TRAN Committee Report

Supplementary Opinion of the Conservative Party of Canada

Introduction

Over the past year, the Standing Committee on Transport, Infrastructure and Communities (TRAN Committee) has undertaken a study on a CANADIAN TRANSPORTATION AND LOGISTICS STRATEGY with a special focus on the impact of transportation corridors within the Canadian transportation system.

Transportation corridors are integral to the safe and efficient flow of goods in and out of Canada.

In a country as large as Canada we have a very diverse topography. Whether they traverse through mountains, the prairies or navigable lakes and rivers, Canada’s multiple transportation corridors present both unique opportunities and challenges. 

One way to address these challenges is to capitalize on the diverse modes of transportation that are utilized by commodities where technologically and economically possible, for example using pipelines to transport oil.  

While transportation by rail remains a safe and viable option, the data shows pipelines are the safest and most efficient way to transport oil.

While natural challenges such as topography and weather can be overcome by the market place, the Government of Canada can, through its policies, make things better or worse for our integrated transportation system.

This supplementary report seeks to highlight this fact.

Members of the TRAN Committee frequently heard from stakeholders, who participated in the study, that certain actions by the current Government are having a negative impact on their ability to operate in an efficient manner.

Take the diversification of oil transportation off of rail and into a pipeline for example.  Doing this would contribute to an increase in safety and efficiency in the transportation system.

However, during its study, the committee heard from numerous witnesses about the negative impacts that the current Government’s policies are having on this safer and more efficient way of transporting oil.

Referencing the Government of Canada’s Bill C-48 Oil Tanker Moratorium Act, Mr. Calvin Helin, Chairman and President, Eagle Spirit Energy Holding Ltd. told the TRAN committee on November 20, 2018:

“The other thing our chiefs wonder about is how come this is being proposed, essentially to cut off half of B.C.'s coast to important commercial traffic, when tanker shipping of oil and petroleum fuels is happening everywhere else in Canada.”

And when asked to comment on a statement that the Government’s decision to introduce Bill C-48 was not based on statistical data or science, Mr. Michael Broad, President of the Shipping Federation of Canada, stayed at Committee on October 4, 2018:

“I’d agree with . . . that.”

Moving more oil through pipelines would remove the demand for rail transportation for this commodity and thereby free up more space for other cargo such as bulk and container traffic.

Another opportunity to address the challenge of Canada’s large geographic expanse is to enact policies that encourage investments by transportation companies in every phase of the transportation system.

However, throughout this study it became clear that the current Government is stifling investment through measures like Bill C-69 and the carbon tax.

This was reiterated again and again in testimony to the Committee.

In his opening remarks to the Committee on September 26, 2018 Mr. Peter Xotta, Vice-President, Planning and Operations – Vancouver Fraser Port Authority, made the following comments on the impact of Bill C-69:

“We're concerned about the impact that Bill C-69 will have on investment in Canada. As a trading nation that aspires to more trade, Canada needs its ports to be ready to manage the increased movement of goods.” 

And responding later to a question, Mr. Xotta also said: 

“The extended timeline that appears to be unfolding is obviously costly. It impacts the securing of commercial partners because of the uncertainly around when that facility might be constructed and thus operational. . . . What is the message, essentially, that's being sent to international investors of major infrastructure projects?”

Commenting on Bill C-69 at Committee on September 26, 2018, Mr. James Clements, Vice-President, Strategic Planning and Transportation Services – Canadian Pacific Railway, also expressed concerns about the impact this Bill will have on Canada’s trade corridors:

“Finally, it is worth noting that the goal of achieving more efficient trade corridors is undermined by federal policy-making that favours additional regulatory interventions in the marketplace and the imposition of significant new requirements for major projects that fall under federal jurisdiction, such as those proposed in Bill C-69.”

And: “By adding an additional uncertainty and complexity into the review process, we are concerned that it is going to discourage the attraction of capital to infrastructure projects that will enhance the supply chain.” 

Responding to a question at Committee on September 26, 2018 regarding the impact of Bill C-69, Mr. Rob Booker, Senior Vice-President, Operations and Maintenance – Neptune Bulk Terminals (Canada) Ltd.:

“With specific reference to Bill C-69 . . . we wouldn't have invested. If that had been the condition two years ago, we would not have made the $450-million investment, because there's no certainty in process. It's really simple. From a business perspective, if there's not certainty in income or outcome, even in timeline—never mind yes or no—if there's just no certainty in timeline how can you make an investment?” 

In commenting on the Government’s imposition of a carbon tax, Mr. Jean-Marc Picard, Executive Director – Atlantic Provinces Trucking Association noted the following at the October 16, 2018 meeting of TRAN Committee:

“. . . a carbon tax must not have a negative impact on revenues and must give us the flexibility to invest in carbon-reducing technologies.” 

Speaking at the same October 16, 2018 meeting, Ms. Nancy Healey, Chief Executive Officer, St. John's Board of Trade, made the following comment about the current Government’s carbon tax:

“. . . everything that comes here either floats or flies, so we are particularly vulnerable. We agree that we need to do something about carbon emissions, but we feel that a carbon tax should be revenue neutral.”

And: “We're concerned that this is a tax grab.”

Conclusion:

These were just some of the comments that stakeholders made with respect to the detrimental impact that legislation such as Bill C-48, Bill C-69 and the carbon tax will have on Canada’s transportation system, and more specifically, our transportation corridors.

Canada cannot begin to address its transportation issues without first addressing policies detrimental to resource development, transportation, trade and investments in infrastructure.

Throughout this first part of the TRAN Committee’s study on CANADIAN TRANSPORTATION AND LOGISTICS STRATEGY the issues identified above can be summed up in two words:

Bad policies.

Bad policies that will have a long lasting negative impact on:

1. Our ability to develop our resources, 

2. Our ability to get our resources to market

3. Canada’s reputation as a reliable supplier of these resources; and

4. Investments in infrastructure necessary to transport Canada’s exports and imports safely and efficiently.

Therefore, we make the following recommendations:

RECOMMENDATION #1 

That the Government withdraw Bill C-48.

RECOMMENDATION #2 

That the Government withdraw Bill C-69.

RECOMMENDATION #3

That the Government eliminate the carbon tax.