Transport Committee on Oct. 16th, 2018

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

I'm going to stop you for a minute, because I want to ask the port authority folks a question.

When we were in Vancouver, the port authority folks said directly to us that if Bill C-69 had been in place over the past number of years, they would have not had the investment at the port they're having today...that's actually under construction.

Would you support that?

[Tony Boemi]

I can't speak to it.

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

Do you know what Bill C-69 is?

[Tony Boemi]

No.

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

Thank you.

It's unbelievable.

[The Chair, Liberal, Judy Sgro]

Ms. Mihychuk.

[MaryAnn Mihychuk, Liberal, Kildonan—St. Paul, MB]

Thank you so much. It's such a pleasure to be here as a visitor. Before I start, I want to recognize that we're on the unceded territory of the Algonquin people here in Ottawa. I'm the chair of the indigenous and northern committee, and it's important for us to move through truth and reconciliation, no matter in what aspect of government.

My questions are going to be directed to the Mining Association representative.

The first point is a statement. It is shocking and disappointing that investment has dropped by 50%, although we've seen a rebound in commodity prices. Canada must pay attention to this important sector that has been a key developer for a brighter future for most indigenous people.

I have two questions. One relates to the port of Churchill. What would it take to enhance the port facilities in Churchill so that the facility could handle metals and minerals? I am aware that we brought in, I believe, concentrate from Europe and tried to move refined metals through it. There were all kinds of complications because of the weight issues. Could you handle that?

Two, could you elaborate on the Alaska Arctic strategy?

We have only a couple of minutes, so I'll turn it over to you.

[Brendan Marshall]

With respect to the port of Churchill, I'm not sufficiently informed to be able to comment. What I can do for the committee, or for you, if that would be helpful, is speak to one of our members, Hudbay Minerals, which operates in northern Manitoba. It would be one of the closest mine refinery facilities proximate to that port. I could get a sense directly from them about their views on that.

[MaryAnn Mihychuk, Liberal, Kildonan—St. Paul, MB]

We have Hudbay Minerals, Vale...and Agnico Eagle Mines has a $5-billion investment in Baker Lake and Rankin Inlet.

I'd appreciate that, for sure.

[Brendan Marshall]

Absolutely.

With respect to the Alaska Industrial Development and Export Authority, AIDEA, we support that institution's design as one that could work in the Canadian context.

AIDEA is basically the Alaskan version of what the current government has proposed to achieve via the Canada Infrastructure Bank. They leverage public dollars to try to attract private capital, but their emphasis is focused differently with respect to outcomes. They also have different tools.

For example, AIDEA can be the sole owner of a piece of infrastructure, which they are. For example, AIDEA owns both of Alaska's deep-sea ports. They lease for operation both of those institutions. In that sense, the State of Alaska is the owner of both of those deep-sea ports.

One example of a great success from AIDEA, which we think would be mirrored well within Canada, is the Red Dog mine. The Red Dog mine is one of the world's highest concentrate lead zinc mines. It was not viable without a road and a port. It received a flexible-type funding approach from AIDEA that had a number of different means for the company to repay that port and road investment over the course of the life of the mine, including a steady interest rate over the course of the 50-year payback period; escalators on the payback, based on commodity price; and AIDEA's permitting the company to postpone its repayments based on commodity price, because the sole purpose of AIDEA is to generate employment and economic development opportunities for Alaskans. In that sense, when you look at an investment outside the context of strictly return on investment, or ROI, and you look at it in terms of trying to generate employment and economic development for local communities, you're going to assess criteria differently

The corollary to that is that in Nunavut, we have a very large lead zinc deposit. It also needs a port and a road. You may have heard of the Grays Bay road and port project from other participants or witnesses before your committee. We don't have the institution in place to help finance that.

Meanwhile, in Alaska the Red Dog mine has generated literally billions of dollars in economic developments, employing indigenous peoples. It's created indigenous businesses. It has employed local Alaskans. It's paid dividends to communities across the entire state based on their resource revenue-sharing formula.

What's happening in Nunavut? Nothing. The company has backed out, basically saying that they'll need to reassess the project at another time.

In terms of having an Arctic-specific fund, we need to be able to assess what the regional realities are to have an institution that understands those to move projects forward.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Marshall.

That brings to a close the first segment of our meeting.

Thank you very much to the witnesses. We very much appreciated your information and contribution.

We will suspend for a moment while we change witnesses at the table.

Thank you.

[The Chair, Liberal, Judy Sgro]

I call the meeting back to order.

We have with us for this segment of our meeting, from the Atlantic Provinces Trucking Association, Jean-Marc Picard, executive director. By video conference from St. John's, Newfoundland and Labrador, from St. John's Board of Trade, we have Nancy Healey, chief executive officer. Welcome to you both.

Mr. Picard, would you like to start.

You have five minutes, please. I'll raise my hand and give you notice when your five minutes are up.

Thank you.

[Jean-Marc Picard, Executive Director, Atlantic Provinces Trucking Association]

You'll cut me off.

Thanks for having me here today. I do have a few points that I'd like to highlight before we get started with the question period.

Briefly, the Atlantic Provinces Trucking Association is, obviously, the voice of commercial trucking in Atlantic Canada, as well as the body that handles public affairs and government and media relations. It represents about 320 companies, including some of the largest carriers in Canada.

The trucking industry is the dominant mode of freight transportation in Atlantic Canada, responsible for the movement of 90% of all goods and two-thirds by value of Canada-U.S. trade. The for-hire trucking industry in Canada produces more than $20 billion in GDP and is expected to hit $24 billion in 2024. Taking into consideration expected labour productivity growth, this industry growth implies the need for 30,000 additional truck drivers by 2024, which in fact, could impact significantly the movement of goods in an efficient manner for years to come.

In terms of the overall Canadian economy, the importance of the role trucking plays cannot be overstated, with issues such as driver shortage, mandatory training, twinning of Highway 185 in Quebec, the Driver Inc. model, the mandatory electronic logging devices and trade barriers.

Some of our recommendations going forward were already presented in the pre-budget submission. The first recommendation would be to support key infrastructure projects to help facilitate Canadian trade. Twinning Highway 185, as I just mentioned, would be a great example of that. Also, the government needs to stop the widespread tax evasion in the trucking industry by addressing the new employment model known as Driver Inc. The government should restore federal excise tax rebates on certain GHG reduction technologies in the trucking industry, which were eliminated in budget 2016. It should mandate the e-logs or electronic logging devices, which needs to be done prior to January 1, 2020, so we are in line with the United States. It should expedite proposed modifications to the temporary foreign worker program. This is simply to enable us to access more foreign workers to address our driver shortage, which is at a crisis point at this time.

There are some details of all those recommendations in the few pages that follow, but I will end it here.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Picard.

Ms. Healey, you have five minutes, please.

[Nancy Healey, Chief Executive Officer, St. John's Board of Trade]

Thank you for providing me the opportunity to appear. I represent the largest business association in Newfoundland and Labrador. We have over 800 members in a province that has a very large and unique geography. It's an island and we have a remote access to Labrador. There are close to 30,000 kilometres of road in Newfoundland and Labrador. This province also is subject to some unique legislation like the Atlantic Accord. We already have over 90% of our energy coming from green sources, thanks to an abundance of hydroelectricity.

I want to speak to you about three topics: Bill C-69, the carbon tax and the pilot shortage. Each of these things, I think, has a unique impact on this province because of the things I have noted. With our large geography, everything has to float or fly to get to this province. We already have some regulatory arrangements with the Atlantic Accord and the Canada-Newfoundland and Labrador Offshore Petroleum Board, which also make us unique.

As for Bill C-69, we need to pause right now and get it right. There is too much uncertainty. It is very complicated and this is eroding both public and investor confidence. Newfoundland and Labrador's offshore is already a costly venture. We're about to go into some new territory, and now that we will be beyond the 200-mile limit, any offshore oil and gas project will be subject to UNCLOS, the United Nations Convention on the Law of the Sea.

Oil is a significant contributor to the economy of Newfoundland and Labrador. It's sometimes as low as 15% and it goes as high as 25% to 30%. We have a huge potential. We have a vision for our offshore to be producing 650,000 barrels a day by 2030. But this vision and this potential is threatened by the current uncertainty, the onerous consultation that the new Bill C-69 is putting in jeopardy. Right now the environment minister, under these new rules, will have the ability to interfere. We need to have a hands-off approach to allow the regulators like the C-NLOPB to do their work. All decisions must be made in the public interest, but we need to have strong regulatory environment with certainty so that any players in the offshore oil and gas sector know exactly what the terms and conditions are upon which they have approval.

When it comes to a carbon tax, Newfoundland and Labrador has a minuscule amount of greenhouse gas emissions. As I noted, we have 90% green energy. Yet everything that comes here either floats or flies, so we are particularly vulnerable. We agree that we need to do something about carbon emissions, but we feel that a carbon tax should be revenue neutral. Like a tax on cigarettes or alcohol, the behaviour must be taxed but there should be incentives or a tax decrease in other areas to offset the cost of the carbon tax. Any proposal that comes from a province to bring in the carbon tax must be revenue neutral, like the one the federal government is proposing.

The last topic that I would like to talk about which has been brought to us by our member companies is the pilot shortage. It's particularly acute in Newfoundland and Labrador where air access is critically important to get to some of our more remote locations, especially in Labrador. I'm sure the committee is very familiar with the worldwide shortage in pilots. Pilot training is very costly and we believe there are barriers to pilot training in the cost and the way that the grants and loans system works. There were also some concerns brought to us by our members with respect to new regulations on flight crews. We urge the committee to ask Transport Canada to enhance its consultation in that regard.

I also share the concerns of our witness from the Atlantic Provinces Trucking Association with respect to driver shortage. Again, Newfoundland and Labrador has two ways of getting all of its goods in. One is Marine Atlantic and the other is OceanEx. We rely heavily upon the trucking community to get fresh produce. We have about a three-day supply of fresh produce in Newfoundland and Labrador, so we are very vulnerable.

Thank you for the opportunity and I welcome any questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Healey.

We'll go to Mr. Tilson.

[David Tilson, Dufferin—Caledon, CPC]

I have a question for both witnesses as to whether they have had an opportunity to review this new trade agreement, the USMCA, and whether they think it's having an effect on the trucking or transportation systems.

Perhaps we could start off with Mr. Picard.

[Jean-Marc Picard]

I had a chance to review it briefly. A truck crosses the border every three seconds, on average, so the agreement is very important to our industry and our community. For the first time in a long time, we saw some companies in Atlantic Canada stocking up on products from the U.S. in the last few months, which we haven't seen in years. It's usually on-time delivery. You don't sit on product or stockpile because it's too costly.

Then again, the new agreement relieves a lot of anxiety, and we're hopeful that goods will keep on moving without too many implications, too many delays, and too many tariffs. Right now, we don't hear that it's going to have a negative impact, so it's business as usual. The flow of goods keeps on moving.

[David Tilson]

Were you consulted?

[Jean-Marc Picard]

The Canadian Trucking Alliance was consulted.

[David Tilson]

Are there any provisions that were in the old agreement that aren't in the new one or vice versa?

[Jean-Marc Picard]

There are none that I'm aware of.

[David Tilson]

Ms. Healey.

[Nancy Healey]

I haven't had a chance to review the chapter with respect to trucking or transportation. I do take a lot of advice on these matters from the Canadian Chamber of Commerce, which is reviewing things in detail. I haven't been made aware of any concerns with respect to that. Certainly any hindrance to moving goods across the border would be of great concern.

[David Tilson]

With respect to your comments on the carbon tax, there's obviously going to be pressure on the Newfoundland and Labrador government to implement it. You have stated that you're opposing the carbon tax.

Has your group taken any action to persuade the government not to proceed?