CANADA TRADE 2007 - Canadian ports to get improved borrowing regime
By Leo Ryan, AJOTRecently responding to urgent demands of the past few years, Canada’s federal government has proposed regulatory changes that would put existing borrowing and funding regimes for Canadian ports on a more competitive footing with US and other foreign ports. The news was strongly welcomed by Gary LeRoux, Executive Director of the Association of Canadian Port Authorities (ACPA). In view of the crowded parliamentary agenda, the Bill amending the 1998 Canada Marine Act (CMA) is not likely to be passed before the first quarter of 2008. Yet Mr. LeRoux is optimistic, “…in light of widespread political consensus in support of trade and transportation gateways.” The Association’s 19 members – drawn from the largest and most financially self-sufficient ports in Canada – handle more than 280 million tons of cargo annually. Canada’s Minister of Transport, Infrastructure and Communities, Lawrence Cannon introduced amendments to the CMA that would, among other things, improve and streamline the current borrowing regime for Canadian ports and widen their access to federal funds for infrastructure projects, environmental sustainability and security measures. The amendments address several, but not all, of the major changes long urged by ACPA members. Original proposed amendments died in the order paper on several occasions due to the calling of federal elections. “In recent years, the global economy has shifted dramatically and the transportation system must adapt to take advantage of these changes,” declared Cannon. “The government must ensure that the competitive position of our national ports is maintained or enhanced in support of Canada’s trade objectives.” The amendments would also include provisions governing the amalgamation of Canada Port Authorities (CPA), introducing more flexibility in the management of port lands, and simplifying the enforcement of minor violations. Once these changes receive parliamentary approval, the federal government said it plans “to bring forward a modernized National Marine Policy as it relates to ports that better reflect the current global marine operating environment.” On borrowing limits, a tiered approach would be implemented that would allow the bigger ports – those with $25 million in operating revenues for three consecutive years – to move to a commercially-based borrowing regime. For new infrastructure projects, Canadian ports have not benefited from financing alternatives such as tax-exempt bonds used extensively by US ports. This does not unduly concern LeRoux. “Our ports will be able to access huge infrastructure programs, and they will be able to use credit rating to raise more funds.” At last summer’s Annual Conference of ACPA, port officials bluntly declared that it was time for government “procrastination” to end. On that occasion, Don Krusel, President and CEO of the Prince Rupert Port Authority, stressed: “The port industry needs fast, effective decisions instead of being an oxymoron joined at the hip by the federal government.” “We must move ahead rapidly rather than regret it later,” concurred Capt. Gordon Houston, President and CEO of the Port of Vancouver. However, two of the initial five key port demands were not dealt with in the proposed legislation. The Canadian ports sought disbursements to municipalities in lieu of taxes to be paid by the port property owner (federal government) and not the port administrations themselves. They had also sought the elimination of the gross revenue charge paid by CPAs to the government – with such funds being allocated to port infrastructure improvements.