUFOUR II", Waterways noted that the price of the vessel approached twice that of the Australian catamaran. Waterways argued that the price of the Canadian vessel would render the entire project financially impossible.

With respect to the "M/V MONTREAL O.N.", Waterways noted that Groupe AML had been asked to provide additional information, but that no information had been forthcoming. Waterways stated that it could not determine if the vessel was suitable or available.

Regarding the proposed service of Shaker Marine, Waterways noted that the "M/V MARINE COURIER" only has capacity for 144 passengers which is unsuitable for the proposed service.

Shaker Marine and Blouin Associés replied to the comments made by Waterways on the offers. No response to Waterways comments was filed by Groupe AML.

Shaker Marine indicated that the "M/V MARINE COURIER" would be introduced into the market at its current capacity but that the capacity would be expanded to 300 passengers by the spring of 1997.

Blouin Associés stated that an offer for the use of the "FAMILLE DUFOUR II" had been made to Waterways but that no response had been received. Blouin Associés expressed the opinion that Waterways had not made any effort to reach an agreement for the use of the vessel.

On October 25, 1996, the Agency requested that Waterways file additional information about the Australian registered catamaran. In its reply of November 1, 1996, Waterways indicated that it would no longer be using the Australian registered catamaran, but that a U.S. registered catamaran (the "KLONDIKE EXPRESS") would be used. In this regard, the Agency notes that under the Coasting Trade Act, persons seeking temporary licences do not have to specify the nationality or name of a vessel. Adequate information about the type of vessel is necessary. However, the applicant may choose the same type of vessel from a nation other than the one specified in an application.

The Agency has examined all of the relevant information related to the offers. In respect of the "FAMILLE DUFOUR II" offered by Blouin Associés, the Agency is of the view that while the vessel is suitable from a technical perspective, the sale price of the vessel renders the proposed service commercially unviable, therefore not suitable from an economic perspective.

Regarding the "M/V MONTREAL O.N." offered by Groupe AML, the Agency is of the view that the vessel is unsuitable from a technical perspective as the speed of the vessel is much slower than that of the proposed catamaran. Since speed of service is one of the attractions of the service proposed by Waterways, the use of a slow vessel would clearly detract from the service.

With respect to the service proposal of Shaker Marine, the Agency is of the opinion that the service, if implemented, would not be identical adequate marine service or similar to that proposed by Waterways as a shoreline service for many cities is very different from a dedicated service operating between two cities.

Consequently, the Agency has determined, pursuant to subsection 8(1) of the Coasting Trade Act, that there is no suitable Canadian ship available to provide the service or perform the activity described in the application and that an identical similar adequate marine service is not available from any person operating one or more Canadian ships.

This determination will be provided to the Minister of National Revenue for any necessary action as provided for in the Coasting Trade Act.

This Decision does not constitute an authority to commence operations in respect of the service for which application has been made.