I'm happy to. Thank you for inviting me here today.
I'll be focusing on the legislation's potential impacts on both current and future port operations and Canadian trade.
Measured by the value of trade that it facilitates, the Port of Prince Rupert is the third-largest port of Canada, and its volumes employ over 3,000 women and men in northern B.C. Competitive Canadian trade gateways not only add value to the industries, which use them for market access, but are significant economic generators themselves.
With respect to creating a moratorium on crude oil tanker traffic on B.C.'s north coast, we understand that protection of the marine environment is of paramount importance to Canadians. The environmental, cultural, and economic values associated with it are enormous. PRPA shares those values and considers environmental protection of lands and waters within the port to be a key element of its mandate.
It should be noted that the navigational approaches to and from the port are among the safest in Canada. This is a result of several factors, including relatively low marine traffic volume, uncongested and unrestricted marine approaches, a deep natural harbour, and short inland water transit times from the Triple Island pilot station. The low level of navigational risk has been quantified and validated by third parties.
Navigational risk is further mitigated by positive steps taken by PRPA, including investment in shore-based radar, navigational aids, real-time navigational data, and best-in-class practices and procedures that clearly describe rules to marine carriers for safe access to and from the port.
With that as context, I'd like to focus on the proposed schedule of products found in Bill C-48.
The list found in the schedule is very broad and has not been accompanied by demonstrable evidence as to why items have been selected for inclusion. There are potentially several trade opportunities that may be negatively impacted beyond the core objective of bitumen. In fact, the legislation has the potential to eliminate existing supply chains and proposed marine services, as well as unintentionally impact future Canadian imports and exports through Prince Rupert, which would have significant economic consequences for the country.
For example, the inclusion of slack wax, a feedstock that's used to create petroleum wax products for Canadian manufacturing, impacts a service and existing capital plant and equipment that has been successfully operating in the Prince Rupert harbour for decades without incident. A vessel that transports slack wax only discharges a portion of its cargo in Prince Rupert, usually below the 12,500-tonne threshold being proposed. However, the total volume carried by that vessel would be impacted by the moratorium, and this could eliminate the service from the port.
The legislation also does not recognize the potential for port services that handle, but are not exporting, heavy oil. For example, a proposed marine fuelling service that includes a 12,500-tonne bunker fuel storage barge in the harbour is currently undergoing an environmental assessment. The capability to fuel large marine vessels at anchor in the port is a critical strategic service that the port needs as it strives to grow Canadian trade. An arbitrary storage limit is a potential hindrance to the development of these kinds of services.
The committee should also be aware that the production of refined petroleum and natural gas liquids is forecast to expand in Canada. In the case of refined petroleum products, while the bill's schedule omits several refined products, it also includes many of the products of the same production process, such as heavier oils and lubricants. The inability to market and maximize value for those heavier products would negatively impact the total economics of the refinery. Similarly, the inability for a future liquid bulk terminal to offer a full slate of refined and natural gas liquids would negatively impact its investment case as well.
Lastly, Transport Canada also notes that amendments to the schedule could be considered, following a regulatory review that would primarily assess whether the ability to clean up a spill has improved. While these criteria are rational to include, the exclusion of criteria specifically related to the empirical risk of an incident spill is a significant oversight. In an extreme example, conditions could be created that eliminated all risk of an incident, yet a product would still be banned under the moratorium because of the challenges of cleanup. Given the strategic attributes of Prince Rupert and our advantage of being arguably the safest port on the west coast of North America, this is a significant oversight in the legislation.
We have the recommendations that follow for amendments to Bill C-48.
Number one, the legislation's schedule of commodities should be reviewed to ensure a full understanding of the trade, economic, and operational impacts of their inclusion.
Number two, the review should be based on demonstrable evidence for their inclusion and include robust consultation with industry and marine transportation experts.
Lastly, number three, the legislation should contain language that requires periodic quantified assessments of the risk of marine incidents in order to provide an improved context for the regulatory process of reviewing the schedule on an ongoing basis.