December 20, 2022
When the government launched the National Supply Chain Task Force, ACPA was pleased to participate in this timely, objective and comprehensive investigation of supply chains in Canada. While ports had been resilient throughout COVID, broader supply chain issues and climate change impacts exposed longstanding systemic weaknesses with Canadian supply chains that demanded assessment and action.
The independent nature of the Task Force process and the high level of knowledge and expertise of its members, under the steady and considered leadership of the co-chairs, provided an opportunity for a systematic, comprehensive, and representative process of consultation and consideration with knowledgeable stakeholders across the supply chain. And, when the report of the Task Force was published, ACPA was also pleased with the clarity and depth of thought of the assessment and the extensive and detailed recommendations tabled.
ACPA provided input to the Task Force, in person and in writing, and was pleased to see much of this reflected in the Task Force’s report, including recommendations for the federal government to:
• Support port modernization, including through more authority, financial flexibility and autonomy, enhanced project approvals and digitalization of supply chains.
• Develop, implement and regularly renew a long-term, future-proof (30- to 50-year) transportation supply chain strategy; and,
• Digitalize and create end-to-end transportation supply chain visibility for efficiency, accountability, planning, investment, and security.
The Task Force report represents a critical opportunity to better prepare ports to meet Canada’s resilient trade and climate aspirations. ACPA urges the government to act quickly on the Task Force’s recommendations particularly given the unrelenting factors facing supply chains and Canada’s economy. The tabling of Bill C-33, as part of the Ports Modernization Review, is also another opportunity to reflect the Task Force’s recommendations to enhance and improve supply chain resilience and reliability.
ACPA offers the following commentary on Supply Chain Task Force Report recommendations:
Port Modernization through More Authority, Autonomy, and Financial Flexibility
Many recommendations that APCA has put forward to the Task Force, and indeed to government through the Ports Modernization Review process, are also found in the Task Force report. In particular, the Task Force supported “port modernization that provides ports with more authority (e.g., extending to inland ports), financial flexibility (e.g., raising financing maximum), and autonomy (e.g., airport authorities model).”1 These remain key aspects of ensuring that ports are modernized and keep pace with global change in trade and port and marine innovation.
The continued ability to make decisions on the right kind of investments, through strengthened, responsive governance reforms that maintain the arms-length of government nature of ports, with appointments of qualified directors in a timelier manner, is also key to port competitiveness. According to the Task Force, over the 50-year period from 2020 to 2070, investments of $4.4 trillion (or approximately $88 billion per year) in marine and transportation infrastructure will be required to meet projected growth in population, including $110 billion at seaports.2
The Task Force says that ‘Both the public and private sectors need to increase investment in marine, road, rail and air transportation assets to facilitate economic growth.”3 ACPA couldn’t agree more. Canada’s port authorities operate our biggest ports, through which most Canadian trade flows; for them to make the needed investments, however, requires greater financial flexibility than they have today, and a continued federal role in financially supporting trade infrastructure. There is an urgency for appropriate funding to build port infrastructure needed now and in Canada’s future.
National Long-Term Transportation Supply Chain Strategy
The Task Force recommended that the government develop a long-term transportation supply chain strategy, including a review to update and modernize related regulations. ACPA has been calling for this essential approach to ensuring supply chain reliability and resilience and agree with the Task Force on the need for this to begin development immediately with consultation including various levels of government, Indigenous groups, industry stakeholders and others.
Regulatory Certainty and Project Approvals
A key element of ensuring a resilient and reliable supply chain is timely completion of infrastructure projects. Given the delays and uncertainty that extended and often denied project approvals send to the world and drag they cause on building resilient infrastructure, ACPA supports the establishment of a major project management office to coordinate and streamline approval processes and evaluate the effectiveness of projects.
Regulatory certainty is also essential to the reliable and predictable functioning of the supply chain. The federal government acknowledges as much in its Critical Minerals Strategy, with its pledge:
“For major development projects where both federal and provincial impact or environmental assessments are required, the Government of Canada is committed to meeting the objective of ‘one project, one assessment’ in its review of projects by working with other jurisdictions to reduce duplication and increase efficiency and certainty in the regulatory process.”4
ACPA encourages the Task Force’s recommended practice of ensuring departmental mandates consider transportation supply chain impacts when developing legislation, regulations and policies. As the federal Critical Minerals Strategy notes, “Transportation infrastructure is a major catalyst for critical mineral development, particularly in northern and remote areas. New infrastructure investments aimed at unlocking new mineral projects in resource-rich regions — including roads, rail, and ports — are needed to help Canada’s mining industry provide the minerals and metals required to reach net zero by 2050.”5
The Task Force is also encouraging innovation in regulatory reporting through the development of a single “window” for regulatory reporting purposes across government with the objective of making reporting easier and standardizing reporting. Given the multiple reports required for regulatory compliance and the value of the data collected, this could be a key aspect of a digitalization strategy.
The Task Force notes that “marine stakeholders suggested establishing a deferred maintenance fund for ports to ensure that existing and future assets are maintained and upgraded as per operational needs on a predicted and planned basis. Most upgrades have been postponed due to lack of funding”6 ACPA continues to be a proponent for such a program, along with making permanent the National Trade Corridors Fund.
Service Reliability and Resilience
ACPA agrees with the suggestions of the Task Force that, on an operational level, service reliability and resilience should and could be enhanced through a number of specific suggestions related to port funding and necessary authorities, along with enhanced and expanded government services.
First, ACPA agrees with the Task Force that funding to ports to cover the costs of service reliability through leasing land, moving containers, providing security and other costs will provide ports with the flexibility to move cargo efficiently immediately, as needed.
Second, ACPA agrees with the Task Force in calling for the expansion of government department services, such as Canada Border Services Agency (CBSA) and the Canadian Food Inspection Agency, required to process commercial goods at ports, land border crossings and airports on a 24/7 basis. This expanded function could be optimized using automation, technology and other mechanisms to increase the efficiency of inspections (as an added benefit, this will also help address labour shortages).
Third, enhanced CBSA staff resources could provide container inspections enroute and/or outside of standard locations and enable the in-bond movement of containers currently being stored at port terminals via rail or truck to inland locations for customs clearance could help with congestion at ports.
And, finally, ACPA agrees that border processes could be made better by improving port infrastructure to allow all ports with customs requirements the ability to clear products.
Technology and the use of data are likely the leading means of optimizing and understanding the movement of cargo within the physical supply chain, including ports. ACPA supports the recommendations of the Task Force regarding digitalization, including the creation of an environment to exchange data, create visibility of the supply chain for forecasting and response. It is imperative that this digitalization process involve a partnership between industry, government and stakeholders. Data governance, through a jointly develop data governance charter, must clarify the collection, storage and usage permissions for data; this will reassure data owners that sensitive and proprietary information is used appropriately. Digitalization is a key means of enhancing resilience and service delivery by industry and government along the supply chain.
ACPA is supportive of the imperative that corridors, border crossings and gateways must be protected from disruptions and encourages a partnered and evergreen approach to developing, testing and executing risk-mitigation strategies for three chief types of risks to our transportation supply chains: climate-related natural disasters, human-caused mischief and labour-dispute delays.
ACPA encourages the Government of Canada to act on the recommendations and the timelines put forward in the Task Force report. The Supply Chain Task Force endorsed our call for modernization to provide ports with more authority, financial flexibility and autonomy. On behalf of Canada’s port authorities, ACPA looks forward to engaging with the federal government on implementation of these and other modernization recommendations in the report.
1 Action. Collaboration. Transformation. Final Report of the National Supply Chain Task Force 2022 page 24
2 IBID page 8
3 IBID page 8
4 The Canadian Critical Minerals Strategy page 24
5 IBID page 26
6 Action. Collaboration. Transformation. Final Report of the National Supply Chain Task Force page 43