Transport Committee on Sept. 24th, 2018

[Ian Hamilton]

Do you mind if I comment on that question a bit as well? What we're seeing, certainly in Hamilton, is that, obviously, the ports offer a gateway to international destinations, versus just North American destinations and overseas destinations. The strong port network probably protects us from some of the potential volatility that would exist in the NAFTA discussions going on today.

Certainly in Hamilton, there has been accommodation of different things for Ontario grains. Part of it is the drought in Europe, part of it is CETA, and not least of all is the volatility of the discussions with the United States.

We've seen a dramatic increase in exports going to overseas markets coming through Hamilton as a result of people looking for new markets. I think the St. Lawrence Seaway and all of the ports along the system are critical in making sure that we exploit these opportunities and, not to put too fine a point on it, that we become less dependent on the trade relationship with the United States. I think that investment in our assets is how we guarantee that those gateways remain open.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Badawey, go ahead.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'll preface my questions by stating the fact that obviously you all know that the Niagara—Hamilton area is a very robust trade corridor, attaching itself to over 44% of North America's annual income within a day's drive. In line with that, there's the ability we have to be multimodal in nature when it comes to water, rail, air and road. With it, there are some challenges, as we all recognize. It's a 1950s system, somewhat archaic, and we're trying to bring it up to 2018, with a 30-year plan beyond that, if not a 50-year plan.

I'm going to throw questions to both of you at once and give you a chance to take the time to answer. I'll start with a few questions to Ian, from the Hamilton Port Authority.

The first question is, can you explain more in depth the partnership between Hamilton and Niagara, and with that the participation that you would have to bring the trade corridor up to current standards? The second question is, who do you expect to be additional partners? What are your expectations of the St. Lawrence Seaway as a partner? What bottlenecks can you try to overcome with respect to the current situation, not just with water but multimodal?

My next question is for the St. Lawrence Seaway. Bruce, you explained a lot about your strategic plan as it relates to your in-house demands and aspirations as they relate to the growth the St. Lawrence Seaway Management Corporation is going to have. What I'm even more interested in is how the St. Lawrence Seaway Management Corporation points itself to break through those walls and become an economic partner beyond its own mandate, to contribute to a true trade corridor well into the future.

On multimodal, are you working with rail, road and air to create more fluidity and integrate more the distribution and logistics systems? How are you working with partners to bring your land portfolio to the next level, through a strategic plan with partners, with respect to enabling even more that land investment to accrue over time? The last question is on dock 12. You mentioned dock 12 and the work that's happening over there. Could you explain a bit about that?

I'll start with Ian, and then we'll go to St. Lawrence Seaway.

[Ian Hamilton]

Thanks, Vance.

The first question you brought up was about the HPA role. As we mentioned, the Hamilton Port Authority has been very successful in creating what we call a multimodal industrial hub. We believe we can bring those same skills into the Niagara region in starting to develop some of the available properties here. We will certainly continue to use Hamilton as a key hub. I think that Quebec, at the provincial level, has done a wonderful job in creating a marine strategy. In that marine strategy, it truly identifies not just ports but ports as multimodal industrial hubs, so we're no longer just a place where cargo transits through. I think this is particularly important in the Great Lakes and the St. Lawrence region, in that it's also where businesses locate themselves, where products are processed. Certainly we're seeing in Hamilton examples such as the first flour mill to be built in Ontario in 75 years, which is located on port property. Quite simply, that's to take advantage of the savings in the supply chain in proximity to the markets.

As I mentioned, the Hamilton Port Authority has done a good job in Hamilton. We're running out of land and believe that we can share some of that expertise with the region of Niagara. That's where I would touch on the partnership you asked about, particularly on the seaway. We certainly see that the seaway, as one of the most important modes of transportation, is critical in that chain for what we would be trying to achieve. The efficient operation of the seaway—the continued movements of goods, the efforts to reduce costs with hands-free mooring and to make it more accessible, the safety record—all of these areas make the gateway that much more attractive for people to move cargo.

The challenge is around capacity, and I think it's sometimes misunderstood. The seaway certainly has capacity available to grow. The challenge is finding the capacity to locate businesses along the seaway property so that new businesses that would utilize the seaway can be attracted. Until we can open up those opportunities and create these industrial hubs, it's hard to find the value proposition to attract businesses to the seaway lands, which would then generate more cargo through the seaway and, again, use the gateway to access international markets.

[Vance Badawey, Liberal, Niagara Centre, ON]

Bruce, go ahead.

[Bruce Hodgson]

Thank you.

Let me start with fluidity. You asked about that, Vance. We spend a lot of time with our customers. Where we find the benefit is in data exchange. That's where we've been very successful in working with both the railways and the western Canada shippers, for example. That contributes to a fluidity model.

In terms of the Welland Canal, we continue to work with both our domestic and our international customers on data exchange, because we feel that it's important, from a planning standpoint, to know when vessels are arriving. That is an area we continue to work on, and we see technology moving forward as being very critical.

We'd like to keep the canal fluid. Obviously, that's not always possible, like today. We probably have a number of wind-bound vessels today. Safety is paramount to us, so we continue to ensure that.

This is just a comment on the assets. We have a very detailed asset renewal management process in place. It's ongoing. With Transport Canada, we agree upon a level of risk to attach to the assets—which is very low, I might add. We then work with Transport Canada to update those assets in terms of our operation. I referred earlier to a 99% availability. From an operational standpoint, we are actually available 99.9% of the time.

In terms of land, again I would go back to the Port Weller dry dock. When we went out and worked with the market, we actually went through a very detailed RFP process in order to find the right operator for that facility. One thing we recognized very early on was that we had to diversify the revenue streams. The vessel repair business is very cyclical, and we needed to develop other revenue streams.

[Vance Badawey, Liberal, Niagara Centre, ON]

And dock 12 was...?

[Bruce Hodgson]

It's another example of where we actually expanded. We were able to work with one of the neighbours to get additional land, and we worked with our existing tenant at wharf 12, along with a local stevedoring company. I think next week our first containers will be coming through that facility. They are targeting the U.S. northeast market.

[Vance Badawey, Liberal, Niagara Centre, ON]

The ships can actually dock at dock 12.

[Bruce Hodgson]

The ships will dock at wharf 12. That's correct.

[The Chair, Liberal, Judy Sgro]

All right. Thank you very much.

Mr. Aubin, go ahead.

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

Thank you, Madam Chair.

Gentlemen, thank you for being with us this morning.

I don't know if you're following the election campaign in Quebec, but when it started, the three main topics seemed to be health, education and work. A few weeks ago, a fourth point was added, a point that is so important that it could become decisive on election day: the whole issue of the environment. When we talk about economic development, we often hear that it must go hand in hand with the environment, but we talk very little about it. So I have a few questions with an environmental bent.

The first is for representatives of the St. Lawrence Seaway Management Corporation.

You mentioned earlier that the seaway's navigation season has been reduced to 280 working days. Is this longer season due to our technological advances, whether it be icebreakers or other things, or climate change?

[Jean Aubry-Morin]

Thank you for the question. Allow me to give three points in response.

First, over the past 18 years, the corporation has increased its expertise in operating the seaway in winter. In particular, we have developed technologies that allow us to operate in increasingly difficult winter conditions. As a result, our season has increased from 262 days to 286 days, which is now our norm.

Second, climate change has allowed us to operate the seaway in winter for a much longer period than we could have imagined 20 years ago. Water and ambient temperatures have changed by about two and a half degrees, allowing us to extend the navigation season in a safe and continuous manner. We look forward to continuing to optimize the navigation season in the future.

Third, we have learned to better work with our sister bodies, including the Canadian Coast Guard and its American counterpart, as well as other pilotage companies. This has allowed us to optimize the use of our assets to extend the navigation season.

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

Still on the subject of the environment, we discussed oil transport in the Gulf of St. Lawrence and on the St. Lawrence River. Given that marine traffic could increase in the coming years, I would like to hear a little bit about the measures in place to respond to a disaster, such as a grounded ship or an accidental oil spill. Are we able to deal with the problems that may arise?

[Jean Aubry-Morin]

The emergency response system developed by the St. Lawrence Seaway Management Corporation over the past 20 years is very robust and has been used as an example by several other agencies. Our response time is exceptional. Unfortunately, we have had to use our system on some occasions. The last time was in 2009, when an incident occurred in the South Shore Canal. In less than seven minutes, we had identified the situation and deployed a response team, which prevented any spills that could have damaged the environment in local communities. We review our system on an ongoing basis.

Earlier, I mentioned that we were working with Fisheries and Oceans Canada and Transport Canada to establish new technologies and assess risks in different locations to ensure the safety of local communities and the protection of protected or endangered species. We make sure that we can study any proposed project, such as the one you are referring to.

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

Thank you very much, Mr. Aubry-Morin.

I would like to take a few minutes with Mr. Hamilton, again on environmental issues.

In your opening remarks, you talked about the porous nature of the boundary between industrial and residential land.

How does the Hamilton Port Authority manage environmental issues with its local partners, who are probably citizens?

[Ian Hamilton]

Dust is one of the biggest issues we deal with in the interface between the community and the port authority. Through our work in developing a sustainability model, the biggest single point the neighbourhoods were bringing up was dust. We're putting that as one of our key areas in building integration.

A real material example of that is the speed with which we're covering salt piles and dust piles, and the introduction of conveyer systems so that material can be moved under cover, as opposed to in the open air, and be less exposed to the wind and the risk. We're paving over some of the sites that are currently unpaved and become a source of dust. We've invested heavily into street sweeping and cleaning up the area that way. We took a model from the Port of Quebec and put a dust monitoring system in place to truly understand where the dust is coming from and then analyze that to see if we can pinpoint the problems.

That's one area that was of particular concern.

The other one is traffic. We've also spent a lot of time working with the City of Hamilton on its transportation master plan to try to understand how best to deal with the truck flows in particular—how to minimize the impact on the community and create truck routes that prevent that.

The final area is a lot of communication. In Hamilton, they're developing a new residential community 200 metres away from the flour mill I mentioned earlier. There's a lot of communication around how we develop that community. Taking some pages out of what happened in Toronto with the Redpath site, we're asking how we can configure the buildings to minimize the creation of dust at the source point. In that situation, the grain mill there has invested almost $10 million in the most modern spout in the world to minimize the dust impact.

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

I know you know Gaétan Boivin very well. He is the president and chief executive officer of the Trois-Rivières Port Authority. He's done an extraordinary job, environmentally speaking.

Are environmental standards common to all the ports across Canada, or is each port authority independent in this regard?

[Ian Hamilton]

I'm very familiar with Gaétan. We spend a lot of time collaborating between the two ports to share best practices. We've been very lucky to have him as a resource.

The environmental standards are not 100% aligned, quite simply because in Ontario, the Ministry of the Environment and Climate Change Resources ultimately is where we would apply for our ECA certification to operate the projects. We run under a number of jurisdictions. Certainly on the water side, Environment Canada, through the Department of Fisheries and Oceans, would have jurisdiction, in which case they would be aligned.

No, we still respect the provincial position of the Ministry of the Environment to deal with air quality in the province.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Hamilton.

Now it's on to Mr. Hardie.

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

Thank you. I'll be splitting my time with Mr. Iacono.

I think a common theme is already starting to develop here, and that is the rub between urban development and trade. What degree of joint planning or collaborative planning is taking place between the seaway or the port and the municipalities up and down the line? This is factoring in, of course, the need to preserve livability in a region, as you were mentioning with the dust issue. Does the planning now involve looking beyond the footprint of the existing port or the existing seaway toward other opportunities to develop things in places where you're not going to have that conflict with municipal interests?

[Ian Hamilton]

In terms of the existing facilities—to your first point—the collaboration in Hamilton has certainly grown exponentially in the last five years. We now collaborate with the city on almost all new projects that border on residential neighbourhoods. We ensure that there is a source of input, and we do whatever we can to make investments to minimize the impact and to allow the two areas to work together. It certainly needs a common-sense approach, respecting that we don't want to abandon our support for industry. At the same time, we don't want to jeopardize the quality of life of our residents.

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

Do you see a wall coming? Let's say CETA really takes off, or international trade really takes off for the seaway and the port of Hamilton. Is there a point at which you've just gone as far as you can go? How far off in the future is that point?

[Ian Hamilton]

I suppose there could be a point. One barrier today, of course, is the cost of ensuring that best practices can be implemented. I applaud the national trade corridors fund and the work that's being done in that area, because that gives an opportunity to invest in new assets that will dramatically reduce the impact for the neighbourhoods and the port. To give a great example, in Trois-Rivières they've done a wonderful job of building integration between the industrial port and the residential neighbourhood through parks on the surface. In Hamilton, we look at one of our priorities as greening the perimeter, so that—

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

I understand all that, but there's only so much of that you'll be able to do while accommodating future growth.

I have a quick question about the seaway before I turn it over to Mr. Iacono.

What about the state of the railways and the road networks? You mentioned the interest in building intermodal hubs. If, all of a sudden, you were in a position to really promote that and deliver the ships, with the goods on the ships, could the railways and the roads keep up?