When Canada in February temporarily banned cruise ships from its ports over Covid-19, the Alaska congressional delegation lambasted the move. They said the move threatened the Alaska cruise industry. What they didn’t mention is that the reason this industry is at the mercy of Canada is because of US law.
This law is the Passenger Ship Services Act of 1886 (PVSA), a close cousin of the Jones Act, another barnacle on maritime commerce and services. But while the Jones Act deals with cargo, the PVSA deals with passengers. It requires cruise ships carrying people between U.S. ports to be U.S.-flagged, U.S.-built, U.S.-owned, and with U.S. crew. As the Alaska example shows, like all protectionism, the law penalizes the very people it is supposed to help.
“The PVSA is not America First,” Utah Senator Mike Lee told the Senate in April. “This is the encapsulation of Special Interests First. Or even, one might say, Canada first. Perhaps this is why the Canadian government is pressuring Congress to keep the PVSA in place.
Canada loves the law because of a loophole that allows ships to bypass the PVSA as long as they call at a foreign port between calls at US ports. This means Canada for Alaska cruise ships. So when Canada closed its ports, it actually shut down the Alaskan industry.
Tourism in general and cruise passengers in particular are already reeling from the cancellations caused by Covid-19. An April report from the Alaska government notes that the cruise industry accounts for $ 3 billion of the state’s economy. “The economies of many communities in Southeast Alaska,” he says, “are entirely dependent on tourism.”