US, CANADIAN AGENCIES DELAY ST. LAWRENCE SEAWAY TOLL TALKS

US, CANADIAN AGENCIES DELAY ST. LAWRENCE SEAWAY TOLL TALKS

Negotiations between the United States and Canada on millions of dollars of shipping tolls for St. Lawrence Seaway traffic have been delayed until early

December, officials from both sides said last week.

A planned session last Thursday to fix the 1994 level of tolls for ships moving between the Atlantic Ocean and Great Lakes ports was postponed until Dec. 2 at the request of Canada's St. Lawrence Seaway Authority, which needed extra time to develop its proposal.The U.S. St. Lawrence Seaway Development Corp. is pressing its Canadian counterpart to break with past practice and roll back shipping fees, by freezing basic tolls at current levels and expanding discounts already offered for new business and for high volume.

David Sanders, staff chief for the U.S. agency and its lead negotiator, said that although the delay means he won't meet his goal of finishing the toll talks by Thanksgiving, he expects to report new fees soon after the Dec. 2 meeting for the 1994 season that begins next spring.

Mr. Sanders also gave new details about U.S. proposals, which include revamping what he said is a volume-rebate program "too complex to be effective."

Andre Landry, director of planning and business development for the Canadian agency, which operates 13 of the 15 seaway locks, confirmed the delay in negotiations but declined to give any details on Canada's positions.

Port and shipping executives around the lakes say Canada's position is crucial to their freight costs, and complain that seaway tolls are a big obstacle to how well the lakes can compete with Mississippi River barging and railroad competitors.

That's because Canada, with its heavy infrastructure investment in the seaway, collects by far the majority of lockage fees, cargo tolls and ship weight charges - which reached nearly C$57 million (US$43.1 million) during 1992.

Canada's agency is under a legal mandate to charge enough to cover its costs of operating locks and dredging the channel, but with declining ship traffic in recent years it has been dipping into a shrinking reserve account as toll receipts lagged behind expenses.

That puts it in a tough position of perhaps turning to Canada's general budget revenues some time next year if toll receipts do not pick up enough before reserves run out.

The U.S. side, which collected only about US$9 million through its two seaway locks last year, already rebates all its tolls and wants Canada eventually to do the same to stimulate business.

U.S. seaway costs are covered by the separate U.S. harbor maintenance tax.

A three-year, bilateral seaway accord that allowed 5.7 percent annual toll increases expires with the current shipping season.

Great Lakes port officials from both countries have said they expected Canada to again seek higher tolls, but hoped the new Liberal government of Prime Minister Jean Chretien would reverse past Canadian policy and scale back seaway fees as a way to draw more traffic into the lakes.

Mr. Sanders said both sides in the talks exchanged initial proposals in September, but citing a secrecy agreement he would not disclose what Canada offered.

While Canada prepares its next proposal, he said U.S. negotiators ''haven't backed off an inch (from) our position."

Besides freezing normal charges, the U.S. wants to expand a new business incentive that rebates 50 percent of tolls on new-business cargoes during summer months, but only rebates 25 percent in the spring and fall. The U.S. proposal would boost that discount to 50 percent all season.

And Mr. Sanders said he not only wants to expand a high-volume 20 percent toll discount to 50 percent, but also simplify a system under which "nobody in the trade knows who gets the (volume) rebate, or who doesn't, or when."

He said the volume incentive uses a formula that compares current tonnage to a five-year average for each cargo category moving through the seaway, a systemwide yardstick that makes it hard for individual ports, shippers or carriers to know when they qualify.

Noting that seaway traffic is heavy at the end of this season, the U.S. negotiator warned that "an increase in tolls would have a disastrous effect on this momentum."

He added that "by expanding the discount program we can further sustain the very positive momentum and may carry seaway trade to expanded levels."