By Michael Broad
Submitted by Shipping Federation
The past year has been challenging for Canada’s international shipping industry, which has had to contend not only with an economy that continues to be characterized by slow growth, but also with a great deal of uncertainty and volatility in the marketplace. Indeed, unpredictability has been the catchword of the year for many shipowners, operators and agents, from those working in the container sector (where intermodal issues wreaked havoc with schedules and created a seemingly never-ending risk of labour disruption); to the dry bulk sector (where demand for some commodities grew at the same time as demand for others fell dramatically); to the liquid bulk sector (where plummeting oil prices combined with heightened social consciousness about the risks – both real and perceived – of transporting oil by water made for a challenging year at best).
Given this uncertain environment, one of the Shipping Federation’s key undertakings during the year was its involvement in the statutory review of the Canada Transportation Act, which it views as an opportunity to help shape Canada’s national transportation policy in the future. In addition to appearing before the CTA review panel for a preliminary discussion, the Shipping Federation submitted a written brief early in 2015, in which it noted that international shipping is a global industry that connects Canada’s supply chains to global value chains, and relies on an efficient logistics network (which includes border management and trade facilitation) to ensure its international competitiveness. With this in mind, the Shipping Federation strongly recommended that the current mosaic of statutes, regulations and practices that govern transportation in Canada be aligned with a general framework that helps connect the pieces together, thereby adding value to the system as a whole. It also recommended that strategic gateways and corridors be given statutory status in the Canada Transportation Act, in order to ensure that key issues such as infrastructure, financing, governance, labour, data gathering, benchmarking, and safety and environmental monitoring are encompassed within the current legislative framework. Although the review panel is expected to submit its final report to the Minister by the end of 2015, it may seek additional comments or input from stakeholders in the interim.
The Federation also continued to closely monitor developments with respect to the Canada – EU Economic and Trade Agreement (CETA) throughout the year, and to highlight the agreement’s positive impacts for Canada’s maritime industry. Not only will the agreement generate additional trade in goods between the two continents, it will also create demand for related transportation services, as a result of which we can expect to see new economic opportunities for Canadian ports and new employment opportunities for workers in the transportation sector. Of particular interest are the CETA provisions that will introduce more flexibility and competitive options into the all-important logistics chain by allowing EU companies to reposition their empty marine containers between Canadian ports. The Federation strongly supports such repositioning and believes it should applicable to all shipping companies, regardless of their nationality or the flag of the ship. Indeed, in 2012, the Federation provided Transport Canada with a proposed legislative amendment allowing such activity under the Coasting Trade Act. Although the issue of empty container repositioning subsequently became part of the CETA negotiation package, we continue to push Transport to extend the liberalization of this activity to all shipping companies by excluding the repositioning of empty containers between Canadian ports from the definition of coasting trade found in the Coasting Trade Act.
Another key element in Canada’s global competitiveness is the efficiency of its intermodal network, and this continued to be a priority item on the Federation agenda during the past year, as labour strife at U.S. West Coast ports, trucking challenges at Port Metro Vancouver and other issues combined to create serious uncertainty about the reliability and resilience of Canada’s supply chain. This uncertainty abated somewhat following the conclusion of new labour contracts on the U.S. West Coast early in 2015, as well as the implementation of the measures announced by the Minister of Transport to enhance the efficiency of Port Metro Vancouver’s drayage system. Specific measures with respect to the latter included the BC government’s introduction of legislation to implement rate regulation for marine container trucking companies serving the port, PMV’s establishment of a reformed truck licensing system (which came into effect on February 1st), and the appointment of a Container Trucking Commissioner with responsibility for administering all future truck licenses.
Canada is very much dependent on international trade, which provides jobs, economies of scale for exporters serving both domestic and world markets, and the ability to purchase foreign goods that would not otherwise be available in Canada. The federal government has emphasized the importance of trade and the essential role that transportation plays in Canada’s economy. Indeed, at a recent meeting of the Toronto Global Forum, Transport Minister Lisa Raitt highlighted the importance of continuing to strengthen trade, and noted that Canada is facing global change by planning strategically to ensure that transportation networks meet national and international demands. We hope that the next government, whoever that may be, continues to be a strong supporter of both trade and the vital transportation networks on which trade depends.