VPA’s future growth hangs in the balance

by James Menzies

VANCOUVER, B.C. – Canadian ports are in danger of losing business to their American counterparts if the federal government doesn’t approve legislative changes that would allow the ports to better grow their business.

That was the message a federal review panel heard when it visited the Port of Vancouver recently, to discuss the legislative changes recommended by the Vancouver Port Authority (VPA).

While the government isn’t expected to announce a decision until June, the VPA says there’s a lot hanging in the balance and regardless of what the feds decide to do, the trickle-down effect will be felt by the trucking industry in B.C.

The Port of Vancouver is Canada’s busiest port, moving about 72 million tons of cargo last year alone.

About half of that freight is either picked up or dropped off at the port by truck.

But the VPA says the port could lose its competitiveness if action isn’t taken to allow the port to seek capital to expand and improve its services.

The changes the VPA has requested include: Ending the stipends paid to the federal government; removing the cap on commercial borrowing; clarifying the issue of payments in lieu of taxes; allowing public investment into port infrastructure; and providing ports with preferred borrowing vehicles.

Jon Hicke, assistant manager of corporate communications and public affairs with the VPA, says the federal government’s willingness to consider the port’s requests will have a monumental effect on its future viability.

“The overall goal of this is to help keep Canada’s ports competitive and on equal footing with our competitors,” says Hicke, noting the Seattle, Tacoma and Portland ports are the biggest of the VPA’s competitors.

“We’re at a crossroads…a decision has to be made.”

While the Port of Vancouver is often favored over the Western U.S. ports because of the currency advantages of shipping into Canada, that won’t necessarily last and the time to act is now, says Hicke.

He says there’s a completely different way of thinking in the U.S., and that puts them at a competitive advantage in many aspects.

“The way the U.S. ports are seen is they’re an economic generator, but in Canada we’re a revenue generator,” says Hicke.

“In Canada we have to pay taxes but in the U.S. they actually raise taxes so if you were living nearby a port you would have to pay tax to the port. That’s an additional stream of revenue that’s available to the U.S. ports. We’re not saying that we should be a taxing authority but it doesn’t make any sense for us to be giving this money away when we could be re-investing it in our own infrastructure.”

The VPA feels it can nearly triple its business by 2020 if the government removes the handcuffs and lets it grow its business. That means removing an imposed borrowing cap that currently sits at about $225 million, an arbitrary figure, according to Hicke.

“We need to be able to pursue private sector borrowing,” says Hicke, noting a new terminal could cost upwards of $1 billion. “That’s not something we can achieve on our own, we need partners to help invest.”

If the government refuses to budge, Hicke warns of a bleak outlook for the Port of Vancouver, and industries such as trucking that rely on it.

“The worst case scenario is that our business will decline and jobs will suffer,” says Hicke.

“We need to be seen as an economic generator…we can create an additional 55,000 jobs (by 2020) and obviously some of those would be in the trucking industry.”

While the B.C. Trucking Association (BCTA) hasn’t formally taken a stance on the port’s requests, president Paul Landry says he’s supportive of the initiative.

“I think it’s fair to say the flexibility the port is looking for in terms of being able to secure investments and whatnot…is the kind of initiative that the port needs in order to grow its business so I certainly wish them well and I hope the federal government is listening to their proposal and gives it serious consideration,” says Landry.

“It’s potentially a substantial area of growth for our industry. Those containers coming and going are business for us, there’s no question.”

Landry does, however, hope that traffic congestion in the Lower Mainland isn’t forgotten in the shuffle, because he says it’s hampering the trucking industry’s ability to serve the port.

The review panel extended its visit to four days from the originally planned two, due largely to the overwhelming support the VPA had garnered for its cause.

A number of presentations were made in support of the changes.

The panel has since returned to Ottawa and will report back to federal Transport Minister, David Collenette.

He will then table a report to the House of Commons in June, in what will be a crucial announcement for the future of the Port of Vancouver and other Canadian ports.

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