Evidence of meeting #146 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A recording is available from Parliament.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
In your opinion, how could the national trade corridor fund be improved in order to address the realities of Canada's northern communities?
Chief Operating Officer, Nunavut Resources Corporation
It needs to be larger, quite a bit larger. On one project, our initial application was for $415 million, whereas the total territorial allocation was $400 million. We don't really have access to what the infrastructure bank is currently offering because they're looking for projects that generate early years commercial returns, and we can't do that in our early years. We believe that in any nation-building project, you have to take the long view that over the long haul this would be good.
Our project will also generate significant tax revenues because it's going to stimulate other debt development, but the bank can't take that into account in their analysis because they can't pass that on to investors.
This is really the only program we have right now that we can apply to, and it's the same for all territorial projects, so my simple answer would be that it needs to be much larger.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Thank you.
I'll give my remaining time to my colleague Mr. Sikand.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
Thank you.
When you're talking about your infrastructure needs, the priority list seems to be based on the funding model, how much money you can get over what time. If you were given your desired amount of money, whatever is required, what would the rollout be in terms of your priority list?
Chief Operating Officer, Nunavut Resources Corporation
From our regional perspective, this is the priority. It allows us to connect to the south on a seasonal basis at least. It gives us access to a bunch of known deposits in the interior of the mainland that are currently inaccessible and really expensive to access—only by helicopter. The idea here is to stimulate economic development for the benefit of the beneficiaries, Stanley's beneficiaries, and to generate jobs and opportunities for businesses. So that's why this is the biggest opportunity to promote economic development. Other things can be sort of tuck-ins and add-ons all over the place, but this will have the biggest single impact relative to any other project that's on offer in Kitikmeot.
Liberal
The Chair Liberal Judy Sgro
Okay, thank you very much.
There are six minutes until the vote, so I will suspend now. We will return immediately following the vote. Thank you.
Liberal
The Chair Liberal Judy Sgro
I call the meeting back to order again.
Thank you to our previous witnesses for staying around for another hour so that if the committee has any questions you'll still be there.
With us by video conference from Vancouver is Peter Xotta, Vice-President of Planning and Operations, Vancouver Fraser Port Authority.
From the Western Canadian Short Line Railway Association, we have Allison Field, Director, Communications and Government Relations.
For the Western Transportation Advisory Council, we have Lisa Baratta, Vice-President, who is with us by video conference from Vancouver.
We will open the floor to Mr. Xotta. You have five minutes.
Peter Xotta Vice-President, Planning and Operations, Vancouver Fraser Port Authority
Good afternoon, everyone. Thank you for inviting us to present today. My name, as has been indicated, is Peter Xotta. I am VP of Planning and Operations at Vancouver Fraser Port Authority, the body responsible for stewardship at the Port of Vancouver. Our mandate is to facilitate the nation's trade through Canada's largest port. We do so while ensuring safety, environmental protection and consideration for local communities.
Last year, the port traded 147 million metric tonnes—that's a 3.5% increase over 2017. In fact, cargo volumes through Vancouver have been hitting record highs for a number of years now, a trend that's forecast to continue at a rate of approximately 3.6% annually. Virtually every sector serviced by the port experienced increases in 2018, in particular in important export sectors such as agricultural products, fertilizers and steel-making coal.
With this significant forecasted growth and reliance on Vancouver as western Canada's port come growing pains in the form of high demands and stresses on our regional infrastructure. As a response, the port authority, in partnership with other members of the Gateway Transportation Collaboration Forum, a local forum which includes the port authority, TransLink, the B.C. Ministry of Transportation, Transport Canada and members of the private sector represented through the Greater Vancouver Gateway Council, work together to develop the greater Vancouver gateway 2030 initiative. This is our shared strategy for smart infrastructure investment. It is guided by the Government of Canada's commitment to strengthen trade corridors in order to increase trade and access to global markets. Essentially, it is our response to the transportation 2030 challenge laid out by Minister Garneau.
Nearly 40 projects identified in the strategy are designed to provide greater rail capacity and fluidity improvements that will directly contribute to the overall scale and productivity of port operations.
Beyond trade, these projects have been designed to have positive impacts on local communities and our environment. The elimination of delays at rail crossings will improve the mobility for commuters and freight, support pedestrian and bicycle access and improve the quality of life for greater Vancouver residents through noise and emission reductions.
In spring 2018, the federal government announced it would contribute over $220 million toward projects identified in our gateway 2030 initiative through the national trade corridors fund. Earlier this year, we applied for additional funding to support additional projects. Decisions on these projects are pending.
We are appreciative of the support the federal government has shown toward this initiative, and we are hopeful for its continued interest to ensure that these vital infrastructure projects are completed. Without the national trade corridors fund, none of this would be occurring.
Continued trade growth through Canada's gateways—Vancouver in particular—is forecast over the medium and likely the long term. Our response to this tremendous opportunity and its associated challenges must also be long term. Recapitalizing Canada's trade-enabling infrastructure programs is important to fulfilling our trade objectives.
In many ways, demand-related challenges are good problems to have. However, the consequences of an inadequate response are quite serious. Without federal funding to sustain our capacity to meet demand, we risk devaluation of Canada's brand as a trading partner and as a place to invest. A loss such as this would come at an increased cost to Canadian businesses and consumers, particularly hurting the middle class.
The financial investment available through the national trade corridors fund has been absolutely essential to ensure the projects identified in our greater Vancouver gateway 2030 initiative reach completion. Private sector financial support for these projects is motivated and perhaps accelerated by time-limited, merit-based incentive programs offered through the national trade corridors program.
To put it simply, these necessary infrastructure projects that support Canada's trade objectives cannot move forward without the national trade corridors fund or similar funds. To further accelerate response, government might consider higher contribution levels in critical trade corridors in order to offer a greater incentive for matching funds.
In summary, there's no way around it: improved infrastructure is required to ensure a fluid supply chain so western Canada's port—Canada's largest port—can remain strong and competitive in the face of this forecast growth.
Once again, and in summary, we are grateful for the support we received from the national trade corridors fund thus far and the way it has helped us work toward meeting the nation's growing trade opportunities and challenges.
Thank you.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
We move on to Western Canadian Short Line Railway Association.
Ms. Field, you have five minutes please.
Allison Field Director, Communications and Government Relations, Western Canadian Short Line Railway Association
Good afternoon, Madam Chair, and committee. Thanks for having me here today and for being willing to listen to the Western Canadian Short Line Railway Association's experience with the national trade corridors fund. We really appreciate it.
As you are aware, our association is a not-for-profit, membership-based organization that represents 17 short lines across western Canada. We operate 26% of the rail line in Saskatchewan and we have hundreds of kilometres in both Manitoba and Alberta. We move grain, pulses, fertilizer, LPG gas, diesel, propane, frac sand and gravel. Some of our customers include Viterra, Pioneer, ETG, G3, AGT, JGL, Paterson, Superior Pulses, Scoular, ADM, etc.
The success of the national transportation network is key for us and our customers. I'm going to touch on four things quickly.
First of all is the overall NTCF process. We had seven short lines apply. Three did not make it through the expression of interest phase. Of the four that did, one decided not to pursue a comprehensive project proposal so we have three that have gone through successfully. We should be hearing shortly about two of them and then another one within the next four weeks or so. So at this moment I'm unsure of what the results are for us.
The process, overall, we found to be really well organized. It was very fast. The funds were limited but overall pretty well organized and the Transport Canada staff were incredibly helpful to us throughout the whole process.
It was really difficult for some of our short lines because obviously we have a hard time raising funds. For example, one of our short lines went through an economic development bank to try to come up with 50% matching funds. They were valuing the railway at 50% of the value of the railway's land, which is obviously small strips of land so not very valuable. That was a really big problem. We had a very short time frame with NTCF to come up with 50% of the funds, and that was impossible for many of our short lines even though they had projects that probably would have been quite good for the NTCF.
There were also unintended results in the process. CN and CP were looking like they were going to be a part of several of our projects and then at the last minute decided not to pursue. The short lines figured out other ways to come up with the funds and to continue on but the unintended result was that short lines are now going to be paying for projects that significantly benefit CN and CP and the class I partners rather than necessarily just themselves with no funding allocated from those partners.
For us, the NTCF will be fantastic for the few that are able to access it, but really we have larger infrastructure needs that aren't addressed here. It would have been really useful, I think, to have had more consultation before the process began to maybe just change some of the ways that it was designed to make more of our short lines be able to access the funds.
Recently there have been several reports, the Canada Transportation Act review report, the Railway Safety Act review report, and the Standing Committee on Finance's report in 2019, that have suggested that there be long-term and sustainable funding for short lines for both economic and safety reasons. It seems that the response to that has been the NTCF and the RSIP, neither of which has really addressed those recommendations. The national trade corridors fund is great for the few that have big projects that they can fund, but really our problems are larger than that. The RSIP is just for crossings so it doesn't really help us with safety. We're really appreciative of the national trade corridors fund and for the projects that will be funded; I am sure it will be hugely successful and great. But overall it really hasn't addressed our issues. There is a lot more work to come.
Thank you.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Ms. Field.
We're on to Ms. Baratta for five minutes please.
Lisa Baratta Vice-President, Western Transportation Advisory Council
Good morning, Madam Chair and members of the committee. Thank you for the opportunity to appear before you to comment on the national trade corridors fund.
The Western Transportation Advisory Council, WESTAC, is a tripartite council of major organizations represented by business executives, labour leaders and government decision-makers. Founded in 1973, WESTAC has a history as a credible, balanced forum. We facilitate collaborative actions to improve western Canada's freight transportation system.
Our membership is a unique group of competing parties including ports, railways, terminals, major importers and exporters and labour unions, as well as the western provincial and territorial governments and Transport Canada.
Today's presentation is based on information from and discussion with the council's industry members.
First of all, we thank the government for establishing a national trade corridors fund. It was a critical initiative to reduce bottlenecks, improve the flow of goods movement and support trade diversification.
In particular, many members, especially in B.C., have been successful in obtaining NTCF funding for projects that reduce trade impacts on local communities, increase system resiliency and benefit exporters across the west.
As Peter said, projects would not be proceeding without this federal support. Transport Canada staff have been excellent at advancing applications in a timely manner without sacrificing appropriate diligence.
We believe that the NTCF was a good first step to addressing key trade infrastructure projects; however, looking longer term, a larger, more strategic program for trade-enabling infrastructure will be needed to capture growth.
Now I will turn to three points we believe are important in the conversation around trade corridors: capacity, reputation and leadership. This information is directly from our annual compass transportation leader survey and dialogue among our members.
Capacity within the transportation and trade network continues to be the prevailing concern both currently and looking ahead 30 years. Addressing congestion that is challenging capacity in key rail corridors and in the last mile before port facilities is essential.
Recent analysis shows that marine terminal capacity on the west coast in Prince Rupert and Vancouver is sufficient across all commodities except oil until 2023, but challenges come in the middle to late 2020s. Rail capacity is currently challenged in some corridors. Railways are investing to reduce constraints. About 20% of the revenue goes into capital improvements. Approximately $5.5 billion will be invested in 2019.
Canada has slipped in global competitiveness rankings for logistics, according to the World Bank logistics performance index. Members report that trading partners are concerned that Canada is not a reliable supplier. WESTAC's survey supports this, with a third of industry leaders stating our reputation has worsened.
Capacity constraints and reputational declines are symptoms of the large problem of the need for coordination and leadership across this industry. We are optimistic that the time to act is now. Leaders from all areas of transportation are signalling a shift in thinking and awareness that, to make next-level improvements in our trade corridors, we have to move beyond silos. Canada needs an explicit supply chain plan.
As one executive said:
All the players involved in transportation need to get on the same page, now. It's critical there is a meeting of the minds between regulators, shippers, carriers, logistics hubs and ports on improving the efficiency of the system overall.
As this committee knows, a national trade corridors strategy, or at the very least a western Canadian strategy, is essential. We fully support the dialogue and fact-finding necessary to create one.
A strategy can provide a leadership framework by articulating priorities for the national supply chain network. This can narrow and align priorities amongst the overwhelming menu of investment choices and stakeholders. This supports the objective of an integrated and interdependent network amongst highways, railways, airports and marine ports. In its absence, we are left with an inventory of individual projects, all of which may have merit, but without a basis upon which to recommend coherent infrastructure priorities and their relative value to trade.
The theory is not only to address the infrastructure gaps, but also to stay one step ahead of emerging challenges and opportunities.
Finally, I leave you with these thoughts.
Transportation corridors need sustained increased funding. Trade-enabling infrastructure offers government some of the highest ROI in economic terms of any category of infrastructure. Trade and transportation infrastructure provides economic returns that pay for all the other infrastructure, for example, social, green and urban transit.
We need formal arrangements for long-term collaboration and leadership in western Canada's trade corridors, and action must be taken quickly. The competitiveness gap between Canada and other nations is steadily widening at the cost of this country's long-held reputation for great performance and reliability. Other countries are pushing hard to grab greater market share.
In the wise words of one survey respondent, “If we don't act together now, as leaders, we will lose what momentum we have. Our reputation will continue to decline and capacity will remain constrained.”
Thank you.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Ms. Baratta.
We'll move on to Mr. Liepert for six minutes.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
Thank you, all, for being here this morning, including the presenters before we broke for the vote.
My colleague Ms. Block represents a Saskatchewan riding, and I represent an Alberta riding. To say that transportation and access through ports like the Port of Vancouver are critical is an understatement.
I listened to all three of your presentations, and there was a lot of emphasis around the need for taxpayer-funded investing. Among the concerns I think I have—and certainly our party has—are that some of the actions that have been taken are detrimental to long-term private sector investment.
Mr. Xotta, we had the opportunity as a committee to travel to and tour the Port of Vancouver recently. We had the opportunity to see about $2 billion in investment, I think, currently under way in Vancouver port, both in grain and other private sector investment.
I was privately told by one of the very senior people with your authority—so I'd like to get the discussion on the record—that if Bill C-69, which I think you're probably familiar with, had been in place two years ago, none of those private sector dollars would be invested in the Port of Vancouver today. Could you comment on that, please?
Vice-President, Planning and Operations, Vancouver Fraser Port Authority
I think the comments were looking back at the last number of years. Once again, referring to the infrastructure programs, through the course of the last number of years, we enjoyed support in the order of something to the tune of $350 million of infrastructure funding through Canada that was matched roughly 50% by the private sector, so $700 million worth of, I'll call them, first and last mile improvements. That was followed by about $2.8 million worth of terminal investments, some of which you mentioned in your question. Certainly from the perspective of those seeking to continue to grow in Vancouver, I think that was a very positive response from that previous policy direction.
I think the concern with Bill C-69 that has been expressed is with regard to the current permitting role the port plays, and many of those $2.8 billion worth of projects were undertaken through the permitting process delegated to ports in this country under the Canada Marine Act.
The proposal that appears to be embedded in Bill C-69 would change the threshold of projects. Our concern, of course, is that many of those major projects—some of the grain projects in particular, with the very large new terminal we have under development—would be classed as a designated project. In other words, that review would be centralized in the new agency under the new act. Our concern is that bringing the projects to fruition would be caught up in a much more complicated and time-consuming process, deteriorating Canada's competitiveness with regard to that particular sector.
It remains a concern; and we're anxious to see how the legislation and the regulations unfold.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
Ms. Baratta, you mentioned the need to develop a strategy for a competitive system in Canada. What is your assessment of Bill C-69 and how that will impact our competitiveness, in the west particularly?
Vice-President, Western Transportation Advisory Council
Mr. Liepert, it's nice to see you again. You spoke at a WESTAC meeting a number of years ago in Edmonton.
In terms of Bill C-69, I would like to quote from our survey. There were two quotes in our reports.
Number one was:
Bill C-69 will add additional burden and complexity to an already overwhelming regulatory process and will have significant negative effect on project development in Canada.
That was one opinion.
Another quote was:
At least three of the Western provinces see this legislation as the death knell for future resource development projects. Infrastructure in support of such projects will be similarly affected.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
Ms. Field, are there any impacts to the operations of the railway association with bills such as Bill C-69?
Director, Communications and Government Relations, Western Canadian Short Line Railway Association
Anything that impacts economic growth will definitely have an impact on us.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
And is it your assessment that it will, based on what you've just heard?
Director, Communications and Government Relations, Western Canadian Short Line Railway Association
Based on what I've heard, yes. But I am unsure.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Thank you, Madam Chair.
I want to explore a number of different things because in essence when government comes to any project with funding, we're dealing with rationing because there's simply never enough to do everything that's needed.
I would like your thoughts on this point. Currently what we do is we allocate monies across a fairly broad band of needs. And it could easily be seen that you allocate a little bit here and a little bit there, you move the needle a little bit, but nobody is actually making substantive progress toward the totality of what needs to be done.
Do you think that government should be thinking about focusing its efforts on one corridor? In other words, should they come in with basically enough effect to actually get it done and then move to the next need and the next, rather than trying to move everybody along at what would need to be a very much slower pace?
I'm looking at you, Mr. Northey, because I think you represent an organization that's really starting way back of the pack at this point.