Op-ed: Looking Ahead to Canada’s Supply Chain Strategy

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Op-ed: Looking Ahead to Canada’s Supply Chain Strategy

By Daniel-Robert Gooch

The post federal budget period is always a time for reflection on the year ahead, as we gain insight into the federal government’s agenda for the year to come. But for those playing a major role in Canada’s supply chains, like Canada’s port authorities, important developments are still to unfold in the coming weeks and months.

Budget 2023 included several commitments of interest to ports. With $110 billion in investments needed at Canada’s seaports over the next 50 years, according to the National Supply Chain Task Force, work will be needed to maintain and strengthen existing infrastructure, expand physical capacity, and deploy innovation and technology to make more efficient use of existing capacity.

Canada’s ports are actively engaged in decarbonization. Budget 2023 signals help on this, with a seven-year $165.4 million Green Shipping Corridor Program aimed at reducing marine’s impact on communities and ecosystems. Canada’s port authorities have been working with carriers and international ports to develop green shipping corridors and the program should help with shore power investments and securing the next generation of cleaner, quieter ships at Canada’s ports.
Budget 2023 also announced the creation of a Transportation Supply Chain Office within Transport Canada that is expected to work with industry and other levels of government to improve supply chain capacity, efficiency, and reliability. While details are yet to be seen, port authorities are hopeful that this will lead to a more coordinated, strategic approach to marine transport policy development, involving industry stakeholders from the outset and more nimbly responsive to Canada’s economic and trade priorities.

Organizations from across Canada’s supply chain sectors have long called for a nationally strategic approach to Canada’s trade corridors. Budget 2023 signals an imminent National Supply Chain Strategy along with strategic trade corridor investments. Eagerly anticipated, this strategy should provide insight into how Canada plans to address the significant infrastructure investment needs outlined by the Supply Chain Task Force.

Insight on this is particularly important given Budget 2023 did not recapitalize the successful National Trade Corridors Fund that has provided nearly $1 billion at Canada port authorities alone. Port authorities across the country await word on federal participation in major planned infrastructure projects — every month of delay potentially adds millions of dollars in costs through construction inflation. Moving project approvals forward more quickly, as the government committed in the budget, would greatly help also.

The Canada Infrastructure Bank (CIB) could play a greater role in meeting Canada’s infrastructure needs. As part of the CIB legislative review underway port authorities are calling for more flexibility for the CIB to engage in projects that may not meet its current criteria for size or private participation.

Ongoing maintenance of critical infrastructure at smaller ports is another challenge the strategy should speak to, as limited port revenues can make it difficult to keep up with necessary upgrades. The federal government could play a greater role in this at small ports, in the same way it does at small airports.

Private investment will continue to be crucial in meeting Canada’s future infrastructure needs, and port authorities are looking for greater financial flexibility to leverage private capital to meet the growing demands on their mandates. Bill C-33, the first major change to the Canada Marine Act in 25 years, should be an opportunity to better align the corporate and financial structure of Canada’s port authorities to meet Canada’s needs for efficient, sustainable trade for the future. But ports are still trying to understand financial elements in the bill, to ensure it will deliver on Transport Minister Alghabra’s pledge to provide ports with the tools to unlock greater performance, efficiency, and productivity.

There is so much to get right in the coming weeks and months ahead. Canada must continue to move exports like agriculture and natural resources and imported food and consumer goods, and do so more efficiently, while taking advantage of emerging opportunities in critical minerals and clean energy. Major investment is required, along with more agility for all parts of the supply chain. A lot rides on decisions being made this year.

May 3, 2023

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