Op-ed: Helping Ports to Help Canada

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Op-ed: Helping Ports to Help Canada

November 7, 2022

By Daniel-Robert Gooch 

Many conversations in Parliament and around kitchen tables across the country have been focused, rightly, on the cost of living. Rising inflation, and the supply chain woes that have helped fuel that climb, have captured the attention of Canadians and political leaders alike.

As we navigate these uncertain times, Canada’s ports continue to act as engines of the Canadian economy.

However, to tackle evolving challenges, the federal government must offer the tools needed for Canada’s supply chains to be ready for tomorrow and beyond. The government’s National Supply Chain Task Force recently tabled its final report outlining a list of recommendations. Canada’s port authorities were pleased to see the sector’s input reflected in many of the recommendations.

With the recent announcement that the Ports Modernization Review is now complete after four years of work, the Minister of Transport has committed to tabling legislation to modernize ports through updates to the Canada Marine Act. Canada’s ports hope to see several issues addressed that will ensure we meet our shared goals of supply chain optimization and building a strong economy:

  • Financial Flexibility– The borrowing rules for Canadian ports have been in place for decades and pose important obstacles for obtaining private investment. The recent task force report recognized this, calling for greater authority, financial flexibility and autonomy for ports, and noting that $110 billion in investments will be needed at Canada’s seaports over the next 50 years.

In an environment where supply chain optimization is needed quickly in the face of mounting global challenges, these policies need to be reviewed. In lieu of borrowing limits, the Association of Canadian Port Authorities (ACPA) recommends that the government establish minimum credit ratings and/or reasonable debt servicing metrics for each port authority to achieve and maintain and permit borrowing within normal market ranges, providing the financial flexibility of private sector organizations and Canadian airport authorities. As an alternative to that, revise the current procedure for establishing borrowing limits so that limits are determined by commercial financial institutions, or by using criteria like those of commercial financial institutions.

  • Port Capacity and Inland Ports – As consumer habits change and Canada diversifies and expands its trading relationships, Canada’s ports need to grow as well to meet Canada’s growing infrastructure needs. However, as with the process for requesting changes to borrowing limits, the current process for buying and selling land also requires changes. The current process is long and tedious, which makes infrastructure expansion difficult and hinders the ability of Canada’s ports to adapt to changing conditions, both here and abroad, which impact their operations and capacity.

On the issue of land ownership, as the task force affirmed, Canada’s ports must also be empowered to build “inland ports” — intermodal terminals directly connected to seaports by rail or road — to allow for more efficient use of land and improve traffic flows for Canadian trade. With the increasingly interconnected nature of supply chain challenges, this will help Canadian ports contribute to reinforcing our economy by facilitating the movement of goods.

  • National Trade Corridor Fund (NTCF) – The NTCF has committed nearly $1 billion in funding at Canada’s ports, and in Budget 2022 earlier this year the federal government announced $450 million more over five years in NTCF funding to support supply chains. As the task force’s report made clear, the funds from this program have been critical for making the necessary infrastructure improvements to adapt to changing supply chain dynamics. We echo calls to make the fund a permanent program to tackle modern day supply chain challenges, as much more investments will be required in the coming decades.

The Supply Chain Task Force also emphasized collaboration in its report, highlighting the need for all stakeholders and government to work together. We could not agree more. When announcing recently that next steps for the Ports Modernization Review would be coming soon, Minister Alghabra echoed many of these priorities. However, Canada’s ports will be watching how, government chooses to implement the necessary changes.

Whether it was the COVID-19 pandemic, armed conflict in different parts of the world, or increasingly, natural disasters, Canada’s ports must remain resilient and continue to help drive the Canadian economy. Reforms to port financing and governance today can help ensure our supply chains are able to keep goods flowing smoothly to people across the country for decades to come.

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