The Importance of our Nation’s Deep-Water Shipping Ports

By Angus Gillespie

This country’s most valuable global trading transportation resource is without doubt the numerous deep-water shipping ports that provide the primary backbone for importing and exporting manufactured goods to and from international destinations, which directly translates into billions of dollars for the national economy on an annual basis.

With each passing year cargo ships continue to get bigger which means the transportation hubs servicing them must also keep up in terms of infrastructure advancements in order to remain relevant. It’s not uncommon nowadays for ports to handle 20,000-foot containers TEUs (twenty-foot equivalent unit) and beyond. The ports are responsible for maintaining the safe and efficient movement of marine traffic and cargo.

The physical expansion of these ocean-faring vessels, both commercial and passenger cruise liners, means the requirement to undertake upgrades at our main ports and canals. The Panama Canal and the Suez Canal in Egypt are two examples of two sizable upgrades have been completed allowing them to handle ships with greater capacity. There has been considerable talk that the Welland Canal, which joins Lake Erie and Lake Ontario, will also need to be widened in order to accommodate the larger ships that meander through the Great Lakes. A timetable for any such upgrades in that regard are still no further than the talking stages.

Here in Canada, the Port of Halifax and Port of Sydney are each undergoing expansion projects as a means of being prepared for the future. Meanwhile, the Port of Saint John is in the midst of a $200 million terminal restoration program that could take six to seven years to complete. Port Saint John is spread across 45 hectares of land along 3,900 metres of waterfront of the Saint John Harbour at the mouth of the Saint John River in the city of Saint John, New Brunswick.

The vast majority of the main shipping ports extend from northern Ontario all the way to the east coast with the connectivity between the Great Lakes, the St. Lawrence Seaway and finally the Atlantic Ocean. However, the largest port in Canada is on the west coast at Port Vancouver, which handles more than 50% of all container cargo moving through some of the country’s busiest container ports. The former Port of Vancouver amalgamated with the Fraser River Port Authority and the North Fraser Port Authority in 2008 to form Port Vancouver.

Vancouver is in the midst of a major overhaul with $700 million in construction devoted to road and rail projects as a means of supporting the shipping industry.

The expansion of the Roberts Bank Rail Corridor in British Columbia has increased the flow of trade between Canada’s largest port and the continental rail system. In the east, enhancements at the Port of Halifax allow it to accommodate the next generation of container ships, while improving facilities for value-added trade.

In 2015, Port Vancouver handled just over 3 million 20-foot-equivalent units of containers, denoting a 5% increase from 2013. Canada’s other major ports in Montreal, Halifax and Prince Rupert, B.C., handled more than 2.4 million TEUs in 2015. As capacity continues to expand so too does the opportunity for more sales of manufactured goods.

Shipments originating from Asia to Halifax via the Suez Canal have become increasingly important over the past five years. As those international vessels increase in size, it’s imperative that the port is in a position to be able to accommodate their needs.

Farther west down the St. Lawrence in Quebec, the Port of Montreal’s accessibility to larger cargo ships can be attributed to the Canadian Coast Guard’s granting authorization of the passage of ships up to 142 feet in width – up from 106 feet.

Most all of the inland ports rely heavily on both road and rail service to transport the goods to either their pick up or drop off points. Rail service is handled by both Canadian National Railway and Canadian Pacific Railway. At some of the larger deep-water ports it’s not unheard of for more than 1,000 trucks to be put into action on a daily basis.

Emerson Report

Transportation Minister Marc Garneau was in Montreal recently discussing the government’s response — following a nationwide consultation — to the sweeping Emerson Report, a review of the Canada Transportation Act. Launched in June, 2015 and led by David Emerson, it was submitted to Minister Garneau at the end of 2015. The Review looked forward 20 to 30 years to identify priorities and potential actions in transportation that will support Canada’s long-term economic well-being. Garneau says he wants everyone to envision what Canada’s economy will look like in 2030.

“Without a doubt it will be cleaner and more innovative. Countries around the world today are investing in public transit networks and smart cities with advanced digital infrastructure with smart roads, smart cars, unmanned aerial vehicles or drones, and distributed energy systems. Norway and Germany are already moving to full zero-emission cars and the world will follow,” says Garneau.

Canada’s transportation system in 2030 will be increasingly electrified, supporting alternative fuels like hydrogen, increasingly using rail and renewable fuels in more efficient planes like the C-Series. To ensure Canada’s auto sector, aerospace sector and others remain strong, Garneau says Canada must be on the leading edge of that change and that means heavy investment in the transportation sector.

“To ship our products to the world we must also protect our environment, protect our coasts, marine habitats and our marine shipping lanes. As we have seen, we must bring our products to market in an efficient manner while taking necessary steps to balance growth with the environment,” adds Garneau.

Efficient transportation is the foundation of the Canadian economy, moving both people and goods to and from market.
In a discussion with Wendy Zatylny, President of the Association of Canadian Port Authorities, she believes the national strategy on the nation’s shipping ports is moving in the right direction.

“The overall approach is one we are very pleased with and think that it’s a strong foundation to build on,” begins Zatylny. “If you take the culmination of the three announcements, including the Fall Economic Statement where it was announced there would be a $10.1 billion pool for investment in infrastructure funding, it puts the marine sector in a good direction in terms of trade and shipping.”

“The infrastructure upgrades will allow us to keep up with demand,” continues Zatylny. “Canada’s Ports Authority has seen fairly steady, consistent growth over the past decade other than the 2009 and 2010 global drop, but they’ve recovered from that.

Shipping in the 21st Century

In observing global trade flow trends and population increases, ACPA is looking at significant amounts of additional cargo coming into Canada in the coming years. Additionally, there are still a number of trade agreements on the table that are being negotiated, even outside of the more predominant ones like CETA. But as a collective unit the port authorities have long been struggling with the ability to fund the increases and the improvements in infrastructure that are required to meet these increased demands.

“A few years ago ACPA and Transport Canada commissioned a study on our infrastructure needs. This was pre-CETA and the total at the time was about $5.8 billion. This broke down as being two-thirds developmental and one-third rehabilitative, so dealing with legacy infrastructure challenges and those needs haven’t gone away,” says Zatylny.

Federal funding is an integral part of the patchwork of financing that the Port Authority puts together to fund a project. Assuming it is set up in a way that all ports can access it then it’s going to go a long way to helping ACPA meet that demand. However, of notable concern is that Canada’s only deep-water Arctic port was shut down this past summer. The future of the Port of Churchill in northern Manitoba remains uncertain but it seems unlikely to be restarted. The closure happened in August following the federal government’s ending of the Wheat Board monopoly, which subsequently allowed Canadian farmers to sell grain to a broader markets, leaving shippers free to use lower-cost, non-Arctic ports. The Port of Churchill was the only deep-water link between Canada’s Arctic waters and its railroad network.

Marine trade employs about 250,000 Canadians with a $25 billion impact to the nation’s economy. A large volume of our imports and exports are with the United States, but at this point Zatylny does not know the ramifications of what it will mean – good or bad – with Donald Trump as the U.S. President-elect. “President-elect Trump has given indications that he wants to look at the border and so we would be concerned and hope there will be positive discussions. Canada and the U.S. have worked effectively to improve the efficiency and fluidity of cargo flow so we hope that will remain. Beyond that, what it means for global trade flows, it’s anybody’s guess right now,” she says.

On the issue of safety, The Association of Canadian Port Authorities works in partnership with the Coast Guard and the Indigenous communities on the coasts that are empowered to be first responders. Anything that strengthens the partners and improves information flow and coordination amongst all the organizations can only help to improve upon the already strong safety record.

“In Canada the government talks about the three coasts, but we say there are actually four coasts. We can’t forget we have the inland St. Lawrence River and the Great Lakes that are very strong areas for shipping as well,” emphasizes Zatylny. “One thing that wasn’t clearly enunciated in the Plan was any additional icebreaking capability. That’s an issue that all the stakeholders on the St. Lawrence and the Great Lakes have been asking to have for a long time both to provide additional safety for the transiting ships and to extend the shipping season. We hope that there will be some consideration given to increasing our icebreaking capability.”

The polar ice caps have been melting at an unprecedented rate over the past decade. While environmentalists have voiced a huge source of concern, with so much more open water it’s also being viewed as an opportunity to expand shipping lanes through the Arctic north. To connect the Atlantic with the Pacific, the Northwest Passage goes along the Northern Canadian and Alaskan coasts, the Northeast Passage follows the Russian and Norwegian coasts, and the Transpolar Sea Route crosses the Arctic through the North Pole.

“The Russians are already using the Northeast Passage but whether that happens or not here is a question for shippers,” remarks Zatylny. “That is an area that has to be approached very carefully in as much as there are still areas where there is ice from year to year.”

The Canadian Hydrographic Service, which is part of the federal government under the Fisheries and Oceans Canada division, is currently working through the extensive mapping-out of safe shipping lanes. But even ships to consider taken new routes through open water, there is still concern about large chunks of rogue icebergs that remain floating obstacles to navigate around. It would also require ships being retooled to ensure their water intakes would not suck in ice and that their systems would be able to withstand the ultra-cold water. Identifying safe shipping lanes is still very much a guessing game at this point.

“I know there have been one-offs, but shipping relies on consistency and reliability and I think we’re quite a ways off from that right now,” opines Zatylny.

Coastal Protection

In addition to the necessary infrastructure funding to ensure our nation’s ports remain relevant on a global level, the health and protection of our coasts along the Pacific, Atlantic and Arctic are critical to the environment and the economy. The federal government recently announced a comprehensive marine safety plan that meets – and often exceeds – international standards and is supported by commitments to Indigenous co-management, environmental protections, and science-based standards.

Canada has the longest coastline of any country in the world. The coasts support traditional Indigenous and coastal community livelihoods, enable the export and import of our goods overseas, are home to abundant Canadian fisheries, attract tourism, and play a substantial role in strengthening the economy.

The need for Canada to have a robust plan to ensure that our coasts are protected in a modern and advanced way is essential. Environmental sustainability, safe and responsible commercial use, and collaboration with coastal and Indigenous communities are all.

As a means to meet these aggressive but obtainable objectives Prime Minister Justin Trudeau has committed $1.5 billion to the nation’s Oceans Protection Plan.

“Canada’s economy, environment and history are inextricably linked to our coastal regions. The $1.5 billion Oceans Protection Plan will make Canada a world-leader in marine safety and takes a powerful step toward co-management of our coasts with Indigenous and coastal communities, together making sure they remain healthy, clean, and safe for generations to come,” said Trudeau, while at a recent event in Toronto.

The Oceans Protection Plan has four main priority areas:

– creating a world-leading marine safety system that improves responsible shipping and protects Canada’s waters, including new preventive and response measures;

– restoring and protecting the marine ecosystems and habitats, using new tools and research, as well as taking measures to address abandoned boats and wrecks;

– strengthening partnerships and launching co-management practices with Indigenous communities, including building local emergency response capacity; and,

– investing in oil spill cleanup research and methods to ensure that decisions taken in emergencies are evidence based.

The Oceans Protection Plan was developed based on work done over the past two years between Indigenous and coastal communities and various government programs. Implementation begins in 2017.

Quick Facts

– A significant volume of Canada’s commodities and processed goods are exported via marine transportation.

– Marine trade employs approximately 250,000 Canadians and injects more than $25 billion to Canada’s economy.

– The Oceans Protection Plan will include over $1.5 billion in funding over five years, starting in 2017-18.

– As soon as 2017, Canadians will begin to see concrete improvements, such as a Maritime Rescue Sub-Centre in St. John’s and legislation introduced to prohibit vessel abandonment in Canadian waterways.

– As part of the new marine safety system, improved marine traffic and navigation information – including hydrography and charting – will be provided to mariners, Indigenous peoples, and coastal communities.

– Enhanced resources will be provided to the Canadian Coast Guard, including new rescue stations, new towing capacity, and new communications equipment.

– New research into the impacts of increased shipping on marine ecosystems will be funded.

– New oil spill response methods will also be funded.

brakel_chamberCBJ November 2016 Cover