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Speaking notes for the Honourable Chuck Strahl, Minister of Transport, Infrastructure and Communities, to the Fifth Annual Canada Maritime conference

Montreal, Quebec
September 14, 2010

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Introduction

Thank you for your kind introduction, and I would like to thank the Journal of Commerce for organizing this event. 

I’m very pleased to be here in Montreal to make my first major speech since becoming Transport Minister to an audience focused on marine commerce.

Conferences such as this are an excellent opportunity to highlight the critical role that marine transportation plays in efficient and competitive transportation systems that serve not just Canada but all of North America.  It also allows all of us to share notes on the opportunities and challenges for our transportation sector as we go forward.

I’m also very pleased to meet you in this city, a city with a great maritime history and presence. 

Montreal, after all, is Canada’s second-largest container port and a vital component of our continental gateway and trade corridor. 

And this brings tremendous benefits to the city and the region.

In fact, according to the Port of Montreal, port activity represents 18,200 jobs and generates $1.5 billion in economic spin-off for the greater Montreal area.

It brings in travellers as well. The cruise terminal welcomed more than 47,000 cruise travellers and staff last year. The money they spend means jobs and economic activity right here in Montreal.

But most important, the Port of Montreal — and the other marine ports across our country — are key to keeping our Canadian economy moving.

It is because of their significant role that the Government of Canada has taken steps to ensure that our ports continue to be well positioned to meet the challenges of the global marketplace. 

Canada Port Authorities were created in the late 1990s under the Canada Marine Act as autonomous, commercialized entities capable of charting their own strategic direction and responding to their own specific market demands. 

Recent amendments to the Act in 2008 provided greater operating and financial flexibility for these ports, including the ability of Canada Port Authorities to apply for and receive federal infrastructure funding. This also included funding for environmental sustainability initiatives and the implementation of security measures. 

Looking back, these amendments proved to be crucial for ports as we weathered the worst recession since the 1930s.

The last two years have been challenging for our economy and ports were no exception. Canada’s Economic Action Plan responded to this economic crisis, putting much needed investment to work to stimulate the economy and create jobs across the country. 

As part of this plan, our government through the Infrastructure Stimulus Fund invested in Canada’s ports, including the Port of Montreal, to improve the intermodal connections between the marine and trucking modes.

And in other ports along the St. Lawrence, such as Sept-Îles and Trois-Rivières, we invested in key projects that will beneficial for the regional industries and serve Canadian exports, which are so vitally important to the Canadian economy.

Other investments were made across the Canadian port system, from Belledune on the east coast to Vancouver on the west coast.

These investments are all part of the $104 million that the Government of Canada put into marine facilities as part of the Economic Action Plan. 

And, it is important to recognize the role that the transportation industry, people such as yourselves, played in bringing these projects forward and committing your own funds in support of these projects.

These infrastructure investments have now all been committed and the projects are being implemented.

And these investments are having the desired effect.

They boosted the economy when Canada needed it most, creating much-needed jobs across the country. 

And as a result of this stimulus, we will continue to create jobs and economic growth for years to come by helping Canadian businesses play a bigger role in global supply chains.

However, complex challenges don’t end there. The work continues for government and for industry. 

While much has been done to invest in and renew infrastructure, we have other challenges that require new ways of doing business.  These include:

•   strengthening our competitiveness in the rapidly shifting global economy;
•   improving our environmental performance; and
•   building strong partnerships across industry and governments. 

These challenges require that we dig deeper; that we use our intelligence, our imagination and our capacity for innovation.  Let me take a few moments to address each of these.

Competitiveness

While Canada has come out of the recession relatively well compared to other G8 economies, these remain challenging times for the Canadian economy and the transportation sector.  The emerging economies of China, Russia, India and Brazil have sparked tough competition among global supply chains - and it will only get tougher. 

Canadian ports are competing with the other North American ports for a bigger share of global shipping, and we are not alone in examining the strengths and the weaknesses of our supply chains and the logistics system that supports them.

Meanwhile the expanded Panama Canal will open in 2014 and create new challenges and at the same time, open new opportunities.

As you are aware, shippers take a close look at port productivity and how well goods will move inland either by rail, truck or short-sea shipping. 

They want efficiency, competitive costs and reliability.  They don’t want hassles, burdens or surprises. They’ve got other things to worry about, and they are inclined to go with the solutions that make it easier to do business.

The quest for more efficiency is certainly on the top of everyone’s priorities. It leads to lower costs, more stable revenues, and predictable reliability. Each partner in the supply chain tries to squeeze as much efficiency as it can in its own operations. 

Increasingly, however, we are realizing that the major gains yet to be made will come from working together, in a more integrated way.  This approach to transportation and trade is at the heart of our gateways and corridors approach.

We are currently in the process of implementing supply chain performance measurement tools that will track performance improvements over time and ensure gateway investments payoff. 

Dwell time performance for import rail containers last year at Canada’s leading ports were consistently below three days, making them global leaders in efficiently moving containers from the dock to the connecting inland rail service.

Certainly reliability is a key factor in attracting and building new business.  A reliable port system means Canadians can enjoy access to competitively priced goods and services.  It also means that the transportation system must continue to support the Canadian economy that is still very much reliant on exports.

Environmental Sustainability

While we seek to improve our transportation systems, we cannot overlook environmental impacts of what we do. 

The marine sector is proud of its role in providing a green transportation option—but even a green mode has to keep improving and striving to be greener. 

As many of you are aware, Green Marine is a collaboration among some 44 stakeholders of the St. Lawrence and Great Lakes maritime industry on both sides of the border.

This collaboration has launched an evaluation program that encourages each stakeholder to assess its performance against seven key environmental issues such as cargo residues and greenhouse gas emissions.

Because many of the solutions to the environmental components of transportation will involve technological innovation. Investing in the right technologies, research, and business practices provides a competitive edge by improving efficiency, reliability and sustainability. 

On the international stage, the Government of Canada has ratified a number of international conventions aimed at addressing the environmental impacts of the transportation sector. These conventions will better protect the marine environment and biodiversity, as well as the safety of vessels, goods and workers on board vessels. 

Canada and other countries will be taking actions to implement these conventions.  Canadian industry, for its part, will need to comply with these international requirements to stay competitive with their international counterparts.

Furthermore, we will continue to work with the United States and other trading partners to  pursue environmental objectives, while keeping in mind that we need to maintain an efficient transportation system. 

The marine industry remains a critical transportation component serving the North American economy.

We need to recognize that our environmental goals are the same as our economic goals.

A more efficient system for example, not only helps reduce greenhouse gases, but efficiency is important for our economy as well.

They are not mutually exclusive.

Partnerships

There is one theme that I see as being essential to how we move forward with improvements to our transportation system— something without which we cannot improve the efficiency, reliability, or environmental sustainability — and that is the need for partnerships. 

Partnerships within the marine sector.  Partnerships across different modes.  Partnerships between governments and the private sector, and among levels of government.  Partnerships at the international level.

Certainly the Asia-Pacific Gateway and Trade Corridor Initiative continues to demonstrate the value of these kinds of partnerships. 

Investments in infrastructure projects worth more than $3 billion are the result of partnerships between different levels of government and the private sector, with total federal investments of over $1.4 billion.

We have seen the benefits that have come from the gateway and corridor approach on the west coast and that is something we want to replicate in the Atlantic and Continental gateways. 

We know that the Asia-Pacific partnership took a long time to evolve — more than a decade. 

And one of the most important lessons from the Asia-Pacific initiative is that it takes much more than infrastructure to improve the competitiveness of a gateway and corridor.

The partnership among Prince Rupert Port Authority, Maher Terminals and CN has yielded impressive results.

Last year, while most ports in North America were seeing their volumes drop in the midst of the economic crisis, Prince Rupert volumes were growing at a rate of 45 per cent. And growth has continued into 2010.

We have implemented policy measures to make the gateway and corridor more competitive, identified measures to increase our efficiency and promoted our unique advantages abroad through ministerial visits and a targeted marketing strategy. 

Thanks to the close collaboration among all our partners, our message is being heard. 

Over the past two years we have been developing the Continental and Atlantic gateways, building the partnerships that are so necessary to realize the full potential these gateways have to offer.

As we look towards the future, it is clear we need to focus on those issues that affect our competitiveness in a global marketplace.

For example, we need to examine existing governance structures and our regulatory frameworks to ensure that they are not impediments to growth.

It takes policies that are integrated across jurisdictions, and every stakeholder pulling together with a common objective.  It takes a truly creative approach to bring different modes together in ways that have not been done before.

The ports and the railways already understand this and I think it is a sign of good things to come. They have come together to address performance issues and establish a system of metrics to measure how well they’re moving freight through the system.

When you measure this kind of performance, it puts everyone’s focus on the right goals:  improving the efficiency of the system as a whole, and demonstrating our ability to meet the needs of domestic and international shippers. 

This doesn’t just help the ports and the railways; it helps the whole supply chain.

Ladies and gentlemen, partnerships have been key to the success of our gateway initiatives and, in my mind, they are the essential way forward.

For example, today, we speak of a “value-added” gateway.  In essence, this means pursuing initiatives that fully lever the economic value of our gateway investments. 

Supporting the development of strategic inland ports brings together clusters of related industries that generate new investment and job creation.

Our government has also put in place several tax incentives that encourage the growth of our import and export sectors and provides Canada with the most competitive tax system among G7 countries.

For example, we harmonized the tariff rules for international maritime containers with those of our American partners.  We’ve completed consultations on a proposed waiver of import duties imposed on foreign-built ships.

In the last Budget, we committed to eliminating all tariffs on machinery and equipment so that by 2015, Canada will be a tariff-free zone for manufacturers.

We will continue to work with other governments and industry to create the right environment to allow value added industries to grow and prosper along our gateway and transportation corridors.

This is a great time to be involved in transportation.  While there are challenges ahead, what I see are new opportunities.  I’m looking forward to working with the marine industry and its intermodal partners to address these challenges head on and to seize these opportunities. 

Thank you.

Date modified:

2010-09-14

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