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Exchange of Notes constituting an Agreement between the Government of Canada and the Government of the United States of America amending the Agreement concerning the Application of Tolls on the St. Lawrence Seaway of March 9, 1959, as amended [1994] CATSer 12 (12 July 1994)

E100479 - CTS 1994 No. 39

EXCHANGE OF NOTES CONSTITUTING AN AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA AMENDING THE AGREEMENT CONCERNING THE APPLICATION OF TOLLS ON THE ST. LAWRENCE SEAWAY OF MARCH 9, 1959, AS AMENDED

I

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

CANADIAN EMBASSY

WASHINGTON, June 10, 1994

No. 85

The Honourable Warren Christopher
Secretary of State
Washington, D.C.

Mr. Secretary,

I have the honour to refer to the discussions which took place recently between officials of The St. Lawrence Seaway Authority of Canada and the Saint Lawrence Seaway Development Corporation of the United States regarding the Memorandum of Agreement between those agencies, dated January 29, 1959, and the Tariff of Tolls set out therein, which were attached to the Exchange of Notes of March 9, 1959, between our two Governments, and amended in 1964, 1967, 1972, 1978, 1980, 1982, 1984, 1985, 1986, 1987, 1988, 1989, 1991, 1992 and 1993.

The discussions resulted in the signature of the enclosed Memorandum of Agreement by the President of the St. Lawrence Seaway Authority at Ottawa on April 11, 1994 and by the Administrator of the Saint Lawrence Seaway Development Corporation at Washington, D.C. on April 21, 1994. This Memorandum of Agreement sets forth amendments to the Memorandum of Agreement of January 1959, as amended, which deal with revisions to the incentive tolls program regarding the alternate use of bunkers and the reduction of tolls charged on steel slab.

I have the further honour to propose that this Note and the enclosed Memorandum of Agreement, which are both authentic in English and French, 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 1959, as previously amended.

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

Raymond Chrétien

Ambassador

Enclosure
Memorandum of Agreement

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, hereinafter referred to as the "Tariff".

WHEREAS Clause 4 of the Agreement provides that "subject to confirmation in accordance with applicable law", changes that "will be compatible with the general terms of the Tariff" may be made by the Authority and the Corporation.

NOW THEREFORE, the Authority and the Corporation have agreed to recommend to their respective Governments the following amendments to the Agreement and the Tariff:

1. THAT Clause 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 between Montreal and Lake Ontario be deleted and the following 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, from calendar year 1994 and until adjusted, be 75 percent in Canadian dollars to the Authority and 25 percent in United States dollars to the Corporation.

2. THAT subsection 2(i) of the Tariff be revoked and the following substituted therefor:

(i) "General cargo" means all goods not included in the definitions under paragraphs (b), (g), (h) and (j), but excluding steel slab;

3. THAT Sections 7, 8 and 9 of the Tariff be revoked and the following substituted therefor:

Incentive Tolls Program

7. (1) Notwithstanding anything contained in the Tariff, the portion of the composite toll related to charges per metric ton of cargo charged on new business shall be reduced by fifty percent for a Seaway transit beginning and ending during the 1994 navigation year.

(2) The discount mentioned in (1) above shall be granted for the remainder of the navigation season if:

(a) a vessel carries, for each transit, 1,000 metric tons or more of new business or a minimum of 1,000 cubic metres of new business project cargo; and

(b) a complete and accurate application for a new business discount, in the manner set forth in the Appendix hereto, is submitted to the Authority for evaluation and audit prior to the beginning of a Seaway transit.

(3) For the purposes of this section, "new business" means cargo that has not moved through a Seaway lock between an origin and a destination as defined below during the navigation seasons of 1991, 1992 and 1993 or cargo that has moved through a Seaway lock in quantities representing less than five percent of the average of Seaway traffic between an origin and a destination during the navigation seasons of 1991, 1992 and 1993. For the purposes of this subsection, "origin" and "destination" mean the country in which cargo is loaded or unloaded, but if the cargo is loaded or unloaded in North America, "origin" and "destination" mean the geographic region in which cargo is loaded or unloaded, those geographic regions being as follows:

(i) the Gulf of St. Lawrence to St. Lambert lock;

(ii) St. Lambert Lock to Cape Vincent on the St. Lawrence River, Lake Ontario and the Welland Canal;

(iii) Lake Erie, Lake Huron and connecting waters;

(iv) Lake Michigan;

(v) Lake Superior and St. Mary’s River; and

(vi) ports elsewhere in North America in regions not specifically described in (i) through (v).

8. (1) A volume rebate shall be granted to a shipper of downbound cargo or to a receiver of upbound cargo at the end of the 1994 navigation season after payment of the full toll specified in the Schedule under the Tariff if shipments of a particular commodity during 1994 exceed by a minimum of 25,000 tonnes the shipper’s or receiver’s highest tonnage for that particular commodity during 1991, 1992 or 1993 in the Seaway. Shippers will be qualified based on the particular commodity loaded at their port of origin, and receivers will be qualified based on the particular commodity unloaded at their port of destination. Shippers and receivers located within the Seaway will be qualified based on the total of their upbound and downbound shipments or receipts of the particular commodity. Should a shipper and receiver of the same commodity qualify for a volume rebate, the rebate will be divided equally between the shipper and the receiver.

(2) Volume rebates shall be granted only with respect to commodities whose shipper and receiver have shipped or received the subject commodity in the years 1991, 1992 and 1993 and have not been the subject of a merger or take-over during 1991, 1992, 1993 or 1994.

(3) The volume rebate shall be equal to a fifty percent reduction of the portion of the composite toll related to charges per metric ton of cargo paid for the shipments that surpass the shipper’s or receiver’s highest tonnage for that commodity during 1991, 1992 or 1993. Payment of rebates will be made directly to the qualified receiver or shipper.

(4) The Seaway traffic history describing the shipper’s or receiver’s tonnage shall be submitted by the shipper or receiver prior to the end of 1994 and shall be subject to audit by the Authority.

(5) Cargoes having been the subject of a new business discount or an alternate use of bulker discount described in Section 9 below shall be excluded from the statistics used for the calculation of volume rebates.

9. Notwithstanding anything in the Tariff, the toll for steel slab, 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 within the St. Lawrence Seaway/Great Lakes system during the three navigation seasons immediately preceding the applicable season shall, upon written application to the Authority or the Corporation prior to the beginning of a Seaway transit, be the toll charged for food grains specified in the Schedule under the Tariff.

10. Notwithstanding anything in the Tariff, a carrier, shipper or receiver shall obtain during a single navigation season, with respect to the same shipment, only one of the following three: a new business discount, a bulk trade discount described in Section 9 above or a volume rebate.

4. THAT the Schedule to the Tariff be revoked and the following substituted therefor.

5. AND THAT the terms of the Agreement and the Tariff as previously amended, except as herein modified, shall continue to remain in full force and effect.

Executed at Ottawa, this 11^th day of April, 1994.

BY

Glendon R. Stewart
President

THE ST. LAWRENCE SEAWAY AUTHORITY

Executed at Washington this 21st day of April, 1994.

Stanford Parris
Administrator

SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION

* Includes Federal Taxes where applicable

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

DEPARTMENT OF STATE

WASHINGTON, July 12, 1994

His Excellency Raymond Chretien,
Ambassador of Canada

Excellency:

I have the honor to refer to your Note number 85, dated June 10, 1994, which refers to the Agreement between our two Governments governing tolls on the St. Lawrence Seaway, effected by the exchange of notes March 9, 1959, with the annexed Memorandum of Agreement of January 29, 1959, as amended, and to the Memorandum of Agreement signed April 11 and April 21, 1994, by officials of The Saint Lawrence Seaway Development Corporation of the United States of America and the St. Lawrence Seaway Authority of Canada, which was enclosed with your Note and which sets forth amendments to the Memorandum of Agreement of January 29, 1959.

I have the further honor to inform your Excellency that the proposals to amend the incentive tolls program and volume rebates, to retain the incentive program regarding the alternate use of bunkers, and to reduce tolls charged on steel slab are acceptable to the Government of the United States of America and that your Excellency’s Note, with the enclosed Memorandum of Agreement, together with this Note in reply shall constitute an Agreement between our Governments to further amend the Agreement governing tolls on the St. Lawrence Seaway, 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:

Mary Ann Peters

Enclosure:

Memorandum of Agreement