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Canada Canada's $4.2 billion cruise industry risks being permanently decimated by proposed U.S. law

01:40  12 june  2021
01:40  12 june  2021 Source:   nationalpost.com

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a large ship in a body of water: The Norwegian Bliss en route from Alaska to Seattle makes it's way towards Ogden Point in Victoria, B.C., on June 1, 2018. © Provided by National Post The Norwegian Bliss en route from Alaska to Seattle makes it's way towards Ogden Point in Victoria, B.C., on June 1, 2018.

Canada’s multi-billion dollar cruise ship industry could end being one of the most permanent economic casualties of the COVID-19 pandemic if the U.S. follows through with a suite of new laws intended to help vessels bypass Canadian ports.

This week, U.S. Senator Mike Lee introduced a bill that, among other things, would repeal a 135-year-old requirement for cruise ships to make a Canadian stopover enroute to Alaska.

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“This arcane law benefits Canada, Mexico, and other countries who receive increased maritime traffic, at the expense of American workers in our coastal cities,” wrote Lee in a June 10 statement .

The Passenger Vessel Service Act, passed in 1886, slaps foreign-flagged ship owners with a fine of US$762 per passenger if they schedule a “closed loop” cruise that only visits U.S. ports. If, for example, the Royal Caribbean-owned Symphony of the Seas loads up its full complement of 6,680 passengers and then goes on a day cruise from Seattle to Portland, its owners can expect a $5 million fine on arrival.

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For Canada, the effect of the law has been to spur a booming trade in visits by cruise vessels looking to dodge the act’s strictures.

This is most apparent on the West Coast, where the 1.7 million people who annually take a cruise ship from the Continental U.S. to Alaska must make a stopover in either Victoria or Vancouver.

In Vancouver, the year 2019 saw 288 visits by Alaska-bound ships, bringing more than a million passengers into the city — a 22 per cent increase in passenger volumes as compared to the prior year. Victoria welcomed a record-breaking 257 ships, pulling in an estimated $130 million in local spending, according to the Greater Victoria Harbour Authority .

a car parked in front of a building:  A cruise ship docks at the Port of Vancouver in 2016. Cruise arrivals in B.C. have grown exponentially in recent years in tandem with the rise in Alaskan cruise traffic. © Ben Nelms for National Post A cruise ship docks at the Port of Vancouver in 2016. Cruise arrivals in B.C. have grown exponentially in recent years in tandem with the rise in Alaskan cruise traffic.

Each year under pre-pandemic conditions, the cruise industry is estimated to bring $4.2 billion in direct and indirect spending to Canada, according to a recent study by the Cruise Lines International Association . Almost all of this is thanks to vessels originating in U.S. ports. On the Atlantic Coast, ships originating mostly from New England bring an annual tide of 1.3 million passengers to Montreal, Quebec City or Halifax.

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With the onset of the COVID-19 pandemic in 2020 – as well as a number of high-profile outbreaks aboard cruise vessels – Canada initially delayed the start of its cruise season until July , before cancelling it entirely.

At the time, Transport Canada’s ban was in line with maritime countries around the world. The U.S. Centres for Disease Control similarly issued a “no sail” order in March 2020. Even when that order was lifted in November, the Cruise Lines International Association, voluntarily agreed to suspend worldwide cruise operations until at least the end of 2020 .

a large ship in the background:  The cruise ship MS Zaandam seen transiting the Panama Canal in March, 2020. The vessel was the site of one of the first major outbreaks of COVID-19 outside China. © REUTERS/Erick Marciscan The cruise ship MS Zaandam seen transiting the Panama Canal in March, 2020. The vessel was the site of one of the first major outbreaks of COVID-19 outside China.

But as mass-vaccination campaigns now cause COVID-19 numbers to plummet across the developed world, regulators are beginning to back off their pandemic restrictions on cruising. Last month, the U.S. Centres for Disease Control cleared cruise lines to begin operating out of U.S. ports provided that 95 per cent of passengers were fully vaccinated . Once on board, conditions are virtually the same as in pre-pandemic times, with minimal social distancing, no masking requirements and even buffet service.

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Europe has also begun to reopen to cruises. Spain lifted its ban on cruise arrivals just this week , while the British cruise industry started back up in late May, provided passengers were either vaccinated or could provide proof of a negative COVID-19 test .

a large ship in a body of water:  The cruise liner MSC Grandiosa sails out of Valletta, Malta on June 10, 2021, a sign of the gradually reopening European cruise economy. © REUTERS/Darrin Zammit The cruise liner MSC Grandiosa sails out of Valletta, Malta on June 10, 2021, a sign of the gradually reopening European cruise economy.

Despite all this, Canada has held fast to a blanket ban on cruise ships until at least February 2022 . Regardless of the vaccination status of those aboard, “cruise vessels carrying more than 100 people are still prohibited from operating in Canadian waters,” according to Transport Canada.

In February, a trio of Alaska representatives directly petitioned Canadian Prime Minister Justin Trudeau to reconsider, saying they believed “there are many ways to achieve a safe sailing season without the extreme measure of a one year total ban.”

“As neighbors and economic partners, we are discouraged by Canada’s lack of outreach before announcing this long term closure,” read the letter, signed by Alaska Congressman Don Young as well as the state’s two senators, Lisa Murkowski and Dan Sullivan.

When Ottawa refused to budge, U.S. lawmakers instead started passing workarounds to the Passenger Vessel Service Act.

The 2021 Alaska cruise season is already safely bypassing Canadian ports thanks to the Alaska Tourism Restoration Act , a bill signed into law by U.S. President Joe Biden that “temporarily allows foreign-owned and flagged cruise ships to transport passengers directly between ports in the states of Washington and Alaska without stopping in Canada.”

The Passenger Vessel Service Act originated as a protectionist law, since it’s designed to ensure that intra-American passenger vessel traffic is reserved exclusively for U.S.-owned vessels.

Although some of the world’s largest cruise companies are American-owned — such as the Miami-based Carnival Cruise Lines — virtually every modern cruise vessel is considered a foreign ship since they fly “flags of convenience” in order to avoid U.S. taxes and labour regulations. The 23 ships operated by Carnival Cruise Lines, for instance, all fly the flags of either Panama, The Bahamas or Malta.

a bunch of items that are on display:  In this aerial view from a drone, five luxury cruise ships are seen being broken down for scrap metal at the Aliaga ship recycling port on October 02, 2020 in Izmir, Turkey. With the global coronavirus pandemic having pushed the multi-billion dollar cruise industry into crisis, some cruise operators were forced to cut losses and retire ships earlier than planned. © Photo by Chris McGrath/Getty Images In this aerial view from a drone, five luxury cruise ships are seen being broken down for scrap metal at the Aliaga ship recycling port on October 02, 2020 in Izmir, Turkey. With the global coronavirus pandemic having pushed the multi-billion dollar cruise industry into crisis, some cruise operators were forced to cut losses and retire ships earlier than planned.

Lee has moved to make the Alaska exemption permanent with a suite of bills gutting the Passenger Vessel Service Act, which the senator has called “bad news.” Most notably, his Safeguarding American Tourism Act would exempt any vessel of more than 800 passengers from the requirement to stop in Canada.

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“This ‘protectionist’ law is literally protecting no one, as there hasn’t been a cruise ship built domestically in over half a century,” said Lee , who fingered Canada as the primary beneficiary of the “arcane” law.

In a Friday statement, B.C. transport minister Rob Fleming said that while he wasn’t worried about the temporary measures of the Alaska Tourism Restoration Act, “this new proposed legislation is of greater concern to British Columbia and Canadians.

The Greater Victoria Harbour Authority, which has seen its revenues hit hard by the cruise cancellation, called on Ottawa to rescind its order against cruise ships in Canadian waters. As the group wrote in a Friday statement, “the threat of any temporary legislation becoming permanent exists and could decimate the $2.7 billion cruise industry in British Columbia.”

• Email: thopper@postmedia.com | Twitter: TristinHopper

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usr: 1
This is interesting!