By Brian Dunn
An ambitious $775 million expansion project at the port of Quebec is facing a lot of push back from several organizations. The project, backed by CN, is a deep-water container terminal known as Laurentia terminal. It is being reviewed by the federal government for national security reasons, since one of the partners in the project, Hutchison Ports Canada, is a subsidiary of Hong Kong-based C.K. Hutchison Co. Hutchison is the largest container port operator in the world, overseeing 57 container ports in 27 countries, with the equivalent throughput of 86 million TEUs in 2019.
CN and Hutchison will inject $505 million into the terminal. Under the agreement announced last year, the terminal will be operated by the two major partners for 60 years. The terminal is expected to be completed by 2024 and have an annual capacity of 700,000 TEUs.
Laurentia’s Managing Director is Don Krusel who used to be CEO of Prince Rupert Port Authority two decades ago, and spearheaded development of what is now the Fairview Container Terminal.
Like any project that involves foreign investment, Laurentia is subject to the provisions of the Investment Canada Act, providing for a review independent of political intervention, according to Treasury Board President Jean-Yves Duclos. But, like many major investments in Canada, politics are never far removed. Now, environmentalists are piling on.
On the other hand, Port of Québec says it has received the support of 170 municipalities and regional municipalities in the province. “There’s a huge potential in these communities in this region to build upon the supply chain that’s going to be created by Laurentia to expand economic opportunities in this region,” Mr. Krusel said. The port has already drawn interest from major exporters for such products as Prairie grain but also forest, agricultural and high-tech products from Quebec, and a two-way trade in automobile parts with Europe. The port even received a testimonial from Port of Rotterdam, one of seven major partners to sign memoranda of understanding with Québec Port Authority. “The opportunities are endless,” Mr. Krusel said.
The project has also received a formal letter of support from Grand Chief Konrad H. Sioui of the Huron-Wendat Nation. The letter, copies of which were sent to the federal and provincial governments, noted that the project “offers environmental commitments” and “will be able to respond to contemporary issues of the economy and integration through a Huron-Wendat perspective,” said a news release from Québec Port Authority. The Huron-Wendat occupied the area stretching from the Great Lakes to the Gulf of St. Lawrence when European explorers first arrived in the 16th century. The First Nation’s territory included the large village of Stadacona, now the site of Québec City. “It is extremely important to engage with First Nations groups that are impacted right from the start, and that’s what the Port of Québec did for the last many years,” Mr. Krusel said.
Conservative MP Pierre Paul-Hus told the Journal de Québec he suspects the project is being delayed because Liberal members from the Montreal region do not want the Quebec expansion to take place. Quebec City mayor Régis Labeaume feels the same way, noting he never heard any concerns about national security until now. Even Quebec Premier François Legault has weighed in, urging the Trudeau government to give the green light to the project. He noted it will provide 1,200 construction jobs and offer employment to 1,000 workers to operate the terminal once completed.
Port of Quebec spokesperson Frédéric Lagacé pointed out Hutchison already has a presence in Canada as a shareholder of Husky Energy, in addition to investments in Adrien Gagnon natural health products, Park N’Fly airport parking lots operator and through the (Hutchison founder) Li Ka Shing Foundation which is incorporated in Canada.
“We are aware of the existence of this legislation. It is up to Hutchison Ports Holdings to initiate the (review) process with the Government of Canada,” said Mr. Lagacé. He added that he doesn’t believe the review process will delay the projected 2024 completion date. Neither CN nor Hutchison would comment on the review.
While the local business community is solidly behind the project and its economic benefits, others are not. Even if the project does get past the review process, it must then contend with environmental groups which seem to be growing by the week. In mid-November, the Impact Assessment Agency of Canada, a division of Environment Canada, said the Laurentia project will have “significant adverse environmental effects [direct and cumulative].” And that it is now up to the federal government to judge whether these are “justifiable.”
The Port Activities Vigilance Committee (CVAP), representing citizens and groups affected by port activities, issued a report in late November that stated that, “due to the facts that have been documented by the expert assessors on the negative impact that the Laurentia project will have on the air quality in the neighbourhoods and the quality of life in the central neighbourhoods of Quebec City, CVAP is opposed to the realization of the expansion project of Port of Quebec.”
In early December, a report by the Quebec Ministry of Environment’s environmental and strategic assessment branch, said that due to the already high concentrations of nickel in the air, Port of Quebec must reduce its “current and future” nickel emissions if it wishes to carry out the Laurentia project. Even members of Quebec’s cultural community have opposed the project, claiming it will destroy wildlife habitats and be harmful to human health. Several Quebec City council members are having second thoughts about the project which has also faced opposition from both University of Laval professors and students.
As opposition to the Laurentia project grows, Mr. Legault said he wants his own government to be able to assess the environmental impact of the terminal.
In response to all the opposition, the Port claims the environmental impact from the expansion will be minimal, because it will handle containers and not bulk cargo and 90 per cent of the containers will be transported by rail and not trucks.
The Port has submitted its follow-up brief to the interim report issued by the Impact Assessment Agency of Canada. The Port’s position is that the brief, which is based on the most current and complete scientific data available, demonstrates that the Laurentia project presents no dangers to human health, is environmentally responsible, and will shape the economic development of Eastern Quebec and the province as a whole.
“We believe that our brief, produced with the assistance of known experts, effectively and comprehensively addresses the key issues raised in the Impact Assessment Agency of Canada’s interim report,” said Port of Québec President and CEO Mario Girard. “Our position is based on sound research, modern science and hard data. Over the past eight years, the Port has done a considerable amount of work assessing Laurentia’s potential impacts on the environment and the community.”
“The bottom line is that Laurentia is a necessary piece of infrastructure in order for Canada to remain competitive on the East Coast, and to not only regain the market share that has been lost over the last couple of decades, but to actually increase its market share,” Mr. Krusel said. According to the Port Authority, the Laurentia project will create the equivalent of 1,750 full-time jobs each year during construction, and “1,000 indirect, induced, and high-paid direct jobs in Canada once commissioned.” Mr. Krusel predicted that when it begins operation, Laurentia “will be the most technologically advanced terminal in North America.” It will also be among the most environmentally friendly “because it will be run on electric or hybrid electric equipment throughout.” By the Port Authority’s estimates, each container flowing through the terminal will have a greenhouse gas footprint that is 18.5 per cent less than for existing terminals.
It would be a major blow to Hutchison if the Laurentia project is rejected. In the past two years, the multinational was rebuffed twice, once by Israel and again by Australia where it had proposed major investments.