Seaway Tolls

tollsNo To Tolls On The Seaway!

TEGMA successfully worked to defeat the Administration's proposed tolls for the Saint Lawrence Seaway Development Corporation (SLSDC) and in 2005 the House Appropriations Committee rejected the proposal when it approved the FY’06 appropriations bill for the Department of Transportation.  Instead, the Committee recommended that the SLSDC be funded entirely through the Harbor Maintenance Trust Fund – as it has been funded since 1985.

Background:
The Great Lakes - St. Lawrence Seaway navigation system provides the U.S. and Canadian midwest with a cost effective waterborne transportation network, linking the region’s ports with each other and with global markets.  U.S. ports on the Great Lakes handle over 200 million tons of cargo each year, supporting more than 150,000 jobs in the region.  The most critical components of the waterway are the 15 locks of the St. Lawrence Seaway.  These locks not only allow ships to navigate the St. Lawrence River from Montreal to Lake Ontario, they also enable vessels to bypass Niagara Falls.  Of the Seaway’s 15 locks, two are in the United States and 13 are in Canada.

Between 1959 and 1986, both the U.S. and Canadian governments charged tolls for vessels transiting the Seaway locks.  These tolls generated revenue for operation and maintenance of the locks.  In 1987, the United States stopped charging tolls.  Canada continues to charge tolls.  U.S. tolls were eliminated in 1986 when Congress created the U.S. Harbor Maintenance Tax.  The Harbor Maintenance Tax was enacted to generate revenue for operation and maintenance of the nation’s navigation infrastructure.  Congress felt that it was inappropriate and unfair for Great Lakes maritime commerce to have to bear the burden of two user fees.  Consequently, Seaway tolls were eliminated. 

On February 7, 2005, the Bush Administration released its proposed budget for federal Fiscal Year 2006.  The budget included a proposal for the United States to once again charge tolls on the U.S. portions on the St. Lawrence Seaway.  These tolls were intended to generate $8 million in the first year, $16 million in the second year and any amount necessary thereafter to cover operation and maintenance costs.   

Competitive Agriculture Requires Cost Effective Transportation

  • The Tolls Could Cripple Trade Through The Seaway:  Millions of tons of agricultural products such as wheat, corn, soybeans, oats, barley, peas and beans are exported through the Seaway each year.  In an industry where pennies matter, the toll proposal could add up to 30 cents to the cost of each ton of export grain.
  • The Seaway Serves As An Important Alternative:  The St. Lawrence Seaway navigation system provides the US Midwest with a cost effective waterborne transportation network, linking the region's ports with each other and with global markets.  It is important that Midwest agricultural producers have efficient transportation alternatives, especially as railways and highways reach capacity.

Tolls Hinder The Seaway's Ability To Compete

  • The Tolls Represent Double Taxation:  Users of the Seaway already pay a user fee to support the operation and maintenance.  The Harbor Maintenance Tax, enacted in 1986, is currently assessed at all Great Lakes and coastal ports.  The revenue from the tax is deposited to the Harbor Maintenance Trust Fund, which today has a surplus balance of $459 million.
  • Only The Seaway Would Have 50% Of Its Budget Funded By Tolls:  The proposal calls for $8.28 million of the $17.18 million budget to be funded by the reimplementation of tolls, with 100% of the budget financed by tolls in 2007.  This is the only new maritime user fee in the Administration's budget.
  • Tolls Discriminate Against The Great Lakes Navigation System:  A new tax imposed exclusively on the users of the Seaway will disadvantage shipments from the region.  This could result in a diversion of cargo to other ports, which translates into job loss at the ports. 

 

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