By Leo Ryan, AJOT
Canada’s federal government has been marking time for too long to carry out regulatory reforms that would enable Canadian ports to better compete against their US counterparts and meet the demands of surging Asian trade. This was a key message that emerged from the Association of Canadian Port Authorities (ACPA) annual conference that was staged in Montreal last week.
The chief messenger proved to be Don Krusel, President and CEO of the West Coast Port of Prince Rupert, where a new container terminal under construction is to come on stream this fall and a major expansion of the facility is planned within a few years.
Although maritime security was predictably high on the radar screen along with current trends in world shipping, the most heated issue was Ottawa’s continued procrastination amid pressing demands for significant changes to the Canada Marine Act (CMA) of 1998.
Among other things, the CMA sets strict borrowing limits for individual ports despite granting them greater autonomy than in the past. Canadian port officials are hoping that sometime this fall the federal government will introduce legislation containing at least three key amendments.
Krusel observed, ‘The existing CMA pushed ports to the edge of privatization without pushing them over the edge. It’s time to stop talking about proposed changes, and to act.’
‘We cannot change as we would like,’ he said, ‘because we have the wrong toolbox stemming from the CMA. The port industry needs fast, effective decisions instead of being an oxymoron joined at the hip by the federal government.’
Krusel said that with business conditions changing virtually every hour, ‘We could miss direction if we are just on autopilot.’
He noted that in order to pursue its expansion, the Port of Prince Rupert will soon require more than one billion dollars in infrastructure financing.
Krusel suggested that Canada’s federal transport department should seek inspiration from regulatory regimes in place in other parts of the world such as the United States, Great Britain, New Zealand and Singapore. ‘There are models out there.’
‘We must move ahead rapidly rather than regret it later,’ concurred Capt. Gordon Houston, Chief Executive of the Port of Vancouver, Canada’s largest port.
Under present regulations, Canadian ports cannot pledge the federally owned waterfront lands as collateral when seeking financing. George Malec, Vice-President of Business Development and Operations at the Port of Halifax, said that his port has innovated by approaching credit agencies directly and detailing revenues to support higher borrowing limits.
In an interview, ACPA executive director Gary LeRoux indicated that in its submissions to Transport Canada, the Association has been calling for a minimum of five major policy changes. ‘We are confident that we will get significant movement on a better borrowing regime, removal of the unnecessary Section 25 of the CMA restricting CPAs from accessing federal funding directly, and a streamlined process for land transactions.’
Canadian ports also want disbursements to municipalities in lieu of taxes (PILT) to be paid by the port property owner (federal government), and not the port administrations themselves.
Such a request presently has little chance of being accepted, however. The same goes for the elimination of the gross revenue charge paid by CPAs to the government, with such funds being allocated to port infrastructure improvements.
Otherwise, LeRoux acknowledged that ‘two federal elections have come and gone, and proposed CMA changes did not get the legislative priority we wished. So things have been in a holding pattern. But the prospects look good that a new bill will be introduced sometime this fall.’
In keeping with tradition, a prominent figure was honored at the annual event by receiving the ACPA’s prestigious Medal of Merit. This year’s recipient was Laurence Pathy, chairman of Fednav, Ltd., a privately owned dry bulk and chartering group which is the bigges