Transport Committee on Oct. 18th, 2023

[Voices]

Oh, oh!

[Annie Koutrakis, Liberal, Vimy, QC]

We know that the bill would allow for the development of inland terminals, and I know that some of the testimony here today touched a little bit on inland terminals. Why would this be valuable for our ports, and do you see this potentially reducing frictions with communities located near port lands?

[Ian Hamilton]

I'll jump on that quickly.

I think the inland terminal idea, which we really do applaud and support, would allow ports to grow their capacity. As Canada grows, we need to increase that capacity. Quite often, ports become surrounded by residential and commercial developments. By being able to hold cargo and facilitate trade at inland destinations.... Really, that's the driver. It's going to build more capacity in supply chains.

[Jacques Paquin]

I would like to comment on that.

Like most ports, the Port of Trois-Rivières is an urban port that's sandwiched between the city and the river. Opportunities for growth on our properties and in the vicinity are very limited. We're doing it, but it's very hard, and we have to be able to go further. We're already working on it, actually. We have a sector about 1.5 km from the port that we've been using very successfully for a few years now. I didn't know that wasn't actually allowed under the act, but Transport Canada authorized it. This proves that it is very doable to create satellite locations that can handle more activity and traffic to support businesses' needs.

[The Chair, Liberal, Peter Schiefke]

Thank you, Ms. Koutrakis and Mr. Paquin.

Now we'll go to Mr. Barsalou-Duval for two and a half minutes.

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

Thank you, Mr. Chair.

Ms. Nugent, you really emphasized the importance of climate change and how ports can contribute to the work we need to do to hit the target in the great Canadian Net-Zero Emissions Accountability Act. I am happy to hear that even though I think ports, like all businesses, have concerns about it.

Can you explain how adding this obligation to comply with the strategy in the net-zero act would get things moving faster than if there's just a plan? As I see it, just having a plan doesn't necessarily guarantee results.

[Amy Nugent]

I think having a plan is a beginning. I think the fact is, though, that asking port authorities to develop a plan from scratch, when they have the major preoccupations of secure trade and supply networks as well as just efficient operations, is a little too much. Also, those examples exist and those policy approaches as well as the law and the targets exist.

Let's move beyond the development and go immediately to the targets that exist under law and translate them to the shipping and the maritime sectors, including ports. The Government of Canada has advocated for very ambitious targets to apply to the shipping sector and to the maritime sector internationally, but it has not reflected that yet in domestic law and domestic tools like regulations, like major incentives, which is the approach we would favour, and/or pricing, which—

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

I don't have much time, and there's something I'd like to focus on. You said it would be good to go beyond what's in the bill and enforce net-zero standards not only for ports but for the entire maritime sector. How can we get to that point for the entire maritime sector and not just for ports?

[The Chair, Liberal, Peter Schiefke]

Please give a 15-second response if you're able to do that, Ms. Nugent.

[Amy Nugent]

Sure. The IMO is starting with a 10% clean fuel standard by 2030, so we know we can move quickly there. Like I said, on domestic vessels and nearshore harbour craft, we can move to electric day over night. It takes about a four-month building season depending on the size of the vessel. We can do that and reduce 25% of Canada's domestic shipping emissions, but that fuel happens at ports, so ports have that critical role to play.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Nugent.

Thank you, Monsieur Barsalou-Duval.

Next, we have Mr. Bachrach.

Mr. Bachrach, you have two and half minutes. The floor is yours.

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

Thank you, Mr. Chair.

I have another question for Ms. Nugent.

In my view, there are two ways of defining emissions targets: either as absolute reductions or as intensity-based reductions. Which one of those do you feel is more important in the case of port authorities? Perhaps you could offer your thoughts on why.

[Amy Nugent]

In a sense, I don't want to actually dwell on intensity-based targets and absolute emissions targets. Arguably, reducing GHG intensity is just a way to get to absolute reductions.

The fact of the matter is that we have to hold global warming below 1.5°C. In order to do that, we've translated our emissions into targets at an international level. In Canada, that's 40% to 45% below 2005 levels. Those are absolute reductions from 2005 levels, and they need to apply to the maritime sector.

If you have a vessel or a port whose operations are more efficient, yet they continue nonetheless not to be zero emitting and to emit more but have more economic output, then you're not solving the problem of emissions. Therefore, we continue to live globally with the impacts of rising emissions and rising temperatures, which is not acceptable. We can't live with it.

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

Maybe to put that a little differently, Ms. Nugent, there are companies out there that claim to have reduced emissions because they've become more efficient, but at the same time, their increases in output have outstripped that efficiency, resulting in an overall increase in emissions.

I guess the question is, when it comes to defining the targets, should it be tonnes of reduction per unit of output or should it be tonnes of reduction, period?

[Amy Nugent]

It has to be tonnes of reduction, period, so it's absolute reductions.

Like I was saying, intensity can be one step on the way, but we have to go to absolute. We have to get to zero emissions, and there are technologies out there that major companies.... The port of Antwerp-Bruges, for example, is a multi-fuel bunkering facility with zero emitting fuel, so it can be done, and we need to get there.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Nugent.

Thank you, Mr. Bachrach.

Next we have Ms. Gladu once again.

The floor is yours. You have five minutes.

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

Thank you, Chair.

One of the other challenges facing ports and their infrastructure is the fact that international import-export is growing, so there is a need to grow the smaller ports because the larger ones are not going to be able to handle the growth capacity.

Places like Sarnia—Lambton, which is my riding, have a port. We have now an oversized load corridor to import and export large fabricated vessels, etc., and we have capacity to grow.

Is there anything in Bill C-33 that you feel would hurt or help the growth of smaller ports?

[Daniel-Robert Gooch]

We represent the 17 Canada port authorities and the parts of the bill we're most familiar with are really the parts that are actually directly affecting the CPAs, so I'm not sure that I can really weigh in on that.

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

Mr. Paquin, do you have any thoughts, knowing that your port is smaller but growing?

[Jacques Paquin]

Thank you.

That's right, there really isn't anything in the act that supports our efforts to ensure growth. As we've heard repeatedly, there's a burden there, and many impediments in the act. People might talk about the idea of inland ports and the fact that it's possible to go out, but, as I said, that's an experiment we can already do.

If I compare that benefit to all the drawbacks, the bad vastly outweighs the good, so it's clearly not something that will help us ensure growth.

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

Thank you very much.

I'm going to pass this on now to my colleague Mr. Muys.

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

Thank you, Ms. Gladu.

I have a question for Mr. Gooch.

When you were here at committee on March 23, you indicated you had prepared a letter to the then minister of transport with a number of questions on Bill C-33 and you were awaiting answers. It was three or four months prior that you had sent the letter. You've articulated some lingering questions today, and you still had some outstanding questions as recently as a month ago.

On March 23, you said that depending on the answers to those questions, it would inform your opinion as to whether Bill C-33 was “a modest improvement” or “actually...quite negative”. Where do we land now? Where are things at?

[Daniel-Robert Gooch]

Thank you.

It's a great question. I do remember that.

Everything I will say is prefaced by.... We have real concerns with the governance, so that has to change. Those recommendations we made are hinging on this. I don't know that we can say yet that it will be an improvement. My sense is that maybe we were looking for answers to questions that have not yet been answered by the government themselves, which is why we've moved to how if this still has to be designed in terms of how the borrowing process will work, we need to be in the room while that's happening, and also our CFOs and our CEOs and those who do this professionally on a day-to-day basis, because we don't. I don't know that the officials at Transport Canada who we've been dealing with necessarily do either. It needs to be designed together.

It's possible that it will be something that's more dynamic that provides some room for ports to manoeuvre within, but that's just wishful thinking on my part. I don't have any concrete information on how this will work to understand whether that is indeed the case or not.

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

All right, so that's wishful thinking, trending on negative.

In particular, can you elaborate with regard to the financial flexibility? We've heard from the port authorities themselves represented here that it is really important. Board governances we've talked about, but that really has to be the thing that's fixed.

[Daniel-Robert Gooch]

It's key. Ports needs to be nimbler.

Financial flexibility is not just about borrowing limits. We haven't really talked about this, but the activities that ports can engage in—Ms. Gladu spoke to your small port.... There are impediments on what CPAs can do.

One of the ways to be flexible is that perhaps there's an office building you can build, but you can generate revenue if you develop the property above that and use that somewhere else in the facility. Airport authorities have the ability to do that, to leverage their assets to do other things. I know some of our ports have been interested in doing things like that, but they've run up against limits on their activities.

I don't know if my colleagues in Trois-Rivières or Hamilton want to speak to that.