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Exchange of Notes between the Government of Canada and the Government of the United States of America constituting an Agreement amending the Agreement concerning the Application of Tolls on the St. Lawrence Seaway [1991] CATSer 12 (1 May 1991)

E100474 - CTS 1991 No. 11

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA CONSTITUTING AN AGREEMENT AMENDING THE AGREEMENT CONCERNING THE APPLICATION OF TOLLS ON THE ST. LAWRENCE SEAWAY

I

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

CANADIAN EMBASSY

WASHINGTON, April 26, 1991

Note No. 047

The Honourable James A. Baker, III
Secretary of State
Washington, D.C.

Mr. Secretary,

I have the honour to refer to the discussions which have taken place between officials of the Saint Lawrence Seaway Development Corporation of the United States and The St. Lawrence Seaway Authority of Canada regarding the Memorandum of Agreement between the parties dated January 29, 1959, and the annexed St. Lawrence Seaway Tariff of Tolls, which was annexed to the Exchange of Notes between our two Governments of March 9, 1959, and amended in 1964, 1967, 1972, 1978, 1980, 1982, 1984, 1985, 1986, 1987, 1988, 1989 and 1991.

The discussions resulted, on January 14, 1991 at Washington, D.C., in the signature by the acting Administrator of the Saint Lawrence Seaway Development Corporation of the enclosed Memorandum of Agreement and on January 7, 1991, at Ottawa, in the signature by the President of The St. Lawrence Seaway Authority of the said enclosed Memorandum of Agreement. This Memorandum of Agreement sets forth amendments which deal with the schedule of tolls, the division of tolls between the Seaway entities, definitions found in the Tariff of Tolls, the expansion of incentive tolls and the introduction of volume discounts.

I have the honour to propose that, for calendar years 1991, 1992 and 1993, the rates for the tolls collected pursuant to the St. Lawrence Seaway Tariff of Tolls be as indicated in the enclosed Memorandum of Agreement, that the tolls collected for the section between Montreal and Lake Ontario be paid 75 percent in Canadian dollars and 25 percent in United States dollars, that the definitions found in the Tariff of Tolls be revised as mentioned in the enclosed Memorandum of Agreement, that incentive tolls be continued during 1991, 1992 and 1993 and that volume discounts be offered during 1991, 1992 and 1993.

I have the further honour to propose that this Note, which is authentic in English and French, and the enclosed Memorandum of Agreement, if such meets with the approval of your Government, together with your Note in reply indicating such concurrence, shall constitute an Agreement between our two Governments, which shall enter into force on the date of your reply.

Upon entry into force, this Agreement shall amend the St. Lawrence Seaway Tariff of Tolls effected by the Exchange of Notes of March 9, 1959, as previously amended.

Accept, Mr. Secretary, the renewed assurances of my distinguished consideration.

D. H. Burney

Ambassador

II

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

DEPARTMENT OF STATE

WASHINGTON, May 1, 1991

His Excellency Derek H. Burney
Ambassador of Canada

Excellency:

I have the honor to refer to your Note of April 26 1991, which refers to the conclusion of discussions between officials of our two Governments concerning the rate of tolls, the division of toll revenue between the St. Lawrence Seaway Authority in Canada and the Saint Lawrence Seaway Development Corporation in the United States, revised Tariff definitions, incentive tolls and volume discounts and further to the signature by the two Seaway entities of the Memorandum of Agreement enclosed with your Note.

I have the further honor to inform you that this proposal is acceptable to the Government of the United States of America and to confirm that your Note, together with the enclosed Memorandum of Agreement, and this reply shall constitute an Agreement between our two Governments which shall enter into force on the date of this Note.

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

For the Secretary of State

Robert H. Pines

MEMORANDUM OF AGREEMENT

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 the financial requirements of the two entities, have agreed to recommend to their respective Governments the following amendments to the Agreement:

1. 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 tolls derived from the operation of that portion of the St. Lawrence Seaway situated between Montreal and Lake Ontario shall, for calendar years 1991, 1992 and 1993, be 75 percent in Canadian dollars, to the Authority and 25 percent in United States dollars, to the Corporation. Provided, however, that these percentages may be adjusted from time to time.

2. That subsection 2(b) of the St. Lawrence Seaway Tariff of Tolls be revoked and the following substituted therefor:

(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 shall be deemed to include:

3. That paragraph 2(b)(iii) of the St. Lawrence Tariff of Tolls be revoked and the following substituted therefor:

(iii) domestic cargo

4. That subsection 2(f) of the St. Lawrence Seaway Tariff of Tolls be revoked and the following substituted therefor:

(f) "Domestic cargo" 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;

5. That section 7 of the St. Lawrence Seaway Tariff of Tolls be revoked and the following substituted therefor:

7. (1) Notwithstanding anything contained in this Tariff, the portion of the composite toll related to charges per metric ton of cargo charged on new upbound business and new downbound business shall be reduced by

(i) twenty-five percent for a transit beginning within the Seaway after the opening of navigation and prior to July 1 or beginning on or after October 1 in the years 1991, 1992 and 1993 and ending at the closing of navigation in the years 1991, 1992 and 1993; or

(ii) fifty percent for a transit beginning on or after July 1 and prior to October 1 in the years 1991, 1992 and 1993.

(2) The reduction mentioned in (1) above shall be granted at the end of the applicable navigation season after payment in full toll specified in the Schedule under the Tariff if:

(a) a vessel carries, for each consignee, 1,000 metric tons or more of new downbound or upbound business; and

(b) an application for a new downbound or new upbound business refund is submitted to the Authority or the Corporation for audit by the Authority or the Corporation.

(3) For the purposes of this section, "new downbound business" means

(a) downbound cargo that has not moved through a Seaway lock during the three navigation seasons of 1987 through 1989 or the three navigation seasons immediately preceding the season in which a new downbound business refund is submitted, or

(b) downbound cargo that has moved through a Seaway lock in quantities representing less than five percent of the average of Seaway traffic to the particular destination during the three navigation seasons of 1987 through 1989 or the three navigation seasons immediately preceding the season in which a new downbound business refund is submitted: for the purposes of this subsection 3(b), "destination" means the country in which the cargo is unloaded but if the cargo is unloaded in North America, "destination" means the port at which the cargo is unloaded;

(4) For the purposes of this section, "new upbound business" means

(a) upbound cargo that has not moved through a Seaway lock during the three navigation seasons immediately preceding the season in which a new upbound business refund is submitted, or

(b) upbound cargo that has moved through a Seaway lock in quantities representing less than five percent of the average of Seaway traffic from a particular origin during the three navigation seasons immediately preceding the season in which a new upbound business refund is submitted: for the purposes of this subsection 4(b), "origin" means the country in which the cargo is loaded but if the cargo is loaded in North America, "origin" means the port at which the cargo is loaded;

(5) When a particular cargo becomes new downbound business or new upbound business at any time during 1991, 1992 or 1993, it shall be considered as new downbound business or new upbound business until the end of the 1993 navigation season.

6. That a new section be added to the St. Lawrence Seaway Tariff of Tolls as follows:

8. (1) A volume discount shall be granted to carriers at the end of the 1991, 1992 and 1993 navigation seasons after payment of the full toll specified in the Schedule under the tariff if shipments of a commodity exceed the average amount of shipments for that commodity in the Seaway during the five navigation seasons immediately preceding the season in which a volume discount is applied. The volume discount shall be equal to a 20% reduction of the portion of the composite toll related to charges per metric ton of cargo paid for the shipments that surpass the average for the preceding five seasons. The volume discount shall be applied on a pro rata basis to all carriers of the particular commodity within one navigation season.

(2) If the above conditions are met, a volume discount shall be granted with respect to following commodities:

(a) grain

(b) other agricultural products

(c) iron ore

(d) other mine products

(e) coal

(f) coke

(g) petroleum products

(h) chemicals

(i) stone

(j) salt

(k) other bulk cargo

(l) iron and steel

(m) other general cargo

(n) containers.

(3) Notwithstanding anything above, a carrier shall not obtain, at the end of a navigation season, both a volume discount and a new downbound or new upbound business refund with respect to the same shipment but a carrier shall obtain the greater of the said discount or refund.

9. Notwithstanding anything contained in this Tariff, the toll for general or containerized cargo for any vessel documented under the laws of the United States or registered in Canada in accordance with the laws of Canada that has been engaged primarily in the bulk trade exclusively within the St. Lawrence Seaway/Great Lakes system during the three navigation seasons immediately preceding the applicable season, shall be the toll charged for food grains specified in the Schedule under the tariff.

8. That the Schedule to the St. Lawrence Seaway Tariff of Tolls be revoked and the following substituted therefor:

SCHEDULE

* Includes Federal Taxes where applicable

9. That the terms and conditions of the Agreement as previously amended, except as herein modified, shall continue to remain in full force and effect.

THE ST. LAWRENCE SEAWAY AUTHORITY
Glendon R. Stewart, President
Executed at Ottawa this 7^th day of January 1991

SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION
James L. Emery, Acting Administrator
Executed at Washington, D.C. this 14^th day of January 1991