Transport Committee on Sept. 24th, 2018

[Bruce Burrows]

I was speaking to the Ontario government's Minister of Transport about this. If you look at the demand for transportation services in Ontario and at the supply of infrastructure available, and you talk about the roads, you'd have to make huge investments in expanding the highway system, and even double-stacking, I would suggest, in the core of the GTA and going into Hamilton and that golden triangle. The only way you're going to handle more truck business is to start looking at approaches like that, which are hugely expensive, and not acceptable from a taxpayer point of view, both in terms of cost and the environmental footprint.

[The Chair, Liberal, Judy Sgro]

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'm going to focus on some of the comments that have already been made.

Specific to the cross-border partnership integration, Mr. Weakley, you mentioned that we have a very strong, robust economic cluster when it comes to both sides of the border, especially in the Great Lakes region, including Niagara-Hamilton, and of course, Ohio and even going as far as the eastern seaboard into Michigan, Indiana, and then back into Canada and the GTA and Montreal.

My first question is with respect to how we can strengthen that even more in terms of the dialogue we're going to have on a binational trade corridor as one corridor, not two or three different corridors.

The second question is to the Chamber of Marine Commerce. Mr. Burrows mentioned that we're at 50% capacity on the St. Lawrence Seaway. How can we fix that? How can we bring it up to 100%?

My third question is for Algoma. You mentioned that there are bottlenecks. I'd like to get some more comment on that. That's why we're here. The minister has been adamant that within the trade corridors funding as well as planning he wants to rid us of bottlenecks in all the gateways and trade corridors throughout the country. How can you folks all participate in doing that here in Niagara-Hamilton?

Lastly, to CN Rail, you mentioned the need to deal with issues of overcapacity. I know that in my little part of the world, we have overcapacity in one part of Port Robinson. That creates a lot of headaches for the residents, because the trains crossing the road can sometimes take up to an hour, which obviously holds up the crossing, but it also puts pressure on emergency services if they have to get into certain areas.

Ultimately, with all those questions asked, I'd like to take it one step further to the mindset you're going to be in when you answer those questions, which is to work and focus as one trade corridor entity, versus being in individual silos, on how you can participate and help resolve the overall challenges that the trade corridor presents.

Jim.

[Jim Weakley]

I'll go first and speak quickly, sir.

There are two aspects, and one is icebreaking. If you look at the 1980s, on the Great Lakes we had 19 icebreakers between the U.S. and Canadian governments. Currently we have 11. The U.S. has gone from 12 icebreakers down to nine. The Canadian government has gone from seven down to two.

Now, to the credit of both coast guards, they manage it as a single system. There are Americans working in Canadian waters and vice versa. The challenge is that there is simply not enough icebreaking capacity to go around. We had as many as 11 vessels stranded in Whitefish Bay in the winter of 2014. About 20% of the total cargo moves during the ice season, so to me that's the biggest bottleneck, and the biggest opportunity to increase capacity on the system is to increase icebreaking capabilities.

I talked also about integrating the two command centres. On the U.S. side there are three command centres. In Canada there's one: the regional operations centre in Montreal. To me it's a shame that they're not integrated as they are in Vancouver. In Vancouver, the Americans and the Canadians are looking at the same screen. There are three primary reasons for this: safety, security and efficiency. Efficiency smooths the cargo moving back and forth because the Canadians and the Americans are looking at the same picture. In terms of security, it's an operational backup, and then for safety, again, it's the common operating picture. In order for efficient decisions to be made, the Americans and the Canadians have to have the same data.

[Bruce Burrows]

Thank you.

You're asking about capacity, better utilization given that we have a big chunk of capacity available. Let me answer that a few ways.

Jim already eloquently spoke to the icebreaking need. He's right on message there. That's a big issue. Both fleets on both sides of the border are old. There's almost no redundancy and backup available anymore. Whenever one ship goes down, which is very frequently, the bad order ratio, to use a rail term, is huge with our icebreaking fleet.

Piloting, here's a great opportunity. I would encourage all of you in fact to contact Minister Garneau and give him the simple message that modernization and reform is well overdue in terms of being needed. Let's move forward and get some legislation into the House this fall or next spring to reform the Pilotage Act. We need a very safe and efficient pilotage system with a harmonized approach and regulatory approach across the border—that's very much what Marc Grégoire's report was about—significant reforms to governance, and most importantly, a key recommendation for labour model flexibility, because costs have really not only inflated at a tremendous rate, but the cost levels are really non-competitive. We've looked at various incremental moves on the grain side and you look at the emerging cruise industry and it's just such a big hit from a cost perspective.

[The Chair, Liberal, Judy Sgro]

Mr. Burrows, I have to interrupt you. Perhaps you can get your comments in somehow at another opportunity.

[Bruce Burrows]

Those are my main points.

[The Chair, Liberal, Judy Sgro]

Mr. Aubin.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I'd like to thank each of your for being here this morning.

I'll start with Mr. Ruhl.

You said you had a solution to solve the bottlenecks. A witness who comes forward with a solution deserves to be heard. I would like to hear what you have to say about that. First, I would like you to give me an example of how a bottleneck can occur. Then you can tell me about your solution.

[Gregg Ruhl]

I'll use two examples. One would be gasoline products. We have a fleet of six product tankers that are trading around the Great Lakes and St. Lawrence Seaway. We trade 12 months of the year. We never stop. We trade certainly into the seaway through the Welland Canal into the GTA area during the season. After the Welland Canal and St. Lawrence Seaway close, we trade gasoline from Sarnia into Green Bay, into Michigan and Wisconsin. We move petroleum products on the Great Lakes, both heavy and light, 12 months of the year.

One of the biggest bottlenecks is the Welland Canal. This is for domestic use. The GTA of course is the largest economy in Canada, and here it is on the other side of the Welland Canal. If the Welland Canal were to remain open just a few more weeks, there would be hundreds and hundreds fewer trucks on the road.

The second commodity is salt. Last year we actually had our ships also operating year-round out of Goderich delivering salt, mostly to U.S. communities that needed it. It was a harsh winter. We actually were laid up and boats were put away as there wasn't enough salt because it was being trucked across Ontario from Goderich into the Toronto area. That's a route we can make by water. The Soo Locks stay open until January 15.

[Robert Aubin, NDP, Trois-Rivières, QC]

Before I run out of time, I'd like you to tell me about your solution.

[Gregg Ruhl]

Briefly, we need to keep the Welland Canal open longer.

[Robert Aubin, NDP, Trois-Rivières, QC]

Okay. How can this be done?

[Gregg Ruhl]

A couple weeks longer would make a huge difference in terms of the number of trucks that would come off the highway. Obviously, all season would be wonderful. There would have to be some significant investment, but not a lot, to keep it open two or three weeks longer. It's a bit of a wasted resource in that December-January time frame.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I have a quick question for Mr. Burrows and Mr. Weakley.

You both mentioned our problem with icebreakers. I have already discussed this with the Trois-Rivières Port Authority. This is a problem that everyone knows about, but that we kept behind closed doors, for fear of losing contracts with customers who would have concerns about the navigation capacity for the products.

Have you been able to see that customers have not signed contracts or have backed down because of this lack of icebreakers, a problem we have had for a long time? Are contracts being lost because of this?

[Bruce Burrows]

I will answer in English, if I may.

Perhaps Mr. Ruhl could better answer the question in terms of whether we have lost business per se. Certainly this spring was a great example, where we were so slow getting going because of heavy ice and not having the capability of icebreaking to keep those lanes open. I'm sure at the margin there was a loss of business, but I can't be very specific about that.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Weakley.

[Jim Weakley]

We've lost business to roads, to trucks, and we still have not recovered from the cargo that we lost earlier this year. We've clearly lost tonnage. We're ahead on a monthly basis, but we're behind on an annual basis. Clearly, the lack of icebreaking in 2014-15, we calculated, on just the U.S. side, cost the economy $200 million. That was $200 million that was lost because we couldn't move cargo.

Keep in mind that normally the icebreaking season is from December 16 to April 15. It has gone on as long as May 18. We've been breaking ice as late as May 18 in the Great Lakes.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

[Robert Aubin, NDP, Trois-Rivières, QC]

I'll take it in my second round.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you, everybody, for being here.

Mr. Weakley, you mentioned regulatory gaps: regulation and policies that aren't well aligned between the two countries. Given the amount of trade that goes back and forth between Canada and the U.S. and the number of times things cross the border in the process of being either shipped or made, I'm concerned.

I don't want to lead you into dangerous political territory here, but we certainly see in environmental regulations, for instance, that there seems to be a divergence between the two countries in terms of where regulations are going in the States versus where they are in Canada. Do you see that and other gaps opening up or do you see a reasonable effort to harmonize things right now?

[Jim Weakley]

I see both. You can look at examples. The RCC has done a good job of trying to harmonize. Two examples they give are Cheerios—they can sell Cheerios on both sides of the border—and, from our perspective, life jackets. It was a Herculean act to align those regulations to sell those two products.

Where I'm most concerned is in the area of ballast water, where the Americans are not a signatory to the IMO and the Canadians are a signatory. There are some within Transport Canada who are taking an overly aggressive approach to ballast water and trying to regulate domestic American transits via a transit standard. Imagine the American government trying to regulate a shipment between Thunder Bay and Sarnia and how outraged the Canadian people would rightfully be, as they were when the State of New York tried to do that. We're on the receiving end of that. There's a good example of a divergence for no good reason.

Notice that I used the word “harmonization”, not “synchronization”. They can interoperate and still be different. I think that's the goal.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

All right. Of course, the water knows no boundary. It just flows back and forth, as you know.