Transport Committee on Jan. 29th, 2008

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

If I understand correctly, your rate of indebtedness is non-existent and you're not afraid that the government will tell you to take out loans rather than use government programs. You expect to be treated the same way as other ports, regardless of your taxation rate.

[Patrice Pelletier]

Exactly. I think that the government will be able to judge the overall objectives of social and economic spinoffs that this administration will define. This expansion project will generate a certain amount of trade and make exports to the United States more efficient. We feel there will be a host of different types of financing, which will mean that we can carry out our expansion and growth project. I don't think we will be disadvantaged, given, as we mentioned, Montreal's importance to the country's economy.

[Brian Masse, NDP, Windsor West, ON]

Thank you for your presentation this morning.

Mr. Hanrahan, I'm glad you have municipal background and experience, because there's one thing that's giving me concern about the bill. There are a lot of advantageous elements, and nobody can disregard the fact that our ports do need modernization, especially given our competition with the United States, which has already been moving on this issue. But one thing is the issue of land use conflict and planning.

This bill will allow for a much more comprehensive usage of your footprint--leases up to 99 years in duration. Normally if you were going to change the land use in a municipality, there would be a process. You would go through the planning advisory committee. There are people there who would vet the process. You would work with the different departments of the city or the town, the municipality. Your adjacent neighbours would be allowed the opportunity to input and there would always be work that happens, outreach and so forth, and then finally it would go to the council for approval. Then there are appeals at the OMB in Ontario if there is disagreement.

Would your association be open to going through local municipal planning principles, similar to other land use changes that other owners have?

[Sean Hanrahan]

I can give you two answers. I think they're complementary, but I'll let you judge.

[Brian Masse, NDP, Windsor West, ON]

Okay.

[Sean Hanrahan]

The first one, to be rather strict, is that this is a pure division-of-powers constitutional argument, and that was decided and set by the Supreme Court of Canada in June 2007. So that's the cold, calculated answer.

The second part of it is that I can't speak from an association perspective as to the relationships between each port and each city. I can speak to my own only. I know that ours is a collegial one and it's one that is constant and is mutually beneficial. You've heard those points being made before. But unless there are others here at the table who want to talk about their particular ports, we haven't taken a pan-Canadian and association position on a port-by-port basis of that.

[Brian Masse, NDP, Windsor West, ON]

I know a cold hard fact is that you have the ultimate hammer at the end of the day, and this is what gives me concern. In my community we have a good relationship with the port authority, but let's take Toronto, for example, where they haven't paid their taxes to the city of Toronto and I believe they're suing the city of Toronto and there's obviously an ongoing conflict with regard to their operation there. My concern is that expanding their powers to basically have a quite significant departure of current port activity and business right now with this new model is one that could increase the conflict if we don't have better resolution models involved.

Do you have any suggestions in this bill on how situations like that could be improved? Because that seems to be the icon of ports and problems.

[Sean Hanrahan]

Yes. I'll let Captain Houston give input there, sir, but I will say one thing that I forgot to say earlier, and that is, there's a schedule to the letter of patent that constitutes each port authority, which restricts the level and the types of activities that each port can undertake as well. So that's something that may be worth a review. But I'll let Captain Houston take it from there.

[Captain Gordon Houston]

Thank you.

Actually, as Sean said earlier, it is clear in the policy statement that you have to have community support for your land use plan. The land use plan is the document a municipality would call its development plan. It's a similar document. So we have to go to them and get buy-in on the land use plan. If we were going to change the land use of an area within the port, it would have to be done through that land use plan, and in that case, you would have to go to that municipality for discussion and comment.

[Brian Masse, NDP, Windsor West, ON]

Yes, but there is a different set of rights for other property owners who are adjacent.

I have limited time, so maybe I can move to another section of this that I think hasn't been discussed yet.

I know that borrowing and increased access to capital, including government grants, is important for ports of all sizes--not just the large ones but also the smaller ones. One thing the bill doesn't cover off is giving the Auditor General the ability to audit a port. Would you be open to allowing the Auditor General to audit the ports? Because once again, you'll now be accessing government contributions directly and having other business relations. Once again, the use of different lands will require oversight, I think. Many of the issues touch on security.

I'd be interested to know whether you'd be open to that.

[Sean Hanrahan]

Mr. Masse, we have seen no consensus about moving away from the current situation, that being that we have at each port an external audit. Many ports have taken on internal audits. Also, we currently have, under the Canada Marine Act, a special examination that must be undertaken by auditors every five years, and that's an extremely comprehensive piece of work. So we feel that there's no fiduciary duty on the financial end of things that's been left untouched in this regard.

[Brian Masse, NDP, Windsor West, ON]

That would be a no, then. That's fine. I'm just trying to get to the reason. I'm not here to attack your position; I just want to know what it is.

[Sean Hanrahan]

We feel that it's covered by the three things I just mentioned.

[Brian Masse, NDP, Windsor West, ON]

Okay.

You mentioned in your brief, with regard to the supportive changes, that you have on the board of directors, currently, seven to fourteen directors. The bill changes that to five to eleven directors. What is your position on that? Are you supportive of reducing the number of directors, and if so, what is the reasoning behind the reduction of directors? Or if you're opposed to it, why would you encourage the status quo?

[Sean Hanrahan]

Thank you, Mr. Masse.

Yes, go ahead, Gary.

[Gary Leroux, Executive Director, Association of Canadian Port Authorities]

Some smaller ports have seven employees, so it makes it a little bit difficult when you have seven board members. It's kind of odd. A lot of smaller port authorities have as many board members as employees. There's no need to have as many, as long as there's a good governance structure and we are able to comply with the act in terms of representation on the board.

[Brian Masse, NDP, Windsor West, ON]

Okay. I'm concerned about local representation. Maybe you could get back to us on that if you do have an official position. Maybe you don't take one, but if you do at the end of the day take one, I would be interested to find out the reasons for that.

My last question really relates, again, to the investment of the third party. I want to understand from your perspective the use of different lands and the lease operations that could be happening. Kind of run through a scenario. Say, for example, a port was deciding to use its land for maybe a new commercial operation, and the property adjacent to it, which was previously zoned for that, now finds itself in competition in terms of the land. Yours is more attractive for some reason. How would you resolve this, or what would be the mechanisms your board would use to engage adjacent property owners in terms of similar land and competition in the market?

[Sean Hanrahan]

Gordon or Gary, would you like to take that?

[Captain Gordon Houston]

Again, as Sean has alluded to, you can only talk about your own port, because we don't really know what goes on at the others. We have always taken a position that as a crown corporation, we don't compete with private industry. So we would be very unlikely to start a business if there were something outside the harbour wall that was doing the same thing. We don't compete with private industry. We actually augment it; we don't compete with it.

[Brian Masse, NDP, Windsor West, ON]

But with this bill, aside from condominium development, I think it's rather open in terms of your land use, and hence, without a process.

My concern is that the adjacent property owners' land value is basically depreciated in many respects, because they'll have restrictions and also a process to go through in terms of land development if they want to do a similar operation or are competing for development, or a proposed development, adjacent to port-available lands that have leases for 99 years that don't have the same processes and are perhaps a quicker operation to run through in terms of development. How do we deal with these situations, as opposed to conflict, at the end of the day?

[Sean Hanrahan]

We are bound, though, by fair market value as well. We wouldn't be able to undercut for the sake of getting the commercial endeavour to move on the other side of the fence.

[Brian Masse, NDP, Windsor West, ON]

Yes, but the flexibility of your land use is often more important than anything else.

[Captain Gordon Houston]

If I may interject as well, because it's federal land, we are subject to the environmental assessment process, while a private business isn't. So our development process is much longer than for a private business; it's not shorter.

[The Chair, Conservative, Merv Tweed]

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

Thank you all for appearing here this morning, and a special welcome to Captain Houston.

I'm a Vancouver native. My community of Abbotsford actually knows very well how much we depend on the success of the Pacific Gateway. I understand, Captain Houston, you're actually quite involved in providing advice on that through your Greater Vancouver Gateway Council.

Perhaps I could start with you, Captain Houston.

One of the issues raised by both Mr. Volpe and Mr. Masse is land use. As we've moved forward with developing this bill, obviously staff within the minister's office have been consulting with municipalities that are impacted by ports. But I'm wondering what steps you have taken in terms of leading the Vancouver Fraser Port Authority to liaise with the City of Vancouver, Metro Vancouver, and surrounding municipalities to ensure their needs are met. Perhaps you could also comment on whether you've found any significant opposition to this legislation from those communities.