Thank you, Mr. Chair.
Thank you to the committee for inviting me to appear before you.
I'm the vice-president of public affairs at GCT Global Container Terminals, headquartered in Vancouver. We are the largest majority-Canadian owned container terminal in the country, and we are a tenant of the Vancouver Fraser Port Authority.
Bill C-33 was born from a chorus of voices from the private sector, labour unions and indigenous communities, all calling on the government to address the functioning of our supply chain and, specifically, the network of Canada port authorities. Since then, Bill C-52 has also been introduced. In some ways, it better addresses some of the shortcomings of Bill C-33.
Today, my comments will focus exclusively on the proposed changes to the Canada Marine Act within Bill C-33.
It is of utmost importance for all members of the committee to understand the current workings of our port system. Private sector companies operate port terminals handling various goods, including bulk, breakbulk, containers and autos, to name some. They assume all of the risks associated with investing in terminal infrastructure, acquiring and retaining customers, and navigating economic fluctuations. These private companies are tenants of port authorities, and port authorities impose rents—and collect rents—escalating fees and regulations upon those private sector operators, all while assuming little to no risk themselves.
As you review and potentially shape Bill C-33, I implore the committee to consider a fundamental question. Do you wish for port authorities to function as governance and regulatory bodies overseeing the supply chain with transparency, or would you prefer for them to remain as they are now, operating opaquely as monopolistic quasi-market players generating revenue for themselves without any real accountability?
This decision is crucial, as it will shape how you approach every aspect of Bill C-33.
For instance, consider the recommendation to modify the borrowing limits for port authorities. Increasing the borrowing limits for port authorities does not necessarily stimulate private investment; rather, it can deter it. This happens because port authorities must repay what they borrow with interest, and this cost ultimately falls on the shoulders of terminal operators, which in turn pass it to their customers, leading to potential inflation.
Port authorities should rarely need to borrow if they're fulfilling their mandate correctly, which is to facilitate trade and grow their private sector tenants. When the private sector is assured of its growth potential, it will invest. Port authorities can also use their lease agreements with tenants to encourage them to take on greater investment risk, thereby reducing the need for port authorities to borrow.
Consider the Vancouver Fraser Port Authority as an example. Over the past 20 years, its borrowing limit has increased three times faster than the volume growth, growing by 385% while volumes grew by 98%. Given this incredible borrowing, one would assume that the port functions incredibly well, but as many of us will have seen, recent global rankings have shown that's not the case. Therefore, it is evident that increasing borrowing by port authorities is unlikely to improve supply chain outcomes. Instead, we should focus on facilitating the private sector's desire to grow and expand. Port authorities should be asking, “How can we assist growth?”, rather than dictating what must be done and, at times, directly competing with private money.
Along the entire west coast of Canada, private sector terminal investment projects are waiting to proceed. The primary obstacle is most often government regulation and often port authorities' individual interests.
I commend the recent announcement by the port of Prince Rupert, which seems to have found a balanced approach. It's unlocked over $750 million in investment by collaborating with private terminals and rail operators and listening to customers.
Not to use a cliché, but the customer's always right. This is because, ultimately, the customer ends up paying. If we take that approach with our supply chain at a national level, we will succeed and potentially save a lot of taxpayer dollars.
In summary, it is crucial to get Bill C-33 right. To achieve this, you must decide whether you want port authorities to determine what is best for Canada or you want the government to have more input and provide guardrails. You must choose whether to unleash private investment or send a message that it will become more expensive to be a customer or a tenant of a Canada port authority due to increased regulatory burdens.
You must decide whether you want to potentially risk more taxpayer dollars by giving port authorities more borrowing powers, or you want to push increased collaboration and the identification of the right investment opportunities with the private sector.
Thank you again for the opportunity to address you today.