Maximizing Our Trade Opportunities
Speech to the Association of Canadian Port Authorities, Annual General Meeting
Ottawa, Ontario
February 26.2007

(Check Against Delivery)

Thank you for your introduction, and thank you for the opportunity to join the Association of Canadian Port Authorities for your annual meeting with government representatives. 

Next year, your organization will celebrate a half-century of achievement on behalf of ports, harbours and marine interests. 

That’s quite a legacy - especially when you consider that Canada Port Authorities today handle $100 billion worth of goods each year. 

Ports are essential to the Canadian economy and to Canada’s overall competitiveness. 

A quarter of Canada’s trade moves through our ports. 

The Canadian economy relies upon the port authorities as key players in the logistics system that enables us to participate in global supply chains – supply chains that bring goods from one country to another, from marketplace to marketplace.    

So today, more than ever before, Canada’s success in this trading environment will depend largely on the quality of our logistics system. 

In order to compete on a global scale, we need the chains to be efficient, fast and reliable. 

Anything less will make Canada vulnerable to our competition in the US and Mexico.  But if we create the right kind of logistics system, and we can transform Canada into the most competitive gateway for North America.   

Canada is well positioned. 

We have enormous opportunities to strengthen our supply chains, to increase trade and to create jobs and wealth at home. 

We have opportunities on the Pacific Coast, and on the East Coast. 

We have the Asia-Pacific Gateway and Corridor Initiative, a strategy to position the West Coast as the best route into North America for Asian traders.

I was recently in China on a trade mission with David Emerson, Minister of International Trade and Minister for the Pacific Gateway. 

The Chinese are making billions of dollars in investments in their ports and transportation infrastructure. 

China is building some 18 new intermodal terminals, and some 100 new vessel berths.  And the Yangshan Deep-Water port in Shanghai, which started construction just a few years ago, is already the world’s third largest container port, after Singapore and Hong Kong.   

The Minster and I sent China a strong and clear signal that we want to work closely with them to develop our ports as gateways to all of North America. 

We met with Li Shenglin, China’s Minister of Communications, and signed a Memorandum of Understanding that will open the door to cooperation on trade gateways and corridors. 

We think there is a lot of room for cooperation in such areas as research, technical exchanges, and gateway development. 

And we think that we have a lot of room to grow – the amount of North American-bound trade that is coming out of China and the rest of Asia.

So those are just some of the opportunities for Canada. 

But what about the challenges?

Let’s face it:  everyone is racing to become the gateway of choice into North America.  We face some stiff competition from the South.   

Canada has many advantages over American and Mexican ports. 

On the West Coast, Vancouver and Prince Rupert can boast that they have the closest proximity to Shanghai and Hong Kong ¾ two to three days closer than U.S. ports such as Los Angeles, which means that a freighter can make an extra trans-Pacific voyage in the course of a year. 

On the East Coast, our ports are also among the closest to India. 

And Halifax is promoting the Suez Canal as a corridor between Asia and North America. 

And why not? 

If Halifax can take advantage of its direct rail connections to Chicago and the Mid-West ¾ combine it with efficient, reliable, and secure operations at the port ¾ it has a good case.

But to date, we haven’t been able to capitalize on this geographic advantage. 

The B.C. ports currently have only nine per cent of the market share of trans-Pacific trade going through West Coast ports.

Compare that to Washington and Oregon, which share 19 per cent of the traffic. 

The goal is to increase Canada’s share of the traffic coming into North America. 

To do that, all stakeholders, including our ports, must work together to make the gateway’s logistics system work as efficiently as possible. 

Certainly this is a lesson we’ve learned in putting together the Asia-Pacific Gateway and Corridor Initiative. 

Many of the stakeholders have been working together for more than a decade to develop a gateway strategy. 

But we no longer have the luxury of a decade to get an initiative like this up and running. 

The time to get in the game is right now.

Perhaps our biggest challenge is ensuring that our chains are more reliable, competitive and efficient than the rest. 

And I can tell you, this is the key concern of our trading partners, foreign investors and shippers.

As with any chain, you’re only as strong as your weakest link. 

When one part of the system breaks down, it affects the rest of us on the chain. 

You saw that these last two weeks with the UTU strike at CN, and the effect on the supply chain. 

Industrial sectors such as agriculture, forestry and auto makers were having trouble shipping products through our ports. 

At the Port of Vancouver, cargo volumes were down an estimated 50 per cent.  In just 10 days, an estimated $730 million in cargo had been held up. 

There were concerns about food and fuel shortages in remote areas. 

Canada’s New Government has taken action.

We took the steps necessary to resolve the negative impact on the Canadian economy.

Last Monday Minister Blackburn told the two parties he would send the government’s Chief Mediator to Montreal to work with the two parties to find a resolution. 

We introduced back-to-work legislation in the House of Commons. 

We were not taking sides, but we were not going to allow the strike to damage the economy and damage our international reputation. 

This weekend, we heard the great news that the two sides have reached a tentative deal, and workers are returning to their jobs. 

The strike has impacted everyone in this room, and I know everyone here is relieved that a deal has been reached. 

We can now handle some of the backlog and move it through the supply chain. 

These kinds of disruptions also affect Canada’s reputation with our trading partners, and with our clients. 

They show a weakness in our supply chain that if not addressed quickly, will have a negative effect on the Pacific Gateway initiative, on our ports, and on the health and stability of the Canadian economy. 

And that is why Canada’s New Government took action. 

We’ll continue to monitor the situation closely. 

I’ve talked about the challenges to building a successful gateway, but I do want to stress, that all the work we are doing, the work being done by this government, the provincial governments, port authorities, stakeholders, and private investors – all of this work is worth it. 

Because transforming Canada into the gateway of choice into North America will mean more jobs, billions in trade, and more opportunities for Canadians. 

That’s why Canada’s New Government has committed $591 million for the Asia-Pacific Gateway and Corridor Initiative. 

We committed some $321 million for immediate projects, and earlier this month I was very pleased to participate in the launch of the first of those projects:

construction of a new seven-lane bridge across the Pitt River in Vancouver.

The Pitt River crossing connects key economic and transportation facilities with Greater Vancouver and links the highway to the CPR intermodal yard.

We have implemented a fast-track consultation and planning process to invest the remaining $224 million in infrastructure funding, and the remaining $27.3 million for non-infrastructure initiatives. 

The key will be federal-provincial consultation, and bringing together both the private sector perspective and expert advice and analysis. 

We’re looking at a governance structure that can respond to the challenges that a major North American gateway will present. 

For example, our government is working with the Fraser River, North Fraser and Vancouver Port authorities to explore the opportunities for a new integrated port authority.

We also know that, in coming years, transportation policy and economic policy in general will not be separated from environmental policy. 

Our Government understands this situation and has designed an achievable, affordable and practical plan which deals with the fact that, after years of inaction, Canada is 35 per cent above its Kyoto targets and there is more smog in our cities.

You most likely have heard of some elements of our plan such as the Clean Air Act, which sets short-, medium- and long-term targets to reduce greenhouse gases and air pollution, or the ecoENERGY programs that support energy efficiency and stimulate the production of renewable power.

We have also recently announced an ecoTransport strategy that I am sure Minister Cannon will outline in more detail. 

It includes $6 million for pilot projects to demonstrate shore-based power options in Canadian ports.  

About 60 per cent of the sulphur dioxide emissions in Vancouver come from ships.  We can reduce those emissions by making shore power available.

Before I conclude, I want to say that we have made some significant progress. 

Canada’s ports are among the world’s best.  Right now the world is looking at Canada, at what we have to offer, and at how we fit into the global supply chain. 

Canada has an opportunity to become an integral part of the chain, and we can do it with your help. 

Canada’s ports must remain an integral part of Canada’s logistics advantage.   

And we look forward on working with you to make a Port Advantage in the years ahead.

Thank you.