Decision No. 610-W-2008

December 8, 2008

File No. W9125/D9/08-4

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APPLICATION

On October 10, 2008, Nunavut Eastern Arctic Shipping Inc. (NEAS) filed, through its Canadian representative, the above noted application with the Canadian Transportation Agency (the Agency).

BACKGROUND

On April 25, 2008, Desgagnés Transarctik Inc. (Desgagnés) applied to the Agency for two coasting trade licences to use two unknown ships to transport 160,000 cubic metres of general cargo, heavy equipment and containers, from Côte Sainte-Catherine and/or Valleyfield and/or Matane, Quebec to Deception Bay and/or different ports in the Nunavik region, Quebec and the Nunavut Territory.

Following the issuance of the Notices of coasting trade application, NEAS and Northern Transportation Company Limited objected to the granting of the coasting trade licences.

On June 6, 2008, the Agency issued Decision No. LET-W-102-2008 wherein it ruled that there were no suitable Canadian ships available to perform the activity. Further, on June 13, 2008, the Agency issued Decision No. 314-W-2008 (the Decision) wherein it set out the reasons for Decision No. LET-W-102-2008.

ISSUE

Has there been a change in the facts or circumstances pertaining to the Decision since it was issued that would justify a review of the Decision pursuant to section 32 of the Canada Transportation Act (the CTA)?

POSITION OF NEAS

In its application for review, NEAS argues that there have been significant changes in the facts and circumstances to justify the review of the Decision by the Agency, particularly as it relates to the evidence that the Agency accepted in its consideration to establish that Desgagnés' applications for coasting trade licences were not speculative in nature.

NEAS acknowledges and accepts that the licences have already issued and would not be revoked as a result of this application for review. Notwithstanding, NEAS claims that the issues it raised remain relevant in light of what actually emerged over this shipping season, including Desgagnés' revised sailing schedules, efforts by it to obtain more volumes of cargo after the Decision issued and the number of sailings that were actually made.

NEAS points out that the Decision indicates that "... the fleet of Canadian vessels of Transport Desgagnés Inc. (Desgagnés' Canadian Ship supplier) is not capable of satisfying Desgagnés' requirements for shipping materials to Northern Canada." However, NEAS argues that Desgagnés advertised on its Web site a revised schedule dated July 29, 2008, according to which at least two vessels of its supplier had available space for voyages to Northern Canada for the same period covered by the temporary licences, namely August and September 2008.

NEAS adds that after the Decision was rendered, Desgagnés subsequently attempted to bid on additional volumes. NEAS is of the opinion that such efforts to obtain more volume suggest that Desgagnés may not have had all the definitive volumes alleged at the time of its applications to the Agency for the two licences.

Therefore, NEAS submits that the Agency is justified to conduct an audit on the information it accepted as non speculative in nature, including the representations that Desgagnés had definite obligations to transport 330,000 cubic meters of cargo over a specified number of sailings within Northern Canada, and that all vessels of its supplier Transport Desgagnés Inc. were not available when the applications for coasting trade licences were filed.

POSITION OF DESGAGNÉS

In its answer to NEAS' application for review, Desgagnés submits that the Agency has already decided in a previous ruling that this matter was moot in light of the Decision, which resulted in the issuance of the two coasting trade licences. Desgagnés adds that the Agency's jurisdiction was spent in July and continues to be spent; and that the Agency's Decision simply cannot be reviewed as there is simply nothing left to be reviewed.

Notwithstanding this, Desgagnés states, for the record, that it in no way admits to any of the factual allegations made in NEAS' submission and denies all allegations made.

Desgagnés indicates that its ships were fully booked this season, requiring the addition in early July of the "DUTCH RUNNER", a Canadian registered ship, to fulfil its needs. In addition, Desgagnés advises that the "ROSAIRE A. DESGAGNÉS" sustained extensive damage due to ice, which resulted in Desgagnés using the remaining capacity of the "DUTCH RUNNER" to transport material which would have been transported by the "ROSAIRE A. DESGAGNÉS".

Desgagnés acknowledges that it published a revised schedule on July 29, 2008, offering some capacity on the "ROSAIRE A. DESGAGNÉS", once it was repaired. However, Desgagnés indicates that this was done because cargo had been moved from the "ROSAIRE A. DESGAGNÉS" to the "DUTCH RUNNER" and some of the mining companies postponed or cancelled their contracts due to the financial crisis. Moreover, Desgagnés states that due to other changes in the initial shipping plan, cargo was also moved from the "CAMILLA DESGAGNÉS" to the "ROSAIRE A. DESGAGNÉS". As a result, the "CAMILLA DESGAGNÉS" had available capacity, which Desgagnés offered afterwards.

Desgagnés states that the foreign ships completed seven trips this season, instead of the eight trips initially planned, again because of the financial crisis which resulted in the cancellation of certain mining projects.

With respect to NEAS' allegation that Desgagnés bid on additional volumes, Desgagnés submits that no new project was created after the Agency's Decision.

ANALYSIS AND FINDINGS

The Agency has carefully considered the issue raised by NEAS.

NEAS requests that the Agency conduct, pursuant to section 32 of the CTA, an audit of the evidence it considered in hearing this matter.

Pursuant to section 32 of the CTA, the Agency may review, rescind or vary any decision made by it if, in the opinion of the Agency, since the issuance of the decision, there has been a change in the facts or circumstances pertaining to the decision.

It is important to stress at the outset that the review contemplated by section 32 of the CTA is not an open-ended authority for the Agency to review its decisions. The Agency's jurisdiction under this section is limited and only arises if there has been a change in the facts or circumstances pertaining to the decision since its issuance. The Agency must first determine whether there has been a change in the facts or circumstances pertaining to the decision sufficient to trigger a review and, if so, then determine whether the new facts or circumstances warrant a review, rescission or variance of the decision.

The remedy requested by NEAS is not for a review, rescission or variance of the Decision, but for an audit of the evidence submitted to the Agency by Desgagnés. That remedy is not provided for in section 32 of the CTA and the Agency has no authority under that section to make any order to that effect.

The Agency notes that the Decision provided advice to the Minister of Public Safety and Emergency Preparedness for consideration with respect to the issue of the licences. The licences were then issued by the Minister of Public Safety and Emergency Preparedness under the provisions of the Coasting Trade Act. As the licences have been issued, it is therefore moot for the Agency to make any order under section 32 of the CTA relating to the licences.

Notwithstanding this, the Agency acknowledges the seriousness of the issue raised by NEAS. The integrity of evidence presented to the Agency is fundamental to the Agency's quasi-judicial role, both under the CTA and when the Agency is carrying out its mandate under the Coasting Trade Act. However, the administration of the Coasting Trade Act, including any matters related to possible breaches of its provisions, is not within the statutory authority of the Agency.

CONCLUSION

Based on the foregoing, the Agency concludes that the remedy sought by NEAS does not fall within its authority or mandate under section 32 of the CTA and, further, that the application is moot considering that the licences have been issued by the Minister of Public Safety and Emergency Preparedness.

Accordingly, the Agency dismisses the application.

Members

• J. Mark MacKeigan
• John Scott