Mr. Speaker, it is an honour today to have the opportunity to elaborate on certain aspects and provisions of Bill C-23. Specifically, I would like to focus on the impact of the proposed changes to the Canada Marine Act on Canadian port authorities.
We have entered a new era obviously in global trade. The patterns of our trade partnerships and relationships continue to change with the growth of our overseas markets, and that has been illustrated in earlier comments.
Canada must work to position itself strategically with east-west trade routes, routes that by their very nature require the transport of goods by marine mode.
New realities are upon us including the reality that marine based trade is becoming more and more important to our economy in terms of volume and the value of goods.
Our ability to accommodate this trade is integral to tapping the opportunities being generated by the ever-expanding markets. Ensuring that appropriate port infrastructure and the intermodal connections exist are crucial to allow for the increase in the volume of goods to flow unimpeded.
Not only does Canada have the opportunity to directly grow its Asian trade relationships but the prospects of developing Canadian gateways and corridors as the pre-eminent transportation routes into the heart of North America will result in numerous value added initiatives translating into long term high paying jobs.
In short, if Canada does not have the necessary infrastructure in place to accept the North American bound trade, it will go elsewhere and the spin-off opportunities will obviously be lost.
Since their inception, the 19 Canadian port authorities that form the backbone of the national port system have been self-sufficient entities that have effectively used their own revenues and borrowings to finance investments in port infrastructure; in other words, building the port capacity that is necessary for security trade growth with overseas markets.
On the whole our port authorities have been successful in pursuing new investments and have been very creative in the partnerships and financial arrangements that have made a large number of infrastructure projects possible.
Our ports have been able to maintain growth due to good management practices and without access to the federal treasury which aligns with the original objectives of the Canada Marine Act. However, the global economic realities of today are not the same as when the Canada Marine Act came into existence in 1998.
During the period that the Canada Marine Act was being developed national economic priorities reflected deficient deficit reduction. Our principal trade focus was with the United States, global logistics changes were in their infancy, and the federal government had minimal involvement in strategic infrastructure investments.
In the last decade, however, various federal funding programs related to infrastructure have been created. The recently announced building Canada fund includes $2.1 billion for gateways and border crossings as well as $1 billion for the Asia-Pacific gateway and corridor initiative. Within all of these strategies and initiatives it is clear that Canadian port authorities have a critical role to play.
Today there is significant pressure, especially on our west coast, to do more to accommodate growing maritime traffic. Canada's bilateral trade with China has increased 500% in the last 10 years. From 2001 to 2006 Canada's exports and imports with China recorded an average annual growth of 12% and 22% respectively.
Some experts are forecasting that container movement at west coast ports will quadruple by 2020. In terms of the time required to ensure that appropriate port related infrastructure is in place to handle this traffic 13 years is an extremely short period of time when we are dealing with port authorities.
Most of this container traffic represents inbound consumer goods, although Canada's booming energy sector and expanding Asian economies are increasing the demand for Canada's energy products and other commodities. Between 1996 and 2006, marine exports to China almost tripled to reach $7 billion.
Canada's west coast ports are planning to invest over $1 billion themselves in the next 10 to 15 years in order to address issues of capacity, including capacity for bulk and liquid bulk exports. However, given the forecast of trade growth within the Asian economies, it is unclear whether these investments by the ports alone will be sufficient to maintain Canada's market share of the anticipated traffic.
While the Canada Marine Act governs several components of our national port system, the proposed changes outlined in Bill C-23 will most profoundly affect Canada Port Authorities. There are several important amendments proposed to the Canada Marine Act; however, the cornerstone of Bill C-23 is a change contemplated in section 25 that would give port authorities the same ability to access federal funding as other transportation infrastructure providers.
The federal government recognizes the need to provide our ports with additional flexibility so that investments in important infrastructure may be made to meet new opportunities. The proposed amendment to section 25 of the Canada Marine Act would remove the existing legislative barrier that prohibits Canada Port Authorities from accessing contribution programs for infrastructure projects.
Access to contribution programs would place Canada Port Authorities on an equal footing with other major infrastructure providers and better reflect the government's current approach to financial investments, an approach which recognizes that from time to time a case may be made for federal investment that is in the public interest and that positions Canada within international trade dynamics, but in such a way that the commercial spirit and independence of the port authorities are not compromised.
The proposed access to contribution programs reflects the priorities of the government and will be focused on capital costs of infrastructure projects, environmental sustainability and security initiatives. Certainly in terms of security funding, these amendments are required to allow a continuation of contributions to ports, which as of the end of this month will no longer be provided under the Marine Transportation Security Act.
Bill C-23 also recognizes the diversity of port operations across the country, including the inherent role of some port authorities within gateway and corridor frameworks and the need to move these ports with significant revenue generating power closer to a self-governing borrowing regime.
In this regard, ports that achieve $25 million in operating revenues for three consecutive years will have the choice of moving to a new tiered structure under which there will be no aggregate borrowing limit. Rather, these ports would be subject to a code of borrowing established in their letters patent and a board-approved borrowing policy to reflect the requirements of the code.
This structure will result in more comprehensive reporting requirements to ensure borrowings are compatible with the policy and the code, but will also allow much greater flexibility to borrow according to the market conditions in order to address time-sensitive opportunities.
For those ports that are not subject to the new borrowing regime, it is important to note that, as a parallel policy initiative, guidelines have been developed that are designed to significantly shorten and clarify the borrowing limit increase approval process. That is important.
Other elements of Bill C-23 relate to strengthening the governance provisions of the Canada Marine Act. In addition to a number of general housekeeping amendments, the introductory provisions of the Canada Marine Act will be changed to recognize the historical, contemporary and future significance of marine transportation and its contribution to the Canadian economy.
The proposed amendments to the Canada Marine Act are integral to the long term objectives of our national gateway and trade corridor strategies. Simply put, the marine system is a major component of our national transportation structure and the Canada Port Authorities truly are the marine gateways for domestic and international markets. Without these important legislative amendments, it would be extremely difficult for our gateways and trade corridors to meet their full potential.