Finance Committee on Oct. 16th, 2018

[Sven Biggs]

Certainly. One of the great ironies, and perhaps one of the reasons that the climate crisis has become so acute, is that the people who contribute the least to climate change through their emissions are the people who bear the brunt of it. We see that both in the developing world and the industrialized world, where the developing world pays a higher cost and will face greater impacts. Also, in the north, they're feeling the impacts of climate change more strongly and they're coming on more quickly, so indigenous people around the world are paying a disproportionate cost from climate change.

When we talk about fossil fuel subsidies, we're talking about subsidies to the producers. This has been a long-standing practice by many industrialized countries to create cheap energy. I think that we need to work on technological solutions and a more distributed electrical system. There are some interesting projects going on here in British Columbia. On Haida Gwaii, as an example indigenous community-owned renewable power is replacing diesel generators.

There are communities like that all across here. Not far from here, in Sooke, British Columbia, the T'sou-ke first nation has gone completely renewable through solar panels. Obviously in the north you face extra challenges with those technologies, and there's probably not enough R and D money going into developing solutions to your unique challenges there.

I would say that part of the renewable economy has to be to find the solutions that work for local situations. We have different challenges here in British Columbia, where most of our electricity comes from hydro, than you might in Alberta, where they're trying to phase out coal and are looking at natural gas as a bridge fuel, but ultimately, they need to get to a fossil-free grid.

[The Chair, Liberal, Wayne Easter]

Do you have a supplementary—

[Michael McLeod, Liberal, Northwest Territories, NT]

I just have one final comment.

I think in the Northwest Territories and Nunavut, we are probably the people who want to get off diesel more than anybody else. The diesel generators are noisy and they smell, so we're looking at a plan to try to get off diesel, but it's challenging.

[The Chair, Liberal, Wayne Easter]

Thank you.

We will have time for three more questions from each of the parties, following Mr. Jeneroux.

Go ahead.

[Matt Jeneroux]

Great. Thank you, Mr. Chair.

I'm coming back to you, Mr. Adem. I want to get your thoughts on a public access policy, and we'll do that, but I want to also indicate that you guys received more money last year from the federal government than the previous year. Is that correct?

[Alejandro Adem]

Yes. In budget 2017 we got the increase.

[Matt Jeneroux]

I only ask because it says on your statement that federal government contributions went up. It appears to be $5 million from 2017 to 2018.

[Alejandro Adem]

Of course, it was a contribution agreement, and that got ramped up.

[Matt Jeneroux]

That's good, because I think you guys do good work, so I think it's certainly something that's worth supporting and continuing to support.

That said, I'll go back to the previous question about ensuring that you guys are supported, not just centrally in Ontario and Quebec, but making sure we have that support outside.

You would know very well from your background that outside of Ontario we have polytechnics, NAIT and SAIT in Alberta in particular. You don't currently have partnerships with them, but I'm thinking that those would be great institutions where you could continue to pursue those partnerships. I hope there are continued talks on the way when it comes to that.

Regarding the public access, though, I believe that in February of 2015, the science minister at the time, Ed Holder, announced that public research dollars to the granting council were to be made public, so every dollar spent or put forward through the tri-agency councils had 12 months to be made public to other researchers. That doesn't apply to organizations like Mitacs, the Canadian Cancer Society, the MS Society or whatever. Would you be supportive of a policy that would encourage that? It would encourage other researchers to continue to develop, based on the knowledge of the funding that Mitacs would receive.

[Alejandro Adem]

Sure. I'm fully supportive of transparency in everything that gets done. Absolutely.

[Matt Jeneroux]

Perfect.

[Alejandro Adem]

On your previous question about the colleges and polytechnics, we did start to work with them last year. We started a small project, a program. We're very encouraged by that, and that's precisely one of the points of our expansion.

The first project we did was with Saskatchewan Polytechnic, and I met with their president. It was excellent.

[Matt Jeneroux]

Anything we can do to continue to help you guys grow into the west would be excellent as well.

Mr. Wilson, I think it has been an hour since you spoke. Quickly, on the port authority and in particular the impacts of certain legislation that may have unforeseen results on your industry, is there stuff out there right now that you're finding is not helpful, something that was perhaps intended to be helpful but isn't at the end of the day? Is there something we could take forward to recommend as the finance committee?

[Duncan Wilson]

A piece of legislation we're watching very closely is obviously Bill C-69. Frankly, it's less about the legislation and more about the regulation that will come with the legislation.

Currently, there's a regulation in place that defines a major projects list, which determines what's included and what's excluded in the scope of environmental assessments. Bill C-69 preserves that list under clause 82. However, one of the things that we understand is being considered as an addition to the list is brownfield port terminal redevelopment projects for vessels greater than 25,000 deadweight tonnes, which are currently excluded.

Those are projects that currently go through a port authority-led review process. In our case, we have a very robust project and environmental review process that has been evaluated by a former deputy minister of environment and has stood the test. In the last several years, through that process we have seen almost $3 billion worth of infrastructure move forward in the port of Vancouver.

[Matt Jeneroux]

You're confident with your current process.

[Duncan Wilson]

Yes, and we're quite concerned about the prospect of losing that review authority. There have been grain terminals, potash terminals and a number of facilities, so it's of great importance to us.

[The Chair, Liberal, Wayne Easter]

We'll go to Ms. Rudd, but just as a further question to you, Mr. Wilson, in your statement you mentioned allowing access to capital through timely borrowing limit adjustments to facilitate borrowing for core port infrastructure growth. Can you expand on that? What needs to be done to make that happen?

[Duncan Wilson]

There are two places where we see this as an issue.

One is, as I mentioned, land acquisition. In the Lower Mainland, there's a tremendous shortage of industrial land required to facilitate growth of our trade. Our borrowing limit was set in 2008 when the Lower Mainland port authorities were merged. Since then, our earnings and our financial position have more than doubled in a positive direction, yet our borrowing limit remains the same. We're trying to buy land and secure it for Canada's trade with that same borrowing cap. One of the things we're recommending in the port modernization review is that our borrowing limit be tied to EBITDA, as a multiple of EBITDA, which would effectively double the limit.

The second thing that is a constraint is in terms of major terminal development. For example, right now we're pursuing a major terminal development, and in order for us to be able to go out to market, to infrastructure developers, we need to show that we have the borrowing capacity to move forward with the project. Otherwise, we won't get a competitive bid process. The effect of that not happening is basically delaying, potentially, a $3-billion terminal investment by an additional two years.

[The Chair, Liberal, Wayne Easter]

Do we set that borrowing limit federally?

[Duncan Wilson]

Yes. The borrowing limit is set. It's a discussion between Finance Canada and Transport Canada, and obviously approved by Treasury Board.

[The Chair, Liberal, Wayne Easter]

Thank you. We can look at that.

Go ahead, Ms. Rudd. These are five-minute rounds.

[Kim Rudd]

Thank you very much.

Duncan, just to follow up on a couple of things in your recommendation 8, as you know, the government has gone forward with a number of innovation funds around clean energy, clean transportation, biofuels, electric vehicles and a whole range of things. You're suggesting something that's different from what's there now. What would that look like?

[Duncan Wilson]

We applaud the government's investment in all these other areas. What we have found, though, is there isn't something that fits squarely within where we have identified a need.

We've looked at the gateway's climate footprint. We applaud and support the government's GHG reduction targets. We have a very sophisticated GHG model that we've developed in the port for gateway emissions, meaning rail, shipping, road—you name it. However, even with the most advanced technologies available today fully implemented across all of the four transportation sectors, we will not be able to achieve those targets.

What we would like to see is a fund or a centre of excellence established around those specific transportation areas. A great example would be, in the Lower Mainland, container trucks. As Mr. Julian will know, it's a very challenging area for us. There are zero-emission technologies available that could be implemented, but they come at a high cost. Getting that take-up and that buy-in from the sector is challenging, so we need to get something to jump-start it.

That's basically where we're coming from on that question.

[Kim Rudd]

That's very helpful. Thank you so much for the clarification.

Vern, I want to mention, in terms of.... I've recently taken on a new role as chair of the parliamentary research caucus. One of the things we are recognizing is the importance of technology as we move forward on a number of these fronts, and not just in Canada. As you may know, we are part of.... New Zealand has a similar caucus, and so do other countries. Do you see your organization and those organizations you support being engaged at the national and international level in some of these conversations around health research?

[Vern Brownell]

Absolutely. We should.

At the stage we are now at as a company, it's probably a little bit early for us, but it's absolutely the kind of organization or caucus that we would like to participate in.