Transport Committee on May 5th, 2022

[Melissa Lantsman, Conservative, Thornhill, ON]

Thank you very much.

I really appreciate your shedding light on this.

[The Chair, Liberal, Peter Schiefke]

We have Mr. Chahal next.

Mr. Chahal, the floor is yours. You have five minutes.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Chair.

Thank you to all the witnesses for joining us today.

I'll start with the National Cattle Feeders' Association.

Over the last number of months, I've had the opportunity to go to some feed-lots, and I've heard directly from them. We saw with the B.C. floods the number of challenges on getting feed to farm animals, and now we're seeing flooding in Manitoba as well.

Would you please comment on what you've seen with how much damage occurred to the association and the feed-lots? What lessons did you learn from the B.C. floods and from what we're now seeing with the Manitoba flooding?

[James Bekkering]

For the feed-lot sector itself in terms of the B.C. flooding, the impacts that we felt were getting supplies, our inputs. Certain things come by rail from foreign shippers with products that we need, and that delayed what we need for inputs.

We haven't seen the effects of the Manitoba floods yet, but I'm sure that the impacts that they have on the transportation system will be coming as well.

In the animal sector itself, there is a lot of north-south trade as well, so the trade of animals is more on the north-south basis than the east-west basis.

Janice, you can chime in as well.

[Janice Tranberg]

If there is a positive, one of the positives was, when the border was blocked, we did an emergency protocol on how to manage animals crossing the border in situations like this. These events this year brought forward things that we had never thought of. If there was a blockage of the border with blockades, we couldn't get beef or live animals across. We couldn't bring up feed from the other side, and we were so short of feed. It was sort of a perfect storm that happened this year, and it really brought forward some of the things that we had never thought of in the past. This emergency protocol was a positive, but I think it also highlighted where we're at and how fragile we are.

You brought up the floods in Manitoba, but right now in southern Saskatchewan and Alberta, the ground is like powder. If we don't get another crop this year, we're going to be back to the situation that we had of scrambling just to get feed. Due to that, prices have skyrocketed, and it's adding another layer on an already fragile system.

[George Chahal, Liberal, Calgary Skyview, AB]

There are challenges with the drought that we've faced over the last few years, and also flooding. You also mentioned the blockades.

With the north-south trade that occurs and with the Emerson and Coutts border blockades for a number of days, how did that impact your industry and specifically the animals that were being transported?

[James Bekkering]

It pretty much brought the trade to a standstill, because not every port can handle animal crossings. From here, after Coutts, I think Emerson is the next port from Alberta to Manitoba that live cattle can cross. Then, into B.C., Kingsgate is the next one. Some of these cattle were having to add an extra 12 to 14 hours of transport to go around to the nearest border crossing so that they could to get to a processing plant in the States. It was adding a lot of stress on the animals. It was adding extra time and extra costs to the transportation.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you for that.

I'd like to go now to the Chamber of Shipping. We've heard a lot in this supply chain study about the shortage of containers. I'd like to get some further insights on how long you think this problem will persist and how Canadian shippers are dealing with it.

[Robert Lewis-Manning]

I'll try to keep this short. Certainly, there has been an issue of access to containers. I think the challenge is in making sure that those containers are in the right place for the right people at the right time. With all the congestion we're seeing, that's becoming increasingly difficult.

I think it's been widely reported that some containers have been going back to Asia empty rather than full, and then coming back with cargo. Those are some operational challenges in order to make sure that loaded containers are going out and then coming back loaded from Asia. That speaks to the Canadian supply chain and how to make sure that full cargo loads are going in two directions. It also speaks to some of the disruption that's happening in Asia and that—

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Lewis-Manning.

Thank you very much, Mr. Chahal.

Next we have Mr. Dowdall.

Mr. Dowdall, you have five minutes. The floor is yours.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

Thank you, Mr. Chair.

I want to thank all our guests as well for their testimony here today. Sometimes I wonder if we have too many guests, because we don't have the opportunity to ask each of them a lot of questions.

My first question is for Mr. Darby on his discussion of the state of the supply chain. I'll give a quick example. I had the fortunate opportunity to view a company in my riding the last time we were in our ridings. It's called Autoliv and has 120 employees. It makes seat belts, as a matter of fact, over 53%, I believe, of the products. They are a company that is here in Canada, and they are a company in the United States as well.

Employee-wise, they had to raise the pay for those employees in order to attract what they need there, and at this particular moment, fortunately, they're at that level. The problem is that when they raise that rate and compete with their American counterparts, they look at it roughly every two years—that's what he was saying—to see whether or not it's viable.

Though Canadian employees certainly seem to have better quality control, from what I gather, when you start factoring in the increased costs of the carbon tax, not just on what they have to pay for the shipping but in their own buildings, and when property taxes are higher—as I know, coming from a municipal background—because it's easier to hit those industries than it is to hit the individuals who are in your community....

Mr. Darby, you say you're worried. Is that a strong enough word for this or should it almost be considered a crisis at this time?

[Dennis Darby]

You could do my job very well. I really appreciate that. That was well done.

Seriously, the issue we have is up until the pandemic Canada's industrial output did well, like you mentioned, because the U.S. could basically take everything we could make. They were on fire, and so we tended to substitute labour for capital and we tended to run our plants as hard as we could. What the pandemic, and the period of the pandemic, has caused us all to look at is, am I going to be competitive once we emerge? Am I going to be able to compete on price? Quality is not usually a problem for Canadian companies. It's, can I compete on price and what are the impacts of all of these various taxes, whether it's local taxes or property taxes?

Yes, we've said to the government we need to have a plan. We don't have an industrial plan right now, sir. Now that we have free trade agreements with so many countries, how are we going to compete with these countries that spend an awful lot more? States like Michigan spend an awful lot more on incentives than the whole of Canada, for example. How do we do that? How do we get that capital here so that rather than having the discussion, as you've mentioned, of do I expand my production here or do I move it to the U.S., we make it more obvious or make it easier for them to say, let's locate in Canada?

Is it a worry? It's a worry about supply chains. I'm really concerned about the future of the industrial sector.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

I don't want to see the supply chain be a lot quicker because we have fewer businesses—

[Dennis Darby]

Exactly.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

—here in Canada.

One of the other things you said in your opening remarks that was interesting was when you were saying that people in the industry think it will be better by 2023-24. What gives you the optimism that you think things will be better by 2023-24?

[Dennis Darby]

There are a couple of things. In some of the areas, specifically semiconductors, our neighbours to the south have done a great job of reshoring, and a lot of that capacity will come on board in the next couple of years. That will help in the automotive sector. The U.S. has been very aggressive in bringing integrated circuit manufacturers back to the U.S., and other countries have done the same. We think the pandemic effects will lessen. That's the other piece, some of those supply chain bottlenecks will be relieved. But even then, out to 2024 means that it has taken us a lot longer to come back. The recovery hasn't really happened overall in our industrial output. It's been slow because of all these headwinds.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

I have one more quick question. This is actually to the National Cattle Feeders' Association.

Something I've heard consistently in this study is the lack of government consultation. Often things come out, and they don't have the opportunity to have their say on how it's really and truly going to affect their industry.

Could you comment a little further on that, please?

[Janice Tranberg]

I can give you an example right now. It's not really on supply chain, but there are certain changes that are happening and consultations that are happening right now and this is the busiest time for a farmer. They're planting and they're getting out there and trying to do some things or get their crop in. It's considerations like that on timing. The example I'm thinking of is the Pest Control Products Act, right now, where they're looking at potentially opening up the act and making changes and they're asking for consultation. The person who will be impacted directly is the farmer and they're just out doing their job right now.

I think considerations like that would make a big difference.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Next we have Mr. Badawey.

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

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chair. I appreciate that.

I want to start off by saying that I'd like to speak about how robust the consultation has been between the government and at least some of the partners in my area of the country. I'm going to direct these questions at one of those partners that we've had robust communications and consultation with, which is the Hamilton-Oshawa Port Authority and Ms. Fenn.

Ms. Fenn, I'll preface my comments by congratulating you, your organization and your team at Hamilton-Oshawa Port Authority for the work you've done on enhancing the capacities available at an intermodal port on behalf of the cities of Hamilton, Niagara and Oshawa. I do want to dive in a bit deeper on that, especially as it relates to the benefits of investing in the Great Lakes and the St. Lawrence, and in particular the Niagara region, Hamilton and Oshawa. The current expanded structure of HOPA, the Hamilton-Oshawa Port Authority, is enhancing your overall capacity.

With that all said, we've heard a lot about this in the consultations we've been having in the last few committee meetings. We've heard about enhancing capacities with respect to strengthening overall the international trade performance that we as a country will have as we enhance those capacities; smart ports; integrating through digitization; intermodal trade infrastructure; investments in that infrastructure, whether it be water, rail, road or air; embracing energy transition, such as the benefit of shipping over other modes of transport; and of course the things that we don't think about all that often, such as CBSA enhancements in capacities, and others that complement your operation.

I'm going to throw this out to you, Ms. Fenn, with respect to a few questions. One, how can you assist manufacturers' distribution logistics within the supply chains in terms of the operation within your partnership? Two, how can you contribute to a national manufacturing strategy? Three, what investments have been, and need to be, completed to enhance HOPA's overall capacity and therefore strengthen the fluidity within the supply chains? Do you consider the Hamilton-Oshawa Port Authority a smart port?

Finally, Ms. Fenn, what recommendations would you make within the port's modernization review to satisfy all of the above?

[Larissa Fenn]

Thank you, MP Badawey.

We are certainly pleased to be serving the communities of Hamilton, Oshawa and Niagara. Over the past couple of years, we have brought those communities and the assets in them together as a port network so that we can provide innovative service and better allocate the infrastructure, the transportation and trade infrastructure throughout the greater Golden Horseshoe in response to the needs of this very unique part of the country, the manufacturing heartland and a rapidly growing population centre.

You spoke about manufacturing. One of the things that manufacturers in southern Ontario need most is space to grow. As the population expands and there is much more pressure on the land base in southern Ontario, Ontario has an acute shortage of multimodal-served industrial spaces of the kind that we operate. What we are hoping to do, and what we're doing in Niagara, and what we're doing in Oshawa and Hamilton, is bring underutilized spaces back into more intensive operation as part of the transportation network. We'd like to see more opportunities, whether lands be part of the federal portfolio or whether lands be other available spaces, to put those lands to work as part of the industrial strategy that others around this table have spoken about.

You spoke about investments. The capital program that HOPA has been operating on is approximately $30 million per year, but we have quite an intense demand from businesses that would like to locate and operate and grow at Canada's ports. I spoke about the excellent impacts of the national trade corridors fund in my opening remarks, and the leveraged investment that we've been able to deliver through them, but we have more projects coming to us than we can deliver on within the boundaries of our borrowing capacity. That's the kind of thing we would like to see addressed within the ports modernization review, giving ports a little bit more of a market and entrepreneurial approach to tackling some of those projects, and looking to the market to help finance them.

You were asking about smart ports. Using data and information to help us understand and make the best cargo decisions within our port network is something that we have been working on with several of our partners, including Transport Canada. We're also looking at the opportunity to reinvent ports as green energy hubs. I think that's a real opportunity in our space in Niagara. It's why we and our port partners have requested access to the dedicated innovation funds and that kind of thing, which can help us look to make ports the hydrogen hubs and that sort of thing that we have seen in other parts of the world.

[Vance Badawey, Liberal, Niagara Centre, ON]

Ms. Fenn, we're running out of time.

Thank you. That was well done.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Fenn and Mr. Badawey.

Mr. Barsalou‑Duval, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

I will continue with Mr. Buy from the Canadian Ferry Association.

I imagine that, in your operations, you have to use a lot of federal infrastructure in its current state. For example, I often hear alarming stories from fishermen who are unable to leave or dock because the docks are in such poor condition.

Would you be able to characterize the state of federal infrastructure in general, at least that which ferries must use?

On the other hand, when I look at the government grant and assistance programs that exist for infrastructure or public transit, it seems that ferries are completely excluded. However, we often look for projects in the regions that could help public transit. Indeed, in remote areas, subways or very high frequency trains are rarely installed.

Do you feel that ferries are being excluded by the Canadian government?