Transport Committee on March 23rd, 2026

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

Thank you, Mr. Chair.

Thank you to the witnesses from all parts of the country who are here.

Mr. Gooch, welcome back to the committee. You've been here many times.

As you know, this committee studied large port infrastructure expansion projects a few years ago, and I think you provided some testimony towards that. There were 12 recommendations that came out of that, many of which you echo again today, many of which your members who have been here for this study have mentioned, in terms of agility, financial flexibility and streamlined reviews.

How do we get beyond the talk? That was three years ago, and the response from the government at that time was that this was important. We had Bill C-33, which you referenced had at least one good aspect. It died on the Order Paper.

How do we get beyond the talk into action? What's the low-hanging fruit that can move forward very quickly?

[Daniel-Robert Gooch]

Thank you for the question and for the ongoing support of the committee.

I think a lot of people are saying that there's not much that can really focus a mind more than crisis. Certainly the government now definitely recognizes the value of diversifying Canada's trade and is making solid steps to move in that direction. We quite like the trade diversification corridors fund and the fact that it's open to calls for regional projects, which was not something we were necessarily sure was going to happen.

There seems to be a corridors approach with the way that the corridors fund has been designed in terms of the articulation of strategic corridors that will hopefully guide investment. There are some additional aspects of the model that need to be reformed. We have had some good conversations with the Department of Transport. I'd say that they are still early discussions, and we do understand that the government is looking at a trade diversification strategy as announced in the budget. If there's legislation to support that, we certainly hope that the input we had on Bill C-33 will be taken to heart as any future legislation is developed.

We also think, though, that some of this can be done through government policy. It does not necessarily require legislative change.

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

What about financial flexibility? That's something that your association has put out a report on. We heard from your members and from you, and Bill C-33 seemed to really fall short on that. We heard that when we did our tour of the ports for that study back in March 2023.

How urgent is that to move on? There are opportunities that can be seized upon, and a model that's 30 years old is not cutting it.

[Daniel-Robert Gooch]

We think that there are some reasonable, modest reforms to the model that can make ports more flexible. Really, they all kind of go together.

I previously worked in the airport sector. They have a very different model. We're not suggesting that this model needs to be changed, but we would suggest greater flexibility in terms of being able to develop revenue lines. If a port wants to develop a revenue line in an area of land that is, perhaps, not critical to commercial activity, given that we do recognize that land has to be protected and water access needs to be protected, perhaps we need greater flexibility in terms of putting up an office tower, for example, on that land that can serve marine and non-marine uses.

We would also suggest more flexible borrowing. My understanding is that our ports don't have the same financial capacity that other organizations of a similar size would have. It can take a year or longer.... You're hiring a consultant, and then the work is redone. I think in our early discussions, Transport Canada has recognized that it could be improved, so we're hoping to see that be improved as well. Really, it all goes together.

There's a role for infrastructure funding as well to push some projects over the line. I know it gets overused a lot, but it's a whole tool box of financial flexibility that we're looking for.

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

What about the bleed to U.S. ports? Once volume is lost, it doesn't necessarily come back so easily. Are we structurally too slow? What streamlines and changes need to be made so that we're not seeing, as was just referenced in the opening statements, business going to New York, New Jersey or ports on the west coast, for example?

[Daniel-Robert Gooch]

We're in a competitive environment in North America. The ports in the U.S. have far greater financial capacity. New York is a massive port, and it's quite dynamic at the moment. Some of our members are taking a look to try to get a better understanding of what's going through the U.S. versus what's going through Canada. I think it's fair to say that it's also quite dynamic, given the Trump administration's plans to put fees on cargo that goes into Canada destined for the U.S. We don't really have a good handle on just what the impact will be.

On the positive side of things, if we're successful in diversifying.... I'm hearing that some of our ports on the east coast are starting to have capacity issues. It is good that this government is moving fairly quickly and that there's a lot of engagement with our members at an individual level on what that looks like.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Mr. Kelloway, the floor is yours. You have six minutes, sir.

[Mike Kelloway, Liberal, Sydney—Glace Bay, NS]

Thank you, Mr. Chair.

My questions will be for Melford. I really appreciate your testimony about the importance of port development in Melford, Nova Scotia. You talked about diversifying supply chains, having less reliance on the United States and reducing congestion at existing gateways. I wonder if you can unpack Melford's role in that. How do you see that evolving?

The second piece to it is this. One of our focuses of this study is on large ports and existing infrastructure but also new ports that may focus on assisting larger ports in some way. I'm wondering if you can also unpack Melford as it relates to collaborating with other ports, not as competition but as an immense value-add to Atlantic Canada and all of Canada.

[Mike Uberoi]

Let me start by giving a little bit of background on Melford. Melford is not a PowerPoint presentation and an idea. We've been working at this for over a decade. We've secured the land through a land acquisition process in which we acquired 106 parcels of land from 66 different landowners. We've done all of the design, the engineering and the permitting. We're ready to start construction. That being said, being able to build that land assembly has created the opportunity for an efficient terminal with a very large footprint that can be constructed on the deepest water on the east coast of North America. Having that deepwater big-ship capacity allows us to go to shipping lines and be able to offer that capability.

When I was CFO at Halterm—I'm dating myself; I looked it up this morning—30 years ago, Maersk brought the Regina Maersk into Halifax to demonstrate that ships are getting bigger. It wasn't that they were going to come but that they were there now and that they were only going to get bigger. It was “get your act together because we need infrastructure to support them”. That was 30 years ago.

On the west coast, with the development of Deltaport and now, I hear, T2 in Prince Rupert, we've seen market share grow by 300%.

On the east coast, we haven't had that same type of new build or new infrastructure built. Melford creates the opportunity to reverse that trend.

[Mike Kelloway, Liberal, Sydney—Glace Bay, NS]

Can Melford assist and collaborate with existing infrastructure—for example, Halifax or the Port of Montreal? Are there synergies there that can be worked in or are being worked in by your operation?

[Mike Uberoi]

I believe so. It would take some legislative changes. Montreal is a great port—end-to-end service, full load, full discharge with vessels—but it's limited by the amount of draft so that the vessels can get into Montreal.

Most, if not all, of the cargo that goes through Montreal and that goes into Asia is transshipped somewhere in the middle. Why couldn't you transship that in Melford? Bring the big ship into Melford, transship the cargo and move it up into Montreal. It would take a legislative change, but we can help support Montreal in that aspect.

From a Halifax perspective, when you look at the volume that the terminals are doing today, you see that Melford wouldn't cannibalize Halifax, and there are two reasons for that.

One is that Halifax's biggest customer is MSC. MSC owns 49% of the terminals in Halifax. It's not going to move cargo from its own terminals.

The other piece is that the majority of the cargo that goes in and out of Halifax moves by rail. The railway isn't interested in moving that cargo to a different terminal. It already has that cargo, so it's not looking to cannibalize that cargo. Anything in and out of Melford would have to be incremental to that.

I think we can work with Halifax, and we're happy to have that conversation. There's a limited amount of space on the waterfront. There's urban congestion. There are air draft issues. So, it's limited with the amount of capacity that it has for big ships. We're happy to have that conversation with Halifax to see if we can work with it. Maybe the grain elevators should be in Melford and not in downtown Halifax.

We're happy to work with them—with Mr. Gooch and the Canadian port authorities and with the Halifax Port Authority—to see if there's a holistic way to look at Nova Scotia and what's best for the province.

[Mike Kelloway, Liberal, Sydney—Glace Bay, NS]

Mike, you talked about recommendations in your testimony. I want to make sure that we capture them in terms of the funds that we have now that are open.

I also want to make sure that we capture the recommendations that you have for this committee that we'll draft at some point that are reflective of ports like Melford and other ports across Canada that are looking to be part of the solution in terms of the supply chain and the general economy of Canada.

[Mike Uberoi]

In addition to my previous recommendations, I would recommend that the Major Projects Office look at Melford and look at ways that we can strengthen the supply chain so that it's not just Transport Canada and the tools in that tool box. It may need broader tools.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

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 thank the three witnesses for being with us today.

I'll start with Mr. Rivest, the president and general manager of Desgagnés Transarctik Inc.

I believe it was last week or the week before, when it became public that the government has decided to subsidize the cost of shipping steel within Canada to help the steel industry cope with U.S. tariffs. This is not necessarily a bad thing because, in many cases, it wasn't financially feasible to ship steel from the east coast to the west coast or vice versa. There's a steel mill in my riding, so of course I care about what happens to our workers.

However, the government chose to subsidize 50% of the cost of rail transportation rather than let folks choose their preferred shipping method. What is Desgagnés's response to the fact that the government has essentially decided to favour rail transportation at the expense of marine transportation?

[David Rivest]

Thank you for the question.

For starters, the government's plan to facilitate or support transportation on an east-west or west-east axis, primarily for steel and lumber, is a good thing. I think it's a good thing. However, subsidizing only one mode of transport—in this case, rail—creates an impediment for other modes of transport, including marine transport.

Last summer, we saw major changes to supply chains because of the new tariffs. Specifically, we realized that steel coils had been shipped from Ontario to Quebec. Desgagnés was involved in unloading ships at the Port of Valleyfield. Because of the government subsidy, that cargo, which makes up nine or 10 trips per year, would be moved over to rail, a mode of transportation that may be less environmentally friendly, slower and less efficient.

What we would like to see here is for the rail subsidy to apply to other modes of transportation as well, including marine transport, so there's a level playing field for everyone.

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

Have you talked to government representatives about this? Do you know how they justify supporting one mode of transportation at the expense of another, thereby indirectly creating unfair competition?

[David Rivest]

Our company has worked with our associations, which have discussed the matter with Transport Canada and others, but we don't have any answers yet. I know discussions have happened internally, but any changes to the approach or how it will be rolled out have yet to be confirmed. At any rate, our company has not had any dialogue or seen any indication that there will be any change in the very short term for the upcoming season.

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

Will there be substantial losses? Conversely, had the subsidy been made available to you, would you profit as a result? Do you have a sense of how much profit or loss there might be?

[David Rivest]

Definitely. Take my earlier example, shipping steel coils from Ontario to Quebec, which we're involved in directly. I'm sure there are others that other operators could point to.

Last year, we saw a substantial decline in the quantity of steel imported from overseas and delivered to Valleyfield on its way to Quebec City. The tonnage dropped by about 70%, which was made up for by equivalent tonnage short sea shipped from Ontario to Quebec. So, if the subsidy applies only to rail transportation, the Port of Valleyfield will lose about 70% of its tonnage, which will have a direct impact on the hours our employees work and, of course, on the regional economy.

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

Thank you.

It sounds like the region will experience major impacts in that sector. I'm eager to find out what you hear, but they may be in the same position and can talk to government representatives now that they're more aware of what this means.

If I'm not mistaken, your company is also dealing with issues around customs clearance. Many other witnesses who have appeared here have told us that there aren't enough customs officers to process goods. Can you tell us a bit about how the staffing shortage is affecting your operations?

[David Rivest]

I can tell you that, over the past two years, the Port of Valleyfield has seen a drastic decline in the number of ships transporting goods from Europe to Quebec, goods that are then distributed locally.

Some ships would contact the port. They had mixed cargo, such as steel and other products combined with containerized goods. Because of the Canada Border Services Agency's limited capacity at this point, that cargo is diverted to U.S. ports in the Great Lakes. In other words, traffic at the Port of Valleyfield is down overall.

This is just one example of why border services and customs need to be more agile in serving multiple ports other than large-scale ports. I'm talking about regional ports, medium-sized ports that make an important contribution to supply chain efficiency nowadays.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Rivest.

Mr. Groleau, we'll go to you for five minutes.

[Jason Groleau, Conservative, Beauce, QC]

Thank you, Mr. Chair. I missed you so much, and I'm happy to be here today.

Thank you for being with us, Mr. Rivest. We've met before. You're the senior executive at Desgagnés Transarctik Inc.

I'll continue along the same lines. There's been a lot of talk about investing in large ports and marine facilities, which is good. We all agree on that. You talked about more recognition for and investment in medium-sized ports. Can you expand on that? Why are those ports and facilities important?

[David Rivest]

Large ports certainly play a critical role in import and export, container terminals and bulk liquids and solids.

Medium-sized ports also play a critical role. These multi-purpose ports are very versatile. They complement the primary transportation axes. For example, they handle general cargo and wind turbine components. We know that major projects are in the works in Quebec, and port infrastructure will be needed to receive those components. Medium-sized ports have to be versatile. Their infrastructure has to be up to date, and the wharves need adequate bearing capacity. They also need improved environmental management to better support all of the major projects in the works, not only in the province but across the country.