Transport Committee on May 16th, 2019

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

I call to order the Standing Committee on Transport, Infrastructure and Communities. Pursuant to Standing Order 108(2), we are studying the Canadian transportation and logistics strategy.

On our panel today, we have Danny Dumaresque. From the Great Northern Port, we have Daniel Villeneuve, President and Chief Executive Officer. From the New Brunswick Business Council, by video conference, we have Adrienne O'Pray, President and Chief Executive Officer. From Maersk Supply Service Canada Ltd., we have Francois-Xavier Morency, Managing Director.

Welcome to all of you.

Mr. Dumaresque, I understand that you have to catch a flight, so we're going to turn the floor over to you, for five minutes.

[Danny Dumaresque, As an Individual]

Thank you very much, Madam Chair, and thank you to the members of the committee for the invitation.

My project, that I have been following now for nearly 30 years, is the final spike to link Canada from sea to sea. It would have a subsea road tunnel under the Strait of Belle Isle. For those who have not been to this wonderful part of the world, we have the big land, Labrador, that is nine miles at its shortest point from the northern peninsula. The two points that would be connected are a little place called Yankee Point on the northern peninsula, and Point Amour, which you can see is the place of the second-highest lighthouse in eastern Canada.

My involvement in this project goes back many years. As a matter of fact, I didn't hear it, and neither did you, but in the fall of 1975 there was a big bang. There was a big explosion on the Labrador side near Point Amour when the government of the day made the first blast to start the tunnel and the process of building a subsea link to the island.

At that time it was premeditated by the urge to get power from Churchill Falls and bring it to the island of Newfoundland. As you know, we haven't been so successful at getting that power to Newfoundland, but certainly, that was what premeditated that move at the time. Shortly after a court decision, that project was abandoned.

I started this as a result of being a member of the legislature from that district, and of course, growing up only 10 miles from where the tunnel would actually join the mainland of Canada. My father actually got nine days of work on that project and told me all about his experiences. Over the last number of years, I have expended a lot of time studying this project. In the first terms that I was in the government, I was preoccupied with getting a link to Canada by road from the Strait of Belle Isle.

Our focus was on the Trans-Labrador Highway, and slowly but surely that took place. As of next year, we will have a fully paved highway from the Quebec border to the Labrador Straits and that part of the equation is done. There was never any need to build a link if you were going nowhere, so for the link to be built, it would have to cross the Strait of Belle Isle and link up to the rest of Canada.

I have spent a lot of time in Norway. There are experts there doing these tunnels. They've done 32, and number 33 is ready to open this fall. It's a tunnel that has quite similar numbers to what we are looking at. It is 14.3 kilometres in length under the sea, from Solbakk to Tau, in Norway. It's 1,000 feet below sea level. We have been there to meet the top people who are supervising this project. It started in 2013 and will be finished this fall.

I went there with two things in mind: to look at the cost and the question of geology, whether that was a prohibiting factor. I'm pleased to tell you the cost is something that I believe will be surprising, but quite realistic. The people of Labrador certainly know the benefits of doing this.

I won't take up any more of the time on the introduction, but I would certainly be happy to answer any questions on what this project may cost, how it might be financed, how it can be constructed and operated, and what benefits it would bring to the economic diversification of our province, but also to build our nation, Canada.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Dumaresque.

Now we'll go on to Mr. Villeneuve.

[Daniel Villeneuve, President and Chief Executive Officer, Great Northern Port Inc.]

Change can often be scary. Whether it's considering a new job, a new town, a new relationship or a new adventure, humans are warriors, and we are wanderers. Our children begin exploring their world without fear. As young adults, we leave our homes to pursue our own dreams. As adults, we start our families and discover new challenges. Skilled people leave home, and sometimes they will return. But for those in Newfoundland and Labrador, my home, we bring the challenges to them. We can inspire and reconnect them to their homes in new and powerful ways.

We all long for connection. We connect with our families. We connect with our friends. We also connect with our neighbours. John Donne famously said, “No man is an island”. With the strength and courage of the people in this room and amongst many others, we can span the gulf between two provinces with a fixed link and connect our nation.

I want to thank you for your attention and consideration today because this is an exciting time. It is not a new idea, but it is a persistent one. The St. Lawrence Seaway, the Confederation Bridge, the Chunnel, Marconi and wireless radio.... Visionaries of many generations understood our need for connection and strove to join together worlds and societies. With a fixed link and a stable network of roads and rail, we have a powerful way to connect the island portion of Newfoundland with the rest of North America in great and powerful ways. With this project, we may count ourselves among the architects of a new future, of Canada's future.

I and others dream of a new extension to highway 138 on Quebec's north shore, a new rail and a great tunnel built on proven technology. Together they can usher in a new chapter of prosperity for all of us. Through rapid transit of passenger, commercial and tourism traffic, we may forever truly connect the many developing resources from all provinces to their neighbours and beyond, but that is only the beginning. It all starts with us, and it all starts now.

There are no losers in a project of this scope, only winners, only us. There have always been challenges, pitfalls and moments of weakness in the pursuit of greatness. In many cases like ours, the ends will justify the means. We will be the proof. A portal between Quebec and Newfoundland can only bring more prosperity, not less. With our tunnel under the straits, the sky is the limit, and we must remain strong.

Through that strength and with this tunnel, we shall forge a connection between the private and public sectors, between provincial and federal governments. We can literally and figuratively pave the way into the future with fewer barriers to our own joint prosperity, especially in rural areas along the proposed path. The vision for similar changes is what drives this mission to reinvigorate our rural spaces. Like the Trans-Canada Highway, we shall nourish the region with new traffic, new business and new vision for a bright future.

It is always darkest before the dawn. Newfoundland is my home, and the people of the region are ready for the change in this vision. They are tired of weather and sea ice, and of the wind cancelling ferry crossings and air traffic, endangering their food security and mobility to the mainland. With this project, we will link the varied people of Quebec and those of Newfoundland and Labrador with the rest of Canada. United, we can knit together a fabric of national and international trade, our environment, employment, education, housing, health and culture. This link will become an artery feeding lifeblood into an infrastructure with new resources, a strong economy and renewed infrastructure. If we build it, they will come.

Like all great journeys, we have constructed a road map to aid our mission. Among the strategies are included our GNP industrial plan, our external trade development plan and our transportation electrification plan. With projects like this and others, we will create a driving force for our future, and it all starts with collaboration like this meeting today. Together we are strong.

Unlike traditional investments, our fixed link will pay dividends immediately. We will provide employment. We will develop infrastructure. We'll proclaim proudly that we believe in the future of those on both sides of the tunnel and all along the roadways and railways. We will change lives. Workers will bring families. For the first time in generations, specialists will flock to us and not the other way around. Money spent on workers and jobs will grow our economy. These are the tides of change.

Like Newfoundland's own island-wide highway, the freedom of motion that a fixed link, new road and rail will offer us is profound. It will encourage towns to develop, and the addition of pipelines for more than people, resources and freight will then fan the flames of change. The link will communicate ideas, dreams and visions for revitalizing the region. lt will create a new era of co-operation between Newfoundland and Labrador, Quebec and greater Canada in ways that cannot be imagined. We must be patient, we must be cautious, but above all we must be wise, united and brave. After all, change can often be scary.

Thank you.

[The Chair, Liberal, Judy Sgro]

Than you very much, Mr. Villeneuve,

Ms. O'Pray, by video conference, for five minutes.

[Adrienne O'Pray, President and Chief Executive Officer, New Brunswick Business Council]

Good morning. On behalf of the 26 New Brunswick-based CEOs that are members of the business council, I would like to thank you for the opportunity to appear before the committee on an issue that is considered one of the council's top three priorities and one that has significant potential for economic development for Quebec and the Maritime region.

The issue we would like to raise with the committee is the urgency in twinning the 41-kilometre stretch of highway between Saint-Louis-du-Ha! Ha! and Saint-Antonin in the province of Quebec.

Specifically, along with the Canadian Chamber of Commerce and the three major trucking associations from Ontario, Quebec and Atlantic, we are advocating to expedite the twinning of Route 185 and to advance the completion date from 2025 to the fall of 2021.

As the only remaining single-lane section of highway between Halifax and Toronto, Route 185 increases costs between the Atlantic region and the larger central Canadian economy for both carriers and consumers. The improvement in the highway would effectively eliminate a tariff of sorts and an interprovincial trade barrier.

Today, long combination vehicles are forced to stop, decouple and recouple after the 41-kilometre stretch, which makes goods from the Maritimes more expensive to export to other parts of Canada and adds cost to Ontario and Quebec carriers. Carriers use a much lower percentage of long combination vehicles as a result, which also impacts driver shortages and increases carbon emissions.

While the project of twinning Route 185 has been ongoing for many years and progress has been made, if we do not expedite this project, every year that we delay will cost the Atlantic economy roughly $1 billion. Taking six years to complete a 41-kilometre stretch of highway will diminish the economic potential for our region.

ln 2017, the New Brunswick Business Council partnered with Dr. Herb Emery of the University of New Brunswick, along with Kent Fellows of the University of Calgary, who has experience modelling the GDP impacts of transportation infrastructure as a lead researcher for the national corridor research project.

Our intention was to actually quantify—for what we understand to be the first time—the economic impact that this transportation bottleneck creates for goods travelling to western markets from eastern Canada and from Ontario and Quebec to the Atlantic region. Based on information we provided to Dr. Fellows, he assessed that the impact of twinning Route 185 would reduce the delivered cost of traded goods by 1.5% to 2.5%, representing annual GDP gain of $1 billion to $1.78 billion for Canada.

We feel governments and leaders who have so diligently been looking for economic growth opportunities, through the Atlantic growth strategy, would be hard-pressed to find projects and opportunities that could provide this level of return in such a short period of time without any increased funding for this project.

To be clear, we understand that Infrastructure Canada and the Government of Quebec signed an agreement for phase three of this project, the twinning of the final 41 kilometres, in 2018, for over $389 million. As the New Brunswick Business Council, we are advocating for the federal government to play a role with the province to agree to advance the funding, which has already been allocated, to immediately fast-track this critical infrastructure project.

There are other important impacts of twinning Route 185 that must also be considered. For example, there are significant emission reductions that can result from the increased use of long combination vehicles. The use of long combination vehicles would allow companies to address the significant labour issues that also impact industry in the form of significant driver shortages.

lt is important to note that this section of highway is also a concern from a safety perspective. According to the Canadian Trucking Alliance, Route 185 is often cited as one of the most dangerous highways in Canada. As with any single-lane highway that has a high level of passenger and tractor-trailer traffic combined with no alternative routes, there is significant risk to public and driver safety.

ln closing, the New Brunswick Business Council believes this is one project that merits focused attention, has high impact, and requires no increase in funding as a means of improving our export performance for the Atlantic region, Quebec and for our nation as a whole.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. O'Pray.

We will move on to Mr. Morency, for five minutes, please.

[Francois-Xavier Morency, Managing Director, Maersk Supply Service Canada Ltd.]

Maersk, based in Denmark, and having operations in Canada, is the biggest marine transportation company in the world, by volume. One of Maersk's five core values is constant care. We translate constant care into our business by taking care of today, while actively preparing for the future.

Most of our activities involve marine operations and logistics. We are conscious that understanding, influencing and partaking in how this industry will evolve is key to our business survival in the next century, and that it affects deeply the society we live in.

Maersk has taken the ambitious step to reduce its carbon emissions to zero by 2050. We will achieve this goal without buying carbon offsets. This means potentially abandoning carbon-based fuels within 30 years. It is therefore with this view that we present some of our perspectives on the evolution of the transportation industry in Canada and its intimate interconnection with the world.

Moving towards decarbonization does not mean reducing our business ambitions. We believe in sustainable growth. In an era of increased global trade and integrated supply chains, the challenges associated with such goals are tremendous. We believe Canada, through its land mass, oceans access, advanced economy, natural resources and initiatives to modernize its transportation network is in a unique position to become a global leader in a modern logistics network. This can be realized in conjunction with environmental stewardship and economic health.

We are in support of the recommendations highlighted in the work done by the committee on the west coast and in the Niagara areas. We would like to add to this view that there should be a drive to use renewable, low-carbon emission solutions to these challenges, especially where technology is already available.

One example could be the electrification of all new rail transport in the Niagara area. Such electrification would spur vigorous economic activities in several layers of the industrial fabric, such as transmissions, construction, heavy industry, etc.

One of the underestimated and underdeveloped trade corridors lies to the east of Montreal-Windsor. It is imperative that Canada work in parallel, tapping into the potential to develop industrial centres in rural areas along the St. Lawrence Seaway and into the eastern provinces.

This trade corridor is rich in resources and renewable energy. It has direct access to what should be important trade diversification targets that are in the Atlantic Basin, namely, Europe, Africa and South America. The eastern trade corridor is key to economic diversification.

There is a significant effort to develop sustainable access to deepwater ports on the Atlantic Basin. Such ports, existing or not, can serve as additional distribution centres for goods that will trade with Asia through the Arctic. They can be adapted or built with renewable power in mind. The cargo coming on giant ships can be redistributed within North America through the road and rail networks, or through short-sea shipping.

For technical reasons, one could argue that the smaller vessels will first see a change in fuel from carbon-based to renewables. The northern routes will open, and Canada must prepare.

The economics of such major infrastructure projects are challenging and only a long-term, non-partisan infrastructure program that is centred on a vision of an efficient carbon-neutral network will ensure that Canada benefits from a privileged access to three oceans.

We therefore would like to recommend an objective to reduce the transportation sector's carbon footprint to zero by 2050. This can be enabled by ensuring that infrastructure is built in a flexible way, ready to receive ships that might change their propulsion methods in the next decades; rails that can be electrified; and highways that can support alternative vehicles. Ensuring that all port slips have access to renewable shore power could be an immediate first step. Maximizing oil and gas exports with a minimal transportation carbon footprint, such as pipelines, could be another.

We recommend accelerating change in the transport industry by building a network of rails, roads and marine routes with access to a renewable energy grid.

We recommend fostering economic acceleration by funding technology programs in such a way that Canada becomes the world leader in developing and deploying non-carbon emitting transportation methods.

We recommend continuing to invest in the infrastructure with a view that the business cases, especially for zero-carbon projects, might take decades to pay off.

Finally, we recommend prioritizing, as a way to diversify the economy, the development of the eastern trade corridor, including deepwater ports, interconnecting networks and Arctic access.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Morency.

We'll go on to questioning. Mr. Liepert, for six minutes.

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

Thank you, Madam Chair, and thank you, gentlemen, for being here today.

Thank you, Ms. O'Pray, for joining us via video conference. I have a couple of questions for you first.

Would you consider pipelines to be part of a transportation strategy?

[Adrienne O'Pray]

Yes. From the New Brunswick Business Council's perspective, we would consider pipelines, of course, to be part of a national transportation strategy as it relates to natural resource development.

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

What would a west-to-east pipeline do for business in your part of the country?

[Adrienne O'Pray]

In Atlantic Canada, I guess if you were to look at the energy east pipeline, of course it would have a significant economic impact. The original plan to have the movement of product to be refined here in New Brunswick would definitely have a significant economic impact. When you look at pipelines from a national strategic point of view, we would certainly view them as part of a nation-building strategy.

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

First of all, I am from western Canada, so I have to acknowledge that many of the issues you face on a daily basis on the Atlantic coast are ones I'm not really that familiar with, so I will leave it to my colleagues across the way who are from Atlantic Canada to ask you about them.

I would like to get some perspective from someone who has dealt with the situation. We currently have before the Senate Bill C-48, and it's fortunately being stalled, which is good. It is a bill that's going to prohibit tanker traffic off British Columbia's, in the Prime Minister's words, “pristine” west coast.

I want to know if you have any experience with tanker traffic on what I consider to be a pristine east coast and whether that's been an issue relative to spills or any environmental damage.

Could you help us out in the western part of the world and tell us whether that's seen as a problem on your coastline?

[Adrienne O'Pray]

I would say that this isn't an issue I have dealt with directly in terms of some of the specifics, but I would say yes, of course, we have significant ports here in Atlantic Canada. To my knowledge, there has not been a major spill.

Of course, as we examine projects like energy east, these are questions that are brought forward by our citizens and by environmental groups, but to my knowledge, to be direct in terms of your question, I'm not aware of any types of spills that have resulted as a result of tanker traffic, to date, in our region.

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

Thank you.

Maybe I will ask Mr. Morency. I believe your company is probably not involved in tanker traffic, but you are involved in shipping on the east coast. What would your thoughts be on this government imposing on the east coast something similar to the kind of ban we in western Canada are facing?

[Francois-Xavier Morency]

I will support the previous person's comment that we've not seen any major accidents. I think it's about how you mitigate the actions you take in shipping. It's too detrimental to the industry to stop the tanker traffic. I think these are choices we have to make. It's important for New Brunswick. It's important for Newfoundland. It's important for the east in general.

What we have to put in place are the necessary measures to make sure that shipping is safe.

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

Are you familiar with Bill C-48 at all?

[Francois-Xavier Morency]

No.

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

Well, it might be a good thing for you to have a look at it and let your members of Parliament in eastern Canada know how bad a bill it is.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Liepert.

Now we'll go on to Ms. Hutchings.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you, Madam Chair.

First of all, good morning and thank you to all our witnesses for their preparation and for being here this morning.

As my colleague recognized, things are a little different in the east. I was fortunate to be here on Tuesday past, and as we heard from the witnesses who were here, climate change is having a huge impact, with the ice in the straits and the impact on the Marine Atlantic ferries. That comes into play, too, with the tunnel conversation we're having.

To the three witnesses here, I'm curious as to what you think the first step should be in developing a fixed link.

[Danny Dumaresque]

The first step is to know the cost, and the second step is to find out how you're going to pay for it. To me, getting to the first step is not a difficult task. I've been in business now for nearly 23 years, and if I have a project, I define my project, whether it's to build a new building or to buy a new piece of machinery. I define what I want and I go to the people who build it and ask them for a price.

In this case, what should happen is that studies should stop. Don't waste any more time and money on academic dissertations. Define the parameters of this project. It's not difficult. This area of the straits has been studied with seismic testing and boreholes, and we've had divers walk across the Strait of Belle Isle. It has been studied for 50 years, so we don't need any more studies. We don't need to waste any more money.

Define the project. Put the project out as a request for proposals, similar to what happened with the wonderful Confederation Bridge. First, we decided what type of bridge we wanted. Then we went out and asked the Canadian construction and engineering industry to tell us, on the basis of the design, what it would cost. Once we got that cost, then, of course, the people came forward and suggested how we might be able to finance it.

In the case of the Confederation Bridge, it was financed by the private sector and didn't cost the taxpayers of Canada or P.E.I. one extra cent.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Great. Thank you.

Mr. Villeneuve, what is the link between a fixed link and your Great Northern Port project? How do you see the two linked together?

[Daniel Villeneuve]

Well, obviously, with the selection of the port location on the northern peninsula of Newfoundland, it will represent one of the largest privately owned ports in North America. The port will be the receiving and the export area for trans-Arctic travel in the future, and of course, we're going to be eliminating 5,300 nautical miles from the transport that is currently happening.

Therefore, it's an opportunity, obviously, for Europe and the northeastern United States, and the hinterland of Quebec, Ontario and the western provinces. The whole east coast will definitely benefit from that, and of course, the fixed link itself.