GULF COAST PORTS 2008 & TRADE - Canadian ports welcome improved project-funding regime
Leo Ryan, AJOTCanadian ports have strongly welcomed long-sought regulatory changes to borrowing and funding regimes that put them on a more level playing field with US competitors. Following delays over the past few years caused by the calling of snap general elections, key amendments to the 1998 Canada Marine Act (CMA) have been passed by the federal parliament and received the required final Royal Assent on June 18. “These amendments will help all port authorities strengthen their businesses in their respective regions and will provide more certainty for the long-term sustainability of Canada’s strategic port network,” said Sean Hanrahan, chairman of the Association of Canadian Port Authorities (ACPA). With 90% of all international freight being moved via the marine mode, the CMA revisions will help Canadian ports capture a “fair share of the anticipated worldwide expansion of trade,” he added. 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. The leading container ports – Vancouver, Montreal and Halifax – and the newly launched container port of Prince Rupert, British Columbia had especially been pushing for a more open, commercially-oriented regime to finance projects running into the hundreds of millions of dollars. WIDER ACCESS TO FEDERAL FUNDS Canada’s Minister of Transport, Infrastructure and Communities, Lawrence Cannon had introduced amendments to the CMA that will, among other things, improve and streamline the current borrowing framework for Canadian ports and widen their access to federal funds for infrastructure projects, environmental sustainability and security measures. “In recent years, the global economy has shifted dramatically, and the transportation system must adapt to take advantage of these changes,” Cannon said. The amendments also include provisions governing the amalgamation of ports, introducing more flexibility in the management of port lands, and simplifying the enforcement of minor violations. On borrowing limits, a tiered approach will be implemented, allowing 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. “Now, they will, at least, benefit from financing for projects within the federal Building Canada Fund,” ACPA Executive Director Gary LeRoux told AJOT. ACPA’s member ports, during last summer’s annual conference, stressed it was time for government “procrastination” to end. On that occasion, Don Krusel, President and CEO of the Prince Rupert Port Authority, bluntly declared: “The port industry needs fast, effective decisions instead of being an oxymoron joined at the hip by the federal government.” “We must ahead rapidly rather than regret it later,” concurred Gordon Houston, President and CEO of the Vancouver Fraser Port Authority which has embarked on a substantial investment program to triple its container cargo (currently 2.3m teus) by 2020 to meet the demands of surging Asian trade on North America’s west coast. However, the legislation passed, Bill C-23, does not include two of initial five key port proposals. The Canadian ports had 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 projects.