Transport Committee on Oct. 18th, 2023

[Ian Hamilton]

The ports across the country would probably prefer nothing at all. However, I think there's probably a good way to address it and still have some oversight.

One of the challenging areas is that as you're entering into projects and you're working with customers, stakeholders and port users, the uncertainty of when you're actually going to be able to commit to a project really makes it difficult to provide the best service possible to Canadians and users and to create supply chains.

As I mentioned and you reiterated, when we submitted our application to increase our borrowing powers, we were told that it was going to be completely straightforward. They thought they could have it done within three months. Now we're up to a year and there's still no finish line in sight.

Not only is it the uncertainty, but there's a cost to doing it as well. We have external auditors come in and give their recommendation for borrowing limits. That's then screened by Transport Canada. Then it's sent on to Treasury Board to be screened again.

You have the timeline. You have the uncertainty. Customers are saying, “Can you make this capital investment,” but you don't know whether you're going to be able to or you're not going to be able to.

The other thing that Mr. Gooch—

[The Chair, Liberal, Peter Schiefke]

I'm sorry, Mr. Hamilton. The five minutes are up for that line of questioning, but I'm sure Mr. Muys will continue along those lines in subsequent rounds.

We'll now turn it over to Ms. Murray.

Ms. Murray, the floor is yours. You have five minutes for your line of questioning.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you very much.

I do understand the perspective of ports being critical economic engines, but many of them are also located right in the middle of richly populated urban areas. From my perspective, we can do a better job through the advisory committee structure that's being set up, and potentially through the chair, who would be a liaison in a way, making sure that the community's needs are being met as well as the port's needs.

One question I have is, where are there ports? Cape Town, for example, has a big economy around tourism and tourism facilities. Marseille, I understand, is very positive in terms of engagement. Have the port executives—you, Mr. Gooch and others—looked at models where that respect for the community's interests being included is successfully incorporated without compromising the economy of the port's activities?

[Daniel-Robert Gooch]

I'd say my impression, in meeting with our ports, is that this is top of mind for our ports in Canada today. I did a tour of the port of Montreal when I first came into the organization. The work they have done to protect the neighbouring residential areas from the port activities, that kind of work is being done around the country—

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you.

I'm sorry to be rude here, but I recognize that I have a primary area, which is environment, and I need to get to that. I'm glad to hear there is some of that happening. I can tell that in metro Vancouver there are lots of conflicts and there is disgruntlement that the port seems to trump the community's environmental or other priorities. I think we can do better.

With respect to the environment, I do get that a seamless supply chain in ports, a reliable supply chain, can lower environmental impacts.

Ms. Nugent, I heard you really focus in on climate and reduction, and that is of critical importance, but from my perspective it's important to think of the conservation issues around ports and the vessels that ports are the key hub for.

Are there thoughts you have around what could be the port's role not just in greening its own operations but in being a driver of more environmentally responsible shipping? Management of noise that can affect the marine ecosystems, as well as pollution and the dumping issues on the coast of British Columbia, are a real concern to people.

[Amy Nugent]

Yes. Thank you.

The port of Vancouver, as many of you know, is the busiest port in Canada. There are three or four that are of the scale of those ports, but people have their eyes on the development of traffic going into future ports, and you're right, inasmuch as ports are a linchpin up and down the supply chain.

There's an opportunity to send a virtuous signal right at the port if you leverage the opportunity that ports provide to bunker zero-emission fuels. That's both for ocean-going vessels as well as for domestic shipping traffic.

First of all, there is that immediate emissions reduction in terms of shipping. If you look globally at the proportion of shipping GHGs, it's about 3%, which doesn't seem like a lot, but it still would be about the sixth-largest country in terms of proportion of emissions. You can do that right at ports. That's why we're talking about a mandate to look at alternative energy supply and get shipping in the queue for that energy supply so that there is a chance to send that virtuous signal.

You talk about noise. You could electrify vessels. There's technology available today, especially for nearshore vessels and activity, whereby you can electrify vessels. We see some partnerships with first nations leading the way on electric vessels. Oceans North has a partnership with the Membertou First Nation on an electric lobster vessel. We see that Haisla Nation just put an electric tugboat, equivalent to 70 Tesla batteries, on the water over the summer. You can do this now. That reduces noise and air pollutants for those communities and, of course, for the sea mammals and sea life.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Nugent.

Thank you, Ms. Murray.

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.

Mr. Paquin, during our earlier exchange, you said you already prepare internal quarterly financial statements and share that information with the government.

Can you explain why having those financial statements audited each quarter would add value for the government? Also, what's the difference between an internal financial statement and an audited financial statement in terms of the costs and resources involved?

[Jacques Paquin]

There's no additional work for us. If we're okay with using internal financial statements and we can adapt to the required format, we don't really have to do any extra work. We're certainly prepared to share more information. We're already providing what we've been asked for, but if the information we're sharing is incomplete or insufficient, if Transport Canada wants more information, we're certainly open to providing that as long as it doesn't mean any extra work for us.

If I may, I also want to point out that we don't think the bill is focusing on the right information. We want to improve supply chains, and we need to share a lot more data among ourselves and with Transport Canada, as well as with other supply chain stakeholders, especially data about the flow of goods. One of the goals is to make that more efficient and effective. Improved supply chain fluidity produces immediate environmental benefits. To achieve that, we need a better understanding of the data about the flow of goods.

Over the past few years, we've worked with Transport Canada on two projects, one on road transportation and the other on rail transportation, the idea being to document real-time movement and get a clear and complete picture of those how those supply chains work so we can try to optimize them. That's the direction we think we should be going in with Transport Canada.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Paquin and Mr. Barsalou-Duval.

Next, we have Mr. Bachrach.

Mr. Bachrach, you have two and half minutes.

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

Thank you, Mr. Chair.

I've asked my questions. I'll summarize them briefly.

One, how do the Americans deal with conflict of interest when it comes to union representation on port boards?

Two, how is conflict of interest managed more generally on Canadian port authority boards?

[Daniel-Robert Gooch]

I've been in this role for just under two years. I'm not super familiar with the U.S. system or how it's structured or what the role of the board there is relative to the operation of the port and whether that's the same as in Canada. We would have to dig a little further on that.

In terms of the port authority boards here in Canada, I believe you asked earlier if an active employee of a company that's at the port would be able to be on the board. The answer is absolutely not, because that individual has a fiduciary responsibility to the board they are on and not to the individual or corporation that nominated them. That would be a pure conflict of interest that just would not generally be approved. It would be individuals who may have had that job 10 years ago or five years ago. They're retired and now they are no longer beholden to the employer with whom they acquired that experience.

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

Okay.

I'll turn to the advisory committees, and I think some good thoughts have been shared on these.

I'm somewhat skeptical about the effectiveness of community advisory committees to provide good input, especially in the cases such as my colleague Ms. Murray mentioned, where the port authority is essentially in conflict with the community for some reason or another. This happens all over Canada. It certainly happens in the region I represent. I know it happens in Vancouver.

How do we ensure a certain level of independence so that those advisory committees are able to really provide the board with the view of the community and avoid a situation in which it simply becomes sort of a PR exercise and it's heavily managed by the authority and, in that case, creates a whole bunch of work that isn't necessary?

[Daniel-Robert Gooch]

It's an interesting question. It's not going to be a veto. I guess as it's intended it is a forum for the port to talk about what they want to do and what's important and what they are planning to do in the coming years and to provide an opportunity for the participants on the various committees to weigh in on how that would affect them.

Where I've seen this done in the past, the information is taken in, and sometimes, but not always, changes are made. Not every recommendation is going to be accepted. The transparency makes for better outcomes. My understanding is that most if not all of our ports are doing this already, particularly the larger ports. It may be different from community to community. Maybe some need to do things a little bit better. A lot of this work is already under way.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gooch.

Thank you, Mr. Bachrach.

Next, we have Ms. Gladu.

Ms. Gladu, it's good to have you joining us at transport and infrastructure. The floor is yours. You have five minutes.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you, Chair. It's great to be back here.

Thanks to the witnesses for joining.

It's been not quite a year since I was on transport. However, the last time I was here we talked about the state of the nation with respect to ports.

The port of Vancouver was ranked 368 out of 370 in the world. The port of Montreal was ranked 311 out of 348 in the world. It was clear that the ports needed assistance from the federal government. There were concerns about supply chain disruptions and labour disputes. Bill C-33 was supposed to be addressing the gaps the ports were facing.

Let's talk about some of those things. Clearly money is going to be key in order to modernize the ports. I've heard discussion about the borrowing limit.

Why do we even need a borrowing limit? If private investors and banks are willing to invest in the projects, do we even need one?

I'll start with Mr. Gooch.

[Daniel-Robert Gooch]

It's a very good question. I suspect not, but I'd actually like to invite our chair to weigh in on this one. He's operating a port.

I would invite Mr. Paquin to comment as well.

It's better for the ports to weigh in on this one as they see it in their own circumstances.

[Ian Hamilton]

Thank you.

Yes, I think it is a very fair question. I think that in a perfect world we would certainly not have prescribed borrowing limits and it would be driven by what the markets would be willing to loan against the assets. I think we're in an interesting situation, in that if we ever went into an insolvency situation, I suppose there might be blowback to Transport Canada. There is that consideration, but no, properly managed with the right boards, I think any vehicle for these investments should be open to us, and we should be able to if we can build a justifiable business case.

I didn't quite finish with Dan Muys' question when I had it before, so I'm going to jump in there.

One of the challenges is that the borrowing limits are set not based on future revenue streams but only based on historic revenue streams, which is something that Mr. Gooch talked about earlier. When you're looking at a market investment, they quite often are looking at what is the earning potential rather than what happened in the past, which again limits our freedom to take advantage of companies that truly want to invest in critical Canadian infrastructure.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Paquin, do you have an opinion on that?

[Jacques Paquin]

I think my colleague, Mr. Hamilton, did a great job of summing up our position on that. We have the same question for the same reasons.

We have big plans, all kinds of exciting plans that would cost much more than our borrowing limit. We've been turning traffic away for years now. We know this has a lot to do with the borrowing limit, but it also has to do with the fact that we don't factor in the possibilities and anticipated revenue. We only use historic revenue.

Obviously that is a big impediment to our ability to bring those plans to fruition and support Canada's economic growth.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you.

My second question, then, is about my concerns with respect to the government wanting to have the minister appoint the chair of the board and have that kind of influence. It seems to me that it is Ottawa telling the ports what is best.

Would you agree with that, Mr. Gooch?

[Daniel-Robert Gooch]

Well, what I would say is that one of the comments that was made by Michel Murray from the Syndicat canadien de la fonction publique on Monday was the concern that that union has with the appointment of the chair. He said that the individual who appoints the chair, that chair is going to be beholden to the minister. Whether that's actually true or not, that's clearly the perception that gentleman had.

When we take that and we compare it to—or we add, I guess I should say—the notion of having active municipal and provincial employees and the risks that they will see themselves as representatives and not bringing the view of the perspective of that community, that distinction we've seen is confusing. Then you have to take a look at the existing process. We haven't even really talked about what's not working now. The minister appoints the majority of directors. In theory, it's in consultation with the user groups.

We did a survey of our members, and nearly half said—

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

I'm sorry to cut you off. I have one final question.

Does Bill C-33 do anything to address the supply chain issues and the labour dispute issues that were of concern?

[Daniel-Robert Gooch]

I can't speak to the labour dispute issues. That's not an area that we would get into.

There are parts of the bill that will help. I believe the system.... There's a strategy that's coming out. I think there's stuff that's in the bill that's meant to feed into the strategy. There's a lot that we still need to see, and so we probably can't really comment on that until we see what the federal government's approach is on that strategy.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Gooch.

Thank you, Ms. Gladu.

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