Transport Committee on Sept. 26th, 2018

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

[Joel Neuheimer]

I'll start.

I'll go back to the announcement by Minister Bains on Monday of this week about his work on resources for the future. He called on industry leaders to get the leaders from the transportation providers and the users together and to not let them go away until the problem is solved.

In terms of the idea mentioned in the program about having this 50-year strategic infrastructure plan, I think it would be a great thing to focus on with business leaders, indigenous leaders, and community leaders. Just think of all the communities across Canada that depend on forestry, and the opportunities we're missing by not getting more of our stuff to market.

It happens to be forestry week: Happy National Forest Week.

If I can go into the grains sector a bit, we have a bit of a reputation issue there. I think people in places such as Japan question whether or not we're going to be able to get the stuff there. We need to be reliable providers. I would like to see us focus on solutions.

Until we get there, we shouldn't be walking away from these tables. We need to sort this out. It's too important not to sort out.

[Greg Northey]

To build on Joel's point and the report from Minister Bains he is referencing, there was a specific report on the agrifood sector, as it's one of the sectors targeted by the government for future growth. It's one of I think six that were chosen. The big point there was that for infrastructure, you want a long-term plan, and you want it to be evergreen. You want to be constantly talking about how you fix it. When you're looking at how to invest and then how to grow infrastructure, that's a key point.

The other main thing in his report—and I referenced it in my opening statement—is that this needs to be evidence-based. In terms of the transportation sector right now, we have very little insight. The ability to get data and information on how fluid it is and how things are moving from ports right back to the country is very limited. The grain sector has invested a lot of money in developing systems to be able to do that, but we need to take it to the next level.

You've had discussions around blockchain already today. These kinds of things are the kind of information we need to make the correct decisions commercially and with the government.

I would flag again that this regulation system is going to be happening soon. That should be a key focus for this work.

[Michael O'Shaughnessy]

I guess I'd highlight first the gateway funding that was announced on the north shore, which helps alleviate some bottlenecks for us. We're looking forward to that as we move forward to 2021.

As a producer, we're investing to improve our inventory stockpiling at the sites so that we can manage some of these challenges we've run into with our supply chain. We're also investing probably close to $400 million in upgrading the Neptune terminals on the north shore to ensure that we have that flexibility and continue to get the service and get the product to market. When these opportunities come up and the market is volatile, we have to capture it.

At a high level, evidence helps, and conversations around the numbers. Data-driven evidence is definitely beneficial, but we all benefit when we're fluid and we all benefit when we're productive. The challenge is that some of our partners are incentivized to run as lean as possible. When we run into these winter issues that happen every year, or have surges in grain crops, they aren't built to recover. That's not how they're running.

[Vance Badawey, Liberal, Niagara Centre, ON]

If I may, Madam Chair, I'll conclude with this.

When you look at facilitating getting all the folks around the table, again, that in fact is why we're here. That is what we're trying to do. This is the initial stage of that.

Peter Xotta from the Vancouver Fraser Port Authority commented today that establishing a federal trade corridor is “the primary and most useful role” the federal government can take. He talked about leadership, bringing people together, being merit-based, and so on. That feels good, yes, but we're only halfway there—not even halfway there—so the intent, following this, is to continue this dialogue and therefore gather the evidence. We can get focused on those infrastructure investments so that they align with and attach to the ultimate strategies—in this case, trade corridors—that we're trying to establish.

Of course, with that, as Greg said, it's being evidence-based so that we do recognize the performance measures—whether it's productivity, whether it's infrastructure, whether it's operations, and the list goes on—and make those investments accordingly to ensure that we elevate our performance.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Badawey.

Go ahead, Mr. Jeneroux.

[Matt Jeneroux]

Thank you, Madam Chair.

Thank you to all three of you for being here today.

To follow along a line that's similar to Mr. Badawey's, I think it's certainly important that we hear where we can go forward with a number of policies, but I think it's also incumbent on the committee to address certain things that are in place, things that are the challenges right now in your industries. In particular, we heard a lot from a number of proponents today who addressed a piece of legislation, Bill C-69, that has been a hurdle to them.

Mr. Neuheimer, you indicated that around your own boardroom table a number of the CEOs are looking to the United States. You addressed one component of that, but I'm hoping you can expand on perhaps some other things that we as a committee can collectively look at—perhaps the challenges around why those CEOs are looking south as opposed to north.

I'll open that up to other members of the panel afterward.

[Joel Neuheimer]

Assuming I understood your question correctly, transportation is not the only threat to investment in Canada. There's also the overall tax system. There's accessing the fibre that we need to access in order to make the products we make. There is a lot of work going on right now on species at risk. We are determined to protect species at risk, but the federal government and the provincial governments need to find solutions to do that in a manner that works and that doesn't unnecessarily drive business out of Canada.

We're facing a range of challenges on the competitiveness front right now. We welcomed the news by the Minister of Finance that he will focus on competitiveness in his next budget. We actually made some detailed recommendations.

If you want, I can send you our pre-budget submission. You can see more detail in there.

[Matt Jeneroux]

I actually have it in front of me here.

[Joel Neuheimer]

Oh, perfect.

[Matt Jeneroux]

A couple of them stood out. Obviously, you talked a little bit about NAFTA. I think that's probably a general theme. We don't know about that yet, I guess.

One that you also brought up here is this: “Address the overall tax burden, including investment depreciation treatments.” That's one sentence in your submission, but perhaps you can expand on that a little bit.

[Joel Neuheimer]

I think we have to be careful about taking business for granted. The industries you see represented here at the table today generate a lot of revenue that helps pay for a lot of really important social programs across Canada, but we are in a global marketplace and we are up against some intense global competition. If it's easier to do business in places like Scandinavia and Brazil and Russia and places like that, we need to figure out a way to make it attractive to do business in Canada again. We need to eliminate some of the challenges we've talked about—transportation infrastructure, access to fibre for us specifically in our business, and the overall tax system.

With regard to the truck driver shortage, along with I think 10 different organizations, we signed on to a letter that was sent to the Prime Minister this past Monday, asking him to act more urgently, in collaboration with provincial colleagues, on the truck driver shortage. I mean, what a lousy reason not to be doing better economically: We can't find people to drive trucks. We can't set people up to drive trucks to get stuff to market. It's ridiculous.

[Matt Jeneroux]

Right.

I did say I'd open it up to the other members. I apologize for going twice to Mr. Neuheimer, but other members, if you have any—

[Greg Northey]

Yes, we have a few examples.

For the pulse sector in particular, a good example of the kinds of things that can cause problems for your industry is India, for instance. It was our largest market. It's a $2-billion market that is effectively closed to us now, due to both tariff and non-tariff trade barriers. The impact of that on the sector was quite big. That product had to find a home somewhere. We had processing facilities in the country that needed to still move it out to keep jobs and to keep the facilities running. As Joel says, the problem we have is that it's extremely competitive out there now. The Black Sea is now matching our production.

Last winter we were faced with transportation problems, coupled with these barriers to a big market for us. It was extremely difficult for Canada to compete, because if we made a sale, we couldn't get the product there. When you have these kinds of failures in your infrastructure and your ability to.... We have some of the best traders in the world and some of the best product in the world, and we can't sell it because no one trusts us to deliver it. That's a big problem, because we're going to see more competition. There are all kinds of things wrapped up in that. There are geopolitical issues, but ultimately, if we're going to be tasked to succeed in the world where competition is going to increase, we need to take these opportunities now to make sure that we have infrastructure and the transportation system we need.

[Michael O'Shaughnessy]

Regarding truck drivers, just to add to Joel's comment, we couldn't get fuel to the sites because we were short of truck drivers. We flew some in from the east coast. We can afford to do that at times because it is a volatile market and we'll take advantage when we can. That's something we had to do.

On the competitive side, we need certainty, so anything we can do to ensure.... It's a global market, as I've said already, but Teck invests across the Americas, so if we view better returns elsewhere, we'll put our money there.

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Aubin.

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

Without the same transparency regarding data as there is in the United States through their system, should the Agency's investigative powers not be reviewed so it is at least possible to have access to such data at a given time and to avoid squaring the circle?

[Joel Neuheimer]

I can start on this one. Thanks for the question.

Actually, this goes back to an ask that a number of the railway's customers made, going back to Bill C-49, which was for for the agency to go out and investigate these types of matters independently. Minister Garneau put some conditions on it. He made it conditional on his approving an investigation and reserving the right to impose certain criteria for how the investigation is conducted. What we think would be even better would be to give the watchdog the power to go out and investigate things that need investigation on its own, without these special limitations.

It's Transport Canada that sets transportation policy in Canada; there should be no fear that the agency is all of a sudden going to make policy. The agency's job is to go out and investigate situations when things are not working the way they're supposed to. I would very much appreciate having the agency act more independently in the scenarios that you're talking about, Mr. Aubin.

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

Thank you.

Would you like to add anything, Mr. Northey?

[Greg Northey]

We very much supported that provision, but one thing we always have to keep in mind is that if the agency needs to investigate, it means it's too late. The failure has probably happened.

If they have the proper data, they can start to see when the supply chain starts to become an issue and they can maybe step in and smooth it out so it's not so bad, but we need to have that kind of insight. We need to have that information to know that this week, we're starting to see red flags around what's happening in the rail network and we need to do something. We need to be able to go to the railways and we need the rails to speak to the customers so they can start to plan: “Okay, we're going to have a problem in the next couple of months.” That did not happen last year.

If they need to investigate a catastrophe or a crisis, it's too late for us. We need to avoid the crisis in the first place. We need to be forward-thinking. We need to be thinking about how we prevent this. Data is a huge example of how we can do it. The U.S. has their data, but I think we can be much better in Canada. We can be much, much better. We don't have to look to them for an example of it. We can set our own regime now. Bill C-49 gave us the ability to do that.

[The Chair, Liberal, Judy Sgro]

Thank you very much. We appreciated all that; it's valuable information. It's only one country, and we all love it and want everybody to do well, so thank you for the advice and the recommendations. Stay tuned for how we move forward.

We will suspend for the next panel to come forward.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

With us we have Parm Sidhu from the Abbotsford International Airport. From the Vancouver International Airport Authority, we have Gerry Bruno, Vice-President, Federal Government Affairs, and from the Victoria Airport Authority, we have Geoff Dickson, President and Chief Executive Officer.

Gentlemen, welcome, and thank you very much for coming in. We realize that it is towards the end of the day and we appreciate your taking the time to come in to talk to the committee and to give us an idea of where you think the future needs to go and how we can all help.

Mr. Sidhu, would you like to go first?

[Parm Sidhu, General Manager, Abbotsford International Airport]

Thank you.

Good afternoon, Madam Chair and members of the committee, and welcome to beautiful British Columbia. I hope you're enjoying your stay so far.

[The Chair, Liberal, Judy Sgro]

We should be outside, actually—then we really would be enjoying it—but that's okay. This is all part of our job.

[Parm Sidhu]

My name is Parm Sidhu. I'm the airport general manager from Abbotsford International. I appreciate the opportunity on behalf of the Abbotsford International Airport to present some information to you this afternoon.

Abbotsford is the fifth-largest city in British Columbia. It's actually the largest city by land mass in British Columbia. It's located in the region of the Fraser Valley, about an hour from here, or 60 kilometres.

The region is one of the fastest-growing areas in the country. There's a fair bit of population growth, and a lot of the industrial and commercial lands are available south of the Fraser, from Surrey to Chilliwack.

Within that region is an asset called Abbotsford International Airport. It was formerly run by Transport Canada, but in 1997 it was transferred or sold to the City of Abbotsford. The City of Abbotsford took ownership in 1997. Since 1997, we've reinvested $75 million into the asset. Basically, we're a self-sustaining business unit of the City of Abbotsford. We do what we do at the airport with the revenue stream we generate. We do not cost the taxpayers of Abbotsford any money. We are self-sustaining.

Since 1997, our passenger volumes have changed drastically. We were at 3,000 passengers in 1996 at transfer. We're now well past half a million, and I'll explain further where we're going with that.

We're a major asset for the Fraser Valley. We're three kilometres from Highway 1. We have two land borders within five miles of either side of the airport. Highway 1 is a critical piece of infrastructure. There's a $22-million investment being made right now in partnership with the City of Abbotsford, the federal government, and the province of B.C. to widen the roadway leading to the airport to four lanes. That's going to significantly enhance access to the airport.

We transformed our business model in 2015. We saw the airline landscape changing, and we saw the future of ultra-low-cost carriers being a reality in Canada. What we did was align our business model to be cost-controlled, just like an ultra-low-cost carrier. In 2015 we transformed our business model. With that, our passenger volumes in 2015 were 490,000. In 2016, they were 530,000. Last year they hit 677,000. This year we're on target to hit 860,000—it could reach as high as 900,000, but we're budgeting for 860,000. Next year we should break the million mark.

What the ultra-low-cost carriers are doing, primarily with Swoop and Flair, means air travel is becoming more accessible to your everyday Canadian. We're talking regularly to people in the terminal now who say, “I would not be flying if it weren't for the low-cost fare.” The importance of ultra-low-cost carriers is huge for Canadians, because they are making air travel accessible to all.

We have four national carriers that operate at our airport. WestJet, which has been a strong partner since 1997, has committed to that region and has offered around seven to nine daily flights since 1997. We have Air Canada Rouge, which offers seasonal service to Toronto. We now have Swoop, which is offering flights to Edmonton, Calgary, Winnipeg, Hamilton, and soon Las Vegas, starting October 11. We'll have three weekly flights. On top of that, we have Flair Airlines, which had a partnership with NewLeaf Travel, and that has really grown our passenger numbers.

With the changing times that we're facing, we are adapting to a different business model. We are operating the airport in a manner that enables others to grow our region, province, and nation in the best interests of Canada. The brand is Canada. We are enabling others to partner with us, especially airlines and aerospace companies, to do better as airlines and fly more people fly out of Abbotsford, barrier-free. We are a regional airport that wants to service our population base from an O&D perspective, an origin and destination perspective, so you're either starting there or ending there. We want to continue to grow our airport.

We also have a lot of aerospace companies at our airport. Cascade Aerospace is a C-130-certified facility, maintaining Canada's C-130 Lockheed Martin fleet. We also have companies like Conair Aerial Firefighting, fighting forest fires globally. Conair's headquarters are in Abbotsford. We also have the likes of Marshall Aerospace and Defence Group.

Also, we have three flight schools. One in particular is Chinook Helicopters, one of the premier helicopter schools in North America. They started a fixed-wing division about two years ago. They saw the possibility of a gap emerging with the shortage of pilots. We're doing everything we can to make sure more pilots are trained and in the system.

With our region and airport growing at a record rate, the further increase in investment in Highway 1 is of great importance. Highway 1 is the main corridor that connects Vancouver to the Fraser Valley and onwards, right to the east coast of Canada. It turns into a parking lot during some peak hours of the day. Any investment in that will not only help Abbotsford; it will help all of us.

In closing, our economic success in B.C. and Canada depends on being competitive on the world stage. Improving our transportation systems will enable B.C. to continue to get products to market and continue to grow our economy.

For Canada's economy to succeed, southwestern B.C. must be able to get Canadian products, services, and people to key markets. It is critical that we address transportation bottlenecks and congestion along Canada's trade corridors, especially the Trans-Canada Highway in southwestern B.C. We must have access to advanced gateways with logistics and integrated infrastructure, and we must have transportation networks that facilitate the movement of goods to market.

The city of Abbotsford and the Abbotsford airport are open for business and thank you for your time.