Introduction
Canada’s ports play a key role in supporting the economy and global trade. In 2018, ports and marine shipping carried nearly $113 billion (19%) of Canada's exports to world markets and brought in $138 billion (23%) of Canada's total imports by value. Canada has over 550 port facilities – with 17 designated as Canada Port Authorities. In total, about 60% of Canada’s marine commercial cargo tonnage is handled by the Port Authorities.
The current system has served Canada well in supporting economic development and international commerce. However, the operating landscape has changed a great deal since the system was launched over 20 years ago, and it will continue to evolve quickly.
There is a greater need for ports to be competitive, efficient and sustainable, while maintaining a high degree of safety and security. As hubs connecting ocean going vessels with landside operations and transportation (rail, trucking, inland transloading facilities, etc.) in an increasingly integrated global economy, ports are more important than ever. These operations need to be coordinated across the supply chain to optimize port, rail and road activities and speed trade to its ultimate destination – whether in Canada or around the world.
At the same time, the importance of Canada Port Authorities is being felt at the local level. More and more Indigenous and local communities want a greater say in matters that impact their communities and quality of life.
In this context, the port system is being be re-examined to make sure it is still well-positioned to support Canadian trade while also responding to the many needs of Canadians.
Objectives and approach
The Ports Modernization Review was launched in March 2018 by the Minister of Transport, and focuses on how ports can make progress on five key goals:
- Supporting the competitiveness of Canada’s economy by facilitating the movement of goods
- Strengthening relationships with Indigenous peoples and local communities
- Promoting environmentally sustainable infrastructure and operations
- Enhancing port safety and security
- Optimizing governance and financial management
An engagement process was launched to gather input on these goals and other related issues outlined in the Discussion Paper. Between spring 2018 and winter 2019, Transport Canada spoke with:
- Canada Port Authorities
- Indigenous communities
- industry representatives
- provincial and municipal governments
- community associations
- labour groups
- academic experts, and
- the public
Transport Canada held five ministerial roundtables with stakeholders across Canada (West Coast, Ontario, Québec, and Atlantic).
We also consulted stakeholders and the public online. Canadians were asked to respond by December 3, 2018. We received over 130 comments and over 120 formal submissions. Submissions were only made public with the permission of the author, other submissions have been kept private.
Read feedback from stakeholders and the public on the on the Let’s Talk Transportation website.
This report summarizes the themes that came out of these consultations.
Stakeholder views
The following sections summarize feedback collected through our engagement with Indigenous communities, stakeholders and the submissions from the website. They have been organized to reflect the review’s objectives.
The opinions and views expressed in this report are solely those of the stakeholders and should not be interpreted as those held by Transport Canada or as a guide to the potential outcomes of the Review.
Supply chain efficiency and competitiveness
Stakeholders want to make sure that Canada’s ports stay competitive and supply chains are fluid.
They want to promote and invest in new infrastructure and technologies that help supply chain actors work together to operate more effectively. “Supply chain actors” include Canada Port Authorities, marine carriers, rail, trucking, transload facilities, shippers, Indigenous partners, port communities, environmental groups, and governments.
Industry players and port authorities raised the issue of competition among ports for funding. They asked for a more coordinated approach such as a national strategic plan to guide investments in ports and intermodal infrastructure to make sure we are making good investments now, and in the future. They said that having supply chain actors work together would help them:
- use the available industrial land in the best way possible
- balance the needs of their communities, and
- make the movement of goods through the Port and local jurisdictions more seamless
They stressed that collaboration would encourage investment in projects that could improve capacity beyond the port, increasing supply chain fluidity while focusing on common user projects. Using inland ports was also seen as a way to address port land constraints and capacity issues.
Stakeholders said that Port Authorities are key to improving existing port capacity and developing infrastructure where markets have failed to provide, such as short sea shipping. Port Authorities’ role as protectors of industrial land was also encouraged to secure availability of land for infrastructure projects key to fluidity of the supply chain over the long term. In return, some see the purchase of lands that are not immediately used for port purposes as a direct encroachment into communities despite city planning and local concerns.
Participants also believed there is a need to improve supply chain visibility through the development and use of technology to improve the efficiency, capacity, reliability, resiliency and competitiveness of Canada’s supply chains.
Port Authorities, port users and industry players noted a number of technologies and activities that could help enhance monitoring to improve the competitiveness and fluidity of Canada’s supply chains. Examples include:
- data gathering
- blockchain and distributed ledger systems
- internet of things
- artificial intelligence (AI)
- autonomous vessels and vehicles
- automation in terminal facilities, and
- radio frequency identification (RFID)
The use of technology for performance monitoring through the sharing and managing of data could improve the trade logistics process, supply chain efficiency and competitiveness, and enable enhanced inter-port cooperation.
Participants highlighted the need to deal with current and future labour issues related to automation and innovation at ports.
Training and re-training was seen as an important part of supporting career advancement in automated and modern port environments. A stable workforce and good relationships between unions and employers are key to making sure port and supply chains operate normally. Workforce retention was identified as a need for ports located outside of urban centres.
Partnering with Indigenous peoples
As part of the engagement process, we heard that relationships between Port Authorities and Indigenous communities can vary. Port Authorities and Indigenous communities have shown they can work together, building partnerships on mutually important issues while advancing individual goals.
Participants stressed that more could be done to recognize Indigenous rights and increase efforts in addressing issues and considering interests raised by Indigenous communities.Footnote 1
Creating more opportunities for Port Authorities and Indigenous groups to work together was encouraged. Examples of this include:
- holding Port Authority meetings in communities whose traditional territory includes the port location
- including Indigenous knowledge in environmental stewardship and monitoring
- integrating Indigenous perspectives into port activities and projects
They also maintained that the Government should update its Indigenous engagement policy for Port Authorities.
When it comes to governance, some stakeholders believed that having Indigenous representatives on Canada Port Authorities’ boards and involved in the decision-making process could be a step towards reconciliation.
Recommendations were made on changing the roles and responsibilities of Port Authorities in the Canada Marine Act to provide a venue for Indigenous communities to ensure their rights are respected and interests are considered in the decision making process.
Participants also stressed the need to consider Indigenous interests when planning for the future.
They suggested that fees collected by Canada Port Authorities could be shared with Indigenous communities to support their economic development. Another suggestion was that a benefits policy could be developed for Indigenous communities that host national transportation infrastructure on their territory. Participants also thought that procurement and contracting opportunities for Indigenous groups were key for economic development.
Sustainability and port communities
Throughout our consultation, we often heard about the need to make Canada’s strategic ports more environmentally sustainable. Canada Port Authorities are adapting to a changing marketplace. Canadians expect them to deal with the social and environmental needs of local communities and to protect the environment where they operate.
Participants want more efforts to reduce greenhouse gas (GHG) emissions to address climate change and promote resilient port infrastructure.
Indigenous peoples, municipalities, communities and industry groups stated that Port Authorities have an important role in supporting the Government’s goal of reducing greenhouse gas emissions from all sectors. Canada Port Authorities suggested that the Government should create a fund to support port infrastructure programs to manage and offset greenhouse gas and air emissions.
It was also noted that Port Authorities should be required to use a sustainable development approach and give more prominence to environmental considerations in decision making. This would include regular assessments of the ports’ climate change vulnerability and creating plans to adapt to climate change.
Participants also called for a better and more consistent sustainability framework.
Indigenous peoples, municipalities, communities and other organizations believed that Port Authorities have a leading role in promoting sustainable practices for port users. However, it was felt that the framework that the Port Authorities currently have to achieve this goal needs to be improved. It needs to be more specific, with a higher standard of environmental objectives, practices, and the performance expected of Canada’s strategic ports.
These participants stated they expect more openness and public accountability for port performance, plans, and practices related to environmental stewardship and climate change adaptation. Participants also said they wanted both the federal government and a supporting national program to monitor the environmental performance of Canada Port Authorities.
Participants emphasized the importance of assessing and managing the negative impacts of port development and operations.
They encouraged work done by Canada Port Authorities to ensure land use compatibility, which is a known principle of good planning that separates and protects sections of land where land uses could cause environmental problems for other sections. Participants also encouraged the Port Authorities to use a joint vision approach for land planning.
Indigenous peoples, municipalities and communities wanted to be more involved in planning and problem-solving related to the impacts of port activities. They wanted to be involved in the process earlier and more often.
Some participants had concerns about the rigour and credibility of Port Authority-led environmental assessments, while Canada Port Authorities were of the view that the scope, complexity, and length of assessment processes made it complicated to develop necessary infrastructure in order to support trade.
Participants also highlighted the need to better integrate the environment in the governance of port operations.
They believed environmental stewardship should be more central to the mandate of Canada Port Authorities. Some participants noted that Port Authorities would benefit from better representation of environmental and local interests in their board composition. Participants also expected Canada Port Authorities to observe the most rigorous environmental standards, no matter the jurisdiction.
Safety and security
Participants identified several issues related to safety and security. As elsewhere, the marine sector is not immune to organized criminal activities, although they do not originate in ports per se. They asserted that there is a need to make sure action is taken to address vulnerabilities that might arise within Port Authorities. Participants underlined that sharing information, responding to crises and ensuring port safety and security were vital to maintain effective operations at Canada Port Authorities.
Stakeholders expressed interest in an updated security framework for ports, with more collaboration between federal, provincial, and municipal authorities and security partners.
They stated that formalizing operations and information-sharing measures between federal agencies, Port Authorities, local emergency services, enforcement agencies, municipalities and partners were key to supporting a collaborative approach. Participants also encouraged ports to develop joint strategies with municipal and provincial jurisdictions for safety and security services, such as policing, flood and fire protection at ports. They also encouraged enhanced collaboration to address security issues posed by organized crime at ports, notably improving customs examination processes and reducing delays to inspect cargo.
Stakeholders highlighted that the ability to respond to marine disaster incidents, such as oil spills, is critical to Port Authorities promoting trade and protecting the environment.
They welcomed efforts to improve coordination between federal departments and Canada Port Authorities on ways to manage marine safety risk for cargo vessel traffic.
Participants also noted the importance of technology for operations and information sharing as well as the vulnerabilities it poses to Canadian ports today.
Port Authorities and port users asked the federal government to develop cyber security guidelines that both Port Authorities and stakeholders can use in their day-to-day operations.
Participants said that collaborative partnerships and information sharing are key factors the federal government should consider when developing future policies on cyber security issues. To support these policies, participants said there will be a need for funding for safety and security activities and implementation of new technologies at ports.
They considered federal funding programs as key to supporting Port Authorities’ and terminal operators’ security regimes and safety obligations. They said they need more federal resources to add to funding from provinces, municipalities and ports to ensure border security.
Port authorities and port users also raised the issue of investing to purchase modern technologies for access control and surveillance. Finally, they encouraged consistent standards for employee security screenings at ports.
Governance
Stakeholders stressed the need to improve the governance of Canada’s strategic ports. Many believed that Canada Port Authorities need to adapt to growing commercial demands and that there is value in better coordination at a system level to make operations more efficient.
It was also noted that since Port Authorities vary considerably in size, operations, resource capacity and local context, the current model needed to change to make sure Port Authorities continue to meet their legislated mandate. They also thought that ports’ eligibility for Canada Port Authority/national strategic port status should be examined. A regionally-integrated approach to capacity planning and strategic development, including inter-port cooperation and amalgamations, could take advantage of the existing complementarities among ports. “Complementarities” means that instead of competing, ports work together to fill gaps and benefit from each other’s strengths.
Stakeholders believed that reviewing the mandate of Canada Port Authorities would help them deliver on multiple policy objectives. A stronger and clearer mandate is key to balancing national, local, economic, and social interests.
The current mandate of Canada Port Authorities was seen by some as needing stronger federal involvement, while others believe that less federal involvement would enable Port Authorities to better focus on their trade mandate. A number of community organizations and industry stakeholders were concerned with Port Authorities’ dual commercial and regulatory role. Some asserted that the Port Authorities’ role as arms-length entities that also carry out port regulations, especially with regard to infrastructure projects and environmental assessments, needs to be reviewed. Many stakeholders also believed that the scope of Canada Port Authorities’ Crown agent status for Indigenous communities needs to be clarified.
Participants had differing views on the choice and make-up of Boards of Directors.
The board appointment process was seen by port authorities as too lengthy. More broadly, a range of stakeholders also believed that the process did not ensure that Boards had a wide range of competencies, experience, and perspectives. As such, participants expressed that some boards lack directors with experience in key areas such as the legal, accounting and engineering fields, and wished to have this change.
Some communities and industry associations would like boards to have greater representation, or at least more involvement, from host communities, Indigenous peoples, civil society, environmental groups and labour. Others wished to have less government oversight in appointing directors, so that boards could make more independent appointments.
Participants expected modern standards of participatory governance – meaningful, inclusive engagement that feeds into decision-making, transparency and accountability.
They highlighted the need for Canada Port Authorities to better respond to local concerns and take into account the interests of host communities, Indigenous peoples, civil society, environmental groups and labour along with those of port users.
Participants wished to see the needs of all stakeholders and partners factored into the decision-making process. Creating a permanent, ongoing dialogue and way to participate in strategic planning was favoured over one-off consultations. Communities also wished to have more consistency in the scope and nature of consultations, including consultations with Indigenous peoples. Participants believed it was essential for Port Authority and municipal decision-making (e.g. land-use planning) to be more aligned.
Participants asked for changes to the way the Government oversees Canada Port Authorities.
Communities, some industry players and port users believed that the current level of transparency and accountability is not enough. They would like to see more accountability between Port Authorities and the federal government. Some participants asserted that changing the scope, level, and use of oversight was key to making sure that Port Authorities consistently and responsibly manage strategic public assets.
Port Authorities themselves maintained that the complexity and length of the amendment process for their letters patent – the federal instrument for defining Port Authorities’ powers– keeps them from responding to market opportunities. When it came to disputes with Port Authorities, some participants conveyed that there needs to be more support for port users and stakeholders.
Port users asserted that making sure that Canada’s strategic ports stay competitive should be a key goal of the Government’s economic and transportation policy. They proposed that this could be done by offering companies efficient, coordinated and cost-effective services. Participants stated that creating an updated gateway and corridors strategy was vital to securing Canada’s trade competitiveness.
Financial authorities
Participants largely agreed that Canada Port Authorities are essential enablers of economic growth, with some respondents emphasizing the importance of ports being given financial flexibility to deal with a volatile trade market. Port Authorities’ flexibility to changing market dynamics was seen as crucial by industry leaders in the export and import sector. Examples of this flexibility include allowing Port Authorities to develop business tied to industrial, commercial, and residential activities.
It was also recognized that the marine industry is changing and that access to capital is critical for long term success at Port Authorities. In response, industry players and associations encouraged the Government to permit Port Authorities to use financing options that would enable them to act on time-sensitive proposals.
The cost and method used to calculate Gross Revenue Charges and Payments in Lieu of Taxes was also raised. Some respondents, predominantly municipalities, thought that Port Authorities are not paying enough for their use of Government-owned land. Other industry groups, and Port Authorities themselves, disagree with this view. They posit that the charges make it harder ports to remain financially self-sufficient and fund infrastructure over time.
Participants emphasized the complexity of large maritime infrastructure projects and the importance of accessing capital via public and private funding.
There is broad consensus that expanding port infrastructure is vital to meeting future demand at Canada Port Authorities. That being said, there were also concerns about the effects large infrastructure projects could have on local communities. Port Authorities and business councils seek improvements to the procedures and timelines for borrowing limit increases as they are necessary to develop new growth opportunities. Similarly, they suggested that more diverse funding sources, beyond Government infrastructure funding programs, are essential to ports meeting future needs.
Canada Port Authorities requested greater authority to expand into industries beyond traditional port activities.
Port Authorities believed that access to new activities would allow them to earn revenue that is slightly diversified from the marine trade sector. To remain financially self-sufficient, Port Authorities carry out both core and non-core activities permitted under the Canada Marine Act and their letters patent. Of note, Port Authorities generate income from similar sources as their peers in other countries. These activities include: renting, wharfage, dredging, and investing excess liquidity. In contrast, municipal stakeholders understood the lucrative nature of some non-core activities, such as residential projects, but also raised concerns about Port Authorities carrying activities being related to a completely different industry than that of marine trade.
What’s next?
The Ports Modernization Review is examining ways to make Canada’s major ports among the most efficient and cleanest in the world by updating the governance structures that promote investment in Canadian ports.
To this end, Transport Canada is analyzing what was heard from participants during the engagement process. The feedback will help us identify potential policy, legislative and regulatory changes that we can make to strengthen Canada’s port system.
Transport Canada would like to thank all of those that have shared their time, views and expertise to support the Ports Modernization Review.