November 7, 2022
By Debbie Murray
The global energy transition is well upon us, and it seems many countries are knocking on Canada’s door. Decarbonization, market forces and geopolitical upheaval are driving this generational shift. Now, as the foreign delegations leave and announcements fade, we are faced with the challenges of converting this opportunity for future prosperity.
All eyes are on ports with many of these foreign delegations and private entities approaching ports to partner and move energy. For Canada Port Authorities (CPAs) – the 17 federally-owned ports operating at arms-length of government – they would likely have a central role to play in terms of storing, loading and even producing the hydrogen, ammonia and Liquid Natural Gas (LNG) that foreign markets are seeking. After all, energy cannot be shipped to overseas markets by any other mode of transportation than marine.
Added to this energy urgency, ports now strive to meet the competing demands of changing supply chains, climate change impacts, changing environmental regimes, and sustainability imperatives which also require infrastructure investments. Financing is tight; CPAs can only borrow up to government-set limits that are inadequate for infrastructure demands placed upon them today, never mind our energy aspirations. Consequently, ports are limited in how and what infrastructure they can invest in. Promises can be made, but they will be hard to keep unless CPAs are extended financial flexibility to build the required port infrastructure.
It is what we do now and next that can position Canada to lead and leverage this demand for its future prosperity. The government is taking many of the necessary steps – signing Memoranda of Understanding (MOUs) and meeting with interested countries and leaders, implementing Canada’s National Hydrogen Strategy, and establishing green technology, innovation and infrastructure funding. But it will be difficult to meet these aspirations in a timely manner given the challenges of financing and approving the port infrastructure needed for the energy transition. We are calling on the government to address these challenges to ensure our collective success.
The federal government’s long-awaited Ports Modernization Review, which Transport Minister Alghabra has committed to acting on before the end of the year, represents a critical opportunity to address these obstacles and better capitalize ports to meet Canada’s global sustainable energy aspirations. From the perspective of Canada’s port authorities, these are:
- A national strategy on transportation supply chains, with the production, storage and movement of fuels of the future as a major component;
- Allowing ports simpler but risk-based access to interested private capital for the infrastructure investments they need to support energy exports. Ideally, instead of borrowing limits, minimum credit ratings and/or reasonable industry-standard debt servicing metrics could be established for each CPA to permit borrowing within normal market ranges;
- Streamlining and accelerating the Impact Assessment process for infrastructure projects and approving a project once the assessment has been conducted,
- Making the National Trade Corridors Fund permanent and consider other federal funding vehicles specifically designed to support decarbonization of ports and marine transport, and
- The continued ability for ports to make decisions on the right kind of investments needed to support Canada’s energy export goals, through strengthened, responsive governance reforms that maintain the arms-length of government nature of ports, with appointments of qualified directors in a timelier manner.
Canada’s ports are poised to help move Canada’s energy; financial flexibility can help realize this ambition.
Debbie Murray is Senior Director of Policy and Regulatory Affairs at the Association of Canadian Port Authorities and the co-chair of the Ports and Marine Working Group within the federal Hydrogen Strategy for Canada, led by Natural Resources Canada.