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Exchange of Notes between the Government of Canada and the Government of the United States of America, together with the Annexed Memorandum of Agreement, providing for a Revised Schedule of Tolls to be Levied for the use of the Navigational Facilities of the St. Lawrence Seaway [1978] CATSer 5 (20 March 1978)

E100436 - CTS 1978 No. 6

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA, TOGETHER WITH THE ANNEXED MEMORANDUM OF AGREEMENT, PROVIDING FOR A REVISED SCHEDULE OF TOLLS TO BE LEVIED FOR THE USE OF THE NAVIGATIONAL FACILITIES OF THE ST. LAWRENCE SEAWAY

I

The Ambassador of Canada to the Secretary of State of the United States of America

WASHINGTON, March 20, 1978

No. 124

The Honourable Cyrus R. Vance,
Secretary of State,
Washington, D.C.

Sir:

I have the honour to refer to the exchange of Notes with an annexed Memorandum of Agreement, between Canada and the United States of America signed in Ottawa on March 9, 1959, and to recent discussions which have taken place between officials of our two Governments concerning tolls to be levied for use of the navigational facilities of the St. Lawrence Seaway Authority, and in the United States by the Saint Lawrence Seaway Development Corporation.

These discussions resulted on March 1, 1978, at Washington, D.C., in the signature by the President of the St. Lawrence Seaway Authority and by the Administrator of the Saint Lawrence Seaway Development Corporation, of the annexed Memorandum of Agreement which sets forth a tariff of tolls for use of the aforementioned facilities.

I have the honour to propose that there be a mandatory intergovernmental review every four years with the first review to occur in 1981, for the purpose of achieving, through the tariff of tolls and revenue sharing arrangements, economic viability for each section of the Seaway based upon recovery of annual operating costs and equitable return to the two Governments for depreciation and capital investments, having regard to the need to encourage the optimum utilization of the existing Seaway facilities.

In preparation for such review, the two Seaway entities shall review their actual and projected revenues and costs and recommend to their respective Governments necessary revisions to the tariff of tolls. Once agreement has been reached between our Governments, the adjustments will be made effective following an exchange of diplomatic notes.

In the period between the mandatory intergovernmental reviews the two Seaway entities should maintain constant surveillance over all of the economic factors pertaining to maintenance and operation of the Seaway and recommend to the two Governments any adjustments which might be required.

I have the further honour to propose that this Note, and the annexed Memorandum of Agreement, which are authentic in English and French, if such meet with the approval of your Government, together with your Note in reply indicating such concurrence, shall constitute an agreement between our two Governments effective on the date of your reply.

Upon entry into force, this Agreement shall amend and supplement the Agreement effective by the exchange of Notes, with an annexed Memorandum of Agreement, of March 9, 1959, as previously amended.

Accept, Sir, the renewed assurances of my highest consideration.

Peter M. Towe

Ambassador

MEMORANDUM

MEMORANDUM OF AGREEMENT between The St. Lawrence Seaway Authority, hereinafter referred to as “Authority” and the Saint Lawrence Seaway Development Corporation, hereinafter referred to as “Corporation,” respecting the Memorandum of Agreement between the parties dated January 29, 1959, as amended, hereinafter referred to as the “Agreement” and the St. Lawrence Seaway Tariff of Tolls.

The Authority and the Corporation, recognizing that their proposal may not fully satisfy the financial requirements of the two entities, have agreed to recommend to their respective governments the following modifications to the Agreement:

1. THAT the Tariff of Tolls for the St. Lawrence Seaway annexed hereto be substituted, effective with the opening of the 1978 navigation season, for the tariff which was referred to in paragraph 1 of the Agreement and was annexed thereto.

2. THAT paragraph 2 of the Agreement, including the subsequent modifications of the division of tolls derived from the operation of that portion of the St. Lawrence Seaway situated between Montreal and Lake Ontario be deleted and the following be substituted therefor:

“2. THAT the division of the tolls derived from the operation of that portion of the St. Lawrence Seaway situated between Montreal and Lake Ontario shall, from the effective date of the new tariff referred to above, be 71 percent, in Canadian dollars, to the Authority and 29 percent, in United States dollars, to the Corporation. Provided, however, that these percentages may be adjusted from time to time.”

3. THAT paragraph 4 of the Agreement be deleted and the following be substituted therefor:

“4. THAT the Authority and the Corporation may, subject to confirmation in accordance with applicable law, amend the tariff to give effect to the division of tolls herein and, without affecting the substance or tenor of the tariff, add to or delete from the lists of goods defined as ‘bulk cargo’, ‘feed grains’, and ‘food grains’ in the tariff, and to make such other changes in the tariff as will be compatible with its general terms.”

4. THAT paragraph 5 of the Agreement be modified by adding at the end thereof the following sentence:

“Provided, however, that the arrangement contemplated herein will not preclude the Corporation from billing and collecting its share of the total revenue when it so desires.”

5. THAT paragraph 6 of the Agreement be deleted and the following be substituted therefor:

“6. THAT there shall be constituted a Joint Tolls Review Board, hereinafter referred to as the ‘Board’, comprised of four persons, two of whom shall be appointed by the Authority and two by the Corporation. The Authority and the Corporation shall alternately appoint a member of the Board to be Chairman, and the Chairman shall act in that capacity for a period of one year or until replaced. Three members of the Board, one of whom shall be the chairman, shall form a quorum. The chairman shall have the right to vote at all meetings of the Board and, in case of equal division, shall also have a casting vote. The Board shall sit at the direction of the chairman who shall cause a record of the proceedings thereof to be kept. The Board may make rules and regulations for its own conduct. It shall be the duty of the Board to hear complaints relating to the interpretation of the tariff by the Authority or the Corporation, or with respect to alleged unjust discrimination arising out of the operation of the said tariff. It shall also be the duty of the Board to conduct an annual review of the tariff of tolls and the sufficiency of the revenues generated by that tariff to meet the respective requirements of the Authority and the Corporation.”

6. THAT paragraph 7 of the Agreement be deleted.

7. THAT the terms and conditions of the Agreement, except as herein modified, shall continue to remain in full force and effect.

THE ST. LAWRENCE SEAWAY AUTHORITY

Paul D. Normandin
President

SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION

David W. Oberlin
Administrator

Executed at Washington, D.C.
this first day of March, 1978

ST. LAWRENCE SEAWAY TARIFF OF TOLLS

Title

1. This tariff may be cited as the St. Lawrence Seaway Tariff of Tolls.

Interpretation

2. In this tariff:

(a) “Authority” means the St. Lawrence Seaway Authority;

(b) “Bulk cargo” means such goods as are loose or in mass and generally must be shovelled, pumped, blown, scooped or forked in the handling and, without limiting the generality of the term or otherwise affecting its meaning, shall be deemed to include:

(i) cement, loose or in sacks;

(ii) coke and petroleum coke, loose or in sacks;

(iii) domestic package freight;

(iv) liquids carried in ships’ tanks;

(v) ores and minerals (crude, screened, sized or concentrated, but not otherwise processed) loose or in sacks, including alumina, bauxite, coal, gravel, phosphate rock, sand, stone and sulphur;

(vi) pig iron, scrap metals;

(vii) pulpwood, poles and logs, loose or bundled;

(viii) raw sugar, flour, loose or in sacks;

(ix) woodpulp, loose or in bales;

(c) “Cargo” means all goods aboard a vessel whether carried as revenue or non-revenue freight, or carried for the vessel owner, except: empty containers and the tare weight of loaded containers, all such containers having a cubic capacity of 640 feet or more; ships’ fuel, ballast or stores, or crew and passengers’ personal effects, and intransit cargo that is carried both upbound and downbound in the course of the same voyage which shall be reported in the Seaway Transit Declaration Form but is deemed to be ballast and not subject to toll assessment;

(d) “Containerized cargo” means any general cargo shipped in an enclosed, permanent, reusable, nondisposable, weathertight, shipping conveyance having a cubic capacity of 640 feet or more and fitted with a minimum of one hinged door;

(e) “Corporation” means the Saint Lawrence Seaway Development Corporation;

(f) “Domestic package freight” means cargo, the shipment of which originates at one Canadian point and terminates at another Canadian point, or which originates at one United States point and terminates at another United States point, but shall not include any import or export cargo designated at the point of origin for transshipment by water at a point in Canada or in the United States;

(g) “Feed grains” means barley, corn, oats, flaxseed, rapeseed, soybeans and other oilseeds, grain screenings, and mill feed containing not more than 35% of ingredients other than grain or grain products;

(h) “Food grains” means buckwheat, dried beans, dried peas, rye and wheat;

(i) “General cargo” means all goods not included in the definitions under paragraphs (b), (g), (h) and (j);

(j) “Government aid cargo” means processed food products which have been donated by or the purchase of which has been financed on concessional terms by the Federal government of either the United States or Canada for the purposes of nutrition, economic development, emergency, or disaster relief programs;

(k) “Passenger” means any person being transported through the Seaway who has paid a fare for passage;

(1) “Pleasure craft” means a vessel, however propelled, that is used exclusively for pleasure and does not carry passengers;

(m) “St. Lawrence Seaway” includes all facilities and services authorized under the St. Lawrence Seaway Authority Act, Chapter 242, Revised Statutes of Canada, 1952, as amended and under Public Law 358, 83rd Congress, May 13, 1954, enacted by the Congress of the United States, as amended and including the Welland Canal, which facilities and services are under the control and administration or immediate financial responsibility of either the Authority or the Corporation;

(n) “Seaway” means the St. Lawrence Seaway;

(o) “Tolls” means the total assessment levied against a vessel, its cargo and passengers for complete or partial transit of the Seaway covering a single trip in one direction;

(p) “Tons” means, unless otherwise stated, a metric unit of weight of 1,000 kilograms (2204.62 pounds);

(q) “Vessel” means every type of craft used as a means of transportation on water, except a vessel of or employed by the Authority or the Corporation.

Tolls

3. (1) The tolls shall be as set forth in the Schedule hereto, and the toll level reached in 1980 shall remain in effect thereafter until modified.

(2) The tolls under this Tariff are due from the representative of each vessel as soon as they are incurred and upon demand of either the Authority or the Corporation payment shall be made within fourteen days of the date of such demand.

(3) The tolls for the section between Montreal and Lake Ontario shall be paid 71 per cent in Canadian dollars and 29 per cent in United States dollars. Payments for transit through locks in Canada only shall be paid in Canadian dollars, and payments for transit through locks in the United States only shall be paid in United States dollars.

(4) The tolls for transit of the Welland Canal shall be paid in Canadian dollars and shall accrue to the Authority.

Security for Payment

4. A representative of each vessel shall provide the Authority or the Corporation with security, satisfactory to the Authority or the Corporation, for payment of tolls.

Description and Weight of Cargo

5. (1) A cord of pulpwood shall be deemed to weigh 1,450 kilograms (3196.70 pounds).

(3) The tonnage used in the assessment of tolls shall be calculated to the nearest 1,000 kilograms (2204.62 pounds).

Schedule

II

The Secretary of State of the United States of America to the Ambassador of Canada

WASHINGTON, March 20, 1978

His Excellency Peter M. Towe,
Ambassador of Canada

Excellency:

I have the honor to refer to your note no. 124 of this date which refers to the conclusion of discussions between officials of both Governments concerning the tariff of tolls for use of the navigational facilities of the St. Lawrence Seaway under the jurisdiction of the St. Lawrence Seaway Authority in Canada, and the Saint Lawrence Seaway Development Corporation in the United States, and the signature by the two Seaway entities of the Memorandum of Agreement annexed to your note.

I have the further honor of indicating the assent of the United States Government to the terms and provisions set forth in your note and its annex, and to concur in your proposal that your note, its annex, and this reply shall together constitute an agreement between our two Governments effective on this date.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State:

Julius L. Katz