Transport Committee on Oct. 16th, 2018

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

How do you ensure that new technologies are being used there?

[Tony Boemi]

What's really important in port study—and it's not just Montreal; it's most ports—in our case we're dealing with a standard vessel with roughly 4,500 containers. What makes us distinct from other ports on the east coast, or even on the west coast, is that when a vessel comes into Montreal, it's a destination port. By that I mean, if I have a vessel coming in at 4,500, I discharge 4,500. This is very different from vessels that will come along the coast, for example, to Halifax, and continue to New York, New Jersey, and so on. As an example, Halifax is a deepwater port. I'm not a deepwater port. Because of my model, I do three times the amount of business that Halifax does.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Boemi. I'm sorry to cut you off. I have to get to Mr. Aubin.

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

Thank you very much, Madam Chair.

Thank you, dear guests, for joining us this morning and sharing your expertise with us.

I also want to say hello to the students who have joined us.

I hope that those who are not bilingual are able to appreciate the amazing service interpreters provide to us on the Hill. That is a point of pride of Canada's legislation on official languages.

That said, let's come back to our discussion. I will begin with you, Ms. Roux.

Of course, no one is against the development of the Port of Montreal in any way. We are all aware of the port's significant economic contribution. The same goes, on a different level, for Trois-Rivières. I know that the collaboration between the two administrations is close and that it is bearing fruit.

I am still concerned about economic development and port expansion being able to align with the respect for or the protection of the environment. Yet, according to associate professor at the Institut des sciences de la mer de Rimouski, Émilien Pelletier, the dredging of the river bed may re-circulate contaminants that would have remained buried forever, and the contamination may extend all the way to Lake Saint-Pierre. So it affects my region.

My question is very simple. Does the Montreal Port Authority believe that river dredging is absolutely necessary in its Contrecoeur project?

[Sophie Roux]

The answer is no. Allow me to elaborate.

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

Thank you.

[Sophie Roux]

Obviously, to create a new container terminal at Contrecoeur, a dock needs to be cast and connected to the St. Lawrence ship channel. The river will need to be deepened to set up the approach area to the dock. That is the only dredging that will be done to expand the port of Montreal at Contrecoeur.

There is currently no St. Lawrence dredging project. We are still trying to increase the competitiveness of the St. Lawrence because it is a blue highway. Goods have always entered that way. Our country and our province developed through marine freight.

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

Can container ships that arrive in your port operate at full capacity or must they reduce their capacity to 80% or 70%?

[Tony Boemi]

All container ships operate at a capacity of about 85%; that is the standard. No vessel enters the port at 100% of its capacity. The capacity of vessels that arrive in the port of Montreal is between 1,800 TEUs and 4,500 TEUs. Container ships operate at a capacity of 80% or 85%.

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

Okay.

I would now like to talk to you about relations with the local population.

During our early visits, especially in the Niagara region, we noted that various ports were lacking space to expand. That is an ongoing problem. I know that, in the case of your port, there is a problem related to the construction of an overpass, and that project has different implications for the population—let's put it that way.

I would like to know two things.

When it comes to the construction of that overpass, you are eager to proceed. Is that because you truly believe it to be the best solution or because you are a bit rushed because the subsidy for that construction is time-limited?

What do you think about the proposal by Marjolaine Boutin-Sweet's office to have the federal government acquire a number of non-public spaces south of the Hochelaga riding?

I am under the impression that all these issues are related and that you can enlighten me better than anyone else.

[Sophie Roux]

In November 2016, we implemented our fourth container terminal—the Viau Terminal. That was a three-part project. We received funding from the new Building Canada fund to set up the container terminal, to strengthen our docks in order to accommodate post-Panamax vessels, and to build an overpass that would connect us to the Souligny Avenue extension, along Assumption Boulevard.

As I said earlier, the port's activities start with a vessel, but then there are trucks or trains that make it possible for goods to move fluidly. That need for additional road access directly related to the port went hand in hand with the implementation of a new container terminal because we are concerned about reducing congestion on the local road network and Notre-Dame Street, and about having much faster access to the upper highway network.

It should be pointed out that the extension of Souligny Avenue has been under discussion for more than a decade. Before we decided where our overpass would be built, there was a long-term process with the City of Montreal and Quebec's Department of Transportation to establish the route of the Souligny Avenue extension.

As for considering other options, such as the possibility of the Government of Canada purchasing other land, we have invited Ms. Boutin-Sweet to discuss that with us further. We are building an overpass over our land, and our property plans do not anticipate the purchase of other land. It should also be pointed out that, before we decide to set up an overpass at a specific location, we must ensure to have the necessary clearance or encroachment.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

[Sophie Roux]

That has always been done along Souligny Avenue.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Now we go to Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

We have had the opportunity, the honour and privilege as a committee to really dive a bit deeper into Minister Garneau's mandate with respect to trade corridors, creating more fluidity as well as eliminating the bottlenecks throughout, not just your area at the port of Montreal, but across the whole nation and even going internationally. When I say internationally, I mean on the other side of the border to the south as well as into the EU.

I'm going to concentrate my questions on that. We've had discussions before, and by the way, thank you for coming today. It's great to have you as part of this whole process. We've had discussions in the past with your association, and we've spoken about both creating fluidity through integrating logistics and distribution and working together within our own regions, but more importantly, how those regions connect throughout the nation and even internationally.

With that, my question for you is, where do you see yourself participating in that overall trade corridor strategy? I want to concentrate as well, as a second question, on the St. Lawrence Seaway and the inability to create port capacity. It's now only operating at 50% capacity. How can you contribute to the overall system to bring that port capacity up to where it should be?

[Tony Boemi]

To answer your first question in terms of trade corridors, a lot of the work that we're doing today to eliminate those congestion points or bottlenecks.... I was saying earlier that when we have ships that come in at about 4,000 containers, they get discharged at once, so you can imagine the bottleneck that it feeds into the system.

Really what we're trying to do is work a lot with some tools that we're providing to the importers and exporters and the trucking companies so that we can provide them with advance information in terms of how to anticipate congestion points and best times of the day to come into the terminal. If you can imagine discharging 4,000 TEUs within a period of 24 and 36 hours, everybody comes in at the same time. That's some of the work we're doing.

In terms of the St. Lawrence Seaway, we've done some pilot projects on how we could increase activity between the St. Lawrence River going in through the seaway, through the locks. It's still ongoing. We're trying to work as much as we can with the seaway to see how we can increase that kind of activity. It's not an easy sell, but it's something that we continually look at.

[Vance Badawey, Liberal, Niagara Centre, ON]

I don't think we can dismiss the fact of or underestimate the impact that CETA is going to have on our transportation system with respect to a lot of product going out and into the midwest in both countries. The St. Lawrence Seaway, as well as the port of Montreal, will be a key part of our overall transportation infrastructure.

With that said, as you know, we're going to hopefully put in place the trade corridors fund and other mechanisms to help you maintain or manage your asset up to a standard which it would be at 2018 and beyond, versus trying to play catch-up with regard to the infrastructure. It is important to have that overall strategy in an integrated fashion before those investments are made, so that we don't have to go backward, but we're moving forward.

You mentioned earlier about maintaining your asset, as well as integrating logistics and distribution nationally. Where do you see a lot of those strategic investments being made?

[Tony Boemi]

If you look at Montreal historically, the port of Montreal has always been a major gateway into the U.S. Midwest. When you look at our European business, roughly 30% of all the business that transits between Europe and Montreal into the Midwest goes through the port of Montreal. We compete very favourably with the ports of New York and New Jersey. We're all running at about 25% to 30%. In terms of our assets, which is our railway system, we own and operate our own short-line railway on port property. We manage roughly 100 kilometres of track. We have four engines. We hand off, or receive from both Canadian Pacific and Canadian National. From our perspective in terms of the fluidity, having access to those markets and the role that we play within that supply chain is really the type of activity that we can do at the port.

[Vance Badawey, Liberal, Niagara Centre, ON]

You mentioned bottleneck and/or capacity issues with so many containers coming into the port of Montreal. Is there opportunity down the road to look at partnering with both the seaway as well as the facilities along the seaway to take that bottleneck away down the system? I know a lot of it is rail right now and partly truck coming out of Halifax, or going into Halifax, Albany, Staten Island, Manhattan, and the ports go on. Are there opportunities going into the ports of Hamilton, Niagara, Oshawa, Cleveland, Toledo, Detroit and beyond that?

[Tony Boemi]

To that point, I'll just give you a bit of background. We worked on a pilot project. We were looking at sending eight ships into Monroe, Michigan, before the closure of the seaway. This would have been a novel idea. We met with the exporter and we met with all the stakeholders and we said, “As a pilot project what can we do?” As a port authority, we said it's a pilot project and we want to make this work, so for those eight ships we'll assess our wharfage—the fees that we normally assess—to zero. We spoke to the terminal operator and we asked what he could do to help out. He said, “When you look at the lift costs, so on and so forth, I'll do it at cost.” We spoke to the St. Lawrence Seaway and they gave us a discount on the locks.

Even with all those steps, we weren't able to make it cost-effective to compete with the railways. That's really the big issue. When you look at the cost factors involved, when you're competing with the railways, it's a very tall hill to climb. At some point we've often said the St. Lawrence Seaway and the Great Lakes are very underutilized. We have the—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Boemi, but I have to cut you off again.

Mr. Bratina.

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

Thank you.

Mr. Marshall, most people would not generally be aware that we've been opening coal mines in the Tumbler Ridge area. I visited those mines prior to the reopening, and it struck me when I heard that approvals were given and the mines were operating again, that the rail infrastructure that previously served in years past had been removed.

Could you give me an idea of how that coal is moving from northern B.C. to its destination? Could you also give me an idea of the impact on the communities of the reopening of those mines?

[Brendan Marshall]

I am not intimately familiar with all coal operations in Canada and the reason is there is a separate association, the Coal Association of Canada, that represents thermal coal. One of our members, Teck Resources, is the largest net coal producer in Canada, so I can speak to its experience with the railways.

Generally speaking, when you see an operation go on to care and maintenance or close for a temporary period of time, that has a particularly devastating impact on the local community. The reason is that many mines are located in remote or more remote regions where that facility would be the major economic driver for that community. If it's the largest employer, and then that employment is dramatically reduced, you can imagine the domino effect through the local economy.

Having a site come back online, and having those people back to work would be something that, generally, I would imagine is a welcome sign for people who have operated or worked at that site for a long period of time.

On the rail side of things, Teck is a perfect example of a captive shipper. The only service it receives is from CP for the movement of its coal. It actually draws an interesting parallel to the conversation that just happened about container shipping. There is also a significant amount of bulk volume that moves through the port of Montreal, but everybody is talking about containers, because if you don't move them, someone else will.

The corollary to that is, “Well, we'll just get that coal later”, or “We'll just get that potash later”, or “We'll just get that timber later.” If you're a captive shipper, and you have no recourse or competitive access, then our view is—which, again, underscores why we need data desperately—that railways will allocate capacity to move other products above and beyond, or first, compared to ours.

It's a constant struggle to try to obtain a balanced relationship with a railway when you're a captive shipper.

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

With regard to the Montreal terminal and lands, we, in Hamilton, were the beneficiaries of the Bunge operation, the set-up of which was very large and expanded. But those lands were sold off privately in Montreal, I believe, the Bunge silos that are near Griffintown.

I am intrigued by the fact that you need land, and there are private lands that are being sold. Are you looking at that? Could you tell me again about the opportunities to acquire land?

[Sophie Roux]

On the island of Montreal, the territory that's under our jurisdiction, we used to have what we called the Old Port of Montreal. That was under our jurisdiction. At the end of the 1980s we retroceded that territory to the Société du Vieux-Port to develop the recreation tourist park that it has become.

As with the industrial revolution, we moved out eastbound on the shore land of the St. Lawrence River. The silo you are referring to is silo number five, which we retroceded at the end of the 1990s, which is also under the jurisdiction of the Société immobilière du Canada and the Société du Vieux-Port. They have a master plan of rethinking the vision of the Old Port of Montreal, version 2.0.