In a bid to save Alaska’s endangered summer cruise season, the state’s congressional delegation has introduced legislation that would effectively hit the pause button on a U.S. law preventing foreign ships from transporting passengers directly between Alaska and Washington state. Perhaps surprisingly, some of the loudest grumblings over the bill’s introduction have not been from U.S. special interest groups but rather those in Canada.
Suffice to say, consternation among foreigners in response to the possible paring back of U.S. protectionist measures is typically not how the script is written. This plot twist is just another one of the many bizarre results of U.S. maritime protectionism.
Under the Passenger Vessel Services Act (PVSA), only cruise ships that are U.S.-flagged, U.S.-crewed, U.S.-owned, and U.S.-built may transport passengers from U.S. ports—typically Seattle—to Alaska and back. But no large cruise ships meeting these requirements operate in the Alaska market (and only one such ship deemed compliant with the law operates anywhere, the Hawaii‐based Pride of America).
As a result, cruise ships departing from U.S. ports must stop in a foreign country—thus making the voyage international rather than purely domestic—to avoid running afoul of the 135‐year‐old protectionist law and incurring a hefty $798 per passenger fine. For Alaska cruises that means a visit to Canada. Stopovers in the country, however, were taken off the table after Canada announced last month that it was placing its ports off‐limits to passenger ships through February 2022 owing to COVID-19 concerns.
Barring Ottawa changing its mind or Washington changing the PVSA, the large cruise ships that typically ply Alaska’s waters during the summer months will be absent this year—and the tourist dollars that come with them. That’s no small thing, with over half of tourists to the state arriving on these vessels.
To address this situation Alaska’s congressional delegation recently put forward a bill that would deem voyages between Alaska and Washington state to be “foreign” and thus not subject to the PVSA through next February. Some in Canada’s tourist industry are worried, however, that a temporary respite from the PVSA could whet the appetite for more permanent changes to the law:
“We are very concerned that this temporary change to the U.S. Passenger Vessel Services Act could become permanent,” said [Wendy Paradis, president of the Association of Canadian Travel Agencies].
Paradis adds: “At the very minimum, in 2021, the Canadian government should allow an operational or ‘technical’ stop in Victoria to satisfy the Jones Act and thus allow Seattle‐based Alaska cruises to run this season, with the required stop in Canada. It keeps port operations continuing and will allow for a more expeditious start when the cruise ban order is lifted.”
If cruise ships are no longer required to call at Canadian ports, “this may have a long term and devastating impact on the [British Columbia] economy and the Canadian travel industry.”
In 2019 the positive economic impact to B.C. from the Alaska cruise season was $2.72 billion and 17,384 jobs.
Such concerns are completely logical. In terms of the large cruise ships that operate between Alaska and the lower 48, Canada’s tourism sector is the PVSA’s lone beneficiary owing to the needless diversion of such vessels to Canadian ports. American shipbuilders aren’t benefitting from the law’s U.S.-built requirement as they haven’t delivered such a vessel in over 60 years. No large U.S. cruise ships are being “protected” in the Alaska cruise market because none exist (there are some smaller PVSA‐compliant vessels that offer Alaska cruises, but most of them accommodate fewer than 100 guests and all of them fewer than 200). And U.S. mariners aren’t benefitting as they have no large cruise ships to crew.
That the greatest amount of handwringing to emerge over efforts to provide PVSA relief comes from Canada should be a flashing red light to policymakers that something is seriously amiss. While pausing the law’s application to Alaska cruises would be a welcome step, this episode demonstrates that a permanent exemption is clearly warranted.