Transport Committee on Dec. 6th, 2007

[Emile Di Sanza]

But—

[Robert Carrier, Bloc, Alfred-Pellan, QC]

In your presentation, you said, “All CPAs would be given the opportunity to lease or license land holdings to third parties—”. This is a question my colleague asked as well. Is this really the case?

[Emile Di Sanza]

No, not at all. This section has to do with public ports and not port authorities.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

So this is about other clauses, and I suppose you cannot necessarily tell me which ones.

[Emile Di Sanza]

This would be the case for a policy initiative. The different elements are described in a document in your binder. The only change to the act is to subsection 45(3.2), concerning the use of lands. It simply says that in the case of a port authority, the land could be for temporary use. It was a matter of clearly indicating the purpose.

Some port authorities have a strategy for this. They will use the land temporarily. However, in other cases, the use would be more or less permanent. As several committee members have already said, some port authorities lost the chance to acquire land because it was more sustainable to use the land for strictly private commercial interests. So it is simply to show port authorities that there are other possibilities, that they will be able to use the land temporarily in an appropriate manner, then in the long term, keep the land for the use of the port. The only change to the act is in clause 23 of the bill, to the proposed subsection 45(3.2), which is on page 11, I believe.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

We must have a good understanding of the meaning.

In any case, it is certainly not explicit in the bill, and that brings up a lot of questions. It could lead to a lot of misuse by port authorities.

[Emile Di Sanza]

In the binder there is another document that explains things in greater detail. It talks about long-term use of land. I can give you the reference later on.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I would appreciate that.

So this is about a regulation that would stem from the act?

[Emile Di Sanza]

It is a policy initiative that would be reflected in the letters patent of the port authorities. The letters patent are like their mandates. They explain what type of land is managed by the ports, the activities that can take place on the land as well as any other information dealing with the use and conduct of the ports.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Ship-ley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chairman. Sometime I do get called “Ship”, but it has nothing to do with the Marine Act, I can assure you.

Welcome to the panel.

I want to clarify a point made by my colleague. It's a concern that marine transportation doesn't nearly capture the significance it deserves. I think that's the whole purpose of these amendments, because under purpose, in clause 4, it says:

In recognition of the significance of marine transportation to Canada and its contribution to the Canadian economy, the purpose of the act is to (a) implement marine policies that provide Canada with the marine infrastructure that it needs and that offer effective support for the achievement of national, regional and local

That clearly speaks for itself in terms of the significance that this government is putting on the Marine Act.

Can you help me with the big picture, generally? We're the support for that. We're going through the amendments on this bill. Do we have the support of all the port authorities and the shippers? This is about a whole package.

[Emile Di Sanza]

The proposed changes, particularly to the introduction or purpose section, clearly reflect the feedback that was received by the panel dealing with the Canada Marine Act when they conducted their review. There was very broad-based input to that effect.

We've also had the benefit of a number of years since that review took place. One of the areas that have come to the forefront is an interest in short-sea shipping--which as a service has existed for many years--as a concept for integrating the marine sector with other modes of transport. There would be the possibility of more efficient use of waterways, and that could have a positive impact on environmental sustainability, reduction of congestion, a more efficient type of operation, more efficient use of port installations, and so on. These are all elements that have come into play in our interactions with the port authorities and other interests. It's not just the ports; the users of the ports have outlined such areas. I think we can clearly see that by virtue of the interest demonstrated in various conferences dealing with the marine sector and short sea shipping.

As far as where various parties stand on the proposed bill, I believe the Association of Canadian Port Authorities released their first assessment of the bill last week. The bill was only introduced very recently. We haven't had the benefit of hearing from too many interested parties, but we do understand there is a lot of interest out there. From what we have heard anecdotally, it's favourable.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

In terms of the time, there hasn't been the access to the extended funding that other transportation modes have had. Part of what's happening now in this bill is to give access to ports to have funding opportunities, I guess, that other modes of transportation would have. I agree that these can only be derived by any sort of business approach by having a strong and supportive business plan that would be accompanying it.

Have the port authorities given us any indication of the costs to them of not having these opportunities for funding in front of them? Have they indicated anything like that to you?

[Emile Di Sanza]

I'll answer in terms of what we have heard. We have heard from port authorities, but we have heard also from other marine interests in terms of the fact that various projects related to the marine sector and related to port operations or installations are maybe not advanced as rapidly or not as viably in terms of partnership arrangements because of the lack of available funds for capital infrastructure.

As I've said, we've also had the benefit of consultations over a couple of years. Since the time that the review panel recommended access to federal funding for capital infrastructure projects, obviously environmental sustainability issues have also come to the forefront. We've also had the experience with the security funding program that has been in place. We addressed all that as part of a coherent and cohesive package relating to the areas that would be targeted for infrastructure funding.

So we have heard from the ports and we have heard from interested parties in the marine sector. Have they given us specific projects? In some instances, they've outlined some projects related—I'll use the term “short-sea shipping” again—that could potentially be realizable with investments from various parties. It's not just from the federal government. It could be from private parties as well that would come to play, or it could be as well from other levels of government that would be eligible for various funding.

[The Chair, Conservative, Merv Tweed]

Mr. Maloney.

[John Maloney, Liberal, Welland, ON]

Earlier questioning dealt with what happens if a port authority ran into financial difficulties. The response, as I heard it, was, well, they've breached their fiduciary duties and they could be at personal risk. But you didn't elaborate. What would happen if a port authority had the best of intentions, made economic capital investments, circumstances changed, and things went sour? What happens in that situation when a port authority defaults on its financial obligations and it's not a breach of fiduciary duty?

[Emile Di Sanza]

I'll ask our director for ports policy to respond to that.

[Janet Kavanagh]

On that one, we've tried to build in sufficient checks and balances that they don't get to a default position. There are timely disclosure requirements with respect to their financial situation. There is always the possibility, I suppose, that a board would act in a very fraudulent manner, but we certainly don't anticipate that happening. With timely disclosure and with the minister being made aware of the information, the minister then can take steps to deal with that. The minister can ask for special examinations with respect to financial matters at any time. Really, the minister as well has the ability to change letters patent in consultation with the port authority and with the boards. So with the timeliness, with the disclosure of information, the minister has the ability to act before we get to that final point.

[John Maloney, Liberal, Welland, ON]

The uses that a port authority can do are in their letters patent, but I thought this bill also expanded the uses possible. Or am I incorrect in that, and if so are there term limits? If I was an authority, could I license for 99 years or for 50 years? Are there restrictions on licences or lease terms?

[Janet Kavanagh]

The bill really doesn't address leasing terms for Canada port authorities. You usually find those in their letters patent. You always find that in their letters patent.

If you are leasing for port activities, currently lease terms are generally around 60 years. If you're looking at activities in support of port operations, that's a shorter lease term; it varies, but it's typically around 40 years at the moment.

Port authorities can ask for the minister to approve a 99-year lease. There's a discretionary aspect there. That has never been put into place, I believe, but we can check on that. One of the things we're doing with the complementary policy initiative as well is trying to make these lease terms uniform across the Canada port authorities. The port leases for some port authorities might be 55 or 60 years; for those activities in support of operations, it could be 35 years instead of 40. We're really just trying to customize them across the board.

[John Maloney, Liberal, Welland, ON]

Residential uses are specifically excluded. That makes sense if the whole idea of a port authority is to nurture a port.

[Janet Kavanagh]

Also it's to reinforce the idea that this is a temporary use; whatever purpose you put that land to, it has to be returned to a state that will allow the port to use it for port operations.

[John Maloney, Liberal, Welland, ON]

Yes, it's so it can be used as a port, as an economic generator. If we look at ports such as Vancouver or Toronto, residential usage has been nurtured right up to the boundaries of the ports. It's high-priced real estate and generates a lot of revenue.

Is it possible that residential uses as an economic generator could be looked at in certain obviously very restricted situations? If the municipality can zone right up to your boundaries with this type of usage, depending on the land area, is it contemplated that long-term leases could be envisaged as an economic generator for residential use?

[Janet Kavanagh]

Well, at this time we've explicitly not provided for residential use. This is the policy position of the government and of this proposal.

[John Maloney, Liberal, Welland, ON]

On amalgamations, the B.C. Lower Mainland has been amalgamated. Are you in a position to comment on whether additional amalgamations in other areas of the country may be considered? If so, what would the criteria be, and would this possibility increase the borrowing limits that a board could look at?