International Trade Committee on April 30th, 2024

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

This is meeting 102 of the Standing Committee on International Trade.

Before we begin, I would like to remind all members and other meeting participants in the room of the following important preventative measures.

To prevent disruptive and potentially harmful audio feedback incidents that can cause injuries, all in-person participants are reminded to keep their earpieces away from all microphones at all times.

As indicated in the communiqué from the Speaker to all members on Monday, the following measures have been taken to help prevent audio feedback incidents.

All earpieces have been replaced by a model that greatly reduces the probability of audio feedback. The new earpieces are black in colour, whereas the former earpieces were grey. Please only use the approved black earpieces.

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These measures are in place so we can conduct our business without interruption and to protect the health and safety of all participants. Thank you all for your co-operation.

I'm not going to read the rest of the message, because it's the same one I read to you every week.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, October 17, 2023, the committee is resuming its study of Canadian businesses in supply chains and global markets.

We have with us today, from the Buffalo and Fort Erie Public Bridge Authority, Ron Reinas, chief executive officer. Welcome back, Ron.

From the City of Port Colborne, we have William Steele, mayor, by video conference.

From the Federal Economic Development Agency for Southern Ontario, we welcome Steve Masson, acting vice-president.

From the Hamilton-Oshawa Port Authority, Ian Hamilton, president, is appearing by video conference.

From Naviga Supply Chain, we welcome Matt Weller, founder.

Finally, from the St. Lawrence Seaway Management Corporation, we have Jean Aubry-Morin, vice-president, external relations, by video conference.

Welcome to you all. I believe there's one witness who is not online yet. Mr. Hamilton has not been able to connect yet, so we'll hold those questions until he's able to join us.

Thank you for taking time out of your busy day to come share your information and your thoughts with us.

We will start with Mr. Reinas, please.

I invite you to speak for up to five minutes.

[Ron Reinas, Chief Executive Officer, Buffalo and Fort Erie Public Bridge Authority]

Thank you, Madam Chair.

Good afternoon.

The Peace Bridge between Buffalo, New York and Fort Erie, Ontario is a critical land-border crossing, with 1.1 million trucks and 4.5 million cars crossing annually. Its public authority is governed by a 10-member international board, with the five Canadian members appointed by Privy Council upon the recommendation of the Minister of Transport.

Canada has invested heavily in trade-related infrastructure—almost $5 billion through the national trade corridors fund, or NTCF, and another $6.5 billion for the new Gordie Howe bridge, as well as other initiatives, such as the Niagara trade corridor. However, since the year 2000, truck traffic across the Canada-U.S. border has declined by almost 25%. In 2023, Mexico surpassed Canada as the top U.S. trading partner. Overall, as a share of all U.S. trade, Canada has declined from 21% in 2000 to 15% in 2023.

Infrastructure investment is negated if other government actions or inaction prevent the border from being as seamless and free-flowing as possible.

Here are three examples.

First, because Immigration, Refugees and Citizenship Canada does not have reasonable service standards for processing the paperwork associated with maintaining or changing status for temporary Canadian residents, it forces people to drive hours to the border, where they must cross the border, be denied entry to the U.S. and return to Canada, where they then receive immigration services immediately. This process has been termed “flagpoling”.

What happens at the border when some 35,000 annual flagpolers arrive? At the Niagara River and Champlain crossings, it takes at least 30 minutes for a flagpoler to be processed by U.S. Customs and Border Protection, translating to eight officers a week dedicated to this process. This means they are unable to staff primary inspection lines, resulting in delays for cars and trucks carrying Canadian exports to the United States. This process is repeated when these temporary residents return to Canada, tying up a similar number of CBSA officers. This process simply should not be happening at the border. During the COVID-19 pandemic, it couldn't because of travel restrictions and it didn't have to, because IRCC granted what was called “implied status” if a temporary resident applied online before their status expired.

Second, the Peace Bridge is the recipient of a $5-million NTCF grant to construct an innovative commercial pre-arrival project. We are constructing infrastructure in Canada to support technology supplied by U.S. customs, allowing all trucks to be scanned and manifest data to be collected while in motion, then adjudicated during the two- or three-minute transit across the bridge. The result is a much shorter stop at the U.S. primary inspection booth. It's a game-changer for the border in terms of enhanced security while at the same time significantly expediting Canadian exports to the U.S.

Why is this project so critical? In 2021, the United States passed the Securing America's Ports of Entry Act, requiring CBP to plan for 100% non-intrusive inspection for all land ports of entry within six years. At the Peace Bridge, it would be impossible to implement that mandate in the United States. Regardless, it is common sense to collect that data in Canada and take advantage of the time and space, resulting in a clearance process that is so much quicker than is currently the case.

Unfortunately, we are not able to realize the full potential of this project because, thus far, Canada has not approved facial identity verification to allow CBP to make inadmissibility determination for the U.S. in transit, even though every truck that goes through the non-intrusive scan in Canada must, in fact, enter the United States.

Third, Treasury Board and Canada's Customs and Immigration Union are at an impasse and there will likely be strike action this summer, seriously impeding the border. The union is telegraphing that it will “bring international borders to a standstill through work to rule action”, even though the union states that work to rule is considered a strike action and Treasury Board states that most CBSA officers are considered essential and “prohibited from participating in a strike”. This happened in 2021 when the border was essentially shut down, with truck queues longer than seven miles entering Canada, and supply chains, trade, tourism and travel all hopelessly gridlocked.

If a free-flowing border is as important as everyone says it is for the well-being of Canada, this simply should not be allowed to happen.

Thank you for the opportunity to make these remarks.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Steele for up to five minutes, please.

[William Steele, Mayor, City of Port Colborne]

Honourable Chair, members of the committee and fellow witnesses, good afternoon.

I want to start off by saying that I'm honoured to be here before the House of Commons Standing Committee on International Trade. Thank you for the invitation to speak and share my views on Canadian businesses in supply chains and global markets.

I think most Canadians will agree with me when I say that we're fortunate to be citizens of such a resource-rich nation. Having easy access to raw materials and bulk commodities makes Canada an important link in the whole supply chain system.

Every day when I look out my window, whether it's from my truck as I'm driving to work or from my office at city hall, the bustling traffic on the Welland Canal always reminds me just how much Canada is connected to the rest of the world. As far as I'm concerned, the cargo on the ships passing through Port Colborne is precious cargo, and, without any of it, our lives would not be the same.

It took a global pandemic for us to realize that we often take the transportation of goods for granted. Since being elected and re-elected as mayor, one of my main priorities has been championing this message, that positive relationships between the public and private sectors are essential. I know I'm not the only one who believes this.

The four mayors along the Welland Canal, Matt Siscoe in St. Catharines, Terry Ugulini in Thorold, Frank Campion in Welland and me in Port Colborne, have all provided our support for partnerships that will position the Niagara region as a strong, multimodal transportation hub.

For the past 200 years, Port Colborne's residents have rolled up their sleeves, started businesses and worked hard at making sure that the Great Lakes stay a vital trade route for Canada. We are incredibly proud of all the progress that's being made today to revitalize our waterfront and transform hundreds of acres of industrial land along the canal. We may be a small town with a community of just over 20,000 people, but we prioritize economic development in a big way. An independent report in 2022 showed that maritime shipping in Port Colborne generates an economic impact of $64.5 million annually.

The Great Lakes—St. Lawrence region is the industrial and agricultural heartland of both the United States and Canada, with a combined GDP of more than $6 trillion U.S. This output would represent the third-largest economy in the world behind the U.S. and China if it were a country. Ontario is the third-largest trading partner with the United States after Mexico and China. Now, imagine what that number could be for all Lake Erie ports if, under a warming climate, year-round shipping became a reality.

I've been a long-time advocate for expanding marine shipping on the Great Lakes, and for good reason. First, it would reduce the number of trucks in urban areas, leading to less strain and congestion on our roads or highway infrastructures. Second, it's a more environmentally friendly option, contributing to lower carbon emissions. Finally, increased shipping activities creates new jobs in the marine industry and allows truck drivers to be closer to home.

In saying all of this, it may sound like I favour marine shipping over other modes of transport. Truthfully though, when it comes to optimizing supply chains and ensuring that Canada is a leading trade partner, I believe that different modes of transport need to work together and be complementary, not competitive.

The global marketplace offers Canadian businesses incredible opportunities, but it's not without its challenges. We saw this during the COVID-19 pandemic. Disruptions and inefficiencies in any supply chain won't just hurt the Canadian economy, but also the everyday lives of Canadian consumers.

Through my involvement with the Great Lakes and St. Lawrence cities initiative, I've had productive conversations with fellow mayors as well as government officials about how cross-border supply chains—that is, at land borders and between Great Lakes ports—are the backbone of Canada's reputation on the world stage.

I'll wrap up by putting emphasis on the importance of collaborative supply chain relationships. We need supply chains to be sustainable, reliable and multimodal if we want Canada's place in the value chain to improve.

There is no doubt in my mind that the federal government should lead by strategically investing in key supply chain infrastructure and by working towards modernizing policy to boost the competitiveness of Canadian businesses.

Thank you again for this opportunity to appear before the standing committee.

I'd be happy to take questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Now we go to Mr. Masson for five minutes, please.

[Steve Masson, Acting Vice-President, Policy, Partnerships and Communications, Federal Economic Development Agency for Southern Ontario]

Good afternoon, Madam Chair and members of the Standing Committee on International Trade.

Thank you for the invitation and the opportunity to be here today.

My name is Steve Masson. I'm the acting vice-president of policy, partnerships and communications for the Federal Economic Development Agency for Southern Ontario, which I will refer to as FedDev Ontario or the agency during my testimony.

Before I begin, I would like to acknowledge that the land on which I join you today is the traditional unceded territory of the Algonquin Anishinabe people, specifically the Algonquins of Pikwakanagan.

FedDev Ontario is one of seven regional development agencies. Our area of focus is southern Ontario. With offices in Waterloo, Toronto, Ottawa and Peterborough, the agency provides economic growth programs and services to small and medium-sized enterprises, communities and organizations. Its mandate is to strengthen the capacity for innovation and clean, inclusive economic growth across a region that is a significant driver of Canada's economy, accounting for more than a third of Canada's population, gross domestic product and employment.

Ninety nine per cent of all businesses in Ontario are SMEs, of which there are almost half a million across the province. Ontario also has the largest amount of international trade of all the provinces and territories, valued at $760 billion in 2023, amounting to half of Canada’s international exports and imports of goods and services.

Helping SMEs to scale up, expand to new markets and integrate into global supply chains is key to fuelling economic growth in the region. FedDev Ontario coinvests in projects that help SMEs to develop, commercialize or produce innovative products, processes and services; improve productivity, capacity and competitiveness; and scale up and expand to develop new business opportunities, including diversification into new global markets.

In addition to directly supporting SMEs, we also invest in cluster building projects across our innovation ecosystem that can act as magnets for attracting international talent and investment to the region. We also work with not-for-profit organizations, such as business accelerators and incubators, to provide tailored support to our scaling firms to help them along their growth journey and enter new markets.

In 2022-23, FedDev Ontario invested $154 million in 135 projects through its ongoing programs. These projects helped create and maintain more than 13,000 jobs and facilitated growth opportunities.

Many of these growth-oriented investments have helped SMEs enter new domestic and international markets and reach new customers across a diverse range of sectors, including digital technology, food and beverage manufacturing, and aerospace.

As in other regions of the country, the pandemic highlighted the vulnerability of our supply chains. Through its investments, FedDev Ontario has supported companies to onshore key capabilities and thereby build a more resilient domestic supply chain. In fact, this was a key priority under the jobs and growth fund that we recently delivered.

Southern Ontario's economy is highly integrated in both North American and international supply chains, including in the automotive industry. The region is the second-largest vehicle manufacturing jurisdiction in North America, with more than 1.8 million light-duty vehicles produced annually in eight vehicle assembly plants. As this industry evolves and demand shifts to zero-emission vehicles, southern Ontario's automotive supply chain will be required to adapt and transform to continue to grow.

FedDev Ontario is helping to position the region's SMEs and communities to capitalize on this once-in-a-generation opportunity, with over $83 million invested to date in the companies and communities at the epicentre of this transition. Closely linked to the growth of this sector is the importance of maintaining fluid and efficient trade corridors to move parts back and forth across these globally integrated electric vehicle value chains.

Thank you again for the opportunity to be here to discuss FedDev Ontario's role as it relates to the committee's study of domestic and global supply chains and Canadian businesses in global markets.

I will be happy to answer questions from the committee.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Hamilton, I understand you're with us now. I'll turn the floor over to you.

[Ian Hamilton, President and Chief Executive Officer, Hamilton-Oshawa Port Authority]

Thank you very much.

Thanks for the opportunity to speak on this important topic. I am here on behalf of the Hamilton-Oshawa Port Authority, the largest Canadian port authority on the Great Lakes. I am happy to be presenting this afternoon alongside our partners from the great city of Port Colborne and the St. Lawrence Seaway.

I'll focus my remarks today on the goal that I think we all share—trade-enabling, efficient, reliable supply chains, supply chains that Canadians can rely on to get the goods where they need them, when they need them. The key to delivering on that goal is ensuring that we have adequate supply chain capacity. Two of the most important barriers we are faced with right now are customs clearance support and our ability to build new trade-enabling infrastructure quickly and efficiently.

The region that HOPA serves, southern Ontario, is Canada's most populous and economically powerful region. It is highly integrated with our most important trading partner, the United States. If the binational Great Lakes region were a single economy, it would be the third-largest in the world. This region is growing in population and economic activity. The time to build new supply chain capacity is before existing systems fail. As we have seen over recent years, coming out of COVID, we are already possibly too late.

As a port authority, our role is to facilitate trade, build robust supply chains, and create the space for Canadian industries to thrive, but we don't do it alone. We are at the centre of a network of stakeholders and partners, including industry, shippers, transportation service providers and others in the sector. We also rely on the support of such organizations as the Canada Border Services Agency. CBSA has a critical job to do in regulating the movement of goods in and out of Canada to protect Canadians. We do believe, however, that the agency could strike a better balance to facilitate trade and commerce.

Here is an example. HOPA and its partner, Hamilton Container Terminal, have proposed a rail transload facility for pre-cleared containers in Hamilton. This facility would help to expand and diversify the supply chain, aligned with population growth in this busy economic region. It will offer a competitive cost option for Hamilton-area importers and exporters. Reduced trucking distances will have positive impacts on congestion and emissions by keeping containers on rail closer to their final destinations.

HOPA and HCT have committed to investing in the required infrastructure, which today is close to $30 million or $40 million. We have a list of commercial partners and shippers who are eager for this service. We have the support and partnership of CN Rail. We are ready to go. We have made a request to CBSA to provide staffing for this facility, estimated to be between two and four staff. The request has now been outstanding for two years, and we are still waiting.

The time to build supply chain capacity is before the next crisis, or before the growing population overtakes our current systems. We would invite CBSA to be more forward-looking to enable this and other projects to move forward.

The other thing we can do as a country, for future-ready supply chains, is to invest in the critical trade-enabling infrastructure, especially in the Great Lakes region, sometimes overlooked as a critical trade gateway. The national trade corridors fund facilitated such investments. I know that there have been some questions about the programs's impact, so let me share a bit of our experience.

Hamilton's Westport is one of the city's oldest harbourfront industrial areas, constructed mostly on industrial fill over the course of a century. In 2018 we were awarded $17 million through the NTCF to modernize infrastructure and improve connections in this zone. HOPA matched that federal investment with a further $20 million. The Westport modernization project was born. By creating new development parcels and modernizing facilities and infrastructure, HOPA turned the initial investment into long-term value.

A couple of years later, we worked with the NTCF again on a $5-million project at Pier 10 in Hamilton, focused on Ontario's grain and food processing supply chains. These projects have more than delivered on their supply chain objectives, fostering increases in cargo volumes, rail volumes, employment and more.

As a result of these investments, we recently announced the construction of Canada's largest sugar refinery in the Westport zone, leveraging the NTCF's initial investment. This announcement was followed closely by the announcement of an expanded flour mill and additional terminal capacity. Both these developments are helping to fuel the food processing sector in southern Ontario.

These outcomes total almost a quarter of a billion dollars in new investment and over a billion dollars in economic impact. They are terrific examples of the value of investing in trade-enabling infrastructure that ports do facilitate and of how these minimal investments can be seriously leveraged.

The most recent budget made no provision for recapitalizing the NTCF or other flagship infrastructure programs. We think this is a missed opportunity to deliver more projects like HOPA's Westport project.

Port authorities are entrepreneurial government business enterprises that are created to be self-sufficient and nimble responders to commercial opportunities that bolster Canadian trade. We think we're delivering on that mandate strategically and successfully.

We would encourage government to empower ports to do what we do best. We can continue to deliver good projects and good outcomes for the Canadian economy.

Thank you for allowing me to address the committee today.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Hamilton.

We'll go on to Mr. Weller, please, for up to five minutes.

[Matt Weller, Founder, Naviga Supply Chain Inc.]

Thank you, Madam Chair and members of the committee, for the privilege to speak to you today.

My name is Matt Weller. I am the founder of Naviga Supply Chain, which was created to respond to the supply chain challenges of small and medium manufacturers, which make up 99.4% of all of Canada's manufacturing. Many of these produce low-volume, high-value or high-complexity products that present a unique set of supply chain challenges that are seldom discussed and even less addressed.

I'm speaking to you today as a practitioner with 24 years of experience working hands-on in every supply chain discipline in a variety of industries who has seen first-hand the productivity and supply chain challenges these Canadian manufacturers face at their roots.

Our supply chain challenges cannot be addressed solely by export programs, process improvements, technology, AI or investment. None are the panaceas many wish they were. To be certain, these are all essential and beneficial elements once a firm has become reliably effective in its productivity and profitability, but disastrous if applied without first achieving effective operations.

Where SME manufacturers are concerned, the core challenge is in getting to this point. There are more challenges stacked against them in this regard than I can list in this short address, but executional knowledge, development and retention are paramount among them.

These pre-existing challenges are now being exacerbated by the perfect storm. Declining birth rates and a large retiring demographic mean that capital is already becoming scarce. Arbitrary taxation and regulatory policies are antithetical to competition and productivity, and serve to stifle SMEs, which further compounds the problem.

Globalization is breaking down, with new geopolitical impacts on supply every day. As we lose existing manufacturing resources, future entrepreneurs are being discouraged from manufacturing, believing that physical production is not a viable business model in Canada. Many VC firms will not invest in manufacturing because of the front-loaded capital aspects and the lack of confidence in their ability to produce value.

It's time to do something different. Here are three suggestions.

First, while industry must inform and lead the solutions to these challenges, a national reindustrialization strategy is needed to coordinate and prioritize those efforts and design a supply chain and business environment that is favourable to productivity. We need to ensure we can understand, identify and retain critical manufacturing resources, skills, capacity and capabilities, and their complex interactions at the detailed levels, which will be needed for both industry and consumers in the much longer term.

Taking a “whole system thinking” approach, we can balance the needs of our economic system and avoid short-term benefits to any particular sector or industry at the long-term expense of overall productivity and economic stability. This is critical for us to survive the societal, economic and geopolitical challenges that lie ahead. The recent pandemic has already demonstrated our vulnerability.

Second is education and funding. Young entrepreneurs are taught how to fundraise, market and sell, but not how to produce. For manufacturing start-ups the default practice is to worry about that later. When later comes, many fail, along with the funds invested in them.

We need to change this trend in our institutions and incubators. We need to incentivize educational institutions to develop supply chain-system thinking for reindustrialization and actively fill the executional knowledge gap. Funding—government or private equity—could be awarded based on executional knowledge retention in meeting productivity targets and—proving the viability of the business with results. This would also serve to de-risk for investors, who otherwise would not invest in any kind of manufacturing.

Third, build a small and medium manufacturing ecosystem.

There is a lot that our small and medium manufacturers can learn from our intangibles tech sector in terms of building ecosystems. Our SME manufacturers tend to be unbelievably stretched on resources, poorly networked online and they struggle in isolation. An ecosystem could help tremendously with this, regionally and nationally. It must be industry-led, but encouraged by government. An active ecosystem can leverage broad, experienced-based knowledge to solve common problems, improve the visibility of Canadian manufacturing and build an inventory of resources and capabilities with collaborative trade networks and relationships across Canada in addition to existing north-south trade patterns.

We need to act post haste. The world is changing quickly and it will not wait for Canada. This study brings me the optimism we could have the dialogues and vision to act.

Thank you for your time.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Weller.

We will move on to Mr. Aubry-Morin.

[Jean Aubry-Morin, Vice-President, External Relations, St. Lawrence Seaway Management Corporation]

Good afternoon, Madam Chair. My name is Jean Aubry-Morin. I'm the vice-president of external relations at the St. Lawrence Seaway Management Corporation. I would like to thank the committee for the privilege of discussing with you the value of the St. Lawrence Seaway, a key link in the North American supply chain and an important gateway for international trade.

We are a non‑profit corporation that was established in 1998 to operate the Canadian assets of the St. Lawrence Seaway. We work closely with the Great Lakes St. Lawrence Seaway Development Corporation, which is the U.S. partner in our binational network.

The Great Lakes St. Lawrence Seaway system is a 3,700-kilometre marine highway that includes 15 locks and extends from the Atlantic Ocean to the head of the Great Lakes. We provide an essential link to a network of inland ports and international connections on both sides of the Canada-U.S. border. Our system supports 355,000 jobs and $30 billion in wages.

In 2022, 252 million tonnes of cargo was moved through the St. Lawrence Seaway waterway, generating $66 billion of economic activity. Marine shipping on the St. Lawrence Seaway is environmentally friendly and cost-effective. One Seawaymax vessel carries the equivalent of a thousand transport trucks or 300 railcars.

The Canadian government recently announced a plan for a green shipping corridor on the St. Lawrence and Great Lakes system. More shipping moving essential cargo through the system will reduce congestion on our highways and the busy rail corridor and will increase transportation sector efficiency and productivity.

Dry bulk and liquid bulk are the major cargo streams on the system—essential goods such as grain, iron ore, salt, petroleum and specialized chemicals. Project cargo, from wind turbines to manufacturing equipment, also moves on the seaway. We are well positioned to support the diversification of Canadian goods shipped by water. Since the conflict in Ukraine began, we have supported increased exports of potash and grain to meet international needs.

Thanks to strategic infrastructure investments, our legendary 99% availability rate means shippers don't have to worry about delays in getting their products to market. We have available capacity that can double the throughput of our existing system in response to future economic opportunities, including the emerging potential of Canada's critical minerals strategy and the ongoing decarbonization of the cargo supply chain.

In addition to the trade growth potential, we offer our system's low GHG emissions. The net-zero focus offers benefits to the entire transportation sector. Through innovation, the SLSMC has reduced its GHG emissions by 58% compared with the 2005 level, ahead of the mandated 2030 reduction target of the federal government.

The recent renewal of our long-term agreement with the Canadian government brings stability and predictability for the corporation and stakeholders. This 20-year agreement allows the SLSMC to continue its mission of maintaining a safe, secure, reliable, environmentally friendly and cost-effective system.

Ongoing investments in marine infrastructure through renewed federal infrastructure funds will strengthen the key supply chain and encourage international trade opportunities. It is critical that the Canadian government continues to recognize the essential value of the St. Lawrence Seaway corridor.

I look forward to answering any questions the committee may have. Thank you very much for the opportunity, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir.

Now we will go on to rounds of questions.

Mr. Baldinelli, please go ahead for six minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I would like to thank the witnesses for being with us today.

As a member of Parliament from Niagara, it's wonderful to see so many witnesses whom we have invited today who have either come from Niagara or their businesses and relationships that deal with trade and supply chains in the Niagara area.

Earlier in the comments by Mayor Steele, he talked about the notion of collaboration, the private sector working together with government and its agencies to facilitate economic growth.

Just yesterday, there was a release that was issued. It came from the Chamber of Marine Commerce. The title of the news release says, “Chamber of Marine Commerce Supports Call for Government to Get Out of the Way of Supply Chains”. In its release it says:

Customs clearance processes are a key part of moving what matters to businesses and consumers throughout Canada, and the Federal Government is responsible for ensuring those processes are carried out efficiently and effectively. There is an ever-increasing number of examples where the Federal Government is not living up to that responsibility to the detriment of our economy and the strength of our supply chains...

Mr. Hamilton, you talked about some of the examples with regards to HOPA in Hamilton and your issues with CBSA. In fact, you talked about a two-year wait to get approval for CBSA staffing for a very important project.

Can you elaborate on that?

[Ian Hamilton]

As a result of the highlighted vulnerabilities of our supply chains coming out of COVID, we realized that we needed to build additional capacity to service the GTHA. We embarked on a project to create a transloading facility for containers that would be brought by vessel into Montreal. Then we would connect it by rail from Montreal to Hamilton and deliver those containers into Hamilton.

The containers would come off the vessel and be pre-cleared there for security reasons. Then they would be brought to Hamilton before they would be allowed to enter into the economy through CBSA clearance. What that requires is the creation of what's called a "sufferance warehouse". That sufferance warehouse would be where containers would be held in bond until they were cleared to enter into the economy.

What we applied for was the ability to create that sufferance warehouse in Hamilton. Between the Hamilton-Oshawa Port Authority and Hamilton Container Terminals, we put up all of the capital and the land resources to facilitate that. Really, all we needed was CBSA to come in to do the inspections. We were little bit dismayed that CBSA had come back on a number of occasions and said there was no business case to support that. Yet, when you look at the container growth in and out of GTHA over the last decade, it has more than doubled.

Then you look at other factors like the increasing population size and the population that we're going to see throughout the GTHA, and you realize that this container volume is going to continue to grow. We need the capacity to be able to meet that demand.

Again, we could be waiting until it's too late.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Yes, thank you for that.

I just want to pivot from that and go Mr. Reinas with the Peace Bridge authority and some of the issues that he is also finding in dealing with CBSA.

We have the ports security act, and you have section 6 of the Customs Act. Now, on the notion of contract negotiations, regardless of where we stand on the contract, it's always that we seem to be negotiating the last contract with our union, as opposed to having forward moves to negotiate a contract in the future.

Could you explain some of those issues?

[Ron Reinas]

I'll start with the last one.

You mentioned the contract. The last contract with CBSA ended in 2022. My understanding is that they are negotiating a four-year contract that will end in 2025. If they settle this summer sometime, it will basically be good for one year, and they'll start all over again. Ideally, the two sides would agree on a longer term contract to remove some of the uncertainty that's associated with the contract.

With respect to Securing America's Ports of Entry Act, the U.S. is moving to their standard operating procedure of 100% scanning of all trucks. Currently, they do about 5% to 10%. Unless we understand what that means in terms of slowing down commerce moving across the border, it needs to be addressed. A one-hour delay means that it's one hour less service that the trucker has, which means that he might not be able to get his product to where it needs to go.

We at the Peace Bridge had to deal with this because we have limited space on the U.S. side. Realistically, it should be addressed at every port of entry because, if you address there, you can examine the shipment while it's crossing. All of the major crossings for commerce in Canada are bridges: Blue Water Bridge, Ambassador Bridge, Peace Bridge and the Queenston-Lewiston Bridge.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

And if I'm not mistaken, we have two of the four busiest commercial bridges in my riding alone.

If I'm not mistaken as well, we're the only bridge that has responded to the new legislation through the PARE program. What is of grave concern is that none of the other bridges is ready for this. I don't think the government is ready for this act.

[Ron Reinas]

Part of the problem is that the bridges are all run differently. The Ambassador Bridge is private; the Lewiston-Queenston Bridge runs on a similar model to us. Other bridge authorities take the perspective that it's for governments to figure out.

We can't wait for the government, because if it gets imposed, it's just one incident away from becoming mandatory. Right now the year is 2026. It needs to be addressed. I thought the Gordie Howe bridge would have incorporated that into their modelling and design, because it only makes sense to do it in Canada and take that time and space to actually adjudicate these shipments.

[The Chair, Liberal, Judy Sgro]

You have only 15 seconds left, Mr. Baldinelli.

We'll go to Mr. Arya for six minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

Mr. Reinas, you did mention the decrease in trade between Canada and the U.S. You seemed to expressly state or at least imply that it is because the border crossing is not seamless. We too can use the statistics. We are politicians. We know how to go in for the rhetoric. I will give you another number. You said it is declining. In 2022, Canadian exports to the U.S. were $436 billion, which was 22% more than 2021.

So, let's stick to the facts. I know that seamless crossing at the border is important. Improvements in any way are always good. We should aim for that. I think steps are being taken. If you want steps to be quicker, it's always good. We'll come to that.

Mr. Weller, you mentioned quite a few problems that you say SMEs have faced. I think those are the same words I heard almost nine years back, when I first got elected. Every year I hear the same words.

However, the exports of manufactured goods are just increasing every single year. In 2018 it was $318 billion, and in 2022 it was $436 billion. I am not saying things are perfect for SMEs; there are challenges. You mentioned the demographics and the birth rate. Compared with G7 countries, I think the only other country that can compete with Canada in terms of the demographics and the birth rate is the U.S. Look at all the other G7 countries. We are in much better shape in any of the statistics we can discuss on that.

You talked about arbitrary tax policies. Why didn't you mention that the small business tax has actually been reduced by our government? Of course, nobody wants to acknowledge the good things, but that's okay.

Mr. Masson, you said that FedDev is helping SMEs to integrate into global supply chains and...productivity. Can you speak about the programs that cater to that?

[Steve Masson]

I would be happy to.

Thank you very much for the question, Madam Chair.

Let me begin by talking a bit about FedDev Ontario's programming in general. We provide two main programming offerings. One is investments directly in business through payable contributions at 0% interest to help companies grow and develop go-to-market plans. Our second key intervention is with not-for-profit partners that are well poised to help these companies integrate into global supply chains.

I can give you one specific example of that, which is the project that we funded with the Toronto Region Board of Trade for their trade accelerator program. This was specifically geared toward smaller SMEs that had about a year or two of market traction already. They came in through a six-week curated program that the board of trade put on to help them develop sector-specific strategies for the markets they were targeting. At the end of that program they would come out with an export strategy that would help them as a springboard.

[Chandra Arya, Liberal, Nepean, ON]

I'll come back to you, because my time is limited.

I have a quick question for Mr. Hamilton.

HOPA Ports and the McMaster Institute for Transportation and Logistics came out with a study for increased use of short-sea shipping in the Great Lakes.

I was not aware of the viability of short shipping. Are there any specific examples in other parts of North America or the world where short-sea shipping is quite viable?

[Ian Hamilton]

Thanks for the question.

In all likelihood, we're probably the only jurisdiction where it's not working well right now. It certainly works very well in Europe. It works along the Mississippi River in the United States, and it works quite well throughout Southeast Asia and Asia, among the various different countries there.

There are lots of examples of how it starts to help alleviate the pressure on our ground transportation network and has the capability to reduce greenhouse gas emissions.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Hamilton.

I have limited time. I'm sorry to cut you off.

I have a question for Mr. Jean Aubry-Morin of the St. Lawrence Seaway Management Corporation.

You mentioned the marine corridor in the St. Lawrence system. Can you slightly expand on that?