Transport Committee on Oct. 23rd, 2023

[Bruce McConchie]

Member, container ships don't anchor. They are scheduled wonderfully to be in the port, because it's a very economic penalty for them to be hovering on anchor.

The main ships are coal and, if you can believe it, Canada is still allowing the export of thermal coal. A lot of it is being mined in the United States. Washington, Oregon and California prohibit it due to environmental concerns, yet we're still bringing it up on trains and shipping it out. There are a lot of ships arriving very early to pick up thermal coal, which we all know is a huge contributor to climate change.

The grain can't be loaded in the rain in Vancouver yet. That makes vessels sit idle at anchorages, and the prairie grain farmers don't get paid. They can't ship their product. Improve that and get rid of thermal coal, and you're a long way on your way towards elimination.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you for that.

Ms. Gee, some of the previous witnesses we've heard from have raised the need for more flexibility for smaller ports. Do you agree with this? What types of flexibility do you think would be most beneficial for smaller ports?

[Bonnie Gee]

Ports were devolved 25 years ago. They have different resources and they have the same aging infrastructure to maintain. My thought is that they probably need some better financing options to maintain the infrastructure they currently have. In terms of what's being proposed in Bill C-33 to add new advisory and indigenous and community advisory committees, many of these offices are very small in terms of their staffing and their capabilities, so to add those obligations onto the smaller port authorities is challenging.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you.

Mr. McConchie, I'll come back to you. What are the challenges with how the Vancouver Fraser Port Authority currently manages anchorages? You mentioned a number of them. Can you give one final comment on that for the benefit of the committee?

[Bruce McConchie]

Actually, they only manage the anchorages under the interim protocols for ships anchoring in the southern B.C. waters, currently. The federal government still has jurisdiction. The port of Vancouver has no jurisdiction. They just came up with an interim plan that has not worked. It was supposed to allocate these ships to different anchorages, and it basically spread the pain. As I pointed out earlier, we saw a huge increase in the number and the usages of those anchorages.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

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

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

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

Thank, Mr. Chair.

Mr. Dekovic, the appointment by government of chairpersons to the boards of directors of ports was mentioned a number of times by witnesses in previous meetings. This is an amendment being proposed in Bill C‑33.

As a client, your company maintains a business relationship with the ports. How do you view the government's desire to control the appointment of port authority chairpersons?

[Marko Dekovic]

Thank you for that question.

It goes back to what I mentioned earlier. Ultimately, Bill C-33 has to decide which way we want to go. Do we want to create port authorities that are more government-like and more government agency-like, or create them or push them to be more private sector market players with some government oversight?

What we have right now, though, which we have experienced in Vancouver, is that ultimately there is no direct link or accountability for when port authority leadership is not necessarily in line with what the priorities may or may not be of the government or the tenants. Many tenants had some challenges in Vancouver, and ultimately there was no mechanism to directly address that. By having the chair of the port ultimately accountable to somebody in government, that will increase that accountability or chain of command to the minister, so that at least the tenants, the private sector and users of the port can approach the minister and expect some answer or action. Currently, when that is done, the answer is that ports are at arm's length and nothing can be done. Of course, that's an example of where it's also a negative, where the government can potentially more politically influence the operations of the port and the leadership of the port. There are some challenges with that.

There is no perfect answer. The question is more this: Which way does the government want to push the port authorities, to be more government or more private sector?

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

If I understand correctly, it sends the message that the government will have greater influence over port management, since a minister will be appointing the chairpersons of the boards of directors.

Ms. Gee, may I ask your opinion on that same subject?

[Bonnie Gee]

It's similar to what Mr. Dekovic just mentioned. Our concern would be the politicization of the chair appointment.

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

Thank you.

Earlier, you spoke about the potential impact of these new measures on small ports. I'm really interested in this aspect. I have no doubts about the ability of major ports like Montreal and Vancouver to implement what is being asked of them, in other words, to ensure greater consultation of groups and communities, as well as the First Nations, and to produce quarterly financial statements. However, I have serious doubts about the impact that this could have on smaller ports, which already have limited staff and resources.

If these new measures were only applicable to larger ports, at what point would a port be considered a major port?

[Bonnie Gee]

Thank you for the question.

When I was looking at their revenue structure.... I think it's important to note that the purpose of the Canada Marine Act is to provide trade-enabling infrastructure. When you look at the financial statements, the primary source of revenue for some of these ports is from managing marinas, not facilitating trade.

A criteria that you might look at as well may be how they derive their revenue.

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

In your opinion, then, it's essentially a matter of revenue, meaning how they derive their revenue.

I suppose that volume is also a consideration. For example, a port that sees three vessels per year doesn't have the same capacity as a port that sees three per day.

[Bonnie Gee]

That's correct.

Then we have a harbour authority that actually receives quite a number of cruise vessels, yet it's not a port authority. That certainly needs to be looked at carefully.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Barsalou‑Duval.

Next we have Ms. Zarrillo.

The floors is yours. You have six minutes.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you so much.

It certainly seems that it's time for some modernizing of how we're managing or not managing the ports.

I'm going to focus on something relatively narrow, though. It's for Mr. McConchie. This is in relation to the frustration of islanders and how long this anchorage problem has been going on.

You mentioned that there was a visit here five years ago. I'm sure it was going on long before that. It's certainly one reason why my colleague, Alistair MacGregor, has a private member's bill around this. It's Bill C-305, an act to amend the shipping act.

This is really in regard to modernization. Considerations around protecting biodiversity and around the environment didn't seem to play into the initial planning. As my colleague, MP MacGregor, has said many times, it's to stop using the precious waterways as an overflow parking lot.

I did want to get some more insight and understanding on how we got from 19 to 476 vessels hanging out in the overflow parking lot.

[Bruce McConchie]

Since I was a teenager, I've been going into the Gulf Islands. I bought property there in 1978 and have lived there permanently for 23 years. I know those waterways wonderfully, and they're precious. With extreme winds in the winter time, strong currents and those kinds of things, we rarely saw a cargo ship anchoring in those waters before 2009. It was rare. All of a sudden, there was a change and then it kept increasing. There was no stoppage.

In 2018, when the federal government came out with the interim protocols, suddenly the anchoring increased again. In fact, Ladysmith and Saltair, which never saw ships before 2018, suddenly were inundated with ships. Now they're anchoring constantly just offshore from very small communities and creating huge underwater and above-water noise there.

The port wanted to expand, but it didn't provide the infrastructure and it didn't address the supply chain. Then it accepted American thermal coal to ship, on top of that. You can see how it compounds. A lot of the vessels that are arriving early are getting there because it's free anchorage. There's no jurisdiction and no monitoring—nothing. As a result, we've been seeing the anchor drag groundings and collisions in our local waters.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you so much for that.

I'm going to ask Ms. Gee the same question about insights.

Could you share with us some insight on why the vessels went from 19 to 476 in a matter of just around 10 years?

[Bonnie Gee]

There's been tremendous growth in our bulk exports through the port of Vancouver. There have been some changes as well in the operational policies within the port, where vessels are limited to stay seven days within the port of Vancouver. We do often see vessels bouncing around more often.

I just wanted to clarify that these vessels are not arriving to just randomly wait for cargo. These vessels are actually contracted to be there. There's a laycan within their charter parties where vessels need to arrive within a certain time to be inspected and ready to load grain. To eliminate the anchorages would severely disrupt the supply chain. Often vessels are entered into contracts with shippers maybe 10 to 12 weeks in advance. Unfortunately, I don't think shippers have confidence in when they'll actually get rail service. What happens is that they think that their cargo may be arriving at the ports within a certain time or certain date, so they ask the vessel to be there. In reality, that just doesn't work.

There's been a lot of focus on improving data, digitalization of the supply chain and understanding where are the bottlenecks. Are there areas where we can improve the fluidity of the supply chain? I think that a lot of that work is going to happen under the supply chain task force. We're hopeful. That's a start. We need to understand what we're working with.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you.

I'm going to ask Mr. Dekovic a question in relation to the amount of debt or the amount of borrowing that's happened. Has the amount of borrowing driven up the number of vessels that are coming in?

[Marko Dekovic]

No, I don't think that correlation could be drawn directly. Ultimately, if the port grows it is expected that the number of anchorages will grow. Think of it as a shopping mall. If the mall expands, you will need more parking spots for the cars outside the mall to service that facility.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

I'll go back to Ms. Gee to ask about the rail.

What are the problems with rail? Even in my office, in Port Moody—Coquitlam, I hear from suppliers, people who are waiting.

What's the problem with rail right now?

[Bonnie Gee]

I think it's the reliability. There's such a demand on the railways right now. There's quite a diversification of cargoes that are moving right now. Fortunately, right now the container volumes are lower than usual, so we should have better fluidity than in previous years. It's just managing the diversity of cargoes that are coming through the ports.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Gee.

Thank you, Ms. Zarrillo.

Next we have Mr. Muys.

The floor is yours. You have five minutes.