47 Elizabeth II, A.D. 1998, Canada

Journals of the Senate

Issue 61 - Appendix

Wednesday, May 13, 1998
1:30 p.m.

The Honourable Eymard G. Corbin, Acting Speaker

WEDNESDAY, May 13, 1998

The Standing Senate Committee on Transport and Communications has the honour to present its

SEVENTH REPORT

Your Committee, to which was referred Bill C-9, An Act for making the system of Canadian ports competitive, efficient and commercially oriented, providing for the establishing of port authorities and the divesting of certain harbours and ports, for the commercialization of the St. Lawrence Seaway and ferry services and other matters related to maritime trade and transport and amending the Pilotage Act and amending and repealing other Acts as a consequence, has, in obedience to the Order of Reference of Thursday, March 26, 1998, examined the said Bill and now reports the same without amendment but with the following observations:

Observations and recommendations

The Senate Committee on Transport and Communications heard over 30 witnesses in the course of its hearings on Bill C-9. It had two meetings with the Minister of Transport, one at the beginning of its deliberations, the other at their conclusion.

Witnesses came from all across Canada and represented a wide variety of marine interests. Many were supportive of the bill, but a significant number were concerned about what the bill might mean to them, or more significantly, what it might mean to their communities. In his second appearance before the committee, the Minister of Transport did much to alleviate these concerns, but the committee was still left with some degree of unease. This leads us to make some comments to the Minister, which we trust he will accept and implement.

Our greatest concern is for the future of small ports in small communities. We heard from some people who were very concerned about the impact of divestiture on the ports in their communities, people who saw divestiture as catastrophic, and offering no hope as a means of attracting the sort of investment they needed for survival. Others argued the need for another regime for ports, something in between a CPA and a local/regional port, a regime more appropriate to ports essential to their region's economy still developing and still needing financial support from government.

Therefore the Committee recommends that the Minister be prepared, on a case-by-case basis, to recognize that certain local/regional ports are essential to the economy of their regions or to the future development of their regions, and:

that such ports will not be divested until the Minister is satisfied that their facilities have been brought to appropriate operating standards for such a port;

that if the $125 million Port Divestiture Fund is not sufficient to facilitate the transfer of such ports, the Minister will seek necessary additional funding;

that the Minister may provide other funding for projects deemed necessary for the future operational success of such ports;

that the Minister will continue to maintain and operate such ports until he is satisfied a viable local entity is in place; and

that the Minister provide for the reversion of such ports to him if the local entity fails to continue such port as a viable operation in the region.

There were also concerns of a financial nature. Many ports or port communities are worried about the additional financial obligations which they face as Canada Port Authorities under Bill C-9. These range from new expenditures for grants in lieu of taxes, the requirement to pay dividends based on gross revenues, the inability to have access to government funding, to the inability to pledge land as security for loans. Some saw these additional obligations posing a real threat to their ability to raise capital for future projects, others saw them as a threat to their ongoing financial viability.

The committee notes that a review of this legislation is required under section 144, to be carried out during the fifth year that the act is in effect. Indeed the minister made much of this review in his remarks to us, pointing out that it would offer an opportunity to put right any unforeseen problems that might arise in the next few years.

We ask that the process of review of this act not wait for the formal process in four years time. We ask that it begin now for the smaller ports, with ongoing assessments of the economic health of communities where ports have been closed or divestiture has taken place. We would like to see the results of such assessments incorporated into the Minister's annual report on divestitures, called for under section 72(7) of the bill along with comments each year on the adequacy of the divestiture fund at that particular time. For the ports which become CPAs, we recommend that the Minister look carefully for any adverse financial impact that this bill might bring, right from the start of a port gaining CPA status. We also ask that the issue of user input to the boards of CPAs be carefully monitored to see whether the process now proposed will work satisfactorily.

The Committee is left with some concerns that the degree of environmental protection afforded for works within ports and the Seaway under Bill C-9 could be diminished if regulations to be developed under the Canadian Environmental Assessment Act are not completed thoroughly and promptly. The committee asks that the Minister of the Environment ensures that when the Canada Ports Authorities do come into existence, that the full force of federal environmental protection is in place, with a minimum of no deterioration over the situation which exists today.

Respectfully submitted,

LISE BACON

Chair