Transport Committee on March 28th, 2023

[Christopher Hall]

I will be brief to allow for Mr. Guy to weigh in.

From our perspective and an ocean carrier perspective, things went relatively well. Yes, there were bottlenecks at times, no question about it, but from our view, the issues that caused the bottlenecks were not new. They were not pandemic systemic; they were systemic issues. The pandemic simply exacerbated the appearance of them and made them more public.

The root causes of the problems during that time were totally systemic. They've been around for years. It's rail capacity not matching port capacity. It's a lack of trucking capacity and equipment availability on the land side and a lack of warehousing space on the intermodal side. Those issues have existed for years, but the system has functioned. When you reach a critical point like a natural disaster or a pandemic, there's no flex. There's no additional flex in the system.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Hall and Mr. Rogers.

I will now turn the floor over to Mr. Barsalou-Duval for six minutes.

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

Thank you, Mr. Chair.

I would like to thank all of the witnesses for responding to our invitation and being with us for the study we are currently engaged in.

I am going to begin with Mr. Paquin from the Port of Trois-Rivières.

I was impressed when I heard you say just now that you had increased your capacity by 40 per cent thanks to your On Course for 2020 project and that you had already used 100 per cent of the new capacity that was added to the Port of Trois-Rivières.

Obviously, I don't have specific knowledge of the entire situation in the Port of Trois-Rivières, but I am generally familiar with the economic difficulties the Mauricie region has had to deal with. I think how your port has managed to survive and experienced such significant growth is truly impressive. It is very much to your credit.

One of our visits to various ports all across Canada was to the Port of Montreal, two weeks ago. The Port of Montreal representatives also mentioned that the Port had achieved its maximum capacity.

Do you think this situation is widespread in all the ports in Quebec?

[Jacques Paquin]

Unfortunately, I can't speak for all the ports in Quebec, because I am not familiar with the exact situation in all the ports. The only one I can really talk to you about is the Port of Trois-Rivières.

In the case of the Port of Trois-Rivières, we have actually experienced this situation. To give you an example, last year, in 2022, we turned away almost three quarters of a million tonnes of goods because we did not have space to handle it.

One of the things proposed in our expansion projects, which I mentioned just now in my presentation, is adding a new terminal. If the new terminal had already been in place, it would probably already be full.

I think the explanation is related to a set of factors. We know that we are one link in a chain. A number of actors have a role to play. Our community has mobilized to make the Port of Trois-Rivières a more efficient port for the benefit of Canadian shippers, and that has resulted in a much higher level of activity.

On that point, I must mention the contribution of the Port workers. The people who work at the Port of Trois-Rivières were very active in carrying out our plan and in the improved productivity we see at the Port. Today, we have a definitely more efficient and more productive port, and this results in more competitive shipping for Canadian businesses.

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

Thank you.

You said you have increased your capacity and your productivity. You also have expansion plans.

Are there obstacles that you have to overcome at present for increasing your capacity? If so, what are they?

[Jacques Paquin]

Wait times were mentioned earlier. Getting authorizations is certainly a challenge for everyone. It has become increasingly difficult to launch major new port projects in Canada. One of the results is the need to make sure that existing facilities are optimized, because it is increasingly difficult to put new ones in place. To optimize them, we have to work together. This is particularly important for the St. Lawrence ports. The St. Lawrence itself is a system. We have a very particular situation.

Take the case of the west coast. There are two dominant ports, but I will take the example of the Port of Vancouver. Maritime traffic at that port is virtually equivalent to traffic in the entire St. Lawrence, where the traffic is scattered and spread around the facilities in 20 or so ports in Canada. Those ports have to work together to make the system more efficient.

As I said earlier, we have to get the maximum out of each facility, and that calls for greater collaboration.

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

Thank you.

You spoke earlier about electrical hook-ups for ships in port, which would require major investments, on the order of $100 million.

Are there any government financial incentives or subsidies at present for providing electrical hook-ups for ships in port?

In our visits to ports all across Canada, we got the impression that this approach was a strong trend in the industry.

What is the situation where you are?

[Jacques Paquin]

It would certainly be necessary to use the same programs as the ones mentioned earlier, such as the national trade corridors fund, the NTCF. It allows for a substantial contribution to these projects. However, I would say that even the unsubsidized part is a significant burden. We are talking about contributions on the order of 50 per cent in these programs, but the remaining 50 per cent is still onerous since this is not creating an activity that will generate more traffic. Rather, it is to fund facilities with the goal of reducing greenhouse gases.

Obviously, that investment is more difficult to make profitable. We have to find solutions, the business model, in other words, that will mean that it is able to function. So it is necessary to get help, and specifically funding from programs like the NTCF programs and maybe other sources.

[The Chair, Liberal, Peter Schiefke]

There are 30 seconds left.

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

Right.

In that case, I am going to stop here.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Barsalou-Duval.

Next we have Mr. Bachrach.

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

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

Thank you, Mr. Chair, and thank you to all of our witnesses for being here today.

This study is about large port infrastructure expansion. I'm very compelled by Mayor Pond's assertion that we should expand our thinking of port infrastructure to include the municipal infrastructure that is inextricably linked with our ports, especially in the context of smaller communities.

I'll start with some questions for Mayor Pond.

Allow me, Mayor Pond, to echo the chair's gratitude at the beginning for the warm welcome you showed the committee during our time in Prince Rupert. The city council, you and the port authority really rolled out the red carpet, and we're very appreciative.

You spoke a bit about the payments in lieu of taxes system. I wonder if you could expand on some of the reforms to that system that you feel would better support municipalities in their infrastructure aspirations.

[Herbert Pond]

Thank you.

I appreciate that in my comments there's a crossover between the provincial mandate and the federal mandate, but I thought it important to deliver the whole message of the challenges that a small municipality sees in the face of a large port. I really need to preface this by saying that we're very thankful for that large part. We embrace the development and we encourage more. One of the advantages of Prince Rupert is that we're not congested and there's opportunity to grow. I want to come out strongly on that side.

The PILT system, or payments in lieu of taxes system, is one of those friction points wherein the port of Prince Rupert and the City of Prince Rupert are locked in an adversarial system. The port is arguing it's their fiduciary responsibility to pay as little tax as possible and that to fail to argue those taxes down would be a breach of their duty, and the city is saying it just needs predictable long-term cash flow so that it can borrow to do the work it needs to do within the municipality. I think both parties suffer in that relationship. It's unfortunate, and what happens is that as you go back and forth through the process, there's a whipsawing effect. It gets argued way up and it gets argued way down, and neither party can predict where it's going.

I don't know what's required on the inside of the port and its mandate. It would be nice to have a system that's far more collegial and negotiated to say, “This is what we can afford to contribute and this is what the city needs to move forward.” It's one in which both parties come together rather than being adversaries in a court system that is costing both parties a lot of money. It's a friction point that really shouldn't be there.

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

Mayor Pond, similarly, you talked about the federal stipend that ports pay to the federal government, which is a percentage of their operating revenue each year. Could you expand on your recommendation regarding how the federal government could alter the way it deals with the federal stipend to better support small-port municipalities?

[Herbert Pond]

I don't know what the overall stipend is in larger cities, larger ports and all of those things, but in a small community that's so outsized by its port.... A study showed that 66% of the households earning over $100,000 a year in Prince Rupert had port wages. In Vancouver it's like 2%. That shows the difference in scale.

The federal government could, for ports under a certain size with host communities under a certain size, pick a number—$50,000, $30,000 or whatever it is. Rather than having that returned to Ottawa, where I don't think it would be missed.... If that stipend were reinvested in the community, it would have a meaningful impact and would go a long way to improving the friction point that exists in what should otherwise be an incredibly positive relationship.

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

Finally, Mayor Pond, if you were able to secure these reforms—if the committee made a strong recommendation and the government of course listened to the wisdom of the committee and made these changes—how would you invest those additional revenues to support community infrastructure?

[Herbert Pond]

We would move towards becoming a modern port city capable of supporting one of Canada's most important trade corridors. That looks at basic stuff; I'm talking water. We estimate that right now our infrastructure backlog is in the $650-million range. With local taxpayers paying $12,300, that's just not possible for us to address. We're talking basic infrastructure—roads, sewers, sidewalks and all of the things we need to do to support the workers who work in those terminals. That's desperately needed for us to do what we need to do to ensure that you can keep doing what you need to do.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mayor Pond and Mr. Bachrach.

Next we have Dr. Lewis.

Dr. Lewis, the floor is yours. You have five minutes.

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

Thank you, Chair.

My first question is for Mr. Guy.

Can you comment on the national trade corridors fund and its effectiveness at making the most strategic investments for Canada when Canada does not have a long-term infrastructure strategy? Specifically, I was very curious about the comments you made in relation to the vision of the trade corridor strategy. You referenced a collaborative approach between businesses, the private sector and indigenous communities. Could you elaborate on that?

[Robin Guy]

Absolutely.

Really, Canada has an infrastructure deficit. That's probably been said to this committee once or twice. At the end of the day, the national trade corridors fund is supporting good projects that are able to support increasing our supply chains and their reliability. As we look forward, that vision provides the support for a good funding program that, again, will allow everybody, including businesses, to understand some of the challenges and how we can work together to address them.

The government is not the sole player in this game. Private business does have a role to play. We're saying let's all come to the table. Let's come forward with a strategy and work together to truly address the infrastructure deficit.

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

You spoke about the implementation challenges. Can you elaborate on the Impact Assessment Agency of Canada? Has it been clear in its timelines and scope? What are the most important sources of delays in obtaining impact assessments? How does that affect the implementation stage?

[Robin Guy]

I've had conversations with regard to putting an economic lens to federal regulators, and I would see that as a suggestion to alleviate issues.

We have issues now and we're looking to solve them. Obviously we can't solve these things overnight, but how do we work together? How do we look at the economic benefit of what we're looking at in addition to other pieces, like the environment, sustainability, etc.?

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

My next question is for Mr. Paquin. You spoke about AI and the need for the government to expand and assist in the expansion of AI for solutions. Can you elaborate on how this will impact employment and whether government can promote collaboration between the various port authorities? Something we heard about while we were visiting the ports was the lack of interconnectivity and the lack of collaboration among the various ports.

[Jacques Paquin]

Thank you.

First, artificial intelligence and automation are solutions that make up for the labour shortage. You have to understand that in recent years, the Port of Trois-Rivières has already more than doubled the number of jobs needed to support the growth of its activities.

As we speak, about 70 new positions are open to workers in the ports. Obviously, we have to meet the recruitment challenge, which is not unique to ports, I understand. So it is means that we are having to envisage all sorts of solutions, including automation and artificial intelligence.

However, we know these solutions are complex, they are going to call for major efforts, and it will be hard for us to envisage them applying to a single port. I would also remind you, in passing, that 90 per cent of the maritime shipping via the St. Lawrence Seaway is comprised of solid and liquid bulk commodities. It isn't the container shipping market, although the automation efforts we are seeing much of in the world to date have been focused on this type of transportation, which is already extensively automated.

The rest of maritime shipping needs to have sustained efforts made, to find solutions to automation and make use of these new technologies, including artificial intelligence. The proportions I have given for the St. Lawrence are very similar worldwide.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Paquin. Unfortunately, once again, time is up.

Ms. Koutrakis, the floor is yours. You have five minutes.