Transport Committee on Sept. 26th, 2018

[James Clements]

We were certainly in discussions with the province and the city, and under the Canada Transportation Act and the Canadian Transportation Agency's precedent, there is a component of railway funding. In this case, given the existence of the railway for a long time in that location, it's small, but we're committed to putting in our component of funding that was contemplated in that discussion.

[Matt Jeneroux]

Is that amount public?

[James Clements]

I don't think so, but it's less than $5 million. It's relatively modest compared with the total cost.

[Matt Jeneroux]

Was that part of the discussion leading up to the decision, that there would be support from CP in some dollar amount?

[James Clements]

Yes. We supported that business case when it went in as well.

[Matt Jeneroux]

Okay, so what's the current status? Where are we? Are we waiting for the conceptual designs? Have we seen delays in anything?

[James Clements]

We're not the lead partner, so I'm not intimately familiar with the exact status. Our engineers continue to liaise with the lead partner, but I can't comment on exactly where we are.

[Matt Jeneroux]

Who is the lead partner?

[James Clements]

I believe it's the city.

[Matt Jeneroux]

I believe the federal government committed to $39.8 million, if I'm correct. The province committed to $28 million, and the city to $19 million.

Again, I'm just curious where we are. Do you have a timeline in terms of when it could be built, or anything?

[James Clements]

No, but on our side, we will support it going as fast as it can be delivered. We will not be the bottleneck.

[Matt Jeneroux]

I'm sure most proponents across the country will support it, but we've seen significant delays in infrastructure across the country, so I was curious as to whether you had any update on this. It sounds like it's still in the works, even though in summer it was anticipated that we'd have that conceptual drawing. There's still nothing as of yet.

Just quickly, could you expand on some of your comments on the impacts of Bill C-69 and what it would mean to CP in particular?

[James Clements]

Our concern would echo that of the previous panel. By adding an additional uncertainty and complexity into the review process, we are concerned that it is going to discourage the attraction of capital to infrastructure projects that will enhance the supply chain.

[The Chair, Liberal, Judy Sgro]

Mr. Aubin.

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

Thank you, Madam Chair.

I will not repeat the question that I asked earlier regarding the number of accidents. That said, to not leave you in the lurch, I found the quote that my question was based on from the Transportation Safety Board report. It reads as follows: "In 2017, 1,090 railway accidents were reported to the TSB, a 21% increase over 2016".

I imagine that you will have the opportunity, outside this Committee, to explain to me the difference between the TSB vision and your own. In your case, the numbers have decreased, which is good news. In fact, if there are fewer accidents in your case, that is positive, but how do you explain the difference between the two visions?

Mr. Clements, you said that, in future funding programs for these corridors, projects involving the transportation of goods and the transportation of passengers must be separated.

Are we at a point where growth will involve two different rail networks? In other words, will railways be established that are reserved for the transportation of passengers and others dedicated to the transportation of goods, rather than letting them share the rail systems?

[James Clements]

To jump on a question I didn't answer from Mr. Badawey, the Lower Mainland is definitely the most challenging point on our entire network. When we look at that, the commuter operation in the Lower Mainland is one in which I suggest we have to think about a long-term solution. In the period where we weren't doing the best job in terms of serving grain movement, we were also facing significant complaints about delays on the West Coast Express.

In infrastructure, we were balancing all of those priorities and not doing a good job for anybody. One way to avoid that happening is to separate the two. That way you don't have the commuter operations and the freight entangled. You don't have to figure out how to make the choice today of whether to spot a Cascadia grain elevator or move commuters into work in the morning.

It's not a comprehensive Canadian strategy. It's one that we see as a Lower Mainland issue.

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

Do we have the necessary land to establish this dual network? Can we purchase enough land to do so?

[James Clements]

It would be a very challenging and expensive project to build an additional track along the inlet. I think environmentally it would be challenging as well. There are also other options to reconnect and redesign the commuter network so you can leverage existing commuter infrastructure and get the satellite community passengers efficiently onto an existing passenger network in the more central part of the mainland.

Mr. Cross is more of an expert on moving passengers than I am.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Cross. We're out of time.

[Geoff Cross]

Okay.

[The Chair, Liberal, Judy Sgro]

I have to thank you all for being here and for giving us an abundance of information.

We will suspend for a minute while we switch panels.

We do have the open mike between 5:30 p.m. and 6:30 p.m. this evening if you would like to come by.

Thank you.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting to order. Thank you very much for participating today in our study.

We have the BNSF Railway Company, Roger Nober, Executive Vice-President, Law and Corporate Affairs; Global Container Terminals, Marko Dekovic, Vice-President, Public Affairs; and Neptune Bulk Terminals (Canada) Ltd., Rob Booker, Senior Vice-President, Operations and Maintenance.

Mr. Nober, would you like to start, for five minutes, please. I will raise my hand, and they will cut you off.

[Roger Nober, Executive Vice-President, Law and Corporate Affairs, BNSF Railway Company]

I will do my best, Madam Chair, to do it in five minutes.

Thank you, Madam Chair and members of the committee, for letting me testify here today on behalf of the BNSF Railway Company.

We are the largest private freight railroad in the world. We are headquartered in Fort Worth, Texas, and are a wholly owned subsidiary of Berkshire Hathaway, but have been a part of—and the third—class 1 carriers in British Columbia and in Canada since we came to British Columbia in 1909. We serve several provinces in Canada, and it is a critically important part of our network and our business.

I'd like to say a bit about myself. I'm an executive vice-president with BNSF. In my prior lifetime, I was the chairman of the U.S. Surface Transportation Board, which is the equivalent of the Canadian Transportation Association. Before that, I was the chief counsel of the U.S. House transportation committee, which is this committee's counterpart in the United States House of Representatives. I've testified many times in the United States but never in Canada. I appreciate the opportunity to be here today to talk to you a little about our railroad.

We very much applaud you for looking at the importance of trade corridors and international trade. For our company, international trade is a critical part of what we do. We are the third class 1 in Canada. We provide the port of Vancouver with its critical three class 1 railroads serving the rest of North America.

We work great hand in hand with our counterparts in Canada—the Canadian National and the Canadian Pacific, which were here earlier. We find those to be fine companies and we enjoy working them. We also feel that, in addition to the service that they can provide, our company can provide an expanded network within the United States, which provides a competitive advantage for the port of Vancouver.

Our footprint is vast. We have 52,000 kilometres of tracks—so 33,000 miles. Of that, of course, only 38 kilometres is in British Columbia, but that allows us to connect to the rest of our network in 28 states and across the United States.

In our experience, the Canadian government's public policy support for trade and trade corridors is something that is a real competitive advantage here. We serve every major port on the Pacific and west coast of North America. We very much admire the public policy initiatives that you all have to recognize the importance of trade at a national and local level, with the private sector and communities working together to be able to mitigate the impact of trade and to be able to invest in corridors for trade. That is something that we appreciate having been a part of and is a real differentiator, in our experience, from the ports in the United States. This gives Canada a great advantage.

It's our goal to continue to serve here and to be able to be a part of the market. We've made investments in our line to be able to expand in the Vancouver area. We are committed to safely operating. We are committed to investing in our system. At our company we have made some of the largest capital investments that any freight railroad has ever made in their network. We think that shows in our unparalleled safety record, particularly in terms of equipment costs, derailments, the condition of our track and the condition of our network.

As I promised, Madam Chair, I would be brief and finish before my five minutes.

Thank you for the opportunity to be here. I look forward to answering questions from the members of the committee and from all of the stakeholders who are here. We very much want to continue to be a part of trade in Canada and international trade out of the Vancouver metropolitan area.

With that, thank you.

[The Chair, Liberal, Judy Sgro]

We are very happy to have you with us today.

Mr. Dekovic.

[Marko Dekovic, Vice-President, Public Affairs, Global Container Terminals]

Thank you.

Good morning, Madam Chair, and members of the committee. Welcome to Vancouver.

On behalf of GCT, Global Container Terminals, I would like to thank you for the opportunity to appear before you today as you undertake this important study on Canadian transportation and logistics strategy, and in particular as you look at western Canadian trade corridors.

Given the multitude of issues—market trends, policy matters, both domestic and international—that are currently facing the transportation supply chain, your study is timely and we welcome it.

Global Container Terminals operates in the heart of Canada's Pacific gateway. We are the country's primary link to trade and commerce with Asia. Not only are we the anchor tenant in the port of Vancouver, we're also the largest container terminal operator in Canada, and indeed the largest maritime employer in the country. We're proudly headquartered here in Vancouver, and we are privately owned by Canadian pension funds.

Global Container Terminals has been a proponent and investor in critical western Canadian port infrastructure for over a hundred years. We also own two terminals in the United States, in the Port of New York and New Jersey: GCT New York, and GCT Bayonne. We have a long history as an economic contributor and wealth generator, in this province in particular. We are committed to Canada, and our current and future planned investments in port of Vancouver will help improve and expand the country's trading capacity as well as our global competitiveness.

We are well positioned to support the right growth strategies needed to meet Canada's trade and capacity demands, while at the same time ensuring best-in-class customer service and being a responsible environmental steward. On this latter point, it is worth emphasizing that Global Container Terminals is committed to continuing to enhance our environmental performance through ongoing innovations in the way we operate, as well as through smart development, namely, growing our company's business by densifying our existing terminals' footprints first.

This commitment continues to be recognized. For example, we were awarded Canada's Clean50 Top15 Projects award for 2017, and have received recognition from Green Marine for our leading results in environmental performance. Most recently, we certified with the Climate Smart program, which is being advanced by the Vancouver Fraser Port Authority. We were awarded the Green Business of the Year Award by the Delta Chamber of Commerce. We were also recently recognized by CN Rail's EcoConnexion partner's award for 2018.

We are proud of these accomplishments, and we will continue to embed sustainability in all our operations and decision-making going forward.

Like other marine transportation operators in B.C., GCT is focused on running the most efficient business we can, while growing volumes. Our ability to do so, and thereby enabling western Canadian trade corridors to perform to their fullest extent, is largely predicated on a reputation of reliability, predictability and consistency across all facets of the supply chain in which we operate. Reliable relationships with our suppliers and commercial partners, honest and good faith collaboration with our landlord and regulator, and a level playing field for developing sustainable and affordable capacity are all key elements required for fully optimizing Canada's western trade corridor.

As Canada's trade relationships continue to diversify, it is critically important, both in the short and long term, that we fully maximize access to those markets. In order to build the strongest trade corridor possible, we strongly encourage the Government of Canada to continue focusing on making the most strategic and informed capital investments in key western Canadian port infrastructure as well as in the marine environment.

These investment decisions should be made through collaborative frameworks like the Gateway Transportation Collaboration Forum, and be based upon informed input from relevant industry stakeholders. They should include suitable funding mechanisms, and fully leverage B.C.'s trade potential by investing in prioritized common user projects that have demonstrated support from the private sector. If these investments are not made based on these principles, they will not generate positive results that benefit the supply chain as a whole.

We welcome the committee's engagement on these important matters and look forward to seeing the culmination of your work.

Thank you again for your time, and of course I welcome any questions.