Introduction

Canada’s marine ports, airports, and highway and rail border crossings are vital entry and exit points for merchandise trade not only between Canada and the United States but also between Canada and its other trading partners. The road, marine, air and rail transportation networks – as well as intermodal and distribution hubs – are also key components of the country’s trade corridors.

According to Transportation in Canada 2016, transportation and warehousing represented 4.5% of Canada’s total Gross Domestic Product in 2016, while our country’s international merchandise trade amounted to $1,050 billion that same year. The United States is Canada’s top trading partner, accounting for 64% of the trade in goods moving between the two countries in 2016. The value of interprovincial merchandise trade in 2016 was $152 billion according to Transportation in Canada 2017.

In its 2015 report on the review of the Canada Transportation Act, the review panel emphasized that Canada needs to improve its transportation capacity to meet the demands of increased international trade in the future. The Committee noted that an effective supply chain that guarantees the smooth flow of goods from production and distribution facilities to end markets could be considered a competitive advantage for businesses.[2]

Given this environment, the House of Commons Standing Committee on Transport, Infrastructure and Communities (the Committee) adopted the following motion on 27 September 2016:

Launch a comprehensive study on the establishment of a Canadian Transportation and Logistics Strategy (using a regional gateway approach) with specific focus on:

• a review of current and future transportation and infrastructure priorities and strategies as they relate to planning, funding, construction, renewal and succession planning of transportation infrastructure;
• a review of government priorities as they relate to funding, designing and regulating transportation and/or transportation infrastructure;
• the incorporation, when appropriate, of the Canada Transportation Act (Emerson) Report findings; and
• an exploration, when practical, of the synchronization of federal plans and priorities with provincial, territorial and local government initiatives relating to transportation and infrastructure policies over the long-term.

This study is being undertaken as the federal government completes a number of reviews and consultations on the performance of Canada’s trade corridors, such as the ports modernization review, the Pilotage Act review, the review of the St. Lawrence Seaway, and Understanding the Effects of Marine Vessel Activity on Coastal Environments.

As part of its study, the Committee travelled to the Niagara Region, Vancouver and Seattle in September 2018 to meet with transportation corridor users and other stakeholders to develop an understanding of the effectiveness of Canada’s trade corridors and identify possible improvements. The Committee also held 13 meetings, heard from 87 witnesses and received 9 briefs.

The following sections summarize the discussions with transportation corridor users and other stakeholders regarding the challenges and opportunities in establishing a Canadian transportation and logistics strategy. The first section highlights similarities across the country by focusing on the effectiveness of Canada’s trade corridors, particularly the capacity of points of entry and domestic transportation networks, and the level of integration among the various components of the supply chain. The two other sections present case studies examining the challenges and opportunities for transportation and trade in the Niagara Region and Vancouver.

Improving the Overall Effectiveness of Canada’s Trade Corridors

Canada’s national transportation infrastructure comprises 26 airports, 18 port authorities, 45,000 route-kilometres of track and 38,000 kilometres of roadways. In 2016, road transportation was the most common method of bringing goods to Canada from the United States, accounting for close to 72% of goods. Similarly, 55% of Canadian exports to the U.S. were transported by road.[3] Excluding U.S. goods, 40% of imports to Canada in 2016 were transported by ship and 37% by truck. Excluding U.S. goods, more than 60% of Canadian exports in 2016 were transported by ship and close to 33% by air.[4]

In its 2018 report on trade logistics in the global economy entitled Connecting to Compete, the World Bank ranked Canada 20th in its Logistics Performance Index, down 6 points from its ranking of 14^th in 2016. According to Greg Northey of Pulse Canada, Canada is no longer among the top 20 countries for key indicators such as “quality of infrastructure, timeliness of shipments, and the ability to track and trace consignments.”

The National Transportation Infrastructure

Marine Transportation Network

According to Transport Canada, Canadian ports are the main point of entry for imported containerized manufactured goods. In 2016, approximately 21% of imports to Canada and 17% of its exports were transported by ship.[5] As shown in Figure 1, the Port of Vancouver is Canada’s largest port, handling 135.5 million tonnes of goods in 2016.

Figure 1—Trade by Air and Sea

Source:  Map prepared by Library of Parliament, Ottawa, 2019, using data from Natural Resources Canada (NRCan), Administrative boundaries in Canada – CanVec Series, “Administrative features,” 1:15M, Ottawa, NRCan, 2018; Lakes, rivers and glaciers in Canada – CanVec Series, “Hydrographic features,” 1:15M, Ottawa, NRCan, 2018; Transport networks in Canada – Canvec Series, “Transport features,” 1:15M, Ottawa, NRCan, 2018; and Transport Canada, Transportation in Canada 2017: Statistical Addendum, “Table A17” and “Table M17,” 2018. The following software was used: Esri, ArcGIS Pro, version 2.1.0. Contains information licensed under Open Government Licence – Canada.

The witnesses participating in this study identified the main bottlenecks for transporting goods, including the state of the transportation infrastructure to bring goods to ports. According to Rajesh Sharma of Tata Steel, although it is important to invest in port infrastructure and terminals, we must not overlook the transportation infrastructure that brings the goods to port. Otherwise, it is “like having an apartment on the 48^th floor in the best building in town, but there is no escalator or elevator.”

Tony Boemi and Sophie Rioux of the Montreal Port Authority (MPA) shared this view, stating that ports must deal with aging infrastructure and the need to optimize their rail network and direct road access. Nick McGrath of Labrador City believes there must be ongoing investment in port infrastructure and port access in order to meet future capacity requirements. In the case of the Port of Vancouver, Joel Neuheimer of the Forest Products Association of Canada noted that the current level of congestion at the port increases delivery times and costs for the forest products industry.

Witnesses also told the Committee that the marine transportation cost structure must be improved to make Canada more competitive internationally.[6] Some said that pilotage tariffs were too high and the current pilotage system did not allow for cost control. Captain Roy Haakonson of British Columbia Coast Pilots Limited refuted that claim, stating that pilotage tariffs represented only 0.1% of the total value of waterborne trade, according to the report on the Pilotage Act Review. Roger Nober of the BNSF Railway Company also remarked that Canadian ports offer cost advantages over some U.S. ports, particularly in terms of labour, more efficient use of technology and public-private support for Canadian port infrastructure. During their visit to the Port of Seattle, Committee members were told that the Government of Canada’s greater involvement in port governance is a competitive advantage for Canadian ports.

A number of witnesses were concerned about the current state of the Canadian and U.S. fleets of icebreakers, stating that Canada must increase its icebreaking capabilities on its main shipping routes.[7] Some witnesses suggested that icebreaking issues in the Great Lakes region could mean a loss of business to other modes of transportation.[8] According to Jim Weakley of the Lake Carriers’ Association, increasing icebreaking capabilities is one of the best ways to increase the system’s capacity, given that about 20% of total cargo moves during the ice season. Mr. Weakley believes there should be greater “harmonization” and “interoperability” between the Canadian Coast Guard and the United States Coast Guard in the Great Lakes. He proposed that the two organizations’ command centres be electronically integrated, as is done on the West Coast.

Chris Straw of the Gabriolans Against Freighter Anchorages Society told Committee members that, despite the introduction of an Interim Protocol for the Use of Southern B.C. Anchorages, there is no control over the number of ships coming in or the wait times to anchor, which can last several weeks. Mr. Straw and Peter Luckham of the Islands Trust Council believe that the increased time spent at anchor is a sign of weaknesses in the West Coast supply chain, since “[a]nchored ships are unproductive ships. They're not moving cargo. They're simply burning fuel and incurring overhead charges, which are undoubtedly passed along to the suppliers of their eventual cargo.” Noise and light pollution from the ships can also be very bothersome to coastal communities, according to Nathalie Anderson, who spoke on behalf of the Cowichan Tribes.

Air Transportation Network

In 2016, approximately 13% of Canadian imports and 11% of Canadian exports were transported by air.[9] As shown in Figure 1, Canada’s busiest airports in terms of cargo handled in 2016 were Toronto’s Pearson International Airport, with close to 382,000 tonnes of cargo and Vancouver International Airport, with more than 247,000 tonnes.

Representatives of the air transportation network reported that airport bottlenecks are often due to the inefficient movement of travellers at security points and border crossings.[10] As Gerry Bruno of the Vancouver International Airport Authority told the Committee, “Borders and security have a tremendous impact on our capacity and competitiveness.”

Andy Gibbons of WestJet Airlines Ltd. stated that the federal government should also review Canada’s aviation cost structure, particularly the fees levied on Canadian travellers, to ensure Canadian airports can compete with those in the United States. Similarly, Cathie Puckering of John C. Munro Hamilton International Airport, noted that U.S. tax structures are far lower and that 5 million Canadians a year cross the U.S. border to fly with a low-cost air carrier.

Ms. Puckering also indicated that growing consumer demand for aviation related-services places increased pressure on airport infrastructure, requiring the expansion of facilities as well as costly airfield rehabilitations. She stated that “[i]nfrastructure must be viewed as a key government priority by further supporting growth opportunities.” Similarly, Parm Sidhu of the Abbotsford International Airport pointed to the economic advantages that a growing airport can bring to its surrounding community, and to the importance for both of ensuring a parallel growth in supportive infrastructure.

Given that some airports play a key role in transporting passengers and goods in Canada’s remote and northern regions, the Federation of Canadian Municipalities (FCM) believes that northern and rural airports require funding to protect and improve air safety in these regions. Geoff Dickson of the Victoria Airport Authority and Daniel-Robert Gooch of the Canadian Airports Council also think that infrastructure funding options for small regional airports should be enhanced, for example, by increasing funding levels under the Airports Capital Assistance Program (ACAP).

Rail Transportation Network

In 2016, approximately 9% of Canada’s imports and 16% of its exports were transported by rail. Figure 2 shows that the Ontario cities of Sarnia and Windsor were the largest ports of exit for Canadian exports by rail, and Windsor and Toronto were the largest ports of clearance for imports.

Figure 2—Trade by Rail

Source:  Map prepared by Library of Parliament, Ottawa, 2019, using data from Natural Resources Canada (NRCan), Administrative boundaries in Canada – CanVec Series, “Administrative features,” 1:15M, Ottawa, NRCan, 2018; Lakes, rivers and glaciers in Canada – CanVec Series, “Hydrographic features,” 1:15M, Ottawa, NRCan, 2018; Transport networks in Canada – Canvec Series, “Transport features,” 1:15M, Ottawa, NRCan, 2018; and Transport Canada, Transportation in Canada 2017: Statistical Addendum, “Table RA12,” 2018. The following software was used: Esri, ArcGIS Pro, version 2.1.0. Contains information licensed under Open Government Licence – Canada.

Witnesses remarked that one of the major bottlenecks for rail system users is the uncertainty surrounding the capacity of railway companies to deliver products to their destination. Some witnesses told the Committee that they were afraid of another freight crisis similar to the agricultural campaigns of 2013–2014 and 2017–2018.[11] Brendan Marshall of the Mining Association of Canada suggested that there is a power imbalance between rail companies and shippers: the latter are often held captive because they are served by only one class I railway.[12] Like Mr. Sharma, he does not believe that the passage of Bill C‑49, the Transportation Modernization Act, will rebalance the relationship. According to Mr. Sharma and Ray Orb of the Saskatchewan Association of Rural Municipalities, rail carriers need to be held more accountable for costs and levels of service.

Peter Xotta of the Vancouver Fraser Port Authority and James Clements of the Canadian Pacific Railway stated that freight and passenger trains share the same rail lines, which can lead to congestion when the demand for both services is growing, as is the case in Vancouver.

Road Transportation Network

Trucking is the primary mode of transportation of goods in Canada, particularly in the central part of the country. In 2016, 55% of imports and 43% of exports were transported by road.[13] Figure 3 shows that Canada’s busiest border crossings in terms of trade are in Ontario, the largest being the Ambassador Bridge in Windsor. A number of witnesses stated that truck traffic between Canada and the United States has declined in recent years.[14] According to Stan Korosec of the Detroit International Bridge Company, total traffic decreased by 35% from 2000 to 2017 for all bridges linking Ontario to the states of New York and Michigan.

Figure 3—Trade at Borders

Source:  Map prepared by Library of Parliament, Ottawa, 2019, using data from Natural Resources Canada (NRCan), Administrative boundaries in Canada – CanVec Series, “Administrative features,” 1:15M, Ottawa, NRCan, 2018; Lakes, rivers and glaciers in Canada – CanVec Series, “Hydrographic features,” 1:15M, Ottawa, NRCan, 2018; Transport networks in Canada – Canvec Series, “Transport features,” 1:15M, Ottawa, NRCan, 2018; and Transport Canada, Transportation in Canada 2017: Statistical Addendum, “Table RO10,” 2018. The following software was used: Esri, ArcGIS Pro, version 2.1.0. Contains information licensed under Open Government Licence – Canada.

A number of witnesses involved in cross-border road haulage stated that wait times could be reduced by making border operations more efficient. In March 2015, Canada and the United States signed a new multimodal preclearance agreement covering air, ground, rail and marine transportation. Its implementation was made possible by Bill C‑23, the Preclearance Act, 2016, which received Royal Assent in December 2017. Martin Bolduc of the Canada Border Services Agency (CBSA) is mindful of the potential gains in efficiency and stated that the CBSA is examining where it could operate in the U.S. to facilitate movement and preclearance so that trucks would not have to stop at the border but could simply slow down and continue. However, he noted that the preclearance of cargo still poses some challenges, such as ensuring that once a shipment has been precleared, it is not compromised before crossing the border.

Jean-Marc Picard of the Atlantic Provinces Trucking Association also highlighted that the trucking industry suffers from the following complexity: companies must comply with federal safety standards and hours of work regulations, even though the provinces are largely responsible for conditions under which trucking companies operate. As a result, regulations on weight and truck dimensions can change from one province to another and complicate matters for trucks that have to cross several provinces.[15] Mr. Picard believes there should be greater consistency at the national level. In its 2015 report on the review of the Canada Transportation Act, the review panel recommended the harmonization of policies and regulations on freight transportation, particularly trucking, between Canada and the United States and between the provinces.

Labour

A number of witnesses addressed the current and future availability of skilled labour throughout the transportation system. In terms of marine transportation, James Given of the Seafarers’ International Union of Canada stated that the country needs another 300 to 400 seafarers to fill the positions left empty through retirement and attrition. He felt certain these positions could be filled through his organization’s “Be a Seafarer” initiative.

Railway representatives told the Committee that it can be difficult to find and retain mechanics because the natural resources sector offers well-paying positions.[16]

As for air transportation, Mr. Sidhu noted the lack of flying instructors and pilots, and Mr. Gooch stated that the shortage is serious and the situation is particularly worrisome for air services in small communities or remote regions.

Lastly, several witnesses speaking about road transportation told the Committee that Canada has a shortage of truck drivers.[17] According to the Canadian Trucking Alliance, Canada’s trucking industry could face a shortage of up to 48,000 drivers by 2024. Among the possible ways to address this problem, Mr. Neuheimer and Mr. Picard suggested that foreign workers could fill some of these vacancies if they were given simplified access to this field.

According to Mr. Gooch, the Beyond Preclearance Coalition foresees a shortfall of 38,000 security screening and border services agents in North America in 10 years. Llewellyn Holloway of the Buffalo and Fort Erie Public Bridge Authority and Kenneth Bieger of the Niagara Falls Bridge Commission believe that technology, particularly biometrics, will make it possible to process more vehicles with fewer agents in the future, but until then, we could face staffing issues with the CBSA agents and U.S. Customs and Border Protection.

Environmental Impact and Effects Assessments

Some witnesses expressed concern over the effect of some provisions of Bill C‑69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, on Canada’s competitive ability to attract capital, particularly the review of permit applications for specific projects.[18] Mr. Xotta, for example, said he was concerned that “environmental permitting processes are getting more difficult and certainly more complex and costly, which will make Canada less desirable as a place for investment.”

Other witnesses, however, supported Bill C‑69 and emphasized that its success depended on its execution.[19] Ewan Moir of the Port of Nanaimo told the Committee that he felt the proposed changes to the environmental assessment process were positive, but that the federal government should ensure these changes did not increase the timeline for environmental assessments or create uncertainty regarding infrastructure funding for the country’s trade corridors.

In conclusion, the stakeholders who testified before the Committee identified certain deficiencies in Canada's transportation infrastructure, both at the ports of entry and exit and in the internal network. These deficiencies cause bottlenecks that affect trade corridors within the country and with our trading partners. Witnesses also highlighted the challenges of workforce recruitment, while others expressed the wish that any legislative changes would not result in an undue increase in delays in environmental assessment processes.

Optimizing the Capacity of Transportation, Logistical and Service Infrastructures

Technologies to Increase Current Infrastructure Capacity

Committee members noted that Canadian ports are exploring a range of technological options to bring goods to market more effectively. One option is blockchain technology, which allows transactions shared among many users to be recorded in a public ledger. According to Mr. Moir, port authorities are discussing this technology through the Association of Canadian Port Authorities to determine how it could be integrated into port activities.

Some witnesses suggested another technological solution to increase efficiency at Canadian ports: a system giving authorities a better understanding of vessels arriving in port.[20] Michael Broad of the Shipping Federation of Canada believes this can be accomplished by creating a marine single window initiative, which would collect all the information required by Canadian authorities, particularly the CBSA, on the arrival and departure of ships in Canadian waters. This information would be submitted electronically through a single portal, without any duplication. According to Tim Nohara of Accipiter Radar Technologies Inc., the technology for what is known as “shared maritime domain awareness” is already available, but to date it has been implemented only on a smaller scale. He made the following comment:

Expanding the infrastructure so that we can see the entire system and the connections: the training, the ports, terminal operators, seaway users—all the stakeholders—and giving the shipping companies and their planning and marketing groups these tools is what will then result in decision-making that will benefit them.

According to Mr. Nohara, it would also be useful to know where pleasure craft are, so that cargo ships would not have to slow down so many times en route. Slowdowns result in significant fuel wastage. The Council of the Haida Nation was likewise in favour of more information on vessel traffic, adding that the information currently available is insufficient to enable an open monitoring and reporting system on vessel activity.

Border Operations

Richard Comerford of the CBSA said that the Agency had already introduced technologies to reduce processing times for people and goods at the border. For example, the NEXUS program expedites the border clearance process for NEXUS participants at land borders, airports and marine ports. Mr. Comerford said that, as of July 2018, the CBSA had approximately 1.7 million active participants in the NEXUS program. A technological option is available for goods as well, known as eManifest, which carriers can use to submit required trade data to the CBSA electronically before they arrive in Canada. In order to create a smart and secure border, Mr. Comerford assured the members that the CBSA is working with their domestic and international enforcement and security partners on implementing “a border strategy that relies on technology, information sharing and biometrics.” Regarding trusted traveller and trader programs, Mr. Comerford also stated the following:

Advance information pertaining to both goods and drivers with strategic risking systems, while leveraging emerging technologies and capabilities, is at the forefront of innovative solutions to reduce processing times while maintaining the integrity of the CBSA mandate.

According to Mr. Bolduc, the CBSA’s security procedures governing the movement of goods at the border are very similar to those in the U.S. Mr. Comerford further stated that the CBSA works regularly with U.S. Customs and Border Protection to develop technologies to improve border crossing efficiency in both directions. Mr. Korosec said that stakeholders involved in transporting goods across the Canada–United States border have a number of forums to discuss border matters, such as the Bridge and Tunnel Operators Association, the Canadian/American Border Trade Alliance, and the Transportation Border Working Group.

Some witnesses took the opportunity to share technology recommendations that would simplify border operations between Canada and the United States. Looking to the United States for inspiration, Mr. Holloway suggested that Canada should issue passport cards similar to those used in the United States so it could take advantage of radio-frequency identification (RFID) technologies.

According to Mr. Bieger of the Niagara Falls Bridge Commission, better redundancy procedures need to be put in place for when downtimes happen, because truckers get stuck at the border when computer systems go down.

Witnesses agreed that the long-term solution to expedite the border clearance process is biometrics. This technology scans digital fingerprints and facial features and, according to Mr. Holloway, would allow “a better recognition of the individuals who are crossing the border in a quicker time.” Mr. Gooch has high hopes for biometric technology, saying that Canadian airports are “ready to implement pilot projects for biometrics in passenger processing.”

During their visits to various CBSA sites, including the Peace Bridge, the gateway to the Pacific region, the GCT Deltaport container terminal and the new Tsawwassen container examination facility, Committee members were able to see first-hand the challenges the CBSA faces in finding a balance between applying security measures at the border and expediting the flow of goods between Canada and the rest of the world. The Committee also had the opportunity to observe how various technologies can be used by the CBSA to expedite the flow of goods at border crossings. According to Roslyn MacVicar of the CBSA, various tools, such as radiation portals to detect radiation levels of shipping containers, “[expedite] the examination and release processes of shipments selected for examination.”

Availability of Data on Supply Chain Performance

As part of the Trade and Transportation Corridors Initiative, Transport Canada, in collaboration with Statistics Canada, established the Canadian Centre on Transportation Data to make data on multimodal transportation and corridor performance available.[21] Now that Bill C‑49, the Transportation Modernization Act, has been passed, rail companies are also required to provide certain financial data to the Canadian Transportation Agency.

According to Ken Veldman of the Prince Rupert Port Authority, two types of data are important for ports. The first is forecasting data, which is used to predict future demand for a port so it can plan to build capacity to meet those needs, and the second is real‑time data on shipments. The Port of Vancouver is currently carrying out a Supply Chain Visibility Project in collaboration with Transport Canada. Mr. Xotta said that this project ultimately aims “to identify when bottlenecks require infrastructure investment to be addressed.” Bruce Hodgson of the St. Lawrence Seaway Management Corporation (SLSMC) said the Corporation works with railway companies and shippers from Western Canada to share data.

Some witnesses said there was limited data in Canada on marine transport, particularly regarding supply chain fluidity and the flow of goods to port.[22] Mentioning the discontinued annual publication by Statistics Canada entitled Shipping in Canada, which was last published in 2011, Karen Kancens of the Shipping Federation of Canada said “there’s no comprehensive source that pulls all of that [data] together … in port-specific and commodity-specific terms.”

Some witnesses, including Mr. Orb, suggested that transparency and sharing reliable data on rail freight could be a good step to restore the balance of power between shippers and rail companies.

Other witnesses told the Committee more data was needed on how climate change affects transport infrastructure, as well as how increased maritime traffic affects coastal ecosystems.[23] Referring to the Canadian Centre for Climate Services established by the Government of Canada, Engineers Canada said, “Consistent national climate data will ensure that accurate climate projections are made, enabling effective planning for both present and future projects.”

Protecting Industrial Land Parcels

Mr. Xotta and Derek Ollmann of the Southern Railway of British Columbia (SRY) told the Committee it was critical to protect trade-enabling land so that goods can continue to flow into and out of Canada. In the Canada Transportation Act Review Report, the panel members recommended putting in place a national corridor protection program, in collaboration with provincial governments, to protect industrial land parcels near trade and transport corridors that could be used to accommodate future trade growth. Committee members got to see first-hand the importance of industrial lands, and the associated issues, when they visited the Niagara region and the West Coast. This issue is discussed in greater detail in the case studies for these regions.

Coastal Protection

In Canada’s Oceans Protection Plan, launched in November 2016, the federal government earmarked $1.5 billion in spending over five years for coastal protection measures. Some witnesses agreed with the principles of the Plan, but Calvin Helin of Eagle Spirit Energy Holding and Ms. Anderson told the Committee that the Plan was underfunded, given the length of Canada’s shoreline. The Council of the Haida Nation and Marilyn Slett, Chief Councillor of the Heiltsuk Tribal Council, believe the federal government should have the power to restrict maritime traffic in sensitive areas and to “control traffic in sensitive ecological areas and harvesting areas.” Ms. Anderson made a similar point, saying that the increase in marine activity along the West Coast has meant that the Cowichan Tribes are no longer able to harvest traditional foods in their historical harvesting area in Cowichan Bay.

Regarding the transportation of oil in particular, representatives from the marine transportation industry assured the Committee that oil can be shipped safely.[24] Sonterra Ross of the Greater Victoria Harbour Authority said that the Authority supported transporting oil by tanker, but that she still had concerns about the environmental risks.

Other witnesses shared recommendations about transporting oil in certain regions of the country. Referring to Bill C-48, the Oil Tanker Moratorium Act, Peter Lantin of the Council of the Haida Nation said that the moratorium must be expanded “to include export of all fossil fuels and persistent and non-persistent oil products through Haida Gwaii and [the] north coast waters [of British Columbia].” According to the Council of the Haida Nation and Ms. Slett, the West Coast must have improved response capabilities in case an oil spill occurs, and this marine response must involve close engagement between the federal authorities and local communities. Ms. Slett added that an Indigenous marine response centre should be built.

Calvin Helin of Eagle Spirit Energy Holding and John Helin of Lax Kw’alaams Band held a different opinion on the effects of Bill C-48. They said that a moratorium on oil tankers along the West Coast would limit economic development opportunities for First Nations in that region.

In summary, several stakeholders who appeared before the Committee indicated that increased use of several existing technologies, such as biometrics, would optimize the capacity of Canada's transportation, logistics and service infrastructure. Many stakeholders also expressed a desire to have access to more supply chain data. Finally, other witnesses shared the view that an increase in trade flows by sea should not be at the expense of coastal protection.

Encouraging Collaboration Between Supply Chain Stakeholders in Canada

Various witnesses told Committee members that, to increase the capacity of Canada’s internal transport networks and its gateways, supply chains need to be better integrated and greater coordination between all system stakeholders is needed.[25] Robert Lewis-Manning of the Chamber of Shipping said the following:

[T]here needs to be a whole-of-government approach to a national transportation strategy, with an oversight body that requires all affected government departments and agencies to work collaboratively toward common goals. Currently, there is some lack of coordination in policies and priorities and an absence of data-sharing that results in an increase in administrative burdens and inefficiencies.

Several witnesses pointed to a current lack of integrated planning with regards to the component pieces of trade corridors, leading each component to act separately rather than in coordination with one another.[26] In order to address this situation, Mr. Nober spoke of the advantages of formal collaborative practices, while Patrick Robson of Niagara College pointed to the need for collective will and leadership in the area of collaboration and integration.

More specifically, the FCM believes more dialogue is needed between port authorities and municipalities, especially as regards “land use and service changes at port facilities.” Jean Aubry-Morin of the SLSMC told the Committee that the Corporation has a stakeholder engagement plan with an outreach program whose purpose is to understand the needs of industry and the community. When Committee members visited the Welland Canal, they saw why it was important for the SLSMC and the communities neighbouring the Welland Canal to maintain a dialogue, given that the canal runs right through some towns, and traffic and access to services, including emergency services, can be affected by whether the locks are opened to ship traffic. Visiting the Port of Hamilton also gave Committee members the opportunity to see what port authorities are doing to improve their relationship with municipalities, particularly as regards managing dust.

Ian Hamilton, of the Hamilton Port Authority, said that the Association of Canadian Port Authorities is a great collaborative forum for ports across the country to exchange “key priorities around sustainability, the interface with the community, and what best practices exist for minimizing the environmental impact.” As regards the St. Lawrence Seaway, Mr. Aubry-Morin said that the SLSMC works closely with its sister ports to ensure that the needs of every segment of the business are accounted for in its strategic plan.

On the West Coast, witnesses told the Committee that the Gateway Transportation Collaboration Forum gave all supply chain stakeholders, including Transport Canada, the opportunity to participate in dialogue, identify the main bottlenecks in the region and determine what investments are needed.[27]

Various witnesses called on the federal government to take a leadership role in establishing a national strategy and to act as a facilitator with supply chain stakeholders.[28] Mr. Broad made the following comment:

[I]t is essential that the government have a vision or a strategy for developing Canada’s trade corridors that is national in perspective and closely tied to the broader trade agenda. Such a strategy needs to support the transportation system’s ability to efficiently serve all the new markets that have been or will be negotiated as part of Canada’s trade diversification agenda…. Such a strategy also needs to align all the departments and agencies that interact with the carriage of international trade so that supply chain efficiency becomes an integral element of how they operate.

Federal Funding Programs

Trade corridors to global markets is one of the five themes of Transport Canada’s strategic plan, Transportation 2030. Under Budget 2017, an investment of $10.1 billion over 11 years was announced for the Trade and Transportation Corridors Initiative. This initiative seeks to support trade corridors, primarily through the National Trade Corridors Fund (NTCF). Up to $400 million in funding is earmarked for transportation infrastructure projects in Northern Canada “that address trade-related issues.”[29] According to Sandra Lafortune of Transport Canada, the purpose of the Initiative is to view the transportation system from a national perspective and to ensure that “the infrastructure that supports internal trade will also end up supporting international trade, because it is seen as a seamless system.”

A number of witnesses were pleased with the creation of the NTCF.[30] As Mr. Xotta said, “Being prepared to facilitate analysis and leaving the door open to potential infrastructure asks is actually the primary and most useful role that the Government of Canada can take.” However, Mr. Marshall pointed out that the funding available was not enough to meet all needs, especially for transportation infrastructure projects in the North. He recommended that the government “renew the TTCI in budget 2019, including the $400-million northern allocation.”

Witnesses explained to the Committee that some federal government infrastructure projects have gaps or inequality issues in terms of their eligibility criteria. In the area of marine transportation, Serge Buy of the Canadian Ferry Association pointed out that some programs make a distinction between transporting passengers and transporting goods, and ferries or ships that transport both at the same time are therefore ineligible for these programs.

In the area of air transportation, Mr. Dickson and Mr. Gooch mentioned the valuable assistance available through the ACAP to regional airports with fewer than 525,000 passengers a year. However, they also mentioned that program funding had not been increased in 18 years, even though construction costs have increased considerably in that time.

Lastly, in the area of rail transportation, Mr. Ollman shared with the Committee his opinion that funding programs specifically for short-line railway companies were needed so they could invest in projects beyond sustaining existing operations, particularly to support future growth for the movement of goods. According to SRY, financial incentives such as tax credits or capital funding grants would give short-line rail companies the means to invest in different areas, such as locomotive fleet upgrades and railway crossing upgrades. Similarly, the Western Canadian Short Line Railway expressed concern about the lack of funding options for short-lines and criticized the NTCF, because it believes the NTCF is intended primarily for major projects that are not appropriate for smaller companies.

In conclusion, several stakeholders who appeared before the Committee argued that the silos between stakeholders in the national transportation and logistics network must be broken down and a greater dialogue encouraged to improve the performance of supply chains in Canada. Witnesses also suggested that certain federal infrastructure funding programs be improved to better reflect the needs of users of transportation and logistics infrastructure.

 

Road Congestion

According to the 2017 Canadian Automobile Association report Grinding to a Halt: Evaluating Canada’s Worst Bottlenecks, five of the top 10 highway bottlenecks in Canada in 2015 were in the Toronto area. The worst bottleneck is a stretch of Highway 401 that cuts across the north part of the City of Toronto. Verne Milot of the Welland/Pelham Chamber of Commerce and Debbie Zimmerman of the Buffalo and Fort Erie Public Bridge Authority said examples of significant transport concerns in the Niagara region are the constant congestion and lack of redundancy on the Queen Elizabeth Way (QEW) highway, which is the primary route linking Niagara and the Greater Toronto Area and the main entrance between Ontario and the State of New York. Ms. Zimmerman pointed out that the movement of goods along this trade corridor is expected to increase by 3% to 6% per year, and that tourism is increasing steadily in the Niagara region as well, so it is important to find “an alternative for truck traffic.” Figure 4 shows the main transportation infrastructure in the Niagara region.

Figure 4—Inset of Toronto-Niagara Falls Region

Source:  Map prepared by Library of Parliament, Ottawa, 2019, using data from Natural Resources Canada (NRCan), Administrative boundaries in Canada – CanVec Series, “Administrative features,” 1:1M, Ottawa, NRCan, 2018; Lakes, rivers and glaciers in Canada – CanVec Series, “Hydrographic features,” 1:1M, Ottawa, NRCan, 2018; Transport networks in Canada – Canvec Series, “Transport features,” 1:1M, Ottawa, NRCan, 2018; and Statistics Canada, 2016 Census – Boundary Files, “Census metropolitan areas.” The following software was used: Esri, ArcGIS Pro, version 2.1.0. Contains information licensed under Open Government Licence – Canada.

Mid-peninsula Transportation Corridor Project

One of the alternatives proposed by various witnesses is the Niagara to Greater Toronto Area Corridor, also known as the mid-peninsula highway.[31] The Ontario Ministry of Transportation has studied this option for many years. Various routes have been considered, but they all would run mostly parallel to the QEW, going through the central Niagara region to connect with Highway 407 or the 401 to reach the Greater Toronto Area. Jayesh Menon of the Foreign Trade Zone, Niagara Region, also indicated that the mid-peninsula corridor would reduce congestion, make it easier to export to the United States, and create further synergies in the Niagara and Hamilton economies.

Greater Use of Marine Transport

Another alternative proposed by various witnesses was the increased use of the marine transportation network along the St. Lawrence Seaway and the Great Lakes.[32] According to a 2017 report from the Council of the Great Lakes Region and CPCS, as well as various witnesses who appeared before the Committee, the Great Lakes ports, including those in Thunder Bay and Cleveland, are underused.[33] James Given of the Seafarers’ International Union of Canada said that the seaway is currently operating at only 50% capacity. However, Claudine Couture-Trudel of Great Lakes Stevedoring cautioned Committee members that increased use of marine transport in the area would require improved intermodal infrastructure.

Jean Aubry-Morin of the SLSMC told the Committee that, as a result of climate change and increased collaboration between Seaway stakeholders, their season has increased from 262 days to 286 days. However, various witnesses mentioned that finding a way to keep the Welland Canal open a few weeks longer each year would reduce the number of trucks on the road in the region.[34] Mr. Nohara noted that ice conditions need to be monitored more closely. In addition to de-icing issues, Mr. Aubry-Morin mentioned that climate change “brings about … greater variability” and that sometimes “the balance between risk and the benefit of a greater season have to be contemplated.”

Industrial Land Use

The St. Lawrence Seaway Management Corporation

The St. Lawrence Seaway Management Corporation (SLSMC) was established in 1998 and is subject to the Canada Marine Act. It is responsible for the safe and efficient movement of marine traffic through the Canadian Seaway facilities. Facilities managed by the Corporation remain the property of the Government of Canada, pursuant to an agreement with Transport Canada. According to the agreement, the SLSMC is responsible for managing and operating the Seaway, as well as maintenance, repairs, acquisition and promotion. In July 2017, the Minister of Transport extended this agreement until March 2023. The St. Lawrence Seaway has 15 locks (13 Canadian and two American), of which eight are located along the Welland Canal that connects Lake Ontario to Lake Erie. The SLSMC collaborates with its American counterpart, the Saint Lawrence Seaway Development Corporation, on operations to ensure the day-to-day functioning of the Seaway. As regards real estate, Bruce Hodgson of the SLSMC made the following point:

[W]e [the SLSMC] manage the lands adjacent to the seaway on behalf of the Government of Canada. The market development team continues to bring operators and investors together to best utilize the real estate and facilities, including landholdings on the Welland Canal, to generate economic growth and employment opportunities.

Industrial Land Along the Welland Canal

According to various witnesses, a number of businesses would be interested in operating in the Niagara region.[35] Given that the Port of Hamilton is at maximum capacity, some may want to set up along the Welland Canal. According to Roy Timms of the Niagara Industrial Association, the federal government owns significant lands that are undeveloped on both sides of the Welland Canal that could be used for economic purposes. Mr. Milot of the Welland/Pelham Chamber of Commerce made the following observation:

Transport Canada can play a key role in sensitively opening up those areas and connecting them appropriately to trade transportation routes as part of a more robust industrial hub. … Dormant, developable industrial lands along the Welland Canal are also no longer acceptable if we’re to entrench the region in a foreign trade zone in a way that will be robust and credible for decades to come.

Scott Luey of the City of Port Colborne and Ted Luciani of the City of Thorold told Committee members that the municipalities along the Welland Canal would like to see these lands developed for industrial or commercial use to stimulate economic development in their region.

 

Growing Demand

According to the Canadian Chamber of Commerce report Stuck in Traffic for 10,000 Years, projections for freight traffic[36] indicate that the rail network in Western Canada will need to nearly triple its capacity by 2045 to meet future demand. Similarly, ports in British Columbia will see the demand for movement of these commodities triple over the same period.

The Port Alberni Port Authority estimates that container traffic will double by 2030, and it had the following caveat: “If the west coast cannot meet the demand for container throughput, the excess volumes will seek the next best alternative, which would be at Canada’s loss.” Similarly, Peter Xotta of the Vancouver Fraser Port Authority pointed out that, despite the planned expansions at West Coast terminals, additional capacity in the container sector is needed to meet future demand. Figure 5 shows the primary transportation infrastructure in the Vancouver region.

Figure 5—Inset of Vancouver

Source:  Map prepared by Library of Parliament, Ottawa, 2019, using data from Natural Resources Canada (NRCan), Administrative boundaries in Canada – CanVec Series, “Administrative features,” 1:1M, Ottawa, NRCan, 2018; Lakes, rivers and glaciers in Canada – CanVec Series, “Hydrographic features,” 1:1M, Ottawa, NRCan, 2018; Transport networks in Canada – Canvec Series, “Transport features,” 1:1M, Ottawa, NRCan, 2018; and Statistics Canada, 2016 Census – Boundary Files, “Census metropolitan areas.” The following software was used: Esri, ArcGIS Pro, version 2.1.0. Contains information licensed under Open Government Licence – Canada.

James Clements of the Canadian Pacific (CP) Railway and Brad Bodner of the Canadian National Railway Company (CN) both thought tripling the network was a bit aggressive, considering the limited expansion capacity at the Port of Vancouver, but they agreed, as did Derek Ollman of the Southern Railway of British Columbia (SRY), that they must continue investing to grow the rail network capacity in Western Canada. Marko Dekovic of Global Container Terminals (GCT) made the following comment about the relationship between terminals and railways:

We’re all as strong as our weakest link in the supply chain, so … with larger ships, we need to be investing in land-side surge capacity. That means the terminal operators and the railways have to be making the necessary investments and we as terminal operators have to do what we can to facilitate the speed at which we move the containers off a ship to a train.

A Supply Chain That Must Adapt

Mr. Bodner said that CN’s biggest network issues were at the end of the line, due to rail congestion, urban encroachment and marine traffic that affect whether bridges can be opened. Witnesses pointed out that traffic on the Fraser River bridge was a bottleneck that limits the capacity for railways to serve the terminals.[37] Mr. Bodner explained to the Committee that the bridge is more than 100 years old and is used regularly by six railways, of which three are freight companies, and that the bridge is open eight hours a day for marine traffic. He believes that the federal government must move forward to replace this bridge.

Mr. Clements recognized that, with regard to grain, CP’s network cannot meet the market demand at the Port of Vancouver gateway; there is simply more market demand “than there is capacity in the supply chain to accommodate the grain traffic.” In his view, the supply chain through Vancouver is constrained by “terminal capacity, the impacts of inclement weather and the operational complexity of the railways, including having to manage around the West Coast Express commuter rail operations.” An alternative put forward by Mr. Clements is to move some activities outside the city, such as the recently opened transloading facility in Coquitlam.

Brad Eshleman of the BC Marine Terminal Operators Association told the Committee that, because of boxcar availability and crew sizes, some products, such as forestry products, are being transported to the terminals by truck rather than by rail. More trucks means more congestion, especially at the Port of Vancouver, where traffic is already heavy, according to Joel Neuheimer of the Forest Products Association of Canada. On a different note, Gagan Singh of the United Trucking Association told the Committee that the relationship between truckers and the Vancouver Fraser Port Authority was sometimes strained.

To expedite the inspection process for containers from GCT Deltaport and the Fraser Surrey Docks, the Canada Border Services Agency (CBSA) plans to open a new container examination facility in Tsawwassen. According to Roslyn MacVicar of the CBSA, it would be double the size of the facility in Burnaby, with a greater capacity to accept and examine containers. Ms. MacVicar also said that a new marine container examination facility would be built in the Burrard Inlet.

Availability of Industrial Land

When Committee members visited the Port of Vancouver, they learned a great deal about the challenges involving the availability of land in the Metro Vancouver area. Several witnesses said there was a shortage of industrial land in Vancouver.[38] Some said that the ports and terminals would have to become more and more efficient, given that they need to increase capacity without having access to more land to support this growth.[39] Mr. Dekovic told the Committee that the GCT Deltaport container terminal managed to increase its overall terminal capacity by 33% “by redoing the layout, semi‑automation and densifying of the tracks on the terminal, and changing the way [it] operate[s].” He added that the Port of Vancouver has an incentive program to encourage container ships to come into port on time, which makes it easier to plan terminal labour and terminal operations, as well as railways.

SRY is concerned about industrial land being converted into residential land, as it pushes heavy industry away from the major transportation corridors and “leads to conflicts and unrealistic community expectations about noise and industrial emissions.” According to Geoff Cross of TransLink, better dialogue is needed between the various stakeholders and the federal government so that a balance can be found between land use needs, local transportation needs and the needs of those involved in goods movement. He made the following observation on this topic:

We always say that the best transport plan is a good land use plan, and that is obviously critical in metro Vancouver with our constrained land base and the economic pressures for residential and commercial uses on it.

One possible solution mentioned by several witnesses is the Port of Prince Rupert, located further north along the coast, whose expansion capacity is not as limited as the Port of Vancouver because it is not located in an urban area.[40] However, Greg Northey of Pulse Canada reminded the Committee that a number of grain companies have invested heavily in their facilities in Vancouver, and Mr. Neuheimer pointed out that, at present, CN is the only railway company serving the Port of Prince Rupert, which limits its capacities.