2nd Reading - An Act to Amend the Canada Marine Act and Other Acts

December 03, 2007

Mr. Speaker,  I am pleased to present to the House today a proposal that will support a more commercial operating environment for Canada Port Authorities (CPAs). 

This proposal is a two-pronged strategy.  It includes amendments to the Canada Marine Act, the legislative framework governing ports, in combination with several policy measures.

It is an approach that is responsive to industry concerns.  It recognizes the importance of promoting strategic investment and productivity improvements yet protects port lands for future transportation needs. 

In relation to CPAs, the National Marine Policy of 1995, emphasized the elimination of overcapacity, promoted cost-recovery, mandated financial self-sufficiency and instituted a consistent governance structure for all major ports. 

I am pleased to report that the objectives of the National Marine Policy relative to ports have largely been met through the Canada Marine Act (CMA), the legislation that introduced a commercial approach to managing the national ports system and marine infrastructure.  CPAs have undertaken their management responsibilities in a sound and fiscally responsible manner and ports are well managed.

Budget 2007 positioned ‘modern transportation infrastructure’ as a core element of our agenda.

We have launched a national gateway and corridor approach recognizing that transportation systems that enable us to move goods and people with world-class efficiency are essential to our future prosperity. 

Specific initiatives such as the Asia-Pacific Gateway and Corridor Initiative, the Ontario-Quebec Continental Gateway and Trade Corridor and the Atlantic Gateway initiatives are tailored to geographic and transportation opportunities in specific regions. 

These initiatives recognize that transportation infrastructure investment requires the collaboration of many parties, including Canada Port Authorities, representation from all modes, all levels of government and private investors.  Each of these initiatives will provide concrete measures to contribute to a more productive economy and a stronger competitive position for Canada in international trade. 

There are nineteen CPAs in the national port system and CPAs are located in each of the regions in which gateway and corridor initiatives are being developed.

Efficient marine transportation and modern port infrastructure are key elements in reaching our Government’s goals. 

Canada’s ability to compete on the world stage is highly dependant on the efficiency of our ports and the availability of port infrastructure.  This is particularly true for our gateway ports that are of specific strategic importance.

While the national policy and legislative framework governing ports are sound and have met their intended objectives, these instruments need to be modernized to ensure that our ports can respond and take advantage of the significant opportunities in the current global market. 

We must make sure that the Canada Marine Act is not a barrier for either ports or the federal government. 

Instead, we must make sure that the Canada Marine Act supports this Government’s ability to make funding decisions in the public interest and to position Canada advantageously within changing global supply chains.

We are responsible for determining the role of the federal government and identifying gaps where other levels of government or private investors cannot provide the level of investment required to support projects that are in the national interest. 

The landscape has changed and the new context calls for an updated policy framework for national ports through a combination of legislative amendments and targeted policy initiatives. 

The proposed legislative amendments are wide-ranging.  They focus on:

• financial flexibilities;
• port access to infrastructure funding;
• environmental sustainability;
• access to security funding;
• a commercially-based borrowing regime for large ports; and 
• supporting amalgamation and governance at ports if required.
  

Targeted policy initiatives focus on:

• a modernized National marine policy, as it relates to ports
• a streamlined mechanism for borrowing; and
• flexibility in the management of port lands.
  

Today, we face unprecedented growth in trade with Asia/Pacific countries, resulting in tremendous pressures on the West Coast.  These pressures are starting to be felt in the Great Lakes/St. Lawrence Seaway system and on the East Coast. 

Our challenge is to find ways to promote new investment in the marine sector while encouraging it to behave as commercially as possible.

Some of the larger CPAs have made extensive infrastructure investments to address capacity constraints but cite barriers such as their current ineligibility for most federal funding as an impediment to further growth.

We are proposing to amend the CMA to provide CPAs with access to federal contributions for capital costs of infrastructure, environmental sustainability and security projects. 

This approach would put CPAs on an equal footing with other transportation modes that have access to contribution funding. 

We are not proposing the creation of a new funding program.

Instead, we are proposing the establishment of a framework to allow CPAs to apply to contribution programs related to infrastructure, environmental sustainability and security projects; programs that either currently exist, or future contribution programs that may be developed. 

In all cases the port would have to present a strong business case that fits specific criteria and that ultimately is in the public interest to warrant receiving public monies. 

For example, these amendments could facilitate access to funds for the exploration of ways to address environmental concerns through new technologies to improve emission controls.  They would also ensure the continued access of CPAs to any available security contribution funding. 

Without this amendment, as of the end of November 2007, contribution funding for the implementation of security enhancements will no longer be available to CPAs.

We are also proposing that Transport Canada work in close collaboration with the Department of Finance and Treasury Board Secretariat to implement a two-tiered approach to borrowing that would provide for a commercially-based borrowing regime commensurate with accountabilities for larger ports with gross annual revenue generation above $25 million, while streamlining the process for the smaller ports seeking changes to their borrowing limits.

There are other concerns related to the use of port land.  Some key ports are facing encroaching residential development and capacity limitations, adding pressures on the preservation of critical transportation lands in urban areas. 

Mr. Speaker, at the moment, there is little incentive for ports to retain lands for future transportation corridors.  It is important to find the right mechanism to maintain ports as important economic generators for national, regional and local economies.  It is critical that we find ways to encourage our ports to invest in land holdings for long-term port development.

To promote the preservation of transportation lands, new opportunities would be given to CPAs by way of new policies implemented through supplementary Letters Patent.  This would expand allowable uses for lands that CPAs lease or license to third parties and assist CPAs in increasing revenues generated on those lands; until such time that the port is ready to develop the property for port purposes. 

However, Mr. Speaker, the CPAs are not proposing to be less vigilant in regard to these lands and all permitted activities will need to be compatible with port operations - for example condos could not be built.

Other amendments that will further benefit CPAs are those associated with future amalgamations similar to the one underway in the Lower Mainland of British Columbia.  We are proposing to incorporate provisions that would put in place a consistent approach to facilitate potential future amalgamations. 

Some key governance amendments are proposed that would be more responsive to CPAs’ needs and would promote a more stable and long-term management framework.

There is also a complementary set of amendments being proposed that are more technical in nature that clarify the wording of the Act and harmonize certain provisions with other pieces of legislation.

Finally, with these changes in place we propose to modernize the National Marine Policy, as it relates to ports, to ensure that the policy context for future decision-making takes into account the emerging trade and global business environment.

Mr. Speaker, in developing this package we have attempted to strike a reasonable balance between encouraging fully commercial behaviour on the part of ports and leaving the door open for them to compete for contribution funds under general programs like our new Building Canada initiative.

Ports in the United States and overseas are focusing more effort on and receiving more government funding for infrastructure, security and environmental initiatives.

Long-term access to federal contribution funding to spur growth in the new gateways or to implement security enhancements is consistent with the high priority we are placing on security and trade.

Canadian ports compete with international counterparts that receive security funding essential for reassuring international trading partners.

Associations representing the marine sector have requested that the government provide the same level of access to funding for CPAs as exists for other transportation entities. Other stakeholders, we have consulted, have strongly supported access to infrastructure funding for ports.

We have considered several different options to determine which one would provide the highest return for our stakeholders and for the Canadian economy.

We are proposing these changes in order to provide a balanced approach, one that combines legislative amendments with targeted policy initiatives that will have the highest positive impact on the marine community and the Canadian economy, yet continue to require a small payment of rent to the Crown and puts reasonable safeguards around borrowing practices. 

On the question of access to government funding programs, we are proposing to put port authorities on the same level playing field as other players in the transportation sector.  However, this Government also recognizes that the right checks and balances will need to be implemented. 

As such, funds provided through contribution programs, with clear accountabilities and program criteria would provide excellent controls and reflect this government’s current approach to the provision of funding. 

Mr. Speaker, we believe that the proposed amendments in Bill C-23 are the right thing to do for our ports. 

They are an important part of this Government’s overall policies and frameworks supporting transportation and trade in Canada. 

It is the right time to make these changes for the Canadian economy.

Thank you.