Transport Committee on April 4th, 2022

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gooch. You're going to have to save that for the next round of questioning.

Mr. Badawey, the floor is yours. You have six minutes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chairman.

I want to thank the witnesses for attending this meeting.

I heard in testimony today trade objectives. I heard ports recovery. I heard attention to supply chains, navigation corridor resiliency and leveraging risk-based access to private sources of capital.

Ladies and gentlemen, I guess the context of my question will be this: redundancy; investing in strategic multimodal trade corridors; ports modernization; integrating distribution data; digital logistics; further additional economic potential throughout the Great Lakes and the St. Lawrence Seaway, such as the Welland Canal in my area; the importance of supply chain infrastructure investments; asset management; recapitalization of the NTCF; and finally, amending the port authorities—I would assume, Mr. Gooch, it's the letters patent—with respect to including the ability to leverage risk-based access to private sources of capital, again leveraging the NTCF.

By the way, I'm very interested in the NTCF. It brings in the private money that leverages the money we're putting out through the NTCF. I will concentrate on that point.

Mr. Given and Mr. Gooch, is it your recommendation that the NTCF, the national trade corridors fund, should concentrate on supply chain resiliency, supporting fluidity and reliable trade flows? With that question being asked, be specific in terms of what some of those investments should in fact be.

I'll start with you, Mr. Given, and then Mr. Gooch will have an opportunity to answer that question.

[Chris Given]

Thank you, Chair, and, through you, thank you to the member.

I think it's an excellent question. Thank you, Mr. Badawey.

As you know, the SIU has a very large presence in the Niagara region, so we are very interested in expanding the infrastructure investment along the Welland Canal in particular and in what can be done with some of the lands that our government owned in that area. The SIU has been involved in discussions with the Hamilton-Oshawa Port Authority on developing lands and looking at what can be done from a multimodal standpoint.

When you look at the Niagara region, I think the tie-in with the rail lines and the access to such a large market via the Great Lakes are really important for marine shipping. As for the ways in which we can take advantage of some of those opportunities, I think you could look at some of the vacant land that's along the Seaway as a potential container depot, where you could have some of that short-sea shipping, removing some of the congestion off the highways and the rail lines, as well as moving containers into that region, which can then be trucked or moved via vessel down into some of the larger markets in the U.S.

There's plenty of opportunity there, and we would definitely be in favour of further investment.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Given.

Go ahead, Mr. Gooch.

[Daniel-Robert Gooch]

Thank you, Mr. Chair.

Thank you for your question, Mr. Badawey. A lot of what you've asked about is in the report you referenced last week, which was done by the committee in 2019. There's a lot in there that's certainly worth looking at.

I'll speak to a couple of areas.

On financial flexibility, certainly, as you noted, there are borrowing limits that were set decades ago, and ports are dealing with amending those. It involves amending letters patent, which can be a very time-consuming process. We would like to see that improved and sped up. Ideally, ports would be able to access capital in the ways that other providers of infrastructure are—such as airports, for example. I used to work with our nation's airports, and they work with lenders in terms of the normal criteria for risk that a private lender would look at.

The national trade corridors fund, I think, has been a fantastic program for Canada's port authorities. They have received about $880 million through that fund so far. It is allowing for those investments in capacity that Ms. Gladu has referenced. They are investing in innovation, including in virtual capacity. When we're processing containers more efficiently through border inspections using technology, for example, that's good for everybody. It's good for efficiency, for promoting smooth trade flows, but also in terms of the environmental side. Efficiency improvements are good on the environmental side as well.

There's another need at our ports, I'd say, and in particular at our smaller ports. They need to make investments just in maintaining their critical infrastructure, and certainly the NTCF has a role to play there, either through continued NTC funding—which as a program we would like to see be made permanent—or, alternatively, through a special fund to promote those investments in ongoing maintenance that smaller ports need but that they may not be able to fund through their own revenues, for example.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Gooch.

Just to drill down a bit deeper, we see that the NTCF has had many mandates in the past few years with respect to what it was gearing its funding to. Do you find that investments in supply chains would be a direction that the NTCF should be taking?

[Daniel-Robert Gooch]

I would say that it is absolutely in line with the objectives of the program. The program is trying to meet many needs. With $880 million going into projects for our ports, I would say that our ports are being recognized by the program. Certainly, anything that can improve supply chain resiliency and the investments that ports need to make in terms of dealing with climate change, to adapt to climate change, which also affects resiliency and redundancy.... Those are all great investments for the national trade corridors program—

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Gooch. I'm sorry, but I have limited time here.

With that, there is the ability for ports, for example, to leverage the dollars that you would otherwise get out of that fund.

[Daniel-Robert Gooch]

Absolutely.

[Vance Badawey, Liberal, Niagara Centre, ON]

Lastly, I'll say this before my time is up: I would encourage all of you to get involved with the supply chain task force.

Thank you, Mr. Chair. I had to sneak that one in there.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Badawey.

As a former chair, he knows how to sneak one in at the last second.

Mr. Barsalou-Duval, you have six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Chair.

The testimonies we have heard so far are very interesting. Many issues have been raised, including the supply chain problems Canada is currently experiencing. More specifically, it is hard to get merchandise that various businesses need. This problem is connected to container shipping and port facilities.

I would like ACPA representatives to comment on potential solutions. I will mention a few.

Some believe we should consider expanding existing port facilities and others are of the opinion that perhaps we should increase the number of these facilities. There currently are not that many. The solution might be to improve efficiency at existing facilities. Solutions may vary from one port to another.

Do these solutions make sense? Which would be the most appropriate?

[The Chair, Liberal, Peter Schiefke]

Mr. Barsalou-Duval, are these questions addressed to anyone in particular?

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

My question is for Mr. Gooch from the Association of Canadian Port Authorities.

[Daniel-Robert Gooch]

Thank you for the question.

I will respond in English if you do not mind.

The answer is really all of the above. There are investments needed in physical ports' capacity, and ports are pursuing those in a variety of ways. There's also technology and innovation.

Canada's port authorities are very innovative. They recognize that through adoption of technologies like artificial intelligence, we can improve the visibility of our supply chains to see where goods and shipments are coming from, where they're going and when they're going to be in a certain place, so that all of the various pieces in our supply chain can move more smoothly. Those technological investments, among other things, can help with capacity in a virtual manner.

I think, Mr. Barsalou-Duval, it's all of the above in terms of the comments you made. There are a variety of ways in which we can ensure that both the capacity and the resilience our system needs are in place for the years ahead, and that these investments are made in environmentally and socially sustainable ways.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

If I understand correctly, you believe that the solutions I proposed are possible, but none of them are a silver bullet.

I would like to move on to something else. The idea of expanding the facilities or even building new ones often encounters opposition, maybe from communities who live in the targeted region or from environmental groups, who maintain that such solutions could have repercussions on the fauna and flora and thereby affect species at risk.

Is there a specific solution among the ones I mentioned that seems more sustainable than another or may have the least possible repercussions?

[Daniel-Robert Gooch]

I think one of the reasons why we are calling for a national strategy on the supply chain, and marine components within that, is that there are so many stakeholders in our communities who have an interest in the outcome of where we go with our investments. There's so much riding on our getting it right in terms of the impact on the environment, but also in ensuring that we have the long-term needs for Canada.

A proper supply chain strategy would look at how all those pieces work together. Certainly our 17 port authorities—these are businesses that are operating federal assets at arm's length—are doing so for the benefit of Canada, for the benefit of the communities they serve. They are tremendously aligned with the federal government's goals on climate change and the environment and are certainly working through all of the processes that are in place, such as the impact assessment processes, in terms of all the physical investments they're looking to make in their communities, because they do understand that what ports do has a tremendous impact on the community and on the local natural environment.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

One of your recommendations is to change the imposed borrowing limits so that you are not always required to go through the government approval process.

If your application were accepted, how would the mechanism work? For example, how would the limit be established or how would the debt control mechanism work?

How would this allow you to move forward with certain plans without having to go through the entire government approval process, except for certain major projects? Would this allow you to speed up the launch of other projects?

In short, how would this work?

[Daniel-Robert Gooch]

Particularly for large projects, our ports today have borrowing limits that are set in letters patent. My understanding is that the process for changing that is very time-consuming and lengthy.

One approach would be to improve that process. An alternative is to move away from arbitrary lending limits and move to where ports are able to work with private lenders based on financial risk and—

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gooch. I'm sorry to have to do that to you once again.

Next, we have Mr. Bachrach.

You have six minutes. The floor is yours.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you very much, Mr. Chair.

Thanks to all of our witnesses for what has been an interesting discussion so far.

I want to pull back a little bit and ask a high-level question. This study is a very interesting one because the supply chain is so complex. It has so many different players and each of those players brings a unique piece to the table. In many ways, I think we could have been having this discussion five years ago and it might have had some similar aspects to it.

Something has happened over the past two years, and particularly over the past year, that has changed the discussion and has made people acutely aware of the supply chain. I don't think many Canadians had ever heard the term “supply chain” until the past number of months. Now, all of a sudden, it seems like we have a major problem that needs addressing.

My question is really about risk and looking forward at the coming five or 10 years. What do our witnesses here today perceive as being the greatest source of risk to the Canadian supply chain? We've heard of lots of sources of risk, but if you could put your finger on the single biggest source of risk to Canada's supply chain in the coming decades, what would it be?

Perhaps I'll start with Mr. Gooch from the port authorities. When the ports talk about risk in the longer-term future, what's the biggest one that comes to the fore?

[Daniel-Robert Gooch]

Thank you for the question. It is an interesting one.

From my perspective, two months in, there seem to be a few. One would be the risk of delaying getting the capacity that is needed for the near future and the long term. Infrastructure investments do not happen overnight, particularly major infrastructure investments of the nature that Canada's port authorities are making. Environmental impact assessments can add lengthy delays. We need to ensure that we are prepared for the opportunities when they arise, so that we're able to take advantage of them in a timely manner. That means investing years ahead.

There are lots of impediments, which I spoke to earlier, in terms of the financial flexibility that ports have to be able to make those investments themselves and working with private lenders. The national trade corridors fund has helped tremendously.

Resiliency and redundancy are another big challenge. We saw the disruptions in Vancouver. We need to ensure that our ports themselves are resilient, but also that our system is resilient so we can adapt to major weather events. It's not just a west coast challenge. Another example is the east coast. There's just a narrow bit of land that connects the peninsula that is Nova Scotia with the rest of the country. That's where our goods from the port of Halifax go across to the rest of the country.

It's about ensuring that capacity is there for the future and that we have a resilient system with lots of redundancies built in to ensure that we're able to get through whatever the planet and the world throw at us.

[The Chair, Liberal, Peter Schiefke]

Mr. Bachrach, before you continue with your questioning—and I'll be sure to stop the time while you're doing this—can you select your microphone, please?

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Definitely.

Is that better?

[The Chair, Liberal, Peter Schiefke]

That's perfect. I'll restart your time.

You have three minutes left.