By Keith Norbury
Several Canadian ports have expanded their facilities in recent years, including enhancements to their breakbulk and project cargo capabilities. However, many of those same ports still have even bigger plans and are hoping that some of the $120 billion in infrastructure funding promised by the federal government will help them realize those plans. What follows are examples of those projects, both completed and proposed, from ports across Canada.
Saint John announces big project
Port Saint John announced a $205 million infrastructure project this July to upgrade its western terminals, primarily to nearly triple its container capacity but also to enhance its ability to handle breakbulk and project cargo, said the port’s President and CEO, Jim Quinn. But, that will only be the beginning, according to Mr. Quinn. The port is looking at spending another $445 million just on additional improvements to its western terminals. “We have to make sure that our country is in position to have the appropriate assets to ensure that our trade is efficient and effective and that we can service our country and also that we can service other parts of North America,” Mr. Quinn said.
Cost of the $205 million project is split evenly among the port, and the provincial and federal governments. The federal contribution is from the national infrastructure component of the New Building Canada Fund, which had been established by the previous Conservative government. To help raise the remaining $445 million, the port hopes to tap the additional $60 billion fund that the new Liberal government established but which has yet to be allocated. (See related story.)
The $205 million project has four key elements, Mr. Quinn said. The first of those is to replace concrete piles at the face of the container terminal with a caisson structure that will have a 100-year life expectancy and strengthen the dock. That will enable the dock to carry loads of 2,000 pounds per square foot compared with 200 pounds at present. The project also called for bringing in larger, 100-gauge cranes to handle the containers. “We’re doing that because the existing equipment has a couple of challenges,” Mr. Quinn said. “One is reach, one is air draft. To accommodate some of the vessels we get in here now we sometimes have to allow the tide to go down to achieve sufficient air draft above the containers.” Other elements of the project include a new and automated intermodal rail yard and dredging of the main channel down to 10 metres from 8.4 metres at present. That will give the port more time to work before high and low water of the massive tidal swings of the Bay of Fundy.
Once completed, the project will increase the container terminal’s capacity to 330,000 TEUs a year from 125,000 at present. Mr. Quinn didn’t say when construction would be completed or even when it might start, although he did expect a request for proposals for detailed design and engineering to go out by mid-September.
In the meantime, the port signed a deal in June for DP World to become its new terminal operator, taking over from Logistec Corporation. Mr. Quinn said the port is excited to partner with DP World, which has a network of 77 terminals around the world, handles 77,000 TEUs daily, and services 70,000 vessels annually. “And they’re determined to make this port their footprint in eastern North America,” Mr. Quinn said. The deal includes the lease on the port’s Navy Island breakbulk facility that will expire in 2020, Mr. Quinn said. The facility used to handle up to a million tonnes of forest products each year, but that has dropped off significantly.
The port has handled windmills as well as special lifts of equipment for the nearby Irving Oil refinery, which has spent hundreds of millions of dollar on upgrades in recent years. The port is also “doing an awful lot of work in facilitating the discussion around tidal power” projects proposed for the Bay of Fundy. And Saint John is also poised for a huge impact from the proposed Energy East pipeline project, should it receive approval.
“At some point you may see Saint John become an entry point for some of the essential components as that new pipeline is built down in this section of the country,” said Mr. Quinn, who admits to being “a proponent of the project from the get-go, saying that the important thing is that it’s done right; it’s done in a responsible way; and that it respects the rights of the groups who voice their opinions.”
Halifax has its own ambitions
At Port of Halifax, the $65 million expansion of the Richmond Terminals, completed in 2014, was financed under the then-Conservative government’s Economic Action Plan enacted after the 2008 financial crisis. The Richmond project, which included the addition of 1,500 feet of dock, has helped to support increased activity at the port, said Patrick Bohan, Director of Supply Chain Solutions for the Halifax Port Authority. So far in 2016, general cargo volumes have increased 25 per cent, he said. “And we’re really glad to have that infrastructure capacity in place now because it’s getting a lot of utilization,” Mr. Bohan said. “We’ve been able to take on more ships and special projects, and kind of keep the wheels turning. You’re (not) getting congested or running into bottlenecks.”
The additional berthing, laydown area, and shed capacity means the port doesn’t have to turn away projects as had happened in the past. For example, the port wasn’t able to guarantee a year or two in advance that it would have sufficient acreage to accommodate a shipment of windmills, he said. That doesn’t mean the port wouldn’t like to put some of that new federal infrastructure cash toward further expansions. “We do have some ambitions for the future and it’s driven by larger vessels coming onto the trade,” Mr. Bohan said, adding that the port is undergoing a planning exercise to identify future infrastructure needs. Without wishing to reveal too much about that, he said Halifax is also keeping an eye on the trend toward larger vessels calling at ports on the east coast of the continent and what that will mean for productivity and the configuration of terminals.
“All these things will be part of our long term planning for the port,” Mr. Bohan said.
He also wanted to underline that the terminal has undergone over $100 million in continuous upgrades since 2000 that also included deeper berths. “It’s not just ourselves but a lot of our partners like the terminal operators and CN have made some add-on investments. So it’s a pretty good complex of infrastructure we’ve put in place, and we’re positioned well for the future.”
Belledune proposes $125 million in investments
Port of Belledune in northern New Brunswick has prepared a business plan that proposes about $125 million in investments over the next five years, said Denis Caron, who took over as the port authority’s CEO in January. He hopes that the federal and provincial governments will each kick in a third of the money with the port ponying up the rest “but we’re not certain about that.”
Among the priorities is $17 million to upgrade one of the port’s four terminals — terminal 3, which is operated by Eastern Canada Stevedoring, a subsidiary of Quebec Stevedoring Ltd. The plan includes a conveyor system and laydown area to increase its capacity for storing and shipping wood pellets to the U.K. The port is also looking at a rail system to transport aggregates about three kilometres to the port, as well as about $10 million in maintenance work on the terminal, which supports a power plant and a lead smelter, and other warehousing upgrades. Construction itself would create about 1,200 jobs over three to five years as well as another 800 indirect jobs, Mr. Caron said. But because the port is in a rural area, it probably already has sufficient roads and bridges to complement the port expansion. However, he has noticed increasing traffic on the road leading to the port, “so there may be requirements for safety reasons to enhance the roadway or to widen it.”
The port also has capacity to handle project cargo, such as wind turbines, and a modular fabrication facility for mining projects in Quebec and Labrador. “We have the capacity currently to do that, but with the mining sector being down, there are not a lot of projects on the go right now,” Mr. Caron said. But he and others interviewed for this article expect the mining sector will rebound eventually. “Natural resources are critical to Canada and in particular here in New Brunswick,” Mr. Caron said. “Those markets seem to be very cyclical, so I think they will bounce back over time. We’re probably at a low period. Now’s the time to do the planning and perhaps the investments as well.”
Thunder Bay hasn’t had federal help
Port of Thunder Bay’s current main infrastructure project is to construct a new building at Keefer Terminal, said port authority CEO Tim Heney. In the last decade, Thunder Bay has spent about $14 million on improvements, including the purchase of a new harbour crane, building a laydown area, constructing a new building, and improving the rail, he said. “It’s an older facility so it’s an ongoing thing,” Mr. Heney said. None of those improvements received any federal funding, although the province of Ontario did contribute, he said. While he would like Thunder Bay to be able to access some of that new federal infrastructure cash, he wasn’t sure that the Port would meet the eligibility requirements because of its small size. “So far it hasn’t been helpful to us,” Mr. Heney said of federal infrastructure programming.
According to the Infrastructure Canada website, the national infrastructure component of the 2014 New Building Canada Fund has a “soft” minimum project threshold size of $100 million. “However, projects with costs below this threshold that can demonstrate national significance could be considered.” There doesn’t appear to be any threshold for projects under the two provincial-territorial components, although federal entities are not eligible for those funds. That would appear to disqualify port authorities, which are federally owned and operated.
Wendy Zatylny, President of Association of Canadian Port Authorities, said the high threshold knocks “a lot of the smaller ports out of the running.” But it also disqualifies many smaller, yet important and strategically wise projects brought forward by large ports. The association has asked the previous government, and repeated the request to the current government, to lower the threshold, Ms. Zatylny said.
At Thunder Bay, general cargo volumes were down to 8,359 tonnes for the first seven months of 2016 compared with 12,683 tonnes for the same period in 2015. Mr. Heney attributed that in part to many more smaller shipments arriving at the port following the introduction of liner services by shippers such as Spliethoff’s.
“We’re starting to see two or three pieces to a shipment come in, versus a whole shipload,” Mr. Heney said. “Prior to that you’d have to book a whole ship to come into the Seaway. So in terms of movements of cargo, we’re still seeing the frequency but we’re not seeing the full shiploads this year so far.”
Nanaimo looking for millions more
Port of Nanaimo, on B.C.’s Vancouver Island, is looking for federal government money to support a $50 million to $70 million expansion plan. However, Port CEO Bernie Dumas said that “our discussions with the federal government this year indicated that they had limited programs for infrastructure projects that would be relating to port authorities.”
Nevertheless, the port is working with its terminal operator, DP World, to build a business case and prepare a white paper describing the plans. Like other port officials, Mr. Dumas said infrastructure spending on ports “is money well spent in the sense that the 18 port authorities in Canada are really the gateway for our economy.” He also favours infrastructure spending on roads, bridges, sewers, and water systems, noting that much of the country’s infrastructure was built five or six decades ago. “It will pay dividends down the road,” Mr. Dumas said, adding that “we’re a trading nation. If we’re going to trade, it’s going to be transportation network that’s going to support it.”
Nanaimo recently completed a $9.3 million upgrade to its Duke Point terminal that included a new barge berth and deep-sea berth as well as a $4 million 104-tonne capacity 2008 Liebherr shore crane that arrived this spring from Brazil. Now the port would like to double the dock face by another 600 feet as well as double its paved laydown area to 30 acres. “We’re looking at the trade, and the new business appears to be bigger ships,” Mr. Dumas said.
Part of the plan is to position the port as a breakbulk centre that would also handle project cargoes, which include cargoes that could be barged to terminals on B.C.’s lower mainland. The expanded dock would also be able to handle a container ship. At present, DP World operates a barge container service at Duke Point. “We want a multi-facet type of expansion or terminal operation where we can actually address a variety of different cargo types, but mainly focusing a little bit stronger on the breakbulk capacity,” Mr. Dumas said.
Dimensional lumber is the port’s core breakbulk business, although that is “a bit soft right now,” Mr. Dumas said. “And that’s our reason to look at the future and try and see if we can diversify ourselves and find some new cargo opportunities.”
A few years ago, the port has also handled windmills for a wind farm on northern Vancouver Island. There’s a potential for more such business next year, but nothing firm yet, he said.
New Rupert facility boosts volumes
At Port of Prince Rupert, a $10 million breakbulk facility that was announced in 2014 is now in service and giving the port’s “cargo volume a boost,” the Port tweeted on July 21. In the first year of the breakbulk facility’s operation, general cargo at Prince Rupert was up 26 per cent, the tweet noted. However, those cargo volumes have fallen off so far in 2016. “Last year it was the first and it was a good year for our project cargo. It’s been fairly quiet since,” said Michael Gurney, Manager of Corporate Communications for Prince Rupert Port Authority. “What we’re crowing about in the twitter post in particular is the 2015 numbers.”
For the first six months of 2016, the port handled 385 tonnes of general cargo, compared with 1,481 tonnes in the same period of 2015.
“I think the facility was used out of the gate by some customers who had specific projects and those projects, or the phase of those projects, have come to an end. We’re now awaiting similar initiatives to draw on the solution that particular facility represents,” Mr. Gurney said.
He remains confident that at least one of the liquefied natural gas projects proposed for Prince Rupert will go ahead — despite fervent opposition from environmentalists and First Nations. In particular, the Shell-backed Prince Rupert LNG project proposed for Ridley Island would likely make greater use of the Prince Rupert breakbulk terminal than the Pacific Northwest LNG project proposed for Lelu Island. “They plan to actually build their own material offload facility on Lelu Island where the modules can be loaded,” Mr. Gurney said.
Even though construction has yet to begin on either project, preparatory engineering work has had “a material effect on Prince Rupert’s economy,” Mr. Gurney said.
Vancouver sees “generational opportunity”
At Port of Vancouver, when it comes to improving breakbulk and project cargo capacity, “the focus is primarily on increasing rail capacity, particularly through the north and south shores of the Vancouver harbour,” said an email from Rachel Wong, internal communications and media advisor with Vancouver Fraser Port Authority. “There are a number of projects being proposed, and work is now being done to develop business cases for submission to government once it announces its new funding scheme,” Ms. Wong added. “Note that these proposed projects may support the port as a whole and not just our breakbulk and project cargo sector.”
According to a posting on the Port’s website, the $14 billion New Canada Building Canada Fund, “and in particular the $4 billion National Infrastructure Component, presents a generational opportunity to identify and address transportation infrastructure needs that will support current and future gateway expansion.”
In 2014, the Port led the creation of a Gateway Transportation Collaboration Forum — that includes federal and provincial entities as well as participation from local governments — “to identify infrastructure needs in major trade corridors.”
Port Authority-led projects proposed or under review include the Roberts Bank Terminal 2 project, and an expansion of the Centerm container terminal.
The port’s cargo statistics for the first six months of 2016 reveal that breakbulk volumes declined 11 per cent year-over-year to 7.5 million tonnes from 8.4 million in the first six months of 2016. Overall cargo volumes were down 5.9 per cent. “The slight decrease in cargo volumes in the first half of 2016 is expected, given the record year we experienced in 2015 and the softening global economy,” Robin Silvester, President and CEO of Vancouver Fraser Port Authority, said in a news release announcing the statistics report. “The long-term outlook for Canadian trade is one of growth, and the port will be ready to handle increased volumes through Canada’s west coast.”