Transport Committee on May 14th, 2019

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I am calling to order the meeting of the Standing Committee on Transport, Infrastructure and Communities. Pursuant to Standing Order 108(2), we are doing a study of the Canadian transportation and logistics strategy.

Welcome to our witnesses and to the committee members.

Ms. Block.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Chair, just before we hear from our witnesses, I want to thank you for the agenda that was circulated. I note that we have a half hour for in camera, and I appreciate that there was some confusion last week about our in camera session. I'm wondering if we will be doing any recommendations to the BIA in camera, or if we will do that in public and then move in camera for the rest of our committee business.

[The Chair, Liberal, Judy Sgro]

It's whatever the wish of the committee is, Ms. Block. If the committee would like to do any recommendations to FINA in public sessions, that's totally fine. It's the decision of the committee.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I think we have typically dealt in public with clause-by-clause or any recommendations that we might want to make and so, at the time you call us to go in camera, is it fine if we raise it?

[The Chair, Liberal, Judy Sgro]

I can ask right now.

When we go to discuss the recommendations for FINA, is there anybody who has a problem with our staying in open session? I don't see that it is an issue for us, so we will stay in open session for that.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

[The Chair, Liberal, Judy Sgro]

You're welcome.

Let's go to our witnesses. From the Atlantic Chamber of Commerce, by video conference, we have Glenn Davis, Vice-President of Policy. Here in the room with us, from the Canadian Chamber of Commerce we have Ryan Greer, Senior Director of Transportation and Infrastructure Policy. From the Municipality of Gros-Mecatina we have Randy Jones, the Mayor, by teleconference. From the Town of Anchor Point we have Gerry Gros, Mayor, by teleconference from Anchor Point, Newfoundland and Labrador. From the Town of Channel-Port aux Basques we have Mayor John Spencer and Councillor Jim Lane.

Welcome to all of you.

We will start with Mr. Davis, by video conference.

[Glenn Davis, Vice-President, Policy, Atlantic Chamber of Commerce]

Good morning. Thank you very much for inviting the Atlantic Chamber of Commerce, on behalf of its 93 member chambers of commerce across the region, to participate in these consultations on the development of a Canadian transportation strategy.

As an introduction, the Atlantic chamber is the oldest and largest accredited business organization in Atlantic Canada and strives to influence the local environment to create economic growth and prosperity for its citizens, including the more than 16,000 businesses and professionals who are members of chambers in communities across the region.

Our mission, experiences and extended network have provided the Atlantic chamber with a broad perspective on issues affecting our economy. In the vein of transportation, in fact, the Atlantic chamber has proposed three resolutions on transportation policy to the Canadian chamber policy debates over the last four years.

Our understanding is that in this limited time we would try to provide the committee with an overview of infrastructure and regulatory challenges that face Atlantic Canada and that if addressed would contribute to increased safety and efficiency and minimize the harm to the environment. Specifically, I'd like to raise issues in a couple of areas.

Number one is how we could improve infrastructure. In terms of infrastructure investments that would have a measurable positive influence on the movement of goods and people from Atlantic Canada to central Canada, the twinning of Route 185 between Rivière-du-Loup and Saint-Louis-du-Ha! Ha! is one of the most pressing. Accelerating the phased approach to the construction of this highway, which began in 2005 and is not slated to be finished until 2025, is critical in providing the ability to operate more efficient long combination vehicles. The impacts of this current bottleneck are increased costs, increased carbon emissions, driver shortages and accidents.

Atlantic Canada also suffers from a lack of pipeline access to domestic supplies of oil and gas. The public demise of energy east due to regulatory challenges makes it clear that Canada needs to resolve the impasse in building pipeline transportation. Our region is currently forced to access energy supplies via foreign purchases or the less safe and less environmentally safe polluting option of rail transportation. A national transportation strategy should include a vision of the necessary infrastructure to move domestic resources to Canadian and international markets.

Atlantic Canada's port facilities are also an enormous asset for communities both large and small. Situated on international trade routes, our ports have the potential to shorten transatlantic marine routes by a whole day, but this potential is dependent on the availability of adequate capacity and efficient intermodal services. Investments to increase handling capacity and efficient access to port facilities will enhance the attractiveness of our ports to international carriers. Equally, small harbour port facilities warrant attention in this strategy, as they provide support to multi-million dollar fisheries that contribute to the region and individual communities.

While much of the discussion regarding transportation strategy tends to focus on infrastructure that's missing, it can't be overemphasized that the federal and provincial governments need to urgently address the growing maintenance deficit of existing infrastructure. This applies equally to secondary roads, as well as primary; our secondary roads are often unable to handle movement of agricultural and resource products to market.

We're also very concerned about the effects of climate change in Atlantic Canada. As a region with more than 33,000 kilometres of coastline, Atlantic Canada will be heavily impacted by the effects of more frequent extreme weather events, rising sea levels and flooding.

Nowhere is this critical infrastructure more at risk than on the Isthmus of Chignecto, the land bridge between New Brunswick and Nova Scotia. The Trans-Canada Highway, which transports an estimated $50 million in goods per day, is protected by a combination of centuries-old dikes and, by default, the class I railbed that is inspected and maintained by the private sector. All of this infrastructure is vulnerable to overtopping in the event of a combination of extreme tides and weather, a scenario where Nova Scotia and Newfoundland would effectively be cut off from the rest of Canada.

There were also stretches of the Trans-Canada Highway near Jemseg, New Brunswick, that were closed during the spring thaws of this year and last. These closures forced the diversion of truck traffic through Saint John, adding 100 kilometres to the distance to traverse New Brunswick.

[The Chair, Liberal, Judy Sgro]

Mr. Davis, I'm sorry to interrupt. Could we just have your closing comments, please, so that we have plenty of opportunity for members to get their questions out?

[Glenn Davis]

Certainly.

I'll very quickly note that in the area of regulation, we feel that the committee should consider the unique circumstances of Newfoundland and Labrador to address the costs of ferry services and human resources. A comprehensive trucking strategy should be part of the transportation strategy in terms of labour requirements. It's also essential that the committee consider the issues of regulating the national airport system and the effect of rents on large and small airports, including the effect of security services providing funds to government that aren't reinvested.

Finally, the committee should also consider the concept of harmonizing regulations between provinces to create a true national highway system, one in which trucks can move freely across provinces.

In closing, I'd like to thank you for this opportunity to speak about determining future priorities for the official transportation system that will reduce greenhouse gas emissions and also provide a basis for economic growth and prosperity for all Canadians.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Davis.

We will go to Mr. Greer, from the Canadian Chamber of Commerce, for five minutes, please.

[Ryan Greer, Senior Director, Transportation and Infrastructure Policy, Canadian Chamber of Commerce]

Thank you, Chair and committee members, for inviting the Canadian Chamber of Commerce to take part in your study on the establishment of a Canadian transportation and logistics strategy.

Unsurprisingly, goods and people movement affects nearly every chamber member amongst our network of 200,000-plus members, many of whom have already appeared before you on this study. We agreed with much of what was in your interim report, and we're pleased to see that it cited the chamber's 2017 report, “Stuck in Traffic for 10,000 Years”.

Thank you for including the Canadian chamber on your swing through the Atlantic portion of your study. My remarks will be a little more national in scope, but I'll start by stating my violent agreement with everything we heard from my colleague, Glenn Davis, at the Atlantic chamber. Maybe we'll just echo and reinforce one issue he mentioned off the top, which is the Highway 185 bottleneck.

He mentioned it's a Canadian chamber national policy resolution. Just for a little context on that, resolutions of the Canadian Chamber of Commerce, our policy positions are set through the proposal, debate and amendment of resolutions by chambers of commerce and boards of trade from across the country every year at our AGM. This means when an issue like Highway 185 is adopted at the national level, it's deemed by chambers from coast to coast to be a national priority of importance to the entire country. I think the Highway 185 bottleneck includes that. I won't get into some of the implications of that, as Glenn did, but just note that we think it's important the federal government work with the Province of Quebec and the Atlantic provinces, if necessary, to accelerate the timeline of the twinning of the highway. Long combination vehicles that do take this route need to decouple, take each trailer separately, and recouple after the 41-kilometre stretch, which, as Glenn said, increases costs, increases carbon emissions and creates safety issues.

I would also like to quickly highlight the work of Krista Ross at the Fredericton Chamber of Commerce, who has been a tireless advocate for this issue within the chamber network itself.

Outside of this issue, the Canadian chamber has several other policy resolutions on goods movement that I think are relevant to your study. In the interest of time, I won't go into them in detail, but would be happy to answer any questions afterwards and send the resolutions along to the committee. They include issues such as the management of the lower Fraser River, the need for a pan-territorial transportation strategy, and the importance of supporting short-line rail in Canada.

I would also like to endorse the work of the Beyond Preclearance Coalition, which the chamber belongs to. Beyond Preclearance is a group of organizations in Canada and the U.S. developing a long-term vision to advance the efficiency and security of the Canada-U.S. border. A few weeks ago, we co-hosted a border transportation summit with the U.S. Chamber of Commerce, with the objective of scoping and designing border pilot projects that will help lead to more integrated border movements for all modes of transportation in the years, and hopefully decades, to come. We would recommend this committee use the vision that's laid out in the Beyond Preclearance white paper as the basis for cross-border transportation issues in your larger strategy.

Last, I would like to highlight what I think is our most important recommendation for your study. It comes from the Canadian chamber's Vote Prosperity 2019 federal election platform, which we released yesterday. It's the standard by which the chamber network will be evaluating all platforms this fall.

We are asking for a greater share of federal infrastructure funding to be directed towards trade-enabling transportation projects. We strongly advocated for the creation of a dedicated transportation and trade corridor fund in 2016 and we were very supportive when the national trade corridors fund was announced in budget 2017. Simply put, this kind of infrastructure has the highest return on investment of all kinds of infrastructure investment by the simple fact that it makes its users more productive. However, with $2 billion in funding over 11 years, the NTCF represents only 1.1% of the 12-year, $180-billion long-term plan.

In its first call for proposals, the NTCF received 357 expressions of interest, which totalled nearly $17 billion in funding requests. Following a screening process at Transport Canada, there were 177 comprehensive proposals submitted seeking nearly $10 billion in funding. That is five times the value of what's actually available for the NTCF over its 11-year lifespan.

This fund guarantees the biggest bang for the federal buck because it is merit-based, unlike most other federal infrastructure funds, which only require meeting basic eligibility requirements and are subject to a high degree of political influence from all three levels of government. The NTCF, on the other hand, is based on detailed assessment criteria related to supply chain fluidity, trade flows and reducing bottlenecks. In other words, it finds the projects with the greatest economic value to our export-dependent economy.

At a time when the international trade landscape is shifting and our competitors are making improvements to their trade infrastructure, we need to be more strategic with our investments. We cannot rely only on our geography, our natural resources and our proximity to the U.S. to generate further prosperity.

Author Parag Khanna has a terrific quote in his book Connectography, which I think should be required reading for anybody drafting a strategy in Canada, in which he notes, “Supply chains and connectivity, not sovereignty and borders, are the organizing principles of humanity in the 21st century.”

It is our view that a Canadian transportation and logistics strategy should be underpinned by having trade-enabling infrastructure as an equal priority in the long-term federal infrastructure plan. We're hopeful that this committee shares this view and will support the recommendation in its work.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Greer.

Next, by teleconference, is Mr. Jones of the Municipality of Gros-Mecatina.

Good morning, Mr. Jones. Please go ahead for five minutes maximum.

[Randy Jones, Mayor, Municipality of Gros-Mecatina]

Good morning.

Thank you very much for the invitation. This is history-making for my region of the country, the lower north shore. To our knowledge we've never been invited to something so important and to be able to make a presentation.

I would also like to thank the committee members for this invitation in French. This is the first time we have been invited here. I'm sorry I am nervous.

This has never happened before. If I sound mixed up, that's just the way it is. This is the way our part of the—

[The Chair, Liberal, Judy Sgro]

No problem, Mr. Jones. You're in good company here. Please go ahead. We have full translation, so please feel comfortable.

[Randy Jones]

Thank you.

You know, I think the first thing that I'd like to speak about, just to show you how different we are from the rest of the country, is that we have to participate by phone, because our Internet is not fast enough. It's being worked on. There is a project being worked on by the federal government.

We are Quebec's forgotten people, on the lower north shore. It's the last frontier. We are working together right now, from Tadoussac to Blanc-Sablon, with southern Labrador, western Labrador and, as of now, part of the west coast of Newfoundland, to complete the 138 and the tunnel across the Strait of Belle Isle, finally hooking up our country from one end to the other.

We have villages on this part of the coast that can see each other, such as Saint-Augustin, Quebec, and on the west side, Pakuashipi. They are less than a kilometre apart and it's a world apart. They don't have access. Mother Nature and climate change have hit us full force. Where it was normal to get a storm 20 years ago that had winds from 60 to 80 kilometres an hour, as we speak, storms are now from 80 to 110, sometimes even to 120. That is unheard of. When the sun goes down in the evening, we are at the mercy of Mother Nature.

People are prisoners in their own communities. The cost to travel by plane is astronomical. The community I represent, Gros-Mecatina, has a small airstrip that was put there by the provincial government. Every year, a doctor comes in to Blanc-Sablon, and they do tests on the ladies for breast cancer, and so on. They took 18 women from my community and went to Blanc-Sablon a few years ago, and on the way back, when they landed, it was nearly a disaster. They nearly went over the end of the runway. The person who did the investigation for Transport Canada told me that this was one of the three most dangerous airports in eastern Canada. I asked him what number we represented and he wouldn't say.

The road, Route 138, and bridges would allow Saint-Augustin, less than a kilometre away, to have access to the airport and the federal wharf. They're on one side of the river, and the wharf and airport are on the other side. That bridge is a must. That's two communities that would be connected. The same is true for the road between other villages. We're in 2019, and most people on this coast have not been able to see the inside of another community in summertime. The only time they get to travel is in the winter, by snowmobile.

The 138 and the tunnel are a must if we're going to preserve our way of life, our culture and our heritage. We've seen communities close. I went to school in Musquaro. That village doesn't exist anymore. Wolf Bay is another village that's been closed. Aylmer Sound is another village that has closed. Lac Sally has closed. Baie de la Terre has closed. The list goes on, but if we had access by road, those communities would still have their necessity. Our economy is the fishery. As it stands right now, we don't have access. We could fish different species and species that don't pay so much, but if you added a truck that could truck it from, say, Kégaska to La Tabatière, that would be another option for people.

[The Chair, Liberal, Judy Sgro]

Mr. Jones, I'm sorry, but I have to cut you off. I need to give all of our witnesses their five minutes. Please stay on the line, because I am sure that many of my colleagues will have questions.

[Randy Jones]

No problem. Thank you very much.

[The Chair, Liberal, Judy Sgro]

We have Mr. Gros, mayor of the Town of Anchor Point, by teleconference.

Are you on the line, Mr. Gros?

[Gerry Gros, Mayor, Town of Anchor Point]

Yes, I am.

[The Chair, Liberal, Judy Sgro]

Please go ahead for five minutes.

[Gerry Gros]

Thank you. I want to thank you for inviting me to this hearing, this consultation.

A large percentage of consumer goods for the island of Newfoundland, the lower north shore of Quebec and southern Labrador come in via Marine Atlantic. This likely explains the higher cost of living in our area. This past winter, an inordinate number of crossings were cancelled due to weather and ice conditions. The same applied to the crossings of Labrador Marine on the Strait of Belle Isle. According to climate change experts, we can expect these weather conditions to continue and possibly worsen into the future.

This problem in large part can be resolved by completing Route 138 on the lower north shore of Quebec and by the construction of a fixed link between the island of Newfoundland and the south shore of Labrador. The completion of this project would greatly reduce the transportation time getting goods from central Canada to our area.

The communities on the Great Northern Peninsula of Newfoundland and Labrador and the communities on the lower north shore of Quebec are isolated, remote and dependent on Marine Atlantic and Labrador Marine for delivery of consumer goods. There are many delays in the winter months due to high winds and/or ice conditions, and this was particularly true this past winter.

Quality of produce and other goods suffers due to the delays, and travel time from our area to the mainland of Canada is far too long and costly. To travel by road from the tip of the Northern Peninsula to Sydney, Nova Scotia, a distance of approximately 900 kilometres, generally takes in the neighbourhood of 24 hours or more, taking into consideration the waiting time at the Marine Atlantic terminal and a six- or seven-hour crossing.

Cellphone coverage in our area is sporadic at best, with many communities having no coverage at all. There's also a need for high-speed Internet.

Completion of Route 138 in Quebec and construction of a fixed link from the island of Newfoundland to the south coast of Labrador will resolve many of the issues we face today.

There are obvious benefits to tourism. Tourists will be able to enter Newfoundland and Labrador through Quebec and return via Port Aux Basques or vice versa, therefore not retracing their steps.

Completing the two projects will have significant economic benefits to the area. First, it will provide employment opportunities for local residents during construction, and upon completion, additional employment opportunities will come about because of increased traffic. There should also be opportunities for new businesses such as restaurants, gas bars, hotels, B and Bs, etc.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Gros.

We will go to Mayor Spencer.

Thank you for your patience, and welcome.

[John Spencer, Mayor, Town of Channel-Port aux Basques]

Thank you very much for inviting me. I want to pass things over to my colleague, councillor Jim Lane, but before I do, I'd like to thank the federal government for solving the capacity problems that we had with the Gulf ferry service in the 1990s. We now have that issue solved. I also want to thank the federal government for the announcement of a new ship. We have an aging vessel. We have a fleet of four, and we're really appreciative of that.

I have to go back to Mr. Jones. He spoke of winds of 120 kilometres an hour. That's only a good day for drying clothes where I'm from. We have seen winds of 180 to 200 this past winter.

I'm going to pass things over to my colleague, councillor Jim Lane.

Thank you.

[Jim Lane, Councillor, Town of Channel-Port aux Basques]

Good morning.

Thank you very much for giving us the opportunity to speak here today. It's a great privilege. It shows that the government is willing to listen to the people from the small areas.

Today I want to talk about cost recovery. Prior to talking to that, I'll mention that the federal government challenged Oceanex in court recently.

On November 30, 2016, Canadian historian Raymond Blake appeared on behalf of the Government of Canada and the Minister of Transport in a federal court in Newfoundland and Labrador to a challenge of Marine Atlantic's right to a federal subsidy.

In an affidavit, Dr. Blake stated that it was understood in the negotiations which led to the Terms of Union between Newfoundland and Canada in 1948 by both the Newfoundland delegation, appointed by the Government of Newfoundland, and the Government of Canada, that under terms 31, 32, and 33, the Government of Canada had a responsibility not only to operate and maintain the Gulf ferry and provide an efficient service, but also to cover all costs associated with operating the ferry service. Both sides also believed that when Canada took over the Newfoundland railway, including steamship services, it would result in lower transportation costs to and within Newfoundland, which would then lead to a lower cost of living in Newfoundland. There was no expectation that the ferry from Port aux Basques to North Sydney would operate on a cost-recovery model. It was understood that Ottawa would cover all deficits incurred by the ferry and that, moreover, the Gulf ferry service would, like the union of Newfoundland with Canada more generally, provide great benefits to the people of Newfoundland. It was a subsidized ferry for the benefit of Newfoundland and Labrador.

To put things in context for the members of the standing committee, the Crown corporation Marine Atlantic was created in 1986. The company uses two vessels primarily, but has a fleet of four to accommodate the busy summer travel season. It employs about 1,300 people and provides around 1,700 sailings annually for over 300,000 passengers and 90,000 commercial vehicles. Marine Atlantic is the only vehicle passenger service into Newfoundland and Labrador, with 25% of the passengers being non-resident. In 2003, the Canadian Industrial Relations Board ruled that constitutionally obligated service was essential and its operations critical to the health and safety of Newfoundlanders and Labradorians.

To reinforce the words of Dr. Raymond Blake, there was no expectation that the ferry from Port aux Basques to North Sydney would operate on a cost-recovery model. Cost recovery has a chokehold on Marine Atlantic. Cost recovery forces tariffs up or equates to service cuts to Newfoundland's constitutionally provided extension of the Trans-Canada Highway.

Cost recovery was introduced by the Government of Canada in 2007 at 60% of operations cost. Fast-forward to 2019 and it is now at 65% of operations cost. However, hidden within that is a cost recovery of 100% on many services, such as a seasonal run to Argentia, on-board vessel concessions, drop trailers, etc. Cost recovery, we believe, has to end.

In 2015, the federal Liberal leader, now Prime Minister Trudeau, voiced alarm over the previous federal government's cuts to Newfoundland's essential service and committed to work to ensure that Marine Atlantic remains affordable to Newfoundlanders and Labradorians. Prime Minister Trudeau highlighted cuts and cost recovery, stating that such measures had forced fares to rise by 11% in the three years leading up to 2015.

Since the Prime Minister's pre-election stand in 2015, fares have risen another 10%, not factoring in the additional burden of security fees and fuel surcharges. Sadly, since cost recovery was introduced in 2007, fares have increased by an alarming rate. Oddly enough, 2019 marks the 70th anniversary of Newfoundland's entry into Confederation with Canada. Was this the vision for those negotiating the Terms of Union in 1949? I think not.

The same year, 2007, when the cost recovery was imposed on Marine Atlantic, then Newfoundland member of Parliament, now senator, the Honourable Norm Doyle stood in the House of Commons and pleaded for a better deal for the people, stating it was a very costly service.