Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 7 - Evidence - February 6, 2007
OTTAWA, Tuesday, February 6, 2007
The Standing Senate Committee on Transport and Communications met this day at 9:32 a.m. to examine and report on current and potential future containerized freight traffic handled at, and major inbound and outbound markets served by, Canada's Pacific Gateway container ports, east coast container ports and central container ports and current and appropriate future policies relating thereto.
Senator Lise Bacon (Chairman) in the chair.
[English]
The Chairman: We are examining the current and potential future containerized traffic handled at, and major inbound and outbound markets served by, Canada's Pacific Gateway, east coast and central container ports, and related current and appropriate future policies.
Our witness this morning is Clare Kirkland, Director of Strategic Development, Regina Regional Economic Development Authority, RREDA.
Welcome to our committee, Mr. Kirkland. We will be pleased to hear from you and then I am sure senators will have a few questions.
Clare Kirkland, Director of Strategic Development, Regina Regional Economic Development Authority: My presentation is fairly simple. I hope to be able to impart that, beneath this presentation, is a powerful concept and something we have come to understand over the last couple of years of working with the industry in Saskatchewan.
I should note that the Regina Regional Economic Development Authority is a creature of the city. It is a non-profit corporation that also receives modest funding from the Province of Saskatchewan. Increasingly, as we work more and more with industry, we receive funding from industry as well as from the federal government.
This presentation is about a 21st-century opportunity. Essentially, the idea we want to present is that Canada sits in a number of ways in an ideal location to capture the growth in the North American container trade.
I want to make some fundamental observations. First, since the Second World War, there has been sustained growth in gross domestic product, GDP. Growth in GDP has been exceeded by the growth in trade globally. The rate of growth of trade has been exceeded by the rate of growth in container traffic. That is due, obviously, to the growth of trade and to the fact that containers are comparatively about a generation old as a technology and have increased their share of trade. It is important to understand that trade increases faster than GDP and container trade increases even faster than aggregate trade.
Second, I want to talk about the technology of the ships. If you had asked people five years ago what the ship orders would be, they would not have been able to project accurately. The economies of scale are so powerful that we are now talking about ships multiple the size they were in the past. This has an important effect on the trade network. The larger the ships become, the fewer the ports can handle them and the more important it is for the ships to be unloaded efficiently. Globally, and North America is affected, this leads to a few key cities, a few key nodes in the network, emerging as the 21st century ports.
Not surprisingly, our concentration is predominantly to the West Coast, although we move significant amounts of pulse crops through Montreal across the Atlantic. On the West Coast, the major port is Los Angeles, with Long Beach and Vancouver being a second tier. However, Vancouver is doing an excellent job of organizing and investing to increase its capacity and I will discuss that later.
Can we organize to capture a share of this growth? Let us look at the globe. I will talk about trade route distances. I am not suggesting that is a dominant factor. It is an important factor with many other factors at play as well.
One of the difficulties in getting the public to understand this opportunity is that people look at their traditional flat maps with the Mercator projection, which distorts our view of the world. On your computer, look on `Google Earth' and rotate the globe. If you are coming across the Pacific Ocean to North America from Tokyo or Shanghai, the shortest distance is to come to the West Coast of Canada through Prince Rupert and Vancouver. It is significantly shorter than the route through Los Angeles. If you get an actual globe and attach a string from Shanghai to Chicago, it passes through southern Saskatchewan. If you do the same thing on the East Coast, you will find that the shorter route to North America from the Suez or the English Channel is via the East Coast.
Let us look at what is happening to the growth potential. I will show you a number of slides from a report that is currently in draft form. We expect it to be finalized in the next week or two. It has been completed by John Vickerman of TranSystems Corporation. We brought him to Regina last year where we organized a national conference on the container system and he was one of the key people, among others. He really got people excited about this concept.
On this graph of the containerized trade in the Canadian ports, you will notice a favourable growth rate. Other than a little hiccup in 2001, there has been an exponential growth rate, basically doubling every eight to 10 years. So the growth rate has been substantial.
You will notice that Vancouver is now around 4.5 million tonnes. If we look at Los Angeles and Long Beach, you will notice that they are up around 15 million tonnes, substantially larger than Vancouver. However, it is conceivable that, on the West Coast, we have the capacity in the future to get a portion of this traffic to come to us.
I also want to bring to your attention an article from the February 1 edition of the Journal of Commerce, which is one of the major trade magazines in the United States. The article states that West Coast ports — that is, West Coast U.S. ports — handled 15.4 metric TEUs, which are 20-foot equivalent units, in 2006, an increase of 8 per cent on surging U.S.-Asia trade that shows no signs of slowing.
That is the essential message that Mr. Vickerman has. He somewhat flamboyantly calls this a trade tsunami. His argument is that inexorable forces cause that trade to increase and it is something we could plan on and organize to capture.
Let us look at the network advantages. Looking at this map, imagine you have the advantage of accessing North America via ships from the West Coast and the East Coast and then look at the rail network in Canada, which is ideally configured to be able to serve the massive markets in the industrial Midwest.
I would also say that is true for both CN and CP. In southern Saskatchewan, we particularly look at the possibility of taking part of the traffic from the West, assembling and marshalling trains in southern Saskatchewan, and running them via the Soo line between Minneapolis and Chicago.
We returned back two weeks ago from an event we organized in Vancouver for a few dozen of the industry leaders — the railways, shippers and others. We sought their interest in this opportunity and proposed that we should organize nationally in order to address the opportunity. These are the questions we are asking ourselves. Are we designing our major ports to be able to handle these large ships, which are now in the 8,000-and-up, 20-foot units?
Part of the challenge in places like Vancouver is do we properly value the reduction in urban congestion resulting from more expeditious freight systems that reduce truck movements in the city?
As an aside, in RREDA we entertain and encourage people with an interest in foreign direct investment. It is startling to listen to the business people from China. They are growing quite successfully, largely on the basis of providing assembly and manufacturing for OECD nations. They are talking about the next wave — they want the larger margins on the top from retail, not the small margins on the bottom from manufacturing.
It looks as if another wave will come from Asia where they organize, through partnerships or directly through their own corporations, to deliver products to market. For example, a while back, a company came in and wanted to produce graders used for road construction and maintenance. This would be competing against major companies like Caterpillar and Champion. They would come in with their own Chinese-manufactured grader, their own brand name, and set up their own assembly yards and distribution systems. We think that is coming so there is an opportunity for Canada to play a role in the growth of distribution and assembly between Asia and the major markets in North America.
The Chairman: In the United States in 2004, only three main ports had excess capacity Global trade is growing rapidly on the North American continent and it is no exception to the rules. Americans are already making investments in order to improve delivery times and port capacities through both private and state funds.
Things are changing quickly in the world of container trade. We learn that more and more as we go on with this study. The Port of Prince Rupert has already announced a partnership with CN and Maher Terminals of New York to create a Midwest express corridor for intermodal trade with Asia. The total investment is in the neighbourhood of $400 million. Prince Rupert could be a very competitive option when compared with U.S. ports in the South, but we need to be ready in terms of port and landside infrastructures.
How quickly should we move to ensure Canada will benefit from the current trend?
Mr. Kirkland: We suggest moving as fast as we practically can. We agree that a few American ports are reaching capacity. The major port, L.A. Long Beach on the West Coast, still has excess capacity, but the rate of growth is such that it will hit its capacity quickly.
In the last five to 10 years, some of the investments they made to increase capacity have not been as effective as they had hoped. When they look at adding land and capacity at a port, there are serious congestion and environmental costs.
Therefore, the faster we move, the more we will be able to establish ourselves as a country with these major nodes that can be effective into the 21st century. Then the minor ports around North America would become ports for short sea shipping, serving the major ports. We argue we should be moving quickly.
Senator Tkachuk: I was at that meeting in Vancouver which was interesting.
One of the things we want to accomplish in this study is to look at where the containers are moving to. From time to time in your presentation, you mentioned Chicago. It comes up everywhere. Can you explain to us what the significance of Chicago is in the movement of containers in North America?
Mr. Kirkland: First, in terms of freight handling, Chicago is the third largest in the world. Singapore and Hong Kong are larger and Chicago is third, obviously not due to the ocean but because of other modes.
Unlike Canada, which has national railways, the Mississippi divides the sets of railways in the United States. A major port like Chicago ends up being the interface between the eastern and western railways. The trade description of Chicago is that it is a ``black hole.'' What is meant by this term is that there is all this massive trade coming in from the East and the West and, to sort it out, is a two- or three-day black hole.
That is another advantage Canada has. Using the Soo Line, we come directly into Chicago. We can serve the people in the Midwest without getting caught up in that rail interchange.
Senator Tkachuk: Does Chicago act for containers like Atlanta acts for UPS and those large delivery companies? Do the containers arrive and are distributed throughout North America from there? Are they unpacked there as well or are they simply sent on to other markets, whether it is New York, Atlanta or Toronto?
Mr. Kirkland: Just about every combination happens in Chicago. If we think about some of the major flows, obviously Europe comes in from the East but Asia can go both ways. It can come across the Pacific, or for a slightly greater distance, you can go to the Suez route — and those routes and liners compete.
If you are moving goods into the East Coast and inland some distance from there, that all comes typically via the East Coast. For containers moving to and from Asia and North America, coming in via the Pacific route is still strongly favoured in the Chicago area.
For instance, Wal-Mart recently participated in an industrial park west of Chicago. They put up a three-million square-foot distribution centre. That would be for materials coming in, being organized into various stores and going out by truck.
I do not know if anyone has recently driven on the roads in and around Chicago. You would not believe the number of five-axle trucks carrying containers driving in and around that area. They vastly outnumber the number of cars on the road.
Those distribution centres, such as the one I talked about with Wal-Mart, are moving out because they want to have space for large buildings and be able to optimize the road and rail network so they can get out of those congested areas. That is the opportunity for us.
Senator Tkachuk: The opportunity is to capture some of those containers heading to Chicago from either Vancouver — or, in the future, Prince Rupert — and pick them up in Edmonton, Saskatoon, Regina, Moose Jaw, et cetera. I know there are a lot of people talking about this. That is the objective.
Married to that would be what to put in those containers to ship back once they are emptied. Do you see urban areas in the West as tiny Chicagos in the sense that they would be doing a little sorting of their own and trucking it out, or do you think there are opportunities for unpacking and capturing the whole load there?
Mr. Kirkland: I think there are opportunities in terms of distribution, assembly and also concerning outbound. Let me talk about assembly.
Increasingly, goods such as cars and airplanes are manufactured from pieces that come from a number of locations, which is phenomenal. We have an advantage in having locations in North America where those basic components may be made around the world but are brought in and assembled from various trade flows and then distributed to the market.
In addition, we have major bulk movement in Saskatchewan, almost all of which goes out with hopper cars on trains. Increasingly, the higher-valued pulses such as oilseeds and malting barley travel in cans. About 50,000 20-foot units are exported in that way.
Imagine that process continuing in a place like China where, in the past, flour mills were on tight water but, increasingly, the people who want to process grains and oilseeds are actually inland because locating on tight water is too expensive. Therefore, they want to receive their goods in containers. Currently, we are told by the people in China we are not adequately responding to that.
If you imagine the tens of millions of tonnes of grains and oilseeds produced in Saskatchewan and a small portion of that trade switching to containers, we would run into the problem faced by most people in the middle of the continent who can not get empty containers.
We are looking at acquiring assembly customers who would bring in — in our case we would need high-strength 20- foot containers — product in those types of cans so we can have the empty containers and move products out. That product could include things like potash.
We think there is potential for large increases in the number of loaded containers that leave Saskatchewan. Our challenge is to find a way to balance that flow. When we look at inbound traffic, we want to find ways to do distribution and assembly so it will have long-term sustainability in terms of serving the U.S. Midwest.
Senator Tkachuk: One other thing we are trying to accomplish is to develop expertise from a parliamentary point of view on ports and this phenomenon of containerization that is exploding trade across the world.
However, I think all of us are probably grappling with the fact that we have noticed many communities, such as Moose Jaw, Regina and Saskatoon, exploring ways to capture part of this market.
What role do you see the federal government playing in this initiative or do we have a role? I imagine on the port side we have a role but perhaps you could provide an explanation of what you would like to see the federal government do, and what kind of policy items you would like to see us recommend or at least study.
Mr. Kirkland: As I mentioned earlier, industry wants to move to these more efficient larger-scale distribution and assembly centres. As part of that, it is important for them to have effective rail and highway access.
In our view, if one looks at the current system and potential for expansion, there is a need for a larger-scale and longer-term strategic infrastructure program that looks at various nodes in the network and ensures, where communities choose to organize inland ports, they then have the highway access to allow that flow to be efficient and unimpeded.
We are just at the beginning of looking at the idea of trade zones for favourable tax and trade regulatory treatment. It looks like there are some programs that could be favourable, but I expect we will want to propose modifications or expansions in that area as well.
Senator Phalen: A quick search on the internet showed the possibility of inland ports being created in Kamloops, Prince George, Saskatchewan and Manitoba, and one was completed in Halifax.
In answer to a question from this committee, the Minister of Transport said that a study of the Halifax inland terminal concluded it could result in an increased capacity of 40 per cent, but Halifax is currently only working at 40 per cent capacity.
If our ports are not working at their current capacity, what is the need for an inland terminal at this time?
Mr. Kirkland: I hesitate to discuss Halifax too much. We are just beginning our discussions with them. I think there are things they have done in terms of balancing their trade that we can learn from.
From our point of view sitting in southern Saskatchewan, as I mentioned earlier, our concentration is primarily on the Vancouver port because Canadian Pacific is our major railway and that is the major port on the West Coast for them.
Vancouver has had more challenges in terms of being able to address the smooth flow of traffic and having adequate capacity. As I said earlier, they are doing an excellent job in moving in that direction. The railways have track-sharing agreements, the ports are now cooperating, and the Province of British Columbia has a major investment in infrastructure. Generally, the movement in Vancouver is very favourable.
Senator Phalen: In your view, would an inland terminal do transloading of containers?
Mr. Kirkland: To move traffic efficiently, imagine we had a ship coming out of Shanghai but you want to load the ship in Shanghai so it comes into Prince Rupert or Vancouver, and those boxes are put on the ship so they can be quickly loaded onto trains. In other words, containers will not need to be unloaded or moved around in order to load more onto the train. Imagine they were loaded onto the ship in a manner in which they could be quickly loaded onto the train in an orderly way. Then those trains can go through to an inland port.
At the inland port in places such as Regina, Moose Jaw and others, they would marshal the trains to specific destinations or break them open and assemble trucks to go to specific stores and that kind of thing.
Think of the inland port as a way of improving the efficiency of the transfer from the ship into the rail system and reducing truck congestion at these major ports. The challenge is that you must organize to offer that whole coordinated service before it becomes appealing to the Wal-Marts and the liner companies.
If we try to approach it incrementally, we will not get there. We need to put these three or four things together at once and then offer it to industry. Then places such as Halifax and others can become more competitive.
Senator Mercer: I spent some time over the past couple of days reading your presentation.
Do not misinterpret my question as being against an inland port in Regina. I think it is an interesting idea. However, the issue does not only deal with importing. You need to address exporting.
You have touched on one of the problems. The people I have spoken with, particularly members of the Canadian Special Crops Association, address the lack of containers as a main issue. Some of them ship product from across Canada, in particular Western Canada, to Vancouver in their normal hopper cars to be loaded then into containers at that stage. Of course, each day that they wait, they lose money. I am told by others that there is a shortage of hoppers, which puzzles me.
How deep has your analysis been? Have you discussed this with the Canadian Special Crops Association? It is important for Western Canadian farmers to have their products shipped via Vancouver and Prince Rupert.
Mr. Kirkland: We worked originally with members of the Canadian Special Crops Association about two years ago. That was followed by a general study of the industry to look at the flows and issues, after which we got into some of the other steps that I talked about. It is a key problem for them because their product is of such a weight that they need the 20-foot containers, not the 40-foot ones, that are high strength. They pay for those to be repositioned. If they are shipping out special crops and are located far from the container terminal facilities in Saskatoon and Regina, then they ship the crops via hopper car and transload it once it reaches port. One of the major advantages of containers is identity protection. The quality can be controlled because the product for a particular customer is loaded into the container that is then sealed up, thereby affording protection. That is of value to the customer. When a transload is required, the potential for problems is introduced. The ideal thing for us is the use of containers. In order to get the empty containers that we need and not have to pay for them, we have to start balancing the trade, which I talked about.
Senator Mercer: It seems to me that the Port of Vancouver is a major obstacle in this process. If I were shipping anything, from mustard seed to dried beans to peas, to Vancouver and had to move it from the hopper car into the container, it would not only cost me money but also, if the Port of Vancouver were true to form, it would cause a delay waiting for the container, thereby driving up the cost again. Is that right?
Mr. Kirkland: Yes. The most efficient method would be to have the infrastructure at the place of origin of the crops.
Senator Mercer: Many of these companies do not reside in Western Canada but simply buy the crops from various Canadian farmers and tranship them.
Mr. Kirkland: Yes.
Senator Mercer: The most efficient way, as you have discussed, is when the containers never touch the ground such that they are offloaded from the ship and loaded onto the railroad car or the truck, depending upon which port they are at and where they are going. With an inland port, the containers touch the ground because they stop in Regina where the containers are moved from one train to another train, requiring repacking or other action. That adds a cost. Do you see that affecting the viability of inland ports when additional costs are incurred for a product that is currently shipped from Vancouver or Prince Rupert to Chicago, perhaps through a less efficient method than you are proposing? When the containers are stopped, they have to be rehandled and that adds an additional cost. How do you make such a system cost effective?
Mr. Kirkland: Some scenarios would be as you describe and a transloading cost introduced. Concerning moving containers to an inland port and then distributing them outward via rail, I spoke earlier to the idea of loading them onto the ship in Shanghai so that they do not touch the ground. They can then be loaded directly onto a train that can move the containers inland. Let us imagine that a train comes into southern Saskatchewan carrying product that is destined for two trains. One train is going to Toronto and the other to Chicago. If the containers are loaded initially in the proper order, then they would not need to touch the ground. They could be loaded from train to train with cranes so that they could be dispersed efficiently.
Senator Mercer: However, they have stopped and someone has taken an additional step in the process.
Mr. Kirkland: That is true. You would have to make up your train consistence for the different destinations. To stop and do a train-to-truck handling would be different because you would need to add value and that would only make sense if you were doing an assembly or operating as a distribution centre. Distribution centres for companies that have dispersion of stores with high-valued products require a small number of distribution centres — perhaps two or three in North America. Those are the kinds of customers that we will be looking for.
Senator Mercer: Are some of the major retailers working at cross-purposes to your proposal? Canadian Tire and Wal-Mart Canada, for example, are saying they do not want 100 per cent of their product shipped through a West Coast port. Rather, they want to split it between a West Coast and an East Coast port in order to protect supply and ensure there will be the needed supply. The labour stability on the West Coast is not as strong as it is on the East Coast. Does that not work at cross-purposes to your proposal for an inland port in Regina?
Mr. Kirkland: Yes. A number of times during our discussion, I wanted to express that we do not think success for us requires we get everything. As well, we do not think it is feasible for wise people to predict well into the 21st century exactly where this should develop. It is a market economy and the system is a network, not just specific nodes.
We talk about making ourselves more competitive as a transportation network. Whomever gets the business — Kamloops, Saskatoon or Regina — we are better off because the nation is more competitive. Regina would like to have the inland port but if the market decides that the infrastructure and decisions made are better off elsewhere, and we are growing as a country and capturing this opportunity, then that is fine by RREDA.
Senator Adams: I live at Hudson Bay. We heard from witnesses last week who have studied container shipping across Canada. There was mention of Churchill, Manitoba, and that there might be cost savings at Rankin Inlet which is close to Churchill. We used Churchill for anything shipped by train to Hudson Bay. Now, it is more costly being shipped to Nunavut via Montreal. The Churchill railway was privatized and now we pay freight charges twice. I am not sure which company will open in the future in Churchill. I believe the witness said Churchill would never open completely because of the frost. The rail line south from Churchill to Winnipeg used to be called the ``muskeg run.'' I lived 11 years in Churchill where there is a permafrost that melts in the summer creating a muskeg. Are you familiar with that affecting the rail line in the summer because there was an agreement with the grain companies to ship until October?
It is a little closer to Churchill than to Vancouver, although close to the same distance. Can you give us some idea of the future for Churchill?
Mr. Kirkland: If there is to be significant trade coming from Europe to the centre of North America, theoretically there is potential for Churchill. Over the years, there have been many geographic and engineering challenges. Many people have talked about the long-run effects of global warming.
The Government of Manitoba is talking with people from SmartPort in Kansas City about a spine system that goes up and down the middle of North America terminating in Churchill. They have talked about increased trade with Russia, et cetera. However, I do not personally have experience in that area and at the moment we are not talking about that as an opportunity for us.
Senator Adams: In the past, there was damage due to ice. A grain elevator there may no longer be successful because containers are used now. It was upgraded about 10 years ago and we have not heard about it since.
In Nunavut, we deal quite a bit with Manitoba. We are talking about winter roads from Manitoba up to Rankin Inlet and Baker Lake.
There is a lot of exploration in the North for gold and diamonds and other things, and it may be cheaper to use containers for that. The government is concerned about that because winter roads may be damaging to the environment.
Mr. Kirkland: With regard to the movement of beans, lentils, chick peas, et cetera, many of those markets are currently out of the East Coast and a great deal of those crops are moved via Montreal. If Churchill became a competitive route, we would have the option of going east via Churchill. However, no one is talking about that at the moment to my knowledge.
Senator Munson: I guess we can call it the Prince Rupert advantage in terms of what is coming to our country and what is coming to the United States. The focus is on Regina and the feeder lines into Chicago.
Are there rail lines that lead from Regina down towards Los Angeles? Is there an advantage to using those rail lines as a hub from Regina into Texas and other areas of the United States? I do not see any rail lines on your graph.
Mr. Kirkland: There are no rail lines shown in the western U.S. I showed only the Canadian networks.
Senator Munson: You showed the feed into Chicago which is the hub. You described it as the third largest inland port.
Mr. Kirkland: Yes.
Senator Munson: In your presentation, you said that the Regina Regional Economic Development Authority's strategic plan talks about facilitating the development of an inland port in Regina through highway improvements, zoning and better tax treatments. You said that RREDA wants to develop an inland container terminal.
Is this meant to feed back and forth across the country and down through Chicago, or would other lines be used?
Mr. Kirkland: There are other methods. You can go down through Lethbridge and connect into Burlington Northern. Union Pacific has a line in Idaho which runs into the Montana-Wyoming area. There are a couple of ways of moving traffic but I do not believe that is currently competitive. That is not a large trade corridor for us. Our bulk products are going to the U.S. Midwest. Alberta ships beef and other products into California, but that is not a trade route that we in southern Saskatchewan are concentrating on.
Senator Munson: What will it take to make Regina the inland port you want it to be? How can that be done to make life better for the people of Regina by creating employment and making it a vibrant hub and a centre for inland ports?
Mr. Kirkland: We look forward to support from the federal government for the necessary highway improvements. We must do a lot more work toward offering something favourable to the marketplace in terms of distribution and assembly. We have to balance our trade and make use of that infrastructure.
As soon as we can say we are developing a new container port in the Moose Jaw-Regina area and can cite the location, players and the federal-provincial funding for infrastructure, we can market that to liner companies in China in cooperation with the railways and begin to build it.
Senator Munson: Are you competing against Winnipeg?
Mr. Kirkland: Yes, we are.
Senator Munson: Have there been any responses to that, or are you yet at the stage with the federal government of discussing the provision of funding and working with the provinces? How far advanced is your plan? I presume Winnipeg has a plan as well.
Mr. Kirkland: Yes.
Senator Munson: Is it healthy competition or are you looking for the same dollars?
Mr. Kirkland: I imagine we are competing for dollars, but that is a healthy competition. We believe Prince Rupert is a strategic advantage for Canada and obviously for CN. If I were in Winnipeg, I could make similar arguments for the CN system feeding from Emerson down into Chicago. We look at the Winnipeg option as competing with us in the marketplace and that is good. If we are to capture this opportunity, we will have to be competitive, which means the different Canadian nodes will have to compete to serve that.
Senator Munson: How far along are you in asking for money?
Mr. Kirkland: We are cooperating with the city of Regina, Canadian Pacific and Saskatchewan highways. The Saskatchewan highways and transportation department, in partnership with the city and Canadian Pacific, has made an application to the federal government. That is all I know in terms of how it stacks up. We are optimistic about that application.
Senator Carstairs: I was born and raised in Halifax and know about the port situation there, and now I live in Winnipeg. I wonder whether it is realistic for us to consider more than one inland port.
It is fair to say there is competition between Regina, Saskatoon and Winnipeg, but is it realistic to think you could have more than one inland port?
Mr. Kirkland: I do not know. We will find out. We are saying let us organize so we make the best of this opportunity as a nation. If we organize to do that, somewhere one or more of these inland ports will emerge. If it turns out we organize well and Winnipeg ends up being the inland port, that is great. If we organize and it turns out there are two, one on the CP system and one on CN, obviously we think we have a competitive advantage on the CP system. However this turns out, we are arguing that we must organize to be as competitive as possible. It is not possible to predict at the moment whether it should be one or two and where the locations would be. One can suggest where the most likely nodes would be. Exactly how the 21st century will unfold is beyond us.
Senator Mercer: Returning to your map, I believe you said you would be coming through Sault Ste. Marie. I look at the map and say it would be more logical to go through Duluth or Minneapolis to Chicago. Is that the CN versus CP line? Are you going to the Soo because it is a CP line?
Mr. Kirkland: That is correct.
Senator Mercer: It looks more direct to go through Emerson or Portal to Chicago.
Mr. Kirkland: The Soo line would leave there just east of Moose Jaw. It goes to Portal, Minneapolis and Chicago. The CN line drops south of Winnipeg through Emerson. The map that I chose has a few extra lines on it.
Senator Mercer: You do not go through Sault Ste. Marie. Do you go down through Minneapolis?
Mr. Kirkland: The Soo line is pretty much a straight line — Moose Jaw, Portal, Minneapolis, Chicago.
The Chairman: Mr. Kirkland, thank you for your contribution to our study. We appreciate your presence here this morning.
Mr. Kirkland: Thank you.
The committee adjourned.