Transport Committee on Sept. 26th, 2018

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Booker, please.

[Rob Booker, Senior Vice-President, Operations and Maintenance, Neptune Bulk Terminals (Canada) Ltd.]

Good morning. My name is Rob Booker, and I am Senior Vice-President of Operations with Neptune Bulk Terminals.

Unlike Roger, this is my first time testifying anywhere, so I apologize if I am a little nervous this morning.

[The Chair, Liberal, Judy Sgro]

We're a friendly bunch here, so you're fine.

[Rob Booker]

Why Rob Booker and why Neptune? I'll give two quick answers to that.

I have my third career in front of me. All my years have been related to export: mining, a career in longshore as a unionized person, and finally in management and the development of port and terminal growth.

Why Neptune? Neptune is on the north shore. If you get the opportunity, please come and visit us. Marko has talked a little about density and intensity. We have 29 hectares, a little less than 3% of the port land area. We will handle 11% of the volume this year. We will be $4 billion of export for Canada this year. We are exclusively Canadian. Everything we receive is mined in Canada and exported for Canada. Every job associated with that is a Canadian job. It's a taxed job in Canada. It is all by rail. We do no trucking. We are 100% on rail.

Out of the many presentations you will hear today, eight of them directly impact our ability to compete or operate. The port of Vancouver, the railways, the port authority, the pilots—six others indirectly impact. If the Port of Nanaimo this morning decides there will be no more anchorages for the port of Vancouver, I'm in trouble, as a business. The interconnection in logistics is massive.

Our experience with the federal government and infrastructure has been exceptional. The north shore trade area was ready to go in 2008-09, and finished $400 million of work with the port. The federal government put up $268 million of that $400 million. Industry will put up the remaining $232 million. Neptune will be responsible for $120 million of that payback for that infrastructure in the end.

Out of that $400-million investment on the north shore, a billion dollars in infrastructure was built. That was round one. When you hear about G3.... Peter Xotta hates it when I say this. He's talked about the port of Vancouver being the largest port on the west coast and the largest port in Canada. The north shore alone, if the rest of it fell into the ocean—and the earthquake people hate it when I say that—we would still be the largest port in Canada, just that string of terminals along the north shore. When CN and CP talk about the intensity of rail activity to the north shore, that's a piece of that.

Neptune alone is responsible for 400 direct jobs in Vancouver. Those jobs pay well enough to allow you to buy a house here. That's no small feat. The indirect jobs associated with us as a primary outlay are about 20:1. Mines, rails—all those indirect jobs are fabulous.

Where do we go next?

We're excited about the current proposed round of funding. Much of that is beyond the north shore, but it facilitates access to the terminal. That's great news. It answers an immediate concern. We're investing $500 million. CN and CP talked to you today about investing $340 million. We're in a two-year, $500-million investment process to take our terminal capacity to 30 million tonnes. Today we're exporting 17 million tonnes. By the end of 2020, we expect to be exporting between 28 and 30 million tonnes through Neptune. That's a growth of 160,000 railcars annually to almost 320,000 railcars annually, and from 300 ships a year to 650 ships a year, through 3% of the footprint, or 29 hectares. It will double our impact on the economy—close to $10 billion by 2021.

The challenge in front of you.... I'm afraid you have the unlimited problem. You have the end of unlimited rail capacity. During my entire career I've been the beneficiary of that, but I think you've heard today that that's coming to an end. It doesn't exist. We've had the benefit of unlimited industrial land. That's coming to an end. You also have the benefit of unlimited demand for Canadian products—unlimited demand for Canadian grain, unlimited demand for Canadian potash, unlimited demand for Canadian steelmaking coal.

It's a difficult task. You've been challenged with current capacity issues, and you've heard some long-term capacity issues. I think there are significantly different strategies required to address this. Should significant damage to the rail bridge occur, we would be in significant trouble economically.

I'll close with that.

[The Chair, Liberal, Judy Sgro]

Thank you very much. It's amazing how we talk about millions and billions everywhere, especially with this committee.

We'll move on to Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Before I ask a question, I need some clarification. One of the things that always happens before these committees is that witnesses come and testify and use terminology that.... I can't speak for my colleagues, but we're a couple of prairie guys. What is the north shore? I thought this was the west coast.

[Rob Booker]

The north shore is the difference between Crowsnest Pass and Banff.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Where are we talking about? I'm relatively familiar with the west coast.

[Rob Booker]

The north shore is everything that's on the other side of the Burrard Inlet from downtown. If you go over the Second Narrows Bridge and you go over the Lions Gate Bridge, you are on the north shore. Mr. Xotta talked to you this morning about a sulphur pile at the Lions Gate Bridge—

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

That's the north shore. What's the not north shore?

[Rob Booker]

The south shore, which you heard about from CP in great detail relative to rail line access and container terminals, that's the south shore.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Where is that?

[A voice]

It's this side of town.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

This is the south shore. Okay. We have that clarified.

I did want to ask a couple of questions.

You're Burlington Northern.

[Roger Nober]

Yes. We were originally the Great Northern, then the Burlington Northern and now BNSF.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Did I hear you say you had 38 miles or kilometres of track?

[Roger Nober]

That's kilometres in British Columbia since 1909.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

You go from the port...?

[Roger Nober]

We go from the port to Blaine.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

To Blaine, Washington...? Okay.

With the lower Canadian dollar, are there lower-cost possibilities for exporters to the U.S. to come into Canada and use your facilities? I'm thinking about dockage fees and all those other things, if they're in Canadian dollars versus U.S. dollars—and God knows our Canadian dollar could be even lower yet the way we're going. Could you comment on that?

[Roger Nober]

Canadian ports have a number of cost advantages over some of the United States ports. They start with the cost of labour, the ability to be more efficient in terms of using technology, and the harbour maintenance fee—tax does not apply to containers and goods coming into Canada. Then you add the dollar and some of the public-private support for infrastructure. Those are competitive advantages for Vancouver.

On the other hand, one of the things exporters or importers will look at is the size of the local market. Los Angeles–Long Beach has a much larger footprint from that standpoint.

Clearly, you just look at the numbers and Vancouver has been winning market share among west coast ports. There's no question about that.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I wanted to follow up in a similar vein with Marko.

You said you have container facilities in Jersey and somewhere else in the States.

[Marko Dekovic]

We have two terminals in the Port of New York and New Jersey. One of them is on Staten Island.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

What could Canada learn from the U.S. in terms of your experience in operating both in Canada and the United States? What are some things they do better than us that we could look at incorporating here?

[Marko Dekovic]

There probably isn't much. In fact, the learning would probably go the other way.