AJOT Insights

Canadian government reviewing port system to enhance competitiveness

Mar 13, 2018

At a press conference staged at Deltaport, Canada’s largest container terminal located at the Port of Vancouver, federal Transport Minister Marc Garneau announced a formal review of Canada Port Authorities to optimize their role in the transportation system as strategic assets that support inclusive and sustainable growth and trade. Industry observers consider that driving the initiative to a significant degree was a widespread concern for Canadian ports to remain competitive with U.S. ports heavily investing in infrastructure improvements with less restrictive financing tools.

Created in 1998 to operate on a commercial basis at arm’s length from the federal government, the 18 Canada Port Authorities (CPAs), including Vancouver, Montreal, Halifax and Prince Rupert, handle more than 60% of Canada’s commercial cargo volume.

Transport Canada is seeking feedback from indigenous peoples, Canada Port Authorities, provincial governments, municipalities, broader domestic and international marine sector stakeholders, and the general public. The review findings are to be released in 2019 and will identify desirable regulatory, legislative and policy changes.

“Canada’s ports play a significant role in the lives of Canadians,” Garneau said on Monday. “They link our companies to global markets, support competitiveness, and contribute to the economic activity of our communities. Even for Canadians living inland, many of the jobs that support middle-class families, and the products they use every day, depend on Canada’s ports and waterways.

“The current port system has served Canada well in supporting regional economic development and international commerce. However, a lot has changed since Canada Port Authorities were established 20 years ago. This change is expected to continue at an ever increasing pace. This is why we need to re-examine the Canada Port Authority system to ensure Canada is always well positioned to innovate and compete for years to come.”

Responding in a comment to AJOT was Wendy Zatylny, president and CEO of the Association of Canadian Port Authorities (ACPA). “In addition to greater funding and financial flexibility, CPAs are looking in a broader sense for support as they adapt to a changing global environment that includes such developments as the Trans-Pacific Partnership (TPP), Canada’s free trade agreement with the European Union, blockchain data management and artificial intelligence.”

Strict borrowing limits allow the CPAs to fund operations solely from their revenue streams, with no ability to pledge assets to borrow from financial institutions.

According to ACPA, funding from government and industry sources of nearly two billion dollars is required to replace aging Canadian port infrastructure.

Robin Silvester, president of the Port of Vancouver, supported the review, stating: “While we believe the current structure of the Canada Port Authorities has worked very well to meet Canada’s trade needs, the Canada Marine Act is 20 years old.”

Since the amalgamation of the ports of Vancouver, Fraser River, and North Fraser into a single entity in 2008, the Port of Vancouver has bolstered its status as Canada’s largest port, handling 136 million tons of bulk, general and container cargo. It is understood, in this regard, that the review will look at the governance structure of other ports. Some analysts have speculated that it could be viable to merge several smaller ports on the St. Lawrence River with the Port of Montreal.

Author Photo
Leo Ryan
American Journal of Transportation

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