Transport Committee on Oct. 18th, 2023

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Iacono.

Mr. Barsalou-Duval, you have the floor for six minutes.

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

Thank you, Mr. Chair.

I'd like to thank the witnesses for joining us today. I am very glad to hear from them. It's good to know how the bill is perceived by the people on the ground who run the ports on a daily basis.

Mr. Paquin, on Monday, witnesses told us that they were very concerned about the minister's desire to claim the power to appoint the chairs of the ports' boards of directors. For our part, we fear that this could lead to political appointments that would not necessarily be in the best interests of the ports.

In what I heard today, both from Mr. Gooch and from you during your presentation, I sensed that you weren't hiding what you had to say and that you felt free to speak. So I was wondering what you thought about this aspect, among others. I was also wondering what effect it might have on the discussion we're having today. Would this discussion and the circumstances be the same if a chair felt directly accountable to the government, or if their appointment had been political in nature?

[Jacques Paquin]

That's an interesting, if speculative, question.

Certainly my colleagues and I have already expressed that concern, as have others. Mr. Gooch touched on that when he talked about confusion around roles. Obviously the board chair plays a key role in ensuring proper operation of the board, but also in fulfilling its mission, which is to ensure good governance of the organization. The chair also sets the tone for trust among board members, and of course board members need to trust the chair implicitly.

Even if an individual is not ill-intentioned, people may sometimes question their intentions. They may wonder if that person is really serving the interests of the board and the organization or if they are more concerned about keeping their job and staying in the minister's good graces. That may not be the case at all, but you know what perceptions can do. Sometimes perceptions can poison the atmosphere, and then you have a dysfunctional board.

I can't really offer a fulsome answer to your question, which I think is a bit speculative, but I think it's risky enough to be avoided. Plus, let's not forget that the minister appoints almost all of the board members anyway. The minister also reappoints them. I think the least we can do is let them choose their own chair so we have functional boards.

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

Do you agree that, in theory, the priority of the chair of a port authority's board of directors should be to do what is good for the port, not what is politically expedient for the government? Could that kind of appointment cause confusion about roles?

[Jacques Paquin]

Yes, that opens things up to confusion about roles. I completely agree with the first part of what you said. The first priority of the board as a whole and each board member individually should be the good of the organization they work for. That's what we should expect from the chair and all the other members.

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

Another reason I wanted today's panel to include a representative from the Port of Trois‑Rivières is that it's not the Port of Montreal or the Port of Vancouver even though it does have significant growth potential. It's not the biggest port in the country.

We've talked a lot about the new administrative pieces ports have to set up: community advisory committees, indigenous advisory committees, municipal advisory committees and quarterly financial reports. I myself am an accountant by trade. When I saw the words “quarterly financial report”, that raised a red flag. I know that kind of report takes a lot of work. That means paying people. I think it's a big responsibility.

Would you please comment on that? I think there should be different rules for little ports as opposed to big ports. That way, little ports can continue to function without being severely handicapped by these new rules.

[Jacques Paquin]

I'll answer your question in two parts, if that's okay.

First, we already send information about our financial situation to Transport Canada every quarter. We can see how that might not be enough, and we're ready to offer more. We produce our own quarterly financial statements. We are certainly ready to send the department information based on those internal financial statements because it wouldn't mean any extra work for us. However, we do have a problem with having our financial statements audited. For a port like ours, that's not a good use of funds.

Second, the bill is asking us for a lot of accountability. In a way, we don't think we're being asked for the right things because—

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Paquin. Unfortunately, your time is up.

Next we will go to Mr. Bachrach.

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

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

Thank you, Mr. Chair.

Thank you to all of our witnesses for joining us this evening.

I have lots of interesting material to dig into.

Perhaps I will start by asking our witness from Oceans North if she would like to complete her statement. I know she had one more paragraph to go.

[Amy Nugent]

Thank you so much, Member.

I think I left off on agreeing with other witnesses on the importance of large-scale investment. I was going to say that the Inflation Reduction Act in the United States has invested $3 billion over four years to support their clean ports program.

We understand that Transport Canada has a $165-million program in development over seven years. That's a good start, and the scale needs to be much larger, in addition to the flexibility spoken to by the port authorities. The quantum of the investment by the Government of Canada at this time in terms of decarbonization simply needs to be much larger.

I wanted to say very much on what witnesses were talking about with members in these latter questions. We see the administrative burden also in the numerous reporting mechanisms and agree that those can and should be simplified. When we say that decarbonization needs to be a criterion, that's not a layer on; that's to say that all these plans such as financial reporting, business planning, borrowing plans, and climate mitigation and adaptation plans should be part of the same planning cycle, which in good business planning they are.

Finally, in terms of the investments, we know what's needed at ports. Port authorities are telling us, and other ports internationally are leading the way with shore power, electrification of ports—and of vessels themselves—near shore, alternative fuel for ocean-going vessels, and renewables. I've spoken a little bit about energy needs and needing to get into the queue.

We're seeing leadership internationally, and we're seeing ports in Canada making those efforts, including in the closed basin of the Great Lakes. We would like to support that. Bill C-33 is a good start. Of course, we think it could go much further, and that responsibility is on the shoulders of Transport Canada in the very immediate future.

Thanks very much for letting me complete those thoughts.

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

Thank you, Ms. Nugent.

Following that, I'm interested in your observation that Bill C-33 should include explicit reference to the Canadian Net-Zero Emissions Accountability Act and the targets and milestone years contained within. One of the interesting things, thinking about ports, is that this act, I believe, relies on the 2005 base year as a way of defining targets.

Could you provide your thoughts on how targets should be set for port authorities and what order of magnitude reductions we should look for from port authorities over the planning duration of the Canadian Net-Zero Emissions Accountability Act?

[Amy Nugent]

What Bill C-33 proposes now is that port authorities individually go away to develop GHG targets. That doesn't make a lot of sense when every other economic sector or certainly the vast majority of economic industrial sectors in Canada are subject to the Canadian Net-Zero Emissions Accountability Act that you reference. That act requires 40% to 45% reductions by 2030 of all industrial sectors, yet we're asking ports to go away to think about and develop within a year their own GHG targets. It doesn't make sense in terms of the capacity, and I think someone referenced that, maybe Mr. Gooch, in terms of the role of consultancies.

Let's use the targets that are backed by science, by a need to hold warming to below 1.5°C, and then embed those targets for ports, albeit it's not easy, and there's a need for very significant energy and infrastructure supports to get there.

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

Thank you very much, Ms. Nugent.

I will turn now to you, Mr. Gooch, and these thoughts around governance of port boards—and I think this is a really important aspect of the bill—and your earlier comments about labour representation on port boards. We've had some discussion about this and how to avoid the pitfalls of conflict of interest and how to ensure the workers, who allow the ports to operate, have some voice in the process.

I was noting that Willie Adams is the international president of the ILWU and is also the vice-president of the Port of San Francisco. I'm wondering whether some similar sort of representation could be possible in Canada; whether the United States has experienced challenges, in your view, because of the fact that obviously their system allows for that kind of representation, and how we deal with this challenge of ensuring representation, while avoiding conflicts of interest.

I would add that another question related to that is around how conflict of interest is currently managed by port authority boards. For instance, and this will show my lack of knowledge—

Okay, I'll finish my sentence, Mr. Chair.

When I look at the witness, I don't have to look at the clock. It will be perfect.

[The Chair, Liberal, Peter Schiefke]

It's a great question, Mr. Bachrach.

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

I'll leave it for the 2.5 minute round.

Whether directors or employees of shippers or terminals are currently permitted to serve as directors is a question I have.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach. That will have to wait for the next round of two and a half minutes.

We will turn the floor over to Mr. Muys.

The floor is yours. You have five minutes, sir.

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

Thank you.

Let me start where my colleague Mark Strahl was cut off in the question, Mr. Gooch. Give a quick answer, please, because I do have a number of questions I want to ask.

It was with regard to it being a solution in search of a problem, with the minister appointing a board chair. You've talked about board governance, but do you have any further thoughts on that?

[Daniel-Robert Gooch]

Well, there are a few concerns. I don't really remember all of Mr. Strahl's questions, but if we're talking about the appointment of the chair, we're really concerned that it creates confusion around the role of the chair.

Serge Bijimine appeared on Monday, and he spoke about the role of ports for running the day-to-day operations, the strategic plan, but it's the minister who sets the strategic vision. He made comments to the effect that if the minister has the strategic part, we want to make sure the chair is there to ensure it's being properly implemented. Certainly, we have been calling for a national transportation supply chain strategy for several years, and we do look forward to seeing the government release that in the coming months.

In terms of how the port feeds into that and what happens in Saguenay, what happens in Prince Rupert, what happens in Nanaimo with those ports in terms of how they build their strategy for the long term, we believe those are decisions that should be made locally and not in Ottawa.

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

Thank you. Yes, it's certainly a muddied answer from the Transport Canada officials and the intent is unclear.

Switching gears, let me ask you this, Mr. Hamilton, because I'm a Hamilton MP and you're doing fantastic work. While we do claim ownership of the Hamilton port, of course we recognize it's in Oshawa and Niagara. Frankly, it's an economic driver for all of southern Ontario.

One of the questions I asked Transport Canada officials on Monday was whether they had done a cost analysis on all these different regulatory burdens, committees and changes that are being proposed in Bill C-33, and the answer was that no cost analysis had been done. Mr. Gooch mentioned that perhaps a larger port estimated that at $200,000 per year.

Do you find it surprising, or is it concerning? Have you done any analysis as to what the cost impact of this would be on HOPA?

[Ian Hamilton]

Yes, we've looked at it, not exactly from a cost perspective but on how many man-hours it would take, and we believe it would take probably two individuals—

[The Chair, Liberal, Peter Schiefke]

I'm sorry, Mr. Hamilton, but unfortunately, we have an issue with the audio. Could you put your microphone—

[Ian Hamilton]

Is that better?

[The Chair, Liberal, Peter Schiefke]

There you go.

We'll ask you to restart the response, sir.

[Ian Hamilton]

I'm sorry. I moved it up to my head.

What we really looked at was how much the additional burden on our staff would be, and we believe that for the Hamilton-Oshawa Port Authority to fulfill all of the obligations, we would have to add probably two additional employees.

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

That's significant.

When you had your annual meeting and community meeting back on May 10, unfortunately I was here in Ottawa, but I sent three members of our team.

You have great plans for the future. As part of this committee we toured the Hamilton port back in March.

I want to drill down on your comments in the opening. I recognize you had a short period of time, so you might want to elaborate on that.

You're doing great work. You've clearly explained how the current process for borrowing limits and financial flexibility and the proposed changes in Bill C-33 are insufficient. You've been waiting a year. What would be better—or nothing at all? I mean, why don't we unleash your potential?