Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 16 - Evidence - March 9, 2017
OTTAWA, Thursday, March 9, 2017
The Standing Senate Committee on Banking, Trade and Commerce met this day
at 10:34 a.m. to study and report on the development of a national corridor
in Canada as a means of enhancing and facilitating commerce and internal
Senator David Tkachuk (Chair) in the chair.
The Chair: Good morning and welcome colleagues and members of the
general public who are following today's proceedings of the Standing Senate
Committee on Banking, Trade and Commerce either here in the room or
listening via the Web. My name is David Tkachuk. I am the chair of the
committee. Today is our meeting number 13 on the subject of our study on the
development of a national corridor in Canada as a means of enhancing and
facilitating commerce and internal trade. During the first part of our
meeting today, I am pleased to welcome John McCauley, Director General,
Regional Operations Sector, from the Canadian Environmental Assessment
Agency. Thank you for being with us today, Mr. McCauley. Please proceed with
your opening remarks, after which we will go to a question and answer
John McCauley, Director General, Regional Operations Sector, Canadian
Environmental Assessment Agency: It's a pleasure to be here today and to
assist you in your study of the national corridor concept.
I have a short slide presentation, which I believe has been distributed,
and I will focus my remarks on how environmental assessment may apply and
assist in furthering the development of this concept. By way of context, for
those of you who aren't familiar with my organization, the Canadian
Environmental Assessment Agency, we report directly to the Minister of
Environment and Climate Change. We produce high-quality environmental
assessments to inform decision making in support of sustainable development.
We are one of three organizations under the Canadian Environmental
Assessment Act that carry out environmental assessments, with the others
being the National Energy Board for projects they regulate and the Canadian
Nuclear Safety Commission for projects they regulate. We manage the
environmental assessment process for projects. We also have a program that
supports and provides for funding to assist the public to participate in
environmental assessment. We serve as the coordinator for consultation with
indigenous groups during the EA process for projects we manage. We have a
compliance and enforcement program that makes sure that the mitigation
measures are, in fact, being implemented and are working as intended. We
work with our colleagues in other jurisdictions across the country to ensure
cooperation and uniformity in how environmental assessment is carried out,
and, finally, we work with our colleagues internationally to exchange best
practices in environmental assessment.
The second slide sets out some general points in relation to
environmental assessment. Mr. Chairman, as you may know, EA is based on the
idea that it's more cost effective and prudent to make changes to projects
to take into account environmental issues before construction and before
environmental harm can occur.
It's used as a planning tool throughout the world, and I think it's
important to keep that notion of a planning tool in mind as you consider its
use and applicability to the Northern corridor concept.
In Canada, the original process was a three-page cabinet directive that
was introduced in 1974. Since that time, requirements have been codified in
legislation and regulation, and we have introduced more precision but, as
well, more complexity. However, the fundamental purpose of taking into
account environmental matters early in the planning process has remained a
fundamental element. Environmental assessment also allows the views of all
interested and affected parties to be brought to bear through the process in
a coordinated way. Finally, the Government of Canada integrates, to the
greatest extent possible, consultation with indigenous peoples in the
environmental assessment process.
The third slide sets out some of the likely relevant EA legislation that
might apply to this concept of the Northern corridor or the national
corridor, as well as any future projects that may be located within the
corridor. In identifying the likely legislation that might apply, we looked
at the paper that had been produced by the University of Calgary and CIRANO
around the concept, and so it's not surprising that, given the nature of the
proposal, it's pan-Canadian focus crossing multiple jurisdictions and large
geographic scope, multiple levels of environmental assessment would be
required for projects that might be located within the corridor. The
Canadian Environmental Assessment Act 2012, or CEAA 2012, sets out EA
requirements for projects that have effects that may link to federal
It has limited application North of 60 degrees. North of 60 degrees,
federal legislation has been enacted through land claim agreements, such as
the Mackenzie Valley Resource Management Act, that set out EA requirements.
It's not surprising that all provinces have environmental assessment
processes, with standards and requirements as well. One of the purposes of
CEAA 2012 is to promote cooperation and coordination between the federal
government and provincial governments in the conduct of environmental
assessment. We spend a lot of time working with our colleagues in other
jurisdictions through bilateral arrangements and project-specific agreements
to ensure that cooperative assessments are carried out. It is a way to
reduce duplication, while respecting the constitutional powers and legal
responsibilities of each order of government.
The fourth slide outlines elements that could support the development of
a strategic approach to furthering this Northern corridor concept. While
CEAA 2012 is largely focused on examining the adverse projects of a specific
proposal, say a mine in a particular location, there are provisions that
enable the examination of the effects of existing and future projects within
a particular region. Those provisions are referred to as the regional study
provisions, and authority is provided to the minister to establish a
committee and to set the terms of reference of that committee to examine the
effects of existing and potential future projects within a particular area
or a particular region. They allow the committee to be established jointly
with jurisdictions and to provide for public participation in the carrying
out of that regional study.
The concept of a committee would most likely be modelled on how review
panels work under the legislation, which is a group of experts appointed by
the Minister of the Environment who have some level of knowledge relevant to
the effects of potential projects that may be carried out. We see a number
of strategic advantages to making use of the regional study provisions in
furthering the concept of a national or Northern corridor. They provide a
broad framework for furthering the development of the concept and for
building support among potentially affected communities. Routing options
could be considered in a strategic, transparent and step-wise fashion
through the regional study. Consideration can be given, in a preliminary
sense, to the kinds of environmental issues that will need to be managed and
the strategies that could be employed to manage those issues. Finally, it's
also a means to enable cooperation with other jurisdictions that may have an
interest or may be affected by the concept. While the provisions are
relatively new — they were introduced in 2012 and have not been used to date
— this notion of examining, through environmental assessment, as a concept
has been done before. You may recall that the Seaborn Panel, in the late
1990s, looked at the concept of nuclear fuel waste disposal. It was a
technical concept. It wasn't located in a specific place but rather the
conceptual nature of the proposal, so there is some experience in doing
The fifth slide describes some of the considerations that we would
suggest, based on experience, are important if you were going to have a
successful regional study and employ them in examining the concept of a
Northern corridor. Typically, we deal with a single project and a single
proponent. For a concept like a Northern corridor, it would be important to
have a champion for that proposal who can serve as the convening body and
move the proposal forward.
As well, it will be important to make sure there are sufficient resources
provided to allow the committee to carry out its work, allow the public to
participate and to access federal science and expertise to support the
committee's work. Finally, given the nature of the proposal, it will be
important to have willing jurisdictions participate.
The sixth slide outlines some of the linkages between a potential
regional study and the subsequent project specific EAs that would be
required, and it's important to think about how a regional study would be
structured to take full advantage of how it could enable and complement
future project specific EAs.
One of the benefits of carrying out a potential strategic regional study
would be that it would lay the groundwork for future project approvals as
they came forward. It would generate the information necessary to carry out
those assessments and identify specific route options, environmentally
sensitive areas to avoid, how it could link with other infrastructure. There
may also be opportunities to bundle potential future projects together to
facilitate a more streamlined environmental assessment based on the
information and analysis that would be contained in a regional study.
It would facilitate coordination and cooperation among the jurisdictions
that have an interest in projects, and in the corridor itself, in order to
avoid duplication. It's important to note, for any potential pipeline
projects that might be located within the corridor, CEAA 2012 sets out that
it is the responsibility of the National Energy Board to carry out EAs of
those kinds of projects. However, the National Energy Board could use the
results of the regional study to inform their environmental assessments of
In the seventh and last slide, as you may know, the Minister of
Environment and Climate Change has appointed an expert panel to carry out a
review of the environmental assessment processes. That panel is expected to
produce its report at the end of March. You may be interested to know that
there have been a number of interventions before that panel calling for a
greater use of strategic approaches, like the one you are examining for the
northern corridor, and like the ones embodied in the regional study
provisions in our legislation. So there is interest out there in this kind
of approach at a strategic regional level.
Finally, I want to remind you that environmental assessment isn't the
final step in bringing projects to fruition. There are many subsequent
regulatory requirements at all levels of government that would be required
to enable actual projects to be implemented. With that, I am happy to answer
any questions you may have.
Senator Tannas: Thank you very much for being here. This is
terrific. I have two straightforward questions. Given that this would be a
multi-use corridor, in your mind does that create any kind of an
insurmountable problem in the environmental assessment process? That's my
first question. Second, we're going to be faced with a decision on whether
or not to recommend the next step in the study and more feasibility around
it. We've had representations from First Nations groups that are into major
project initiatives; certainly the University of Calgary has proposed that
they would like to take their study to the next level.
Would you see that as one more preliminary study, one step closer but
still very tight, and that it would be appropriate for an environmental
assessment activity to take place or should maybe wait a bit further down
Mr. McCauley: On the first question, in terms of the multi-use
nature of the corridor, I think that can be accommodated within the
environmental assessment process, particularly if you take advantage of the
regional study provisions. If you think of the regional studies akin to a
land use plan, which looks at multiple uses by definition, it can be
structured in such a way. We need to work with the other jurisdictions who
are implicated to do that.
I would encourage you to think broadly in the sense that there may be
opportunities, from an environmental protection perspective, to use the
corridor to link protected areas, for example. I don't think the multi-use
issue is an insurmountable issue. It can be accommodated.
In terms of the second question and the timing of the next activity, one
of the advantages of the regional study provisions is the legislative
provisions are relatively wide open, so you have flexibility in terms of how
you design and set the terms of reference for that. It could be employed at
the next step and, as I said in my remarks, one of the issues around it is
who is the champion for this activity and who would be the one making the
representation to the committee and helping the committee to understand how
it could work.
The more definition that you have, the better suited the regional study
provisions are, but there is some flexibility in the provisions to adjust it
to particular needs.
Senator Black: If the champion, to use your words, was the
Government of Canada, would you recommend this in the Canadian interest?
Does that in any way affect your thinking around process?
Mr. McCauley: No, I don't think it does. The act contemplates that
the government could be a proponent of projects, for example, and that has
happened in the past. We're independent in the sense that we report directly
to the Minister of Environment and provide advice directly to her, but it
can be other departments or entities that lead projects.
Senator Black: Building on Senator Tannas' question, if that were
to be the case, there are obviously a lot of preliminary conversations that
would need to go on. Can your agency be part of those conversations?
Mr. McCauley: Yes, I think so, and it has relevance in terms of
how to set the terms of reference for the committee and study.
Senator Black: You could be a participant in preliminary work.
Mr. McCauley: The act indicates that the agency has a role in
providing support to committees when they are established, so yes.
Senator Black: Tremendous presentation. Thank you.
Senator Galvez: I'm so happy to see that the agency has recovered
some of its past activity and it's very refreshing. For 20 years I gave the
course on environmental evaluation assessment at the University of Laval in
Quebec City. Last year, I had 300 students, civil engineers taking this
One of my worries on the environmental evaluation of multiple projects is
the cumulative effects. As you said, the proponent comes and that's the
evaluation for its own project and its own corridor. It has a very narrow
study zone, but now with this corridor, I'm reading there are a lot of
multiple uses. Will you be worrying about supervising or foreseeing these
cumulative impacts for the corridor?
Mr. McCauley: That's a great question and given that you have
taught environmental assessment, I better be careful in my answer.
The impetus for the provisions, one of the main reasons was how to manage
cumulative effects and the recognition that it's difficult, if not
impossible, on a project-by-project basis to do so. The provisions were
introduced to take a regional approach that would allow a more effective way
to manage cumulative effects.
You can accommodate the management and assessment of cumulative effects
in a regional study. That's one of the reasons why the provisions exist and
one of our roles, when we get down to project assessment, is actually from a
compliance and enforcement perspective. It's to ensure the mitigation
measures are being applied as they were committed to in the environmental
assessment, and to make sure they have the intended results.
The way the process works is the minister issues a decision statement,
which includes legally binding conditions that the proponent must comply
with, and so then we monitor the proponent's performance relative to those
Senator Galvez: Climate change is affecting Canada in an intense
way, but even more in the North. The permafrost is not there, and these
pipelines and highways will have to be designed taking all of these changes
We all know that when we come to cost, it's better to plan before than
when it comes to mitigation, because when we have to mitigate it costs more.
How are you going to take that into consideration?
Mr. McCauley: That's a great question. The way an environmental
assessment works at the federal level, we have an explicit requirement to
look not only at the effects of the project on the environment, but look at
the effects of the environment on the project. We do explicitly look at
things like climate change, changes in forest fire or those activities that
may affect the project. We do look at that in the environmental assessment,
so yes, it's taken into account.
Senator Enverga: Thank you for the presentation. On your strategic
approach for conditions for success, you mentioned that funding would be
necessary for the committee that would be appointed by the Minister of
Environment and Climate Change. Can you tell me if there is any timeline?
When will this committee be established? When will the funding come? Will it
be a federal committee that will oversee all the action to make this happen?
Mr. McCauley: Good question. The provisions in the law give the
minister the flexibility to establish a committee in situations where there
is only federal interest and jurisdiction. But also to establish a committee
jointly with other jurisdictions where there are multiple interests or
jurisdictions. The committee can be established among all the participants
or all the jurisdictions that may be affected by the concept.
The reason I raise the resources issue is that there are no provisions in
the legislation to recover the costs of carrying out the work of the
committee. My agency isn't resourced to do this work, although it is our
responsibility and we would obviously work to support the committee as best
we can. If we are going to set one up, it will be important to make sure
there are sufficient resources required to allow the committee to carry out
its work, the public to participate, and that federal experts can provide
their expertise and science.
Senator Enverga: Is there any legislation in the works that may
make this happen?
Mr. McCauley: As I said, the minister struck an expert panel to
review environmental assessment processes, and their recommendations are due
at the end of the month. This issue of regional approaches has been raised.
I don't have any insight as to what they might be recommending, but we
expect that given people have raised this issue in their sessions, the
expert panel will have some advice.
Senator Gold: Thank you for being here. In contemplating a project
of this scope, and your agency's part in the overall regulatory framework,
what worries you the most about a project like this, and what should we be
most worried about?
Mr. McCauley: I would say the scope worries me. It is still a
conceptual idea, and I think there needs to be more work to try and refine
that idea. Otherwise, you can spend a lot of time and effort that may not be
productive; so I would encourage if there is a way to try to add more
specificity to the concept, what it is and what it is not. That worries me.
It's a question of figuring out, if we went down that path, what do you
want the regional study to accomplish? That can be translated into the
mandate of the committee, and they can carry out the work. Given that the
proposal is pan- Canadian and it touches so many parts of the country and so
many communities, it will be important to have a process that people will
have confidence that it's going to represent their views, that they will
have a chance to participate and their issues will be identified and
addressed through that.
Senator Gold: Given the scope and the inevitable length of time
all these processes will take to get organized, much less be implemented,
there will be changes of government in so many jurisdictions. Do you have a
concern about the sustainability of a project of this kind, given the
changing political landscape?
Mr. McCauley: To me a frequent criticism of the regional study
provisions is there is always an impetus to move quickly because we have
projects we need to move forward. This concept provides an opportunity to do
some longer- term planning to put in place conditions that will support
project development, not in the immediate future, but in the medium term and
longer term. You need to be thinking about that.
I can't say whether a change in government would change the level of
support for the concept. If you strike the committee and they have a
mandate, then they would be expected to continue that mandate until they
The Chair: You have addressed the national corridor, but you also
talked about a regional corridor. When you say "regional corridor,'' what do
you mean? Is it two provinces? Do you mean the West or the East?
Mr. McCauley: I'm referring to a national corridor. I'm using the
word "regional'' because that's the phrase that's in our legislation. I did
note in the University of Calgary study they had an offshoot up the
Mackenzie Valley and one to Churchill. You would look at the entire
Senator Ringuette: First of all, thank you very much. You've given
us hope, I think. When you say you need the resources, I would say that when
the committee is trying to study a proposed pipeline that the resources to
do the study have to come from the proponent of the project. This is not the
Could it be possible within your legislative framework that
Infrastructure Canada would act as the general proponent of the project and
would provide the resources for the committee?
Mr. McCauley: There is nothing that would prevent that from
Senator Galvez: I'm happy to see that we are planning ahead; this
is so important. With climate change, for sure we're going to go more and
more to the North and construct. This will bring a lot of activity in the
construction and building.
We know that the building code is something that is done by NRCan and
that it is basic, and then provinces, depending on their ideas, choose to
adopt or improve it, according to their needs.
Given that these projects are going to be construction-intensive, would
it be a good idea that you talk to the building code people and start
thinking about the rules that need to be applied for construction in the
North in the context of climate change?
Mr. McCauley: It would be important to have discussions on a
number of levels around a range of issues like that one as the concept moves
forward. Given that there is a longer-term view to the corridor and how it
would be put in place, trying to identify what might be the standard two
years from now will be an issue that we'll need to be looking at for sure.
Senator Smith: What feedback, if any, have you received from the
provinces in terms of the Ring of Fire in Ontario or the Quebec Plan Nord
program? Have you received specific ideas from the provinces as to what they
want to do? As we look at this massive project, which if implemented
properly would be a game changer, I always ask whether you do the whole
project at once or in pieces. There appear to be three pieces. Then, do you
tie it to your priorities in terms of trade? If our priority now is to
really focus on Asia, especially from the agriculture sector, then you think
that maybe the western opportunity would be the one to focus on. What type
of interaction, if any, have you had from provinces? Obviously, we will have
to get the provinces heavily committed to this to be an active participant,
plus the indigenous people, of course.
Mr. McCauley: I agree with you. I think the provinces will play a
key role in terms of how this moves forward and in what form it moves
forward. We haven't, that I'm aware of, had discussions with the provinces
about this concept or about their particular interests around regions in the
provinces that they may want to link to the concept.
We do have assessments of active projects underway in some of those
locations, but it's on a project-by-project basis, not in this sort of
Senator Smith: How would you stimulate? Who would be the initiator
to get the provinces involved?
Mr. McCauley: I think there are probably a couple of avenues. Some
of that comes back to who the champion is for moving this concept forward.
So that is one area.
Then, on the environmental and regulatory side, we have a committee of EA
administrators that we talk to on a regular basis across the provinces.
There are ways in which we have a number of federal-provincial territorial
committees that we could start to engage if this proposal is moving forward
and there is desire to try to do something from a regional study or
Senator Smith: Understanding your concept, of course, it has to be
a national initiative. Within the national initiative of the federal
government, what would be the key department initiating a leadership
Mr. McCauley: I'm not sure. On the face of it, Infrastructure
Senator Smith: Let me ask you in a different way. Who would be
potentially two or three options that could look at something like this so
that I am not putting you on the spot to get a direct answer?
Mr. McCauley: I think Infrastructure Canada, obviously, may have a
role given the nature of it. As I understand it, you also have the desire to
have pipelines and power lines in that. That would seem to implicate the
National Energy Board, and Natural Resources Canada would have an interest
in mining. I think they have been here to speak to you about some of their
interests. Those seem to me to be the ones potentially.
Senator Smith: Within Infrastructure, maybe the Infrastructure
Bank would be a key player because they are tied into the pension funds.
Maybe that can stimulate some interest and maybe some funding for the
Senator Black: Can you help us to understand how we might be able
to recommend or construct a one-window environmental approach, whereby the
proponent doesn't need to talk to Ottawa and then talk to seven or eight
provinces? Is that possible? If so, how does it get done?
Mr. McCauley: One of the ways it could happen is through a
multilateral agreement among the provinces and the federal government as to
how the environmental assessment responsibilities would be discharged. We
work cooperatively with the provinces on project assessments, so that may be
one vehicle to do that.
Some of it depends on the specifics of the proposal as to where it is and
how big it is and what is included in it, but probably that would be, at
least off the top of my head, the place to start.
Senator Black: So it is possible in your view that that will be
the process that you would recommend us looking at?
Mr. McCauley: Yes.
Senator Black: Great. Thank you, sir.
Senator Galvez: In traditional environmental impact assessments,
we concentrate on assessing the impacts on humans and the environment,
mostly in safety and security. But today we have other frameworks of
evaluation associated with carbon emissions and greenhouse effects. Before
you, we heard from the president of the steel association talking to us and
saying that Canadian steel has a very low footprint compared to that of
China and Korea. Yet, we keep using this steel. In parenthesis, I could say
that it is of less quality than the Canadian steel.
In your new environmental assessment framework, are you going to add some
new ways of evaluating this impact and include these footprint evaluations?
Mr. McCauley: Under the current legislation and in accordance with
the interim approach and principles that the government adopted in January
of last year, we now take into account upstream GHG emissions that relate to
projects. We also looked at direct greenhouse gas emissions.
As to what might be in the future, what changes may be introduced as a
result of the recommendations of the expert panel? I don't have any insight
as to where they may go, but I think those kinds of subjects have been
raised with them. We will wait to see what advice they have at the end of
The Chair: If there are no more questions, thank you very much,
Mr. McCauley. It is very much appreciated.
It gives me great pleasure to welcome, from the Freight Management
Association of Canada, Robert Ballantyne, who is the President. Thank you
for being with us today, Mr. Ballantyne, and contributing to our study.
Please begin with your opening remarks and then we will go to a question
and answer session.
Robert Ballantyne, President, Freight Management Association of
Canada: Thank you very much, Mr. Chair and honourable senators. It is
always a pleasure to appear before Senate committees. It is usually the
Transport Committee that I see so it is really of interest to me to meet
with this committee. I have been promoted; I guess that is what one would
The Chair: It is the first committee that the Senate established
under the federation, the only committee, actually. It used to have 50
members, so I am glad you are only sitting with a few of us.
Mr. Ballantyne: The Freight Management Association of Canada
appreciates the opportunity to come and present our views on the proposed
Northern corridor. FMA has been representing the views of shippers since
1916 and focuses exclusively on freight transportation issues as they impact
the success of Canadian industry in domestic and export markets. Last year
was a real milestone. It was our centennial year. In passing, I must say
that I was not at the very first meeting.
The 90 companies that are members of FMA are from all parts of Canada and
from most industrial sectors, including mining, forest products,
agriculture, food processing, manufacturing and retailing. FMA members
contribute over $100 billion to the Canadian economy and purchase more than
$4 billion worth of freight transportation by air, freight, marine, rail,
truck and intermodal. A number of FMA member companies are household names.
A list of member companies has been provided. I think they are attached to
the speaking notes.
Looking at the proposed northern corridor, the proposal envisages a bold,
imaginative undertaking that would require broad consensus and buy-in from
all levels of government, from the population generally, from First Nations
people in particular and also from major private sector players across the
It is acknowledged that the proponents are putting forth a "concept'' and
are proposing an extensive research program to determine if this is a viable
project. For an undertaking of this magnitude an extensive research project
is a necessary first step.
A unique element of the proposal is that this would be a multi-use
corridor that would include rail, road transport along with electrical
telecommunications transmission, and facilities presumably would include
pipelines for oil and gas transmission. The proposal envisages a corridor of
up to several kilometres in width which would facilitate its multi-use
The proponents are putting forth the idea that "such a comprehensive
approach may be more viable than a series of incremental steps because it
provides greater room for accommodation of diverse interests.'' This is an
interesting observation but will only be proven by application. Opposition
to all major infrastructure projects does not lead one to think that such a
major undertaking would be subject to less opposition. Concern about river
crossings jeopardizing permafrost and other delicate land areas and
interfering with animal migration routes will be part of the formal
environmental assessments and will also be of concern to environmental
activists and some First Nations groups.
Next are my comments on the proposal. Most of my comments will be limited
to the potential impacts on shippers but here are a few general comments
Probably the last project in Canada that was proposed with this scope and
magnitude was the building of the Canadian Pacific Railway, starting in
1881. This was a nation-building project that had broad strategic reasons
for moving forward in addition to support for commercial developments. It
was a condition of British Columbia joining Confederation and a necessary
infrastructure development to open the West and to keep the American
expansionists from moving north.
Strategic concerns influenced the right of the CPR. The government wanted
it to be as close as possible to the U.S. border. This led to the use of the
very difficult Rogers Pass route through the Rockies rather than the easier
Yellowhead Pass that became the route of what is now Canadian National
Railway. The difficulties with the Rogers Pass, and the growing traffic in
the 1970s and 1980s, led the Canadian Pacific Railway to undertake their
most recent major infrastructure project of approximately $800 million to
build the Mount Macdonald project under the Rogers Pass in the 1980s to
improve the route for westward trains. The CPR shareholders funded the
entire project. There was no government money in it.
I mention this example as it appears that the proposed northern corridor
may have similar strategic considerations as the proponents suggest and that
these strategic considerations could have an impact on the route chosen,
even if it is not the most appropriate route from an engineering
As a former railway civil engineer, I should point out that the low
rolling resistance of the steel wheel on the steel rail is the reason why
railways are so energy efficient. The downside of this characteristic is
that the railway grades must be kept to a minimum, generally about 1 per
cent. That is about a one-foot rise in every hundred feet of distance. This
means that railway location engineering may not always be compatible with
the less restrictive grade requirements of roads, pipelines, et cetera, that
may share the corridor.
Looking at it from a shipper perspective, the growth in the Canadian and
world economies requires that transportation infrastructure and facilities
keep up with the demand. While the large land mass is the source of much of
Canada's wealth, it is also a formidable barrier for Canadian producers to
get their products to global markets in a timely manner and at a competitive
As the proponents note, there is a considerable growth in Canadian trade
with Asia and with the signing of the CETA agreement, there are expectations
of a significant increase in Canada-EU trade. The growth in international
trade will lead to more imports, as well as more exports, as many consumer
goods originate in Asia. As the Canadian population expands, the demand for
internationally sourced consumer goods will continue to rise.
The viability of the proposed northern corridor will depend on the level
of commercial activity that will be served by such a corridor. While it is
anticipated that much of this will come from the forestry and mining
industries that may emerge in the geographical areas close to the corridor,
there may be advantages to exporters and importers in the southerly more
developed parts of Canada as well. A good example of this growth of traffic
is the growth of traffic through the Port of Prince Rupert. Container lines
calling at Prince Rupert have found transit time advantages from unloading
at Prince Rupert for speedy rail movement by Canadian National Railways to
Chicago and other U.S. midwestern markets and to southern Ontario markets.
In summary, FMA understands that the proponents are now requesting up to
$800,000 in funding for phase 1 research to determine both the need and the
viability of the project. The "three pillars'' of phase 1 that they propose
seem reasonable; that is, physical dimensions, routing the location and the
engineering considerations; second, the financial dimensions, cost benefit
analysis and financing options; and, third, land ownership issues, namely,
community involvement, governance issues, et cetera.
This seems a reasonable first step. The summary is relatively modest and
FMA would recommend that the Senate support the proponent's request for
federal government funding.
Thank you very much. I would be pleased to enter into any discussion with
The Chair: Thank you, Mr. Ballantyne.
Senator Galvez: You are correct when you say that concerns about
river crossings and jeopardizing permafrost, et cetera, are delicate issues.
That is correct, for sure. However, in the past we didn't have the same
design and lineal parameters that we have now because humans learn by
mistakes. We learned the mistakes the hard way. We put trains close to
cities, which is why Lac Mégantic happened. We now have experience and that
is why we should modify these things.
Give me your impression. I am hoping that will modify the way new
projects will come to light and be developed. That is, the layout, the
design and the materials will be thought about in a different way. My
question about the building code and construction is this: Do you talk to
the people involved in construction?
Mr. Ballantyne: With construction there would be a lot happening
and many different groups and people and experts involved.
First, your point is well taken. All the regulatory hoops would have to
be jumped through before the project could go ahead. Over the decades, these
I think back to the building of the St. Lawrence Seaway. That project
started and took about five years. We couldn't even do an environmental
assessment for something like the St. Lawrence Seaway in less than 15 or 20
years now. I am not sure that is an improvement but that is the way things
The reality of the world is as it is. The environmental requirements do
have to be met. Also, the obvious engineering work has to be done in terms
of the geotechnical work; that is, what are the soil conditions? What are
things like that which must be dealt with? All those things have to be done
in a way that meets society's requirements. You are quite right; society's
requirements have changed dramatically over all those years.
Having been involved in this stuff for coming up to about 57 years, I've
seen a lot of changes in that aspect of this kind of thing. I hope that
answers your question.
Senator Galvez: At the end of your presentation, you recommended
that we give $100,000. I am replacing someone here, so I am not aware of the
project that requested the $100,000. Does that refer to the Calgary
Mr. Ballantyne: Yes.
Senator Galvez: Is it a university that should do this type of
study, or should it be a consortium? What is your opinion on that?
Mr. Ballantyne: As I understand the proposal from the School of
Public Policy at the University of Calgary, they put forward this proposal —
I see this as a preliminary proposal — then they are proposing the very next
step, what they call "phase 1'' of a research project. They are asking for
$800,000 to carry out this first research project, which they describe as
only "phase 1.'' Presumably, assuming that went ahead, then you would start
to drill down in even more detail, for example, what are the prospects for
the use; what are the costs and benefits; what are all the environmental
concerns, in a detailed way going forward. I assume this would be done by
the people at the School of Public Policy and their partners, an
organization called CIRANO. There is nothing that explains what CIRANO is,
so I'm not sure who they are, but I think they would carry it on further.
They indicate they would bring in other university people and experts as
Senator Tannas: Just for your edification, Senator Galvez, we are
not here to study an $800,000 study; we are here to study the northern
corridor. The University of Calgary made a pitch that one of the
recommendations that they'd like us to make to the government is to fund
this study, but we have heard from others who want to be involved, so it is
not just "take this or not.''
Thank you for being here. Your presentation was very clear. You have 57
years in business. You talked about the railway. We would never get the
railway built today. We would never get the St. Lawrence Seaway built today.
Mr. Ballantyne: No, that is right.
Senator Tannas: If you were a betting man, 57 years forward, some
guy is driving a truck across the country on the northern corridor route.
Will he say, "Man, somebody had some foresight,'' or do you think it will be
an empty highway, a white elephant? If you were a betting man, which will it
Mr. Ballantyne: Obviously, it's hard to look 57 years into the
future. It is easier to look 57 years back, to tell you the truth.
I would be reasonably optimistic about this. I think the country will
continue to develop. I think that the resources we have in this country are
almost not matched anywhere else in the world. This speaks well, I think, to
the future for Canada and for the Canadian North. I would expect there is at
least a reasonable possibility that, in a sense, it would be like the
Canadian Pacific Railway. It would open up the country and that in itself
would cause development to happen. It is like a lot of government-type
infrastructure such as roads, where governments will build a road or a
subway in downtown Toronto or whatever, and that sparks further private
development. I would be optimistic that it would do that.
Senator Gold: CIRANO is the Centre for Interuniversity Research
and Analysis of Organizations. It is based in Montreal.
Mr. Ballantyne: Thank you.
Senator Gold: We heard from a previous witness about the
importance of narrowing the scope of this project, which is currently
conceptual in nature, so as to better understand and evaluate it.
In light of your expertise and the folks you represent, you mention on
page 3 of your written remarks that much depends on the level of commercial
activity that the corridor would support.
From your point of view, from the shipper's point of view, if you had to
draw the map to narrow the scope, what should the route be?
Mr. Ballantyne: That's a very difficult one. First, in the report,
the route they are showing is very vague and notional, somewhere fairly
close to the top of the three Prairie provinces, that borders the three
In coming up with a final route design, it would be useful to look at
what the developmental possibilities might be. I was here for part of the
previous speaker's discussion with you, and there was some discussion, I
think, about the Ring of Fire in Ontario. Clearly, it would be useful to
have the route available to that area. I think one of the problems with any
development of the Ring of Fire has been the problem of no one being sure
what kind of infrastructure they want for it and where it should go. I think
that would be useful. I think in other parts of the country, too, if it were
a case of looking at the forestry implications, the potential mining
implications or resources that might benefit from this, then that would
probably help in developing the more detailed route for it.
Senator Plett: I want to go a little further on your comments
about the environmental studies that would now need to take place for the
St. Lawrence Seaway and further to what Senator Tannas spoke about, namely,
that the railway could never be built now.
Many of us have travelled to China many times. I know this might be a bit
of a loaded question, and I don't want it to be. Senator Day and I certainly
have travelled around China a fair bit. We visited the port in Shanghai,
which is the largest container port in the world, I believe. They built a
road of about 30 or 35 kilometres and they built a bridge to the port. The
bridge is 32 kilometres long. They built the world's largest container port,
and this took about a year and a half. Do they have zero environmental
studies? Clearly, they have enough studies so that they know the
infrastructure will stay standing. It is a great road, and I am sure the
bridge is a sound bridge. Will we just continue to lose ground because we
are going overboard one way and they are maybe going overboard the other
way? What is the solution here?
Mr. Ballantyne: You raise some interesting points. I have been to
China a number of times, but I have no idea what their environmental
assessment processes are. I suspect that if they aren't well developed, they
will develop, so I think they will get more like us.
I think we could improve our environmental assessment processes in
Canada. You were talking to the previous speaker about the issue of both
federal and provincial environmental requirements. It's not clear to me why
there has to be more than one environmental assessment anywhere in the
country. Why can't there be one environmental assessment that would meet
both federal and provincial requirements? I think that would be useful.
I think a good example of the difficulty in getting things done is the
Gordie Howe Bridge between Windsor and Detroit. This is a little bridge —
not very big at all — and there is no shovel in the ground, yet it has been
talked about and studied for 20 years.
We have to find a way to improve the speed with which we can deal with
the environmental requirements, but also the speed with which we can plan
and get these projects going.
I contrasted the Gordie Howe Bridge with the St. Lawrence Seaway. It was
a bi-national major project, maybe the biggest single civil engineering
project in North America in the 20th century. Both Canada and the U.S. were
able to get this done and do the construction in about five or six years.
It's just incredible. We couldn't come even remotely close to that in this
day and age, so I think there is a lot of work.
Senator Plett: Is that because it takes that long to do the
assessment and there are too many groups, or is it because every time an
assessment gets done we have some group that is protesting it and we have to
start all over again?
Mr. Ballantyne: It depends on each project; it won't be exactly
the same. It's a series of things. The delays are not always the
environmental assessments. In some cases, there are other regulatory
requirements that have to be met as well.
For the Gordie Howe Bridge, there were state requirements from Michigan
that weren't necessarily environmental. There were approval sign-offs by the
U.S. federal government, similar things in Canada as well.
We build up so much regulation or law that projects have to meet that
they really are time consuming, and I think there are cases where people
don't approve and will use whatever access they have to the courts to delay
them as well. That happens. Again, I go back to the St. Lawrence Seaway.
There were villages that were put under water in Ontario. The authorities in
Ontario and the federal government were able to buy the people's private
properties and there wasn't that much pushback that I can recall. I was
pretty young at the time, but I do recall it.
There are things that were done then that wouldn't be acceptable now in
terms of forcing people out of their houses and so on. That's how we got
Upper Canada Village. A lot of those houses that were moved from those
villages were put in Upper Canada Village.
The Chair: If there are no more questions, thank you so much, Mr.
Ballantyne. That was very informative, very enjoyable.
Before we say good-bye to Mr. Ballantyne, the meeting on March 30 will
have about an hour for in camera discussion. We will talk about our trip,
our budget and about the Copyright Board. You have all seen the letter that
we got back from the Copyright Board. We haven't heard anything more on the
question of whether they will look at the board while they're studying the
legislation. So I want to have a little discussion amongst all of us to see,
if it's going to be stuck in the mud, whether we might want to unstick it
here and have a couple of hearings or two on the board itself.
That's what we will be doing and if there is anything else you want to
add to the in camera portion, please drop me a note and I'll put it on the
Senator Black: Does the clerk have any sense about timing of a
potential visit to the U.S. so we can start to hold time?
The Chair: The first week of May is what we're looking at.
Senator Black: The first week of May, Energy is travelling to
Atlantic Canada. That's why I want to get —
The Chair: We'll talk about it. We'll never be able to satisfy
everyone's itinerary, so we will have to do the best we can and go from
there. Otherwise, we will never get it done. We'll do the best we can and
we'll talk about it.
Senator Massicotte: Could I ask Senator Plett about how his bill
is coming along?
Senator Plett: I apologize it didn't get out yesterday. It is
complete, it is being translated and I am very hopeful that you will have it
The Chair: Anything else? The meeting is adjourned and we'll see
you after the break.
(The committee adjourned.)