Transport Committee on Oct. 2nd, 2018

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

In terms of standardizing regulations, is the problem bigger, smaller or the same in the case of cross-border trade with the United States, for instance, which is an important partner for you?

[David Chaundy]

I think we've had a similar issue in the past. I don't know if this has been fully resolved. When we did our research report there was some conflicting information. We have had similar long-standing issues around truck and weight limits in the United States—in Maine in particular—where what's allowed in Atlantic Canada is not permitted further south in the United States just because of the type of road infrastructure in northern Maine.

Again, I think that issue has been fairly long-standing. I don't know if it has yet been fully resolved. Those are our two key corridors, so anything that impedes the capacity or the regulatory issues around that.... The regulatory issues are sometimes based upon the infrastructure. The vehicle weight limits are because of the way the road has been built, so it's partly an infrastructure issue. The regulatory is the apparent issue but it really comes back to whether we have a road capacity that will accept vehicles of certain weights.

This is not just about a section of road. This is about thinking more in a system point of view where it's coming to and from Atlantic Canada. It's going further south but there are sections where that system is not working because you can't keep certain trucks on certain roads.

I can't say if the United States issue is bigger or smaller than Quebec, but both linkages are very important. We've heard about those issues from my members in the past.

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

I will now turn to Mr. Sharma.

You very clearly illustrated the problems you face with the rail industry when you want to ship your products.

I don't know if it's a question of modernizing, adding or upgrading port facilities, but let us assume that the rail problems are resolved and the companies can export your full production. Would the port also be able to export all your products seamlessly and in a relatively short time, considering the increase you anticipate?

[Rajesh Sharma]

If I understood the question correctly, you asked, if the railing was adequate, then would the port be able to cope with all the exporting requirements.

No. As of now, the bigger problem is the port infrastructure. When you have to export bulk commodities, there is a terminal on which the ship berths, and you lower it. That terminal has been built, in this specific example, as a public terminal for 50 million tonnes of capacity. The associated infrastructure required to unload the trains coming from the mines, to handle the material, to put it on conveyors and connect it to the terminal is absolutely inadequate. It is not even good enough to cater to 10% to 15% of the capacity. As a result, first, the investment that the government and the mining companies have made is not able to realize its full potential; second, the existing players are struggling; and third, new players will not come on board because they see that this is a big bottleneck for evacuation of material.

If that is taken care of, I think there will be a direct correlation in terms of improvement of economic activity and exports.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sharma.

That's exactly what we were looking at last week. After doing our travel last week, we all can understand exactly what you're talking about.

Mr. Iacono.

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

Thank you, Madam Chair.

Mr. Chaundy, you referred to trucking a number of times, specifically the weight and type of trucks allowed, but aren't the related regulations and the roads under provincial jurisdiction?

[David Chaundy]

Essentially, the issue is that different provinces have, for different reasons, established different standards. Atlantic companies are not just trading and trucking within one province. They are going across provinces, across Canada and to the United States. The challenge for them is different provincial regulations, different standards, that then impede their ability to travel because they don't look at these provincial borders. They just look at where they need to get their goods or their people to and from. The challenge is the coordination of that and the harmonization of those standards.

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

Have you raised this problem with provincial officials?

[David Chaundy]

We have, as part of the research for this, been in discussions with them and that's probably why we put forward our proposals, not just for transportation but for these regulatory issues across the four provinces. It's to try to help facilitate and encourage greater co-operation and collaboration, and provide a mechanism to help advance this, because we don't yet see that commitment and the timeline and the process to actually achieve what the four premiers have said, in principle, they want to do. We feel they really need to step up and be more specific about the goals, the timelines, and the work plan or the process of the infrastructure changes to make that work.

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

You referred earlier to the problems companies face at the U.S. border. What exactly are you referring to?

[David Chaundy]

There are several challenges that we've heard. Probably the biggest one that we heard when we did our pre-consultation around NAFTA is around temporary entry of individuals. There are restrictions on the number of occupations that the U.S. will access. Things have changed a lot since NAFTA was put into place so it's about individuals not fitting into those occupational categories, challenges not getting their visas or being screened and questioned. A lot of the concern was around the business entry, but we have also heard from firms saying that inspections seem to have been tightened up. They've had an increased proportion of loads rejected for different reasons.

Again, it's just a lack of clarity on the rules and maybe different interpretations or applications of those rules. Again, businesses need to know what the rules are and they then need to know they can comply with these. I think there's been some uncertainty created because either the rules are not broad enough on the temporary entry or they're not clear enough or there's been a change in the application.

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

What is the situation in the lobster industry now in terms of jobs and economic spinoffs?

[David Chaundy]

Can you clarify? I'm not sure exactly what you're looking for me to comment on in that question.

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

Have there been problems exporting lobster or is it all proceeding smoothly?

[David Chaundy]

Certainly we have seen fairly substantial growth in our lobster industry. We've seen expansion to new markets and we have seen, as part of that, some increases in capacity, particularly in the airline shipping capacity. I think there has been some response on the supply side, the transportation side, to accommodate that. I don't know if there are any particular issues right now....

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

Sorry. Isn't there a problem with respect to the lobsters having to be transferred to Toronto or Montreal in order to be shipped, for example, to China?

Can you elaborate on that?

[David Chaundy]

I can't speak to the specific situation, but we have heard that in the past Atlantic Canadian firms would be trucking down to Boston, for example, to ship out of Boston rather than Halifax, so yes, we have heard that in the past. I know there's been some improvement in terms of new airline services to Korea. I don't know to what extent that is still happening to a greater degree but, yes, we have certainly heard that in the past.

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

Mr. Sharma, in your remarks you mentioned something about Quebec. What exactly is it that Quebec is doing well, that is advantageous, and should this be shared or used by other ports? In your remarks there was something you highlighted about Quebec doing something that's advantageous.

[Rajesh Sharma]

As I was explaining, the infrastructure that is supporting the dock was owned by a private company and hence the access per se was blocked. Today the conversation has moved on from access to adequacy.

Due to the unfortunate circumstance of difficult market conditions, the Quebec government acquired those assets and facilities. They spent money to get those facilities and develop them, or consider developing them on a multi-user, equitable access principle. That was step one: the conversation for reaching the terminal or reaching the port started. Otherwise, there was no conversation. That's creditable and that's something they did at a time when the iron ore industry was totally in doom and gloom. In any case, no single, private player would be able to be the catalyst that would cater to all. I think this is a good model.

My point was that it requires more investment and more support.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Sharma.

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

Mr. Sharma, I have a few questions about your port. Are you in Pointe-Noire?

[Rajesh Sharma]

Yes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Most of your iron ore that comes in comes, I assume, out of taconite, by ship.

[Rajesh Sharma]

No, our iron ore is right now DSO. It comes from the mines in Quebec. It is exported by ships, yes, 100%.

[Vance Badawey, Liberal, Niagara Centre, ON]

What is your current capacity?