Decision No. 192-W-2000

March 20, 2000

March 20, 2000

APPLICATION by G. Heard Construction Ltd., pursuant to the Coasting Trade Act, S.C., 1992, c. 31, for a licence to use an unnamed American Versa-Dredge for dredging operations in Central Canada, the Great Lakes and Arctic regions, during the period commencing on or about February 2, 2000 and ending on February 2, 2001.

File No. W9125/H7/00-1


APPLICATION

G. Heard Construction Ltd. (hereinafter the applicant) has applied to the Minister of National Revenue for a licence to operate the service set out in the title. The matter was referred to the Canadian Transportation Agency (hereinafter the Agency) on February 2, 2000.

Notice of the application was given on February 3, 2000. Comments were received from Dean Construction Company Limited (hereinafter Dean Construction), Northern Transportation Company Limited, Nouvelles Frontières, McNally Marine Inc. (hereinafter McNally), Huron District Contracting Limited (hereinafter Huron District), Navigation Arcade Ltée, Verreault Maritime Inc. and Thousand Island Marine Construction. The applicant filed its reply on February 21, 2000, and additional comments were received from Dean Construction, McNally and Huron District.

PRELIMINARY MATTER

On February 28, 2000, the applicant filed with the Agency additional comments after pleadings were closed. The Agency considered the matter and as they were filed outside the normal pleadings, they will not form part of this Decision.

ISSUE

The issue to be addressed is whether there are Canadian vessels suitable and available to provide the proposed service or perform the activities described in the application.

POSITIONS OF THE PARTIES

The applicant

The applicant states that the proposed dredge has special maneuvering capabilities in small places and confined marinas and harbours. It has a draught of 22 inches and is propelled by a star wheel propulsion system that allows it to walk along the bottom. The dredging unit is designed to fill geotextile filtering tubes for projects the applicant has coming in the next few months, which could not be done with larger dredges of hydraulic type offered by McNally, Verreault Maritime Inc. and Dean Construction. The applicant also states that it holds contracts for work on the east shore of Lake Huron, but cannot state dates, as this is dependent on Fisheries and Oceans Fish Habitat Regulations.

Thousand Island Marine Construction

On February 7, 2000, Thousand Island Marine Construction filed an objection to the granting of the application, which was later withdrawn by letter dated February 14, 2000.

Northern Transportation Company

Northern Transportation Company replied that it does not object to this application, but that the Agency should apply coasting trade rules to any application involving United States of America flag vessels in a similar manner to the U.S.A. regulatory criteria of the Jones Act. This policy matter does not fall within the Agency's purview.

Nouvelles Frontières

Nouvelles Frontières states that it has Canadian dredges available for work in the regions of Central Canada, the Arctic and the Great Lakes.

McNally

McNally states that it has numerous dredges available to perform the proposed activity, listing some of its equipment available in the Great Lakes area: JOHN HOLDEN - a 16-inch hydraulic suction dredge, and four clam shell dredges of different capacity ranging from 1.5 cubic yards to 5 cubic yards.

Navigation Arcade Ltée and Verreault Maritime Inc.

Navigation Arcade Ltée objects to the application as it is too vague and does not provide enough details such as the type of dredging, the location and dates of the work to be performed. Verreault Maritime Inc. expresses the same concerns, and adds that it could offer a number of dredges of a different type, but is unable to identify which one of these could perform the activity as the specific activities are not described.

Huron District

Huron District objects to the granting of the application, stating that Canadian equipment is available, including its own, and that the work proposed by the applicant is in the area where it operates on a regular basis, between Port Franks and Port Elgin, on Lake Huron. It has Canadian floating plants to undertake the work, including the tug "DANEL MAC", and the barge "H.D.L. no. 1".

Huron District states that it has equipment that works as well or better in confined areas of marinas or ponds, and that it has been successfully dredging such areas for many years. Its equipment is able to load directly into dump trucks or into other areas, without using large filter bags filled with spoil mixture that has to drain. The filter bags must then be split open so that the material can be hauled away and the bags cannot be reused.

Huron District is not aware of any projects requiring the filling of geotextile tubes, but uses that material for other projects, and this material could be made into containment tubes, if necessary.

Huron District has equipment available to do dredging work including Canadian tug, barge, cable dredge, excavators and dragline, and asserts that it has the Canadian marine equipment to perform the work of the dredge for which the application is being made.

Dean Construction

Dean Construction objects to the granting of the application and states that it has one portable suction dredge that is easily transportable and capable of both large and small volume contracts in an endless range of areas; that it has successfully filled geotextile tubes with its suction dredge; and that it can be mobilized and operational with its suction dredge within a few days notice.

Dean Construction states that the dredge's propulsion method is irrelevant, and that self-propulsion is rarely a necessity for a dredge, but could be obtained by various means. It has equipment that requires only 18 inches draught rather than the 22 inches required for the Versa dredge. Its modular unit suction dredge is not assembled as it can be transported by road or sea and assembled in various configurations, as needed.

Dean Construction lists its floating dredge plants that are available for work in the Great Lakes, St. Lawrence Seaway, Atlantic Coast, Arctic, and Inland waters; the Canadian Jubilee with a 10 cubic yards clamshell dredge; No. 2 Scow with a 5 cubic yards dredge; two Manitoba Bridge transportable sectional barges that can be used with modular suction dredge or clamshell dredge, and can also be used as cutterhead suction dredge; Amherstburg barge with a 1.5 cubic yards clamshell dredge that converts into a 14-inch hydraulic cutterhead suction dredge; and Powell scow being refitted as a 10-inch hopper fed suction dredge or 1.5 cubic yards clamshell. All these are available with matching dumpscows and tugs, including a twin screw shallow draft tug.

ANALYSIS AND FINDINGS

When an offer of Canadian ships is made in response to a notice of application to use a foreign vessel, the Agency must determine whether there is a Canadian ship suitable and available to provide the service or perform the activity described in the application, pursuant to the powers vested in it by section 8 of the Coasting Trade Act.

The application is for an American Versa-dredge to be used for any dredging activities in Central Canada, the Arctic and the Great Lakes areas for a period of approximately one year. The application was opposed by a number of Canadian operators, some offering a variety of Canadian equipment, others stating that the application was too vague to allow them to know which of their vessels to offer because of the lack of information on the requirements for the specific activity.

The Agency notes that a variety of equipment, barge, tugs, hopper suction dredges and clamshell dredges with a capacity ranging from 1.5 cubic yards to 10 cubic yards were offered by operators involved in this type of activity in the Great Lakes area. In addition, McNally offers a 16-inch hydraulic cutter suction dredge. Based on the information on file, the Agency finds that the need for a self-propelled unit has not been demonstrated by the applicant and is of the opinion that Huron District has the Canadian marine equipment required to perform the work of the dredge for which the application is being made.

The Agency is also of the opinion that the requirement for specific equipment capable of filling geotextile filtering tubes has not been proven. In fact, Dean Construction has filled geotextile tubes successfully with its suction dredge and it has equipment that has only 18 inches draught compared to the 22 inches required for the versa-dredge. These floating dredge plants are available for work in the Great Lakes, the St. Lawrence Seaway, the Atlantic Coast, the Arctic and the Inland waters.

In light of the above, the Agency concludes that there are Canadian vessels that are suitable and available to perform the dredging activities stated in the application.

CONCLUSION

The Agency has determined pursuant to subsection 8(1) of the Coasting Trade Act that there are Canadian vessels available to provide the service or perform the activities described in the application.

This determination will be provided to the Minister of National Revenue for any action deemed necessary, as provided for in the Coasting Trade Act.

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