Transport Committee on March 23rd, 2023

[Bonnie Gee]

Yes, and it's not just between the ports but with the federal departments as well. Our vessels provide 96-hour advance notice to, I think, eight different departments, and these are separate reports. There seems to be no coordination in terms of managing the arrival of vessels and clearing the vessels in. It's become quite complex, and I think just this month we have four different advance arrival reports being requested of our vessels to submit.

There is a lot of opportunity to develop a port community system based on a digital platform. I think Canada is expected to have a national single maritime window in place by January 2024. I don't believe that there's been any or enough effort put into that, so I'm not sure where we'll be in January. The intention is to have a single window where everyone can see what is coming to Canada and understand how we can best manage the movement of goods, vessels and other pieces of the supply chain.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Thank you, Ms. Gee. You've done a very great job for being in that position for such a short time, so thank you for your responses.

My next question is for Mr. Gooch.

You spoke about merit borrowing limits. I'd like for you to elaborate on that a bit and maybe speak about some of the red tape that you see in that whole process.

[Daniel-Robert Gooch]

Certainly my colleague from Vancouver can add to my comments, but it takes years. There are fixed borrowing limits in the letters patent for each of our CPAs. It takes years to change them. My understanding is that they represent maybe half of what an organization that doesn't have limits would be able to borrow. When it takes years to change a borrowing limit, private capital is just not going to wait that long, so it's an incredibly cumbersome process.

We would recommend that borrowing limits be eliminated and that projects be considered in terms of financing on the merits of the projects as well as the creditworthiness of the organization that is putting forward the proposal.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Mr. Boudreau, could you speak briefly about the data sharing and the end-user climate outcomes that you raised in your testimony?

[Trevor Boudreau]

We have invested significantly in YVR in our entire operation. On our passenger side, we launched a digital twin in 2021, which is helping us with our passenger terminal.

On the cargo side, you'd be forgiven if you came to YVR's cargo village.... I am disappointed that the committee unfortunately couldn't make it out here as well when you were out here in B.C. You would be surprised to know that it looks very much like 1984. There's a lack of coordination and a lack of visibility. We worked closely with our cargo village partners to explore a pilot for an air cargo community system, one that would give greater visibility to what's coming in and what needs to go out.

Currently you will see a large number of trucks coming onto Sea Island, and that creates congestion. They sit there idling while they're waiting for their cargo to go, and it's very inefficient. One of the first use cases we've had for the air cargo community system is a truck slot management system, so we can tell the trucks when to come on, and they can optimize their time here and optimize their time getting off the island. The community benefits because there isn't the congestion on our bridges on and off the island. If you had been here, you'd know that we're an island and that we're connected by several bridges, so we need to make sure those bridges are clear and moving efficiently.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Dr. Lewis, and thank you, Mr. Boudreau.

Next we have Mr. Rogers.

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

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thanks, Chair, and thanks to the witnesses here today and to the people online.

Mr. Gooch, we had many groups present when we did our report on supply chains. What do you see as the most important priorities that were identified in that recent supply chain task force report?

[Daniel-Robert Gooch]

For us, there was a recommendation on providing port authorities with greater financial flexibility through more autonomy and authority. That speaks to what I was speaking to with Dr. Lewis in terms of the borrowing limits and moving to a model that is more flexible.

Mr. Boudreau just spoke to what the Vancouver Airport Authority is doing to improve the efficiency of its operations. It operates under a very different regime when it comes to financing. The airport authorities do not have the challenges that we've identified at the port authorities when it comes to raising capital. They're much more flexible in terms of what they can do, much like a private organization.

The other recommendation that I'd say was top of mind and quite important was the call for a national transportation supply chain strategy, so we can take a whole-of-Canada look at our supply chains and work on the various corridors that we have in this country.

The Great Lakes, for example, are an interesting case study, because they have unused capacity. There are a lot of opportunities to more efficiently flow goods down the St. Lawrence and within Canada as well, but we really need to take a strategic look at it, because there are many impediments that are not connected to each other that we would have to overcome to really maximize the use of that fantastic asset we have, which is the Great Lakes St. Lawrence system.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

It would be very important, then, going forward, to have a discussion on that strategy.

We recently visited ports that have long-term visions for 30 years out and 50 years out for Canadian ports in order to mitigate that. What kind of vision do you see for these ports that would mitigate future supply chain issues or problems or challenges?

[Daniel-Robert Gooch]

You know, I was visiting one of our ports, and they have an interesting story. They have enough land to have the capacity to handle the next 50 years. They don't need to physically expand the footprint of the port, but they need to move some things around. They have an opportunity to relocate, for example, some of where their cruise operations are. That would be an expensive part of the project, because it would entail a physical building that passengers could flow through, but that would open up container capacity.

Now, the costs associated with container capacity are quite minimal, but that's where the value is. You get the value from a financial perspective on the container capacity. The costs are on the passenger side. The borrowing limits don't allow them to finance this as a complete project, which they would be able to do if they operated like an airport authority and had the financial flexibility of an airport authority.

The national trade corridors fund only funds the movement of goods, so they couldn't use that for the cruise facility. They're in this strange situation in which they have all the capacity they need, but the constraints of the model make it challenging for them to move forward to do what they need to do.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Okay. Thank you.

Mr. Stewart, we talk about conflicting views, of course, and we hear them here today in terms of what we need to do going forward. Can you describe what kinds of consultations you currently undertake when proposing expansion projects or changes in how you operate? What is your understanding of how Bill C-33 would change consultations?

I'm sorry. That's for Mr. Miller.

[David Miller]

We currently have in place a pretty extensive system of consultation committees with the local municipalities, with first nations and with residents in the area. We really already have in place most of what Bill C-33 envisions.

I think what they envision is a challenge for some of the smaller ports that just don't have the staff to deal with some of what they feel they are being asked to do. In an area like ours, where we're dealing with 16 municipalities and numerous first nations, we've developed over the years a pretty robust system in terms of consultations. It's worked quite well for us.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Rogers, and thank you very much, Mr. Miller.

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.

My question is for Mr. Gooch or Ms. Gee.

We know that marine shipping is steadily increasing. It's praised as the mode of transportation that generates the least greenhouse gas per kilometre. However, it's undeniable that shipping has repercussions, on biodiversity and elsewhere.

Have you come up with strategies to reduce greenhouse gas emissions and their impact on biodiversity? Do you have a mitigation strategy?

[Bonnie Gee]

Certainly, there is a lot of work under way in managing biodiversity on the west coast, and a lot of engagement with first nations as well when it comes to co-governing our marine waterways. You're correct that marine transportation is focused on decarbonizing over the next several decades. The challenge we have is that we're not sure what the fuel of choice will be for many vessels in the future. That choice will drive what vessels are being built. It's kind of a chicken-and-egg situation: We need fuels to be available, but we don't have a clear decision as to which fuels will be preferred.

Vessels are already slowing down for southern resident killer whales to reduce underwater noise. What's happening with new marine protected areas is that there's a discussion around minimum standards of what can actually happen in marine protected areas. From our perspective, we would like to see designated low-impact marine corridors for shipping, where we can either reduce speed or require certain fuels.

There is still a lot of work to be done. We need the required infrastructure. We don't have adequate port reception facilities if, for instance, we're to mitigate all discharges from vessels. I think Prince Rupert doesn't even have an adequate reception facility, in any case.

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

I heard a lot of talk last week about dockside electrification. More and more groups are moving towards electrification. That looks like a very good idea. At least when the vessels are berthed, there are no greenhouse gas emissions; at least electricity produces a lot less.

How long do you think it will take for all your members to be able to operate like that dockside? It would seem that not all shipowners have this capacity.

[Bonnie Gee]

Vessels that are operating on a fixed route can certainly look at electrification. We have cruise vessels and container vessels that are already using shore power when they're alongside. However, for the other trades—the boat trades—the vessels aren't necessarily coming here on a regular basis, so shore power is not the solution for these vessels.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

The floor is yours. You have two and a half minutes.

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

Thank you very much, Mr. Chair.

Mr. Miller, building on my question regarding public investment and approvals following private investment, I note that despite being in the assessment and evaluation process for over a decade, the Roberts Bank T2 project still doesn't have a terminal operator.

Could you explain why the Vancouver Fraser Port Authority has had so much difficulty attracting a private investor to the project?

[David Miller]

We really haven't had difficulty. The reality is, we haven't tried.

A process was begun, and when it became clear...when we had the ministerial information request and it was clear that the process was going to drag on significantly longer than we anticipated, we didn't see a point. The potential operators, with the uncertainty of the timeline, would likely come in offering significantly less than they might in a different circumstance, so we felt it was in our best interest to wait and go to tender at a later date, when there was more certainty involved in the timeline.

We've certainly had interest. We have no doubts whatsoever in our minds that we will have numerous parties interested in being the operator, but we just haven't gone through that process as of yet.

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

One of the reasons for the long timeline is that Environment Canada has raised some very strong concerns about the impact of the project on the environment, stating that the adverse effects of the project will be “immediate” and “continuous” and “cannot be mitigated”.

One of the big concerns, I understand, is this biofilm that accumulates on the sand and is vital for the migratory birds that rely on it for nutrients.

What's the port authority's current plan for mitigating those impacts?

[David Miller]

We went through a very extensive review process, and there was a fairly high level of comfort from the review panel in terms of what's being done to accommodate both salmon and resident killer whales. In terms of biofilm, there was one question about which they felt they did not have enough information to reach a conclusion. That was not about the quantity of the biofilm, but the quality of the biofilm.

Certainly, we've had numerous experts in the field who agree with us about the lack of impact, and the first nations in the area agree with us. It's interesting that there's great interest in first nations and indigenous knowledge when they agree with the department, but when they disagree, they suddenly don't want to talk to them.

When they said that the impact would be immediate, we made the offer that we would build, in effect, the shell of the facility, and then we would stop; we would take a break—which we have to in any event, because of fishing seasons and crabbing—and there could be a monitoring process. If there were signs of impact that couldn't be mitigated in other ways, we would pull it out. That's how confident we are. All of a sudden, the department came back to us and said, “Well, maybe not immediate; we really need a few years.”

That's the frustration we've been dealing with.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Miller, and thank you, Mr. Bachrach.

Next we have Mr. Muys.

The floor is yours. You have five minutes.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you.

I'm intrigued by the conversation we have had around borrowing limits, borrowing capacity and financial flexibility—and these are just two examples; they're not even the biggest ports—because what struck me on our tour of ports is that in Saint John, their borrowing capacity is $8 million. It takes them $30 million to build a pier, while $8 million will buy you three houses in the GTA.

Hamilton port, which is close to my heart and to Mr. Badawey's heart because it takes in Niagara and has great opportunities for short-sea shipping, has a borrowing limit of $45 million. It's going through the process now to increase that. Of course, it's lengthy. That's a port that has four billion dollars' worth of cargo going through it and 40,000 Ontario jobs attached to that.

You talked about it briefly in your opening testimony, but maybe you could elaborate on some of the other shortcomings of Bill C-33, or missed opportunities as we look at that.

Mr. Gooch can start, and then maybe Mr. Miller can talk from the perspective of the Vancouver port, which we haven't had a chance to get to.

[Daniel-Robert Gooch]

I would say the financial aspects of Bill C-33 are where we have the biggest questions about the bill. We first saw the bill when it was tabled in the House of Commons. We reviewed it and addressed questions and concerns in a letter to Minister Alghabra in December.

We had a good, productive meeting with Transport Canada officials one month ago today, but we have big questions about how the borrowing process will work. There are extensive new financial reporting requirements in the bill that are proposed as well. Ports are already reporting significant amounts of data on a quarterly basis. We don't have an answer to the question, “Is what's being provided today sufficient to meet what is desired, or is it an onerous new requirement in terms of reporting?”

We've been told that it's meant to inform a borrowing limit process that will be more dynamic and more responsive to changing business environments, but we don't have the answers on what that looks like or how it works.

If the reporting requirements are similar to what is happening today and if the borrowing process is more dynamic than the hard limits we have today, that could be an improvement. It's not what we were asking for, but we simply do not have the answers. We hope to get them before we come back before this committee, because otherwise we can't say whether this bill is a modest improvement or if it actually might be quite negative.