U.S. targets Canadian ships with proposed inspection fee hike

Canadian cargo ships may soon be facing a hefty new bill at American ports on the Great Lakes.

The U.S. Department of Agriculture has proposed a significant hike on inspection fees and the elimination of annual inspection caps on Canadian ships sailing the St. Lawrence Seaway and Great Lakes.

The Canadian shipping industry is crying foul.

According to the Chamber of Marine Commerce's estimates, increased inspection costs for Canadian ships could more than double under the new rules.

Washington's proposed fee increase could increase a ship's annual cost of doing business by as much as 238 per cent, the chamber said.

“They are unjustified on the grounds of environmental risk and would make Canadian Great Lakes vessels less competitive against U.S. Great Lakes ships carrying the same products in the same waters," the chamber's president, Stephen Brooks, said in a media release.

It has proposed to raise the fees for agricultural quarantine and inspection services of ships from $496 to $825 per inspection.

The agency would also eliminate the annual fee cap of charging a maximum of 15 times per vessel.

"These staggering fee hikes fly in the face of President Obama’s oft-spoken commitment to the efficient flow of goods between our two nations."

The United States Department of Agricultural Animal and Plant Health Inspection Service says the increase is needed to recover costs of performing the inspections.

Other vehicles subject to increase

It's also looking at adjusting current fees charged for certain agricultural quarantine and inspection services that are provided in connection with certain commercial trucks, railroad cars and aircraft.

"We have determined that revised user fee categories and revised user fees are necessary to recover the costs of the current level of activity, to account for actual and projected increases in the cost of doing business, and to more accurately align fees with the costs associated with each fee service," the agency says in its proposal.

The agency reviews manifests and documentation accompanying incoming cargo. It also looks for contaminants, pests, or invasive species and inspects containers, compliant wood packaging material and packing materials.

The Chamber of Marine Commerce has filed an official complaint with the U.S. Department of Agriculture, the agency behind the proposal.

“It’s clear to us that Canadian Great Lakes-St. Lawrence ships have been caught in a system intended to prevent
international ships from bringing in pests and infestations from foreign ports. This does not apply to us as our vessels carry primarily non-agricultural products including minerals in bulk," Algoma Central Corporation CEO Greg Wright said in a release.

The fee increases were proposed in April. The comment period ended Tuesday. A final ruling is expected in December.

The Chamber of Marine Commerce says Canadian ships should be exempt since they never leave the bi-national Great Lakes area.

David Cree, president and CEO of the Windsor Port Authority, says the drastic changes would hamper business in Windsor.

He calls the port one of the Great Lakes' most vital shipping hubs.

"It's one thing to absorb increased costs over a period of time, but to have costs go up that quickly all in one year is very difficult to explain to the shipping industry that wants to use the Great Lakes," Cree said.

Cree says the changes would affect both shippers and consumers.

"Impact on costs can certainly have an impact on end users and cost end users, so we're concerned about an increase of that magnitude and share the Chamber of Marine Commerce's sentiments," he said. "We need to have a careful look at it."

Canadian Great Lakes ships carry more than 33 million tonnes of products across the border. Their cargo includes iron ore for steel production; coal for energy production; salt for winter de-icing; and construction materials.

The bi-national Great Lakes-St. Lawrence Seaway marine industry generates $35 billion in business revenues and supports 227,000 jobs in the U.S. and Canada, the Chamber of Marine Commerce says.