Transport Committee on Sept. 26th, 2018

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

That's good to hear, but there has to be something.

[Marko Dekovic]

Just to give you an idea, New York and New Jersey is not a gateway port. It's a massive local market. There is a lot of trucking, yet there has been no truck reservation system in place. We had a truck reservation system in place for a while. We actually transferred that knowledge from here and were the first ones to do it over there. That's an example where we transferred knowledge from here to there.

Something that is perhaps different there is the port authority has a much clearer mandate. It's a complex mandate but a clear mandate. It's a lot more transparent and a lot more directly linked in the governance model to elected officials. It's complex because it's a bi-state authority. People would say there's a higher level of accountability.

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

What about things like regulatory burdens? Are there regulatory concerns in Canada that they don't have in the U.S. in your business that we could learn from?

[Marko Dekovic]

They're pretty similar.

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

Are they? Okay, and what about taxation policy, as an operator?

[Marko Dekovic]

I'm not the expert on that, so I could get back to you, but overall it's a very different taxation model because the port authorities and everything that happens there are very much state-owned and state-run.

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

All right.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie.

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

Thank you, Madam Chair.

I'm not going to disappoint your colleague Mr. Ketcham, Mr. Nober. I do want to talk about your line through White Rock and along the coast. If trade grows, given the speed constraints and risk of slides, etc., how do you square that?

[Roger Nober]

We certainly recognize that the communities of White Rock and Surrey have had concerns about that rail line, and community concerns about our volumes that have gone through there, and we have been working with them for many years to try to mitigate some of those issues, some of which involve operating practices and some of which involve infrastructure, like pedestrian bridges.

We believe the line has sufficient capacity to be able to handle a reasonable amount of increase of volume, and when you're dealing with consumer products, you often have unit trains that provide a great deal of efficiency. I think some of the concerns of the community are really very long-term concerns about the location of the line and how that would ever be mitigated or addressed. Those present a lot of challenges. A number of communities across our system have similar kinds of concerns and they're all very difficult questions because the community—

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

I'll have to interrupt here because I have some further questions, but your experience is not dissimilar from communities all around metro Vancouver that are next to either port facilities or rail facilities, or in the case of Knight Street, which connects a huge amount of heavy truck traffic from the Fraser River up to Burrard Inlet, and probably connects with your operations, Marko.

Rob, you went into an area that I'd like to see expanded by both of you gentlemen. You've been here. You've been listening. What have you heard so far, and what have you heard that either gives you confidence or concerns about the level of investments you want to make to improve the density of your operations and increase the capacity?

[Rob Booker]

With specific reference to Bill C-69 and the potential to have CEAA be the regulator for environmental approval, we wouldn't have invested. If that had been the condition two years ago, we would not have made the $450-million investment, because there's no certainty in process. It's really simple. From a business perspective, if there's not certainty in income or outcome, even in timeline—never mind yes or no—if there's just no certainty in timeline how can you make an investment?

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

Marko.

[Marko Dekovic]

You have the rail capacity where we're looking to invest in the south shore, our GCT Vanterm terminal. Rail capacity is key to the investments the government is making in the south shore with the port and the private sector. It's key to enable that ongoing and continued investment in densification of that terminal to continue growing.

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

When we consider that the size of vessels is increasing, and the number of containers that will arrive at any given time has gone up quite substantially, again looking at rail capacity, do you have confidence that they're going to be able to move this large bulk of containers—mixing two analogies here—as efficiently as the ships that bring in all those containers?

[Marko Dekovic]

That's a great question. We're all as strong as our weakest link in the supply chain, so yes, with larger ships, we need to be investing in land-side surge capacity. That means the terminal operators and the railways have to be making the necessary investments and we as terminal operators have to do what we can to facilitate the speed at which we move the containers off a ship to a train.

As an example, we went live this Monday with our $300-million investment project at Deltaport, where we have densified our existing rail yard through semi-automation. It's an example of where we're going to increase the capacity and the velocity of cargo moving from a ship onto a train through our terminal to deal with the larger ships and helping the railway partners by loading up the train cars at better speed.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Monsieur Aubin.

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

Thank you, Madam Chair.

Gentlemen, I thank you for being with us today.

Mr. Nober, earlier when Mr. Dekovic answered a question about the harmonization of American and Canadian regulations, I saw you nod your head and I sensed that you may have wanted to add a qualifier to that decision.

I would like you to hear from you on the same question.

[Roger Nober]

I was thinking about that very well-posed question.

Given our experience in Canada and our experience in the United States, do we see any part of the United States that would have regulatory lessons for Canada? I was thinking to myself, can I even think of one? There are some that go both ways.

I would say that in terms of the permitting and right-of-way maintenance process, there are some procedures for categorical exclusions, let's say, from environmental review. They take maintenance practices that are happening routinely and repeatedly over and over again and say that they'll just review those once and determine that they don't need individual reviews.

We're a very capital-intensive business, as you heard from CN and CP. Even for our investment of $50 million, which we've done in our 38 kilometres here in British Columbia, the ability to receive regulatory approval to be able to act on those is important.

That's one place where I confess that I don't know if Canada has the same if you look at the long-haul carriers, but that's a place where, when the U.S. regulators are being co-operative, things can work very well for approval to work on our tracks.

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

Thank you.

I come back to you, Mr. Dekovic.

You spoke of growth by densifying activities at existing terminals. First, I have a very simple question to resolve my ignorance.

Is the Port of Vancouver now able to receive Super Post-Panamax ships, or is it limited to Panamax?

[Marko Dekovic]

Yes. Currently, at the port of Vancouver in particular, GCT Deltaport is equipped to handle the largest vessels that could call or that are in the trans-Pacific trade. We can receive vessels of up to 22,000 TEUs at Deltaport.

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

I understand that, if you opt to densify terminals, it is because it is hard to increase the space at the Port of Vancouver.

What percentage of increase do you hope to achieve through the densification of activities?

Will it have a significant impact on fluidity of ship traffic for ships that must now anchor off the port while waiting their turn to load or unload?

[Marko Dekovic]

Those are very good questions. Thank you.

On densification, I mentioned a rail project as an example. We have managed to increase our overall terminal capacity by 33% just by redoing the layout, semi-automation and densifying of the tracks on the terminal, and changing the way we operate. There was no additional land, but there was a 33% increase in the entire terminal capacity. That's an example of handling the larger ships and a bigger surge capacity.

As for whether ships will be delayed as a result, we have the necessary cranes to handle the largest ships right now. Container ships, unlike the bulk carriers, perhaps, run on a pretty scheduled program. In fact, the Port of Vancouver has an incentive program to encourage the container ships to come on time, which allows us to properly plan our terminal labour and terminal operations, as well as the railways. That integration of the supply chain is encouraged. As I mentioned before, the velocity of cargo will move as fast as the weakest link in the supply chain.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Iacono.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

I'm giving my time to Mr. Hardie.