Transport Committee on Sept. 26th, 2018

[Matt Jeneroux]

Okay. That's interesting.

I noticed that the other two proponents were shaking their heads in agreement. I'll leave it to them to maybe put it in their own words some of the challenges that Bill C-69 makes for your organizations.

Mr. Dekovic.

[Marko Dekovic]

Bill C-69 is generally a step in the right direction, but the key will be the execution. The concept is good, but much like some other regulatory processes, while it looks good on paper, it is how it is executed and how the timeline is kept.

Therefore, we are supportive of its general direction. I would echo some of Rob's comments that we definitely want to make sure that certain projects that are on federal land, that are currently being regulated by existing federal regulatory agencies, should probably stay.

One thing we would support is that in cases where, for example, the port authority is the project proponent, it should not be its own permitting reviewer. With Bill C-69 looking at that and pulling that out, we think that's a step in the right direction. It just creates a better, more transparent, more accountable process, which will ultimately build trust from the public, and I think that's ultimately what Bill C-69 is attempting to do, to rebuild confidence in the regulatory process.

[Matt Jeneroux]

Mr. Nober, do you have a comment?

[Roger Nober]

I have nothing to add.

[Matt Jeneroux]

Chair, those are all my questions.

[The Chair, Liberal, Judy Sgro]

Mr. Aubin.

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

Thank you, Madam Chair.

I would like to spend the few minutes I have left with Mr. Booker.

You are somewhat of a prophet preaching in the wilderness. You are the first to say things that we don't want to hear because we are always talking about growth. For your part, you state that the capacity for growth in the rail sector is reaching its end.

In your mind, when you say that, is there a deadline?

[Rob Booker]

I don't know so much about our horizon as the opportunity. I was asked about the Second Narrows rail bridge and the tunnel. There is a twin opportunity for the federal government and terminals at the port: twin that bridge and twin that tunnel.

It's a key risk in the supply chain today. If that bridge and tunnel go down for any reason, the economic impact will be incredible. It will be catastrophic. It's an aging asset. It's over 55 years old. It's going to take us 20 years to build another one, so start now.

My message is not so much that we're at the end; it's that we're too slow. We're way too slow in addressing the Fraser River rail bridge. There are key, critical, single-line pieces in the infrastructure chain that impact our logistics, and if we don't start acting now, with the pace of our ability through all the processes.... We have to get on it.

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

Does our slowness in implementing this infrastructure, if that is the right thing to do, have a direct impact on the price of goods internationally?

Are some products being made rare because we are unable to export them as much as we would like, due to a lack of means, or are our foreign competitors taking advantage of the situation?

[Rob Booker]

Certainly I can speak from the coal side of that business, and in particular, metallurgical coal from Australia. Absolutely Australia has rebuilt their facilities. Their intensity on a footprint is huge. On my 29 acres, the Australians would move 60 million tonnes of coal.

In terms of their pace, it took them from 2016 to 2018, two years, to build that facility and the support infrastructure behind it. I don't think we could do that in Canada in 10 years right now. It's not that we have a bad process. We're just slow to get there.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I understand Mr. Badawey has one additional question.

[Vance Badawey, Liberal, Niagara Centre, ON]

I do have a quick question. Hopefully those who were here from before will be here for the next round of delegations.

Concerning the national trade corridors fund, Mr. Aubin correctly identified something that we heard earlier about the Fraser River bridge. Has there been some thought given to a collaboration by all of you to make an application to the the trade corridors fund to replace that bridge, versus just one of you or maybe just a part of you, but to actually get together as a region and make that application together, obviously for the benefits you've outlined?

Ken, did you want to add to that?

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

Yes. Basically, we're talking about two bridges and a tunnel.

[Rob Booker]

Partly from a port perspective, being engaged as a B.C. maritime operators member and looking at that infrastructure and when that money will be made available, it's not put to us as to what the priority is. It's put to us as, here's a dollar amount that we think we can afford to spend as the federal government, and as business people, we're very cognizant of that reality.

Now we're stuck in the position of what the best decisions are for those dollars, relative to the capacity that we're experiencing today. It's always hard to get to the foundation of the house, when you have no shingles on the roof.

[Vance Badawey, Liberal, Niagara Centre, ON]

Taking into consideration what the net result is going to be, from the plus side on your balance sheet, to then make room from your operational or expense side to actually be able to support further investments by you and to then annually, with discipline, contribute to financing that debt, that is the consideration that you have to make. What is this bridge investment going to give you to contribute to your bottom line to then invest in other capital projects that your operational side, through the annual budget, would contribute to, with respect to any financing of debt and/or financing of a reserve that would pay for those future capital projects? That's the consideration.

That's why I asked the question. You're not in this alone. If that application could be made for the benefit of all of you, then why isn't the application being made on behalf of all of you?

[Marko Dekovic]

In particular, I think that the Fraser rail bridge is a good example and perhaps something that will require the Gateway Transportation Collaboration Forum to dig in deeper. It is regularly talked on. Again, it's just a matter of near-term priorities, but as you know, I believe the Fraser bridge is owned by the federal government and operated by CN Rail. The railway services the port terminals, both container and bulk, so it is a perfect opportunity for massive collaboration and to sit down together and figure out how, who and when best to apply.

It's definitely something that's on the radar of the Gateway Transportation Collaboration Forum.

[The Chair, Liberal, Judy Sgro]

Thank you all. It was invaluable information that we received from the panel, as well as the others. Thank you very much.

We will suspend for a moment, while we switch panels.

Thank you.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

Thank you all very much.

Now with us from the BC Marine Terminal Operators Association—Marko has decided to stay, he liked it so much—we have Brad Eshleman, who is the Chair. We also have, from the Canadian Ferry Association, Serge Buy, the Chief Executive Officer, and from the Port Alberni Port Authority, we have Zoran Knezevic, President and Chief Executive Officer.

Welcome. We're happy to have all of you here.

Mr. Buy, would you like to start? You have five minutes, please, and when I raise my hand, they'll cut you off.

We would love to hear your comments.

[Serge Buy, Chief Executive Officer, Canadian Ferry Association]

That sounds good. Thank you, Madam Chair. The clerk must have mentioned it a number of times to us, so I'm cognizant of the time.

We are the national voice of the passenger vessels sector in Canada, and our members include ferry operators from across the country: provincial governments, municipalities, indigenous organizations, and private corporations. We range from small operators bringing trucks and cars to remote communities to BC Ferries, one of the largest ferry operators in the world.

Every day across the country, Canadian ferries bring people to work, tourists to their destinations, and goods to market. They are an integral component of Canada's transportation infrastructure and an essential service for many living in remote communities.

Annually, our sector transports more than 53 million passengers in 21 million vehicles. Often overlooked is the considerable amount of goods that are transported aboard Canada's ferries, worth billions of dollars annually. For example, Marine Atlantic annually transports more than 100,000 commercial units and accounts for more than 50% of all the goods shipped to Newfoundland. In fact, when sailings are delayed due to weather, communities across the province experience food shortages.

Similarly, the BC Ferries service is fundamental for those on Vancouver Island or in remote or indigenous communities throughout the Inside Passage, Gulf Islands, and Haida Gwaii. Put simply, it's how all goods, foods, supplies, and fuel reach those communities.

Given the unique nature of ferry vessels, we believe that our sector is well placed to help the federal government to achieve its goals under the transportation 2030 plan if steps are taken to allow us to reach our full potential.

Currently there are many government programs that support a wide range of activities related to the marine and transportation sectors. However, the criteria for some of those programs are too restrictive and do not account for the realities of marine transportation. As an example, there are support programs that are available for passenger-only transportation and others for goods-only transportation. The reality is that ferry vessels often transport both goods and passengers together, making us ineligible to apply to any of those infrastructure programs. This is an easily corrected problem that is putting certain remote communities at an unfair disadvantage. Changing the criteria for those support programs would allow for more efficient transportation of goods to communities across the country and a more optimized transportation system as a whole.

This government has taken historic steps to support research in many ways and across many sectors. However, we believe that innovation in marine transportation is one area that is lacking. As an example, there are over 1,800 Canada research chairs across a variety of disciplines, but not one related to marine transportation.

Canada, and indeed Vancouver, is home to many world-leading companies that are undertaking research and development projects, ones that are aimed at reducing vessel noise and carbon emissions, making travel more efficient and more. As the transportation 2030 initiative lays out a plan supporting innovative technologies, our sector believes this is an opportunity to support those Canadian innovations and the marine transportation system as a whole.

By offering more support for sector-wide research, including naming a related Canada research chair, the federal government will be giving our sector the tools it needs to make our transportation system more efficient.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Eshleman is next.

[Brad Eshleman, Chair, BC Marine Terminal Operators Association]

Thank you very much for having us here today.

My name is Brad Eshleman. I'm the Chair of the B.C. Marine Terminal Operators Association. We represent all the major export and import terminals on the west coast of Canada, handling over 120 million tonnes annually and virtually 100% of the trade on and off deep-sea vessels on the west coast of Canada.

We were established in 1963, so we have a long history on the west coast. Our mandate is to improve the economic and environmental viability of B.C. marine terminals and invest in and promote the value of the port industry to local communities, the province and the nation. We're very engaged in our local communities. We're engaged with first nations in all the ports we operate in. Our members are also significant sponsors of local charities and community events and those in need in our community.

Investment in our terminal capacity has been the primary objective of our members over the last number of years. In addition to the jobs that we've created, we've invested over $3 billion in the last eight years. We have $3 billion in invested in terminal capacity, and we have potential future investments of over $5 billion. This has all been enabled through the support of government investments in trade corridor infrastructure and the B.C. Ports Property Tax Act, and it's through private industry.

What this has resulted in is the creation of family-sustaining jobs. The longshore hours of work have increased from approximately six million hours in 2008 to a projected nine million in 2018. That's a 50% increase in hours. These investments have resulted in an increase of over 2,000 family-sustaining jobs throughout the marine industry alone. These jobs come with good pensions and good health benefits.

I have some comments for the committee. The west coast is Canada's gateway for western Canada's commodities to the world. Terminals play a central role in driving innovations and capacity, given their position as a convergent point in the supply chain. We have demonstrated significant success in working together. Governments, with private industry, have joined to expand Canada's trade capacity to the world with the investments that the federal government has made in the trade corridors and that the private industries have made.

However, there are a number of areas that we need to focus on to continue this success. One is that further investments are needed by governments to address bottlenecks in the trade corridors. This requires a coordinated approach with input from industry stakeholders to ensure that maximum benefit is derived to increase capacity.

Another one is preserving and creating new terminal capacity. Terminal land with deep water, road access, and rail access is in short supply on the west coast. Continued investments by terminal operators to create capacity is required to meet our trade demands. Canada's current regulatory environment seems to be creating more obstacles to investment rather than a clearer path. This is obviously a concern to the terminals that are investing to help handle those goods for Canada's trade to the world.

I know there is a current review going on with respect to environmental reviews and how we're going to handle those in the future, and I would ask that the federal government be mindful of that, as bringing terminal investment forward in a timely basis is critical for that investment to happen.

You will note that there is a grain terminal being built in Vancouver right now called G3. It will be the most efficient grain terminal on the west coast of North America, handling over eight to 10 million tonnes annually. This investment, if it had been delayed in environmental regulatory processes for a lengthy time, likely would not have occurred. The panel needs to be aware of that.

Another item is addressing competitiveness and productivity issues. It's important we work with labour to improve the efficiency of our transportation systems or risk being non-competitive with other ports in the world market. We must recognize that people are the central consideration to the marine sector's ability to support the economy and the reliability of our country's supply chains. It is important that we be viewed as an efficient and reliable port of call for shipping companies to compare and call and pick up or drop off goods.

We're currently reviewing labour availability. It has been an issue with respect to our industry. Right now we have increased capacity, so it creates strains on our system.

Labour practice is under review. We're currently negotiating a collective agreement with our labour partners, which is going well right now. However, we do not want to see a slowdown or labour disruption in the future, as that goes to the credibility of our trade and our ports in the world's eyes.

[The Chair, Liberal, Judy Sgro]

I'll have to stop you there.

Can you make your additional comments and respond to some of the members' questions?

[Brad Eshleman]

Sure.

I just have two more sentences and then I'm done. Is that okay?

[The Chair, Liberal, Judy Sgro]

Go ahead, sir.