[Recorded by Electronic Apparatus]
Monday, October 7, 1996
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[English]
The Vice-Chairman (Mr. Comuzzi): [Technical Difficulty - Editor] ...on Transport to consider Bill C-44, a proposed act to amend the system of Canadian ports and harbours in Canada. The first presenters, and I welcome them to the table -
Mr. Keyes, since you're from Hamilton, why don't you introduce them?
Mr. Keyes (Hamilton West): The first witnesses before us this morning, Mr. Chairman, are representatives of the Canadian Federation of Municipalities. The deputy mayor of the city of London, Mr. Hopcroft, will introduce himself. Dan McGregor is a senior policy analyst with FCM. Mr. Don Drury is an alderman of the city of Hamilton. He's also a regional councillor.
The Vice-Chairman (Mr. Comuzzi): Welcome, gentlemen.
Mr. Hopcroft, the usual process is that each witness group has approximately half an hour. If you'd limit your remarks to the first ten minutes or so it would allow everyone -
Mr. Grant Hopcroft (Federation of Canadian Municipalities): Thank you very much,Mr. Chairman and members of the committee. We appreciate your providing the Federation of Canadian Municipalities with the opportunity to appear before you today on Bill C-44, the proposed Canada Marine Act.
I'm the deputy mayor of the city of London and I'm chair of FCM's national transportation and communications standing committee. I am joined today by Dan McGregor, FCM's senior policy analyst responsible for marine transportation, and alderman Don Drury of the city of Hamilton.
The first issue I'd like to address is the issue of payment of property taxes by Canada port authorities. FCM was very disappointed to learn last year of Transport Canada's plan to give federal port authorities a unilateral federal exemption from payment in lieu of municipal property taxes, as currently required of federal port corporations under the Municipal Grants Act and the crown corporation grants regulations. Bill C-44 is silent on this matter. The tax status of Canadian port authorities remains unclear.
Municipal leaders unanimously oppose any property tax exemption for Canada port authorities, for the following reasons.
First, tax exemption would violate a decades-long practice of federal port corporations making payments in lieu of taxes based on the assessed value of their properties and municipal tax rates.
Second, a tax exemption would run opposite the agreement reached among FCM, the Minister of Public Works and Government Services, and the President of the Treasury Board on March 11 of this year. The agreement recognizes that:
- property tax is founded on the distribution of local government costs among property owners in
proportion to the value of their properties...and not on the value of the services consumed by
each property.
- The agreement further states that:
- ...payments-in-lieu of taxes on the properties of federal departments and agent Crown
corporations should be based on the principles of property taxation
Fourth, a tax exemption would contradict the understanding FCM reached with the former Minister of Transport on October 23, 1995 that municipalities with federal port authorities would be no worse off financially as a result of marine policy reform.
Fifth, and finally, neither FCM nor the affected municipal governments were consulted by Transport Canada in the development of this proposal, even though extensive consultations were held with federal port corporations, shippers, and users, which in their own interest demanded to be exempted from municipal taxes.
We believe the federal government must continue to honour its obligations and commitments to municipal governments as a responsible property owner and corporate citizen. We urge the committee to amend Bill C-44 to make it clear that Canada port authorities will assume full responsibility for payments in lieu of taxes to host municipalities.
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On the issue of policing, Bill C-44 will dissolve the Canada Ports Corporation, which currently provides police services to federal ports corporations. Our understanding -
I'm pleased to be joined now by Mayor Morrow. Welcome, Mayor Morrow.
The Vice-Chairman (Mr. Comuzzi): Welcome.
Mr. Robert M. Morrow (Mayor of Hamilton): Welcome to all of you. Thank you for coming to Hamilton.
Mr. Hopcroft: Our understanding is that these policing responsibilities will be transferred to municipal or provincial governments. FCM believes that all property owners, including the Government of Canada, should have equitable access to municipal services. Accordingly, Canada port authorities should be entitled to basic municipal police services.
National ports, however, require higher service levels and specialization to deal with criminal activity unique to ports. Just as large industrial concerns do, Canada port authorities should hire their own security services to augment municipal policing or pay user fees in addition to payments in lieu of taxes if they wish municipal police to assume the role previously played by the Canada Ports Corporation police.
I'd like now to turn to the issue of governance, Mr. Chairman. FCM is encouraged to see that Bill C-44 provides for direct municipal representation on the boards of directors of Canada port authorities. We note, however, that municipal representation would be decreased in the case of Fraser River port or any other harbour commission that might convert to port authority status.
Further, we are concerned that the interests of port communities might be compromised by giving port users and shippers - who may not be tied to the community - majority representation on the authorities' boards of directors. We recommend that a majority of directors comprise representatives of the community who are not aligned with shippers and users. These should include business persons, not directly involved with the port, who have suitable experience and skills. These should also include greater municipal representation than the single appointee provided for in the bill. We urge that strict conflict of interest guidelines be put in place for all Canada port authority directors.
On the issue of land use jurisdiction, FCM believes that as a matter of operating principle, and not withstanding any federal constitutional prerogative, federally owned or federally operated ports should act in compliance with the municipal planning authority. Bill C-44 allows Canada port authorities to develop their own land use plans without regard to community official plans.
FCM appreciates the move towards greater public accountability regarding land use plans, especially in respect of existing port corporations. We believe, however, that Canada port authorities should require specific political authority from the Government of Canada for any action they take that is at variance with municipal official plans and by-laws. We would add that a mechanism can and should be developed to provide for binding third-party mediation or arbitration to resolve disagreements on land use.
Subclause 24(2) of Bill C-44 restricts Canada port authorities to engaging in:
- activities within the port related directly to shipping, navigation, the transportation of
passengers and goods and the handling and storage of goods.
With respect to payment of stipends to the Crown, under Bill C-44 Canada port authorities will be required to pay a portion of operating revenues to the federal government. Given the large savings to the federal treasury that will result from the offloading of federal port costs onto communities through marine policy reform, there is no justification for such payments. FCM believes that any revenue generated by a Canada port authority should be reinvested in the port to enhance its competitiveness. Failing this, stipends to the Crown should be based strictly on operating profits as opposed to revenues and should be phased out over time.
Given our location this morning, it would be remiss of FCM if we did not comment on the unique nature of the Hamilton and Toronto harbour commissions. FCM recognizes the unique historical development of both Hamilton and Toronto harbours and, in particular, the special investments in harbour infrastructure and governance made by the cities of Hamilton and Toronto. A made-in-Hamilton or a made-in-Toronto solution in reforming these commissions should be allowed.
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I'd like to comment next on the transitional committees, Mr. Chairman. FCM is very concerned that port transition committees made up exclusively of users have been created by Transport Canada to develop the letters patent of prospective Canada port authorities. We urge your committee to impress upon Transport Canada the importance of balanced consultations in the development of these documents. Municipalities should immediately be invited to participate in the transition committees.
On the transfer protocol for regional and local ports, the Treasury Board manual states that:
- ...federal real property in Canada that is being offered for sale must first be offered to other
federal custodian departments and then to Crown corporations, provincial governments and
municipal governments in that priority.
We believe municipal governments are in a position to balance local public interests in current and future uses of regional and local ports. Bill C-44 is silent on this point. We urge the committee to recommend that Treasury Board reverse this decision and thereby ensure that public interests are protected in the divestiture of regional and local ports.
On the issue of funding regional and local ports, under the marine policy reform funding will be eliminated over six years and a $125 million fund has been put in place for capital upgrades on a first-come, first-served basis over six years. FCM opposes the elimination of federal funding for regional or local ports in the absence of consideration of its impact on trade, commerce, and economic development.
In closing, I wish to stress that port municipalities recognize the strong interrelationship between the economic success of a port and the health of the local economy. Ports consume municipal services, and their activities impact on land use issues and local economic development. All ports, regardless of size or importance to individual firms or the national economy, are significant to the municipalities in which they are located.
I thank the committee for this opportunity to register the views of FCM on this important subject. We would be happy to answer any questions you have.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Hopcroft.
Welcome, Your Worship Morrow. Do you have anything to add to the presentation?
Mr. Morrow: Just that I support it completely and we will be making our own city's presentation to you at noon, thanks to your scheduling people.
I do want to welcome you very warmly. We've kept abreast of things through Stan Keyes and our other local members. I see Beth Phinney here.
We very much appreciate that you're here. This is a major port in Canada. We appreciate the recognition that such is the case.
We do have some concerns. FCM has addressed several of them very well. We'll be able to flesh things out in local terms better at the noon hour.
Thank you for coming. Let us know of anything we can do to make your stay as enjoyable as possible.
The Vice-Chairman (Mr. Comuzzi): Thank you.
Mr. Keyes.
Mr. Keyes: Thank you, Mr. Chairman.
Good morning, gentlemen. I want to thank you for coming before us this morning. Certainly when SCOT first visited this whole issue and made its report in May 1995...it has been working diligently and constantly to try to improve any prospective legislative agenda, and then of course the work up to Bill C-44. To be quite truthful, and we've said this before, the research staff of the former committee and SCOT itself had an eye to successful commissions, such as the Hamilton Harbour Commission, to model what the ports and harbours of this country might look like in the future. That serving as the model, we took it from there, with one eye to the success of harbour commissions like the Hamilton Harbour Commission and of course another eye to the needs and requirements of ports and harbours across the country.
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FCM has presented to this committee before, and it's become very well entrenched on exactly where the Federation of Canadian Municipalities is coming from. I have to take some issue with a couple of the points you make in your report again today.
For example, at the bottom of page 1, where you say that municipal leaders unanimously oppose any property tax exemption, are you aware of the position of the Municipality of Thunder Bay?
Mr. Hopcroft: Thunder Bay was represented on our ports committee and was in support of the brief that's before you this morning.
Mr. Keyes: In fact, that is not so. We were in the community of Thunder Bay just last Friday. The community of Thunder Bay sees the need, sees how ports and harbours across this country are net generators - as you mentioned in the last page of the report - of economic wealth in this country, net generators of those all-important jobs in this country. So Thunder Bay is not in agreement, in fact, with your position on property tax exemption.
That being said, however, it should be said that Thunder Bay and other ports we have visited across the country are concerned about and take issue with tax exemption. This committee is hearing from the ports and harbours in this country that federal agency status, which you are correct in saying is not addressed in this particular bill, is a provision that should be included in the bill, if not to protect harbours and ports across this country from the additional taxation that could prove to be detrimental to any port or harbour...but beyond that does make provision, with federal agency status, for some type of graduated grants in lieu, or fee for service, coming back to the community for the services it provides.
You can comment on that comment, if you like.
Mr. Hopcroft: Without being too argumentative, Mayor Hamilton of Thunder Bay was on the committee that drafted the brief before you this morning. I'm not aware of the specifics of the City of Thunder Bay's brief that was just presented to your committee, but we certainly had full opportunity -
Mr. Keyes: We can make that available to you, if you like.
Mr. Hopcroft: Regardless of whether it's unanimous, it's certainly an overwhelming view of municipalities. We urge that the view held by Treasury Board in striking the agreement that was penned several months ago, which I think stands for some very important principles, be abided by and respected by both levels of government.
The Vice-Chairman (Mr. Comuzzi): Mr. Hopcroft, I'll interject here that I have asked the clerk to send to each member of your committee a transcript of the evidence we heard last Friday from the mayor of the city of Thunder Bay.
Mr. Hopcroft: Thank you.
The Vice-Chairman (Mr. Comuzzi): So perhaps we could move to another topic.
Mr. Keyes: Sure.
Deputy Mayor Hopcroft, what would be your opinion if, as requested, federal agency status was an active amendment in Bill C-44? What would be your reaction to the addition of a grant in lieu that would come with that particular amendment, of course reflecting a provision to, say, negotiate - ensuring that the port's bottom line can sustain that particular payment?
Mr. Hopcroft: We've had the long-standing position that federal or provincial or municipal property taxes are typically based on taxation principles, which in a lot of cases aren't based on how much use of the service one makes. There are user fees that apply in those particular situations, but property taxes are something we don't consider negotiable.
Many property owners feel they don't get a specific service to the extent they would like, but overall we have a responsibility, as you do, to provide service in the broader public interest. You don't let property owners or income taxpayers negotiate taxes on the basis of the service they receive from the federal or the provincial governments. We don't believe property taxes should be negotiable either. The principles of property taxation and payments in lieu being based on value are long entrenched in Canadian law. We see no reason to differ in the case of ports or any other business opportunities or business ventures or quasi-business ventures.
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Federal and provincial institutions have made payments in lieu of taxes for many years. They're not based on services consumed. They are based on respect for what the value of those institutions are in the community. The agreement penned between FCM and Treasury Board earlier this year respects those principles. We're simply urging the federal government to be consistent in this regard: respect those principles that were penned earlier this year and don't make exceptions to them.
The Vice-Chairman (Mr. Comuzzi): Mr. Mercier, do you have a question?
[Translation]
Mr. Mercier (Blainville - Deux-Montagnes): Certainly. You recommend that the board comprise a majority of community representatives linked neither to the shippers nor to the users. Would you comment on that recommendation?
[English]
Mr. Hopcroft: The recommendation is based on our views that strict conflict of interest guidelines are required, and that shippers and users may put their own interests ahead of the public interest in the operation of a port in a particular community.
On another principle, we feel that local people - be they local government representatives or local business people - will have the interests of the community, the viability of the community, and the role of the port in that community uppermost in their minds when making decisions related to the port. We do not feel this will always be the case with respect to shippers and users who may in fact not be located in that community or have a base in that community, or who may not respect the local importance of the port in the community's economic development. The City of Montreal very strongly shares this view, and participated in the development of the brief that's before you this morning.
I don't know if Mayor Morrow cares to add anything on that point.
Mr. Morrow: We have some concerns about representation, but I think they're probably best left to be covered later on today.
Mr. Hopcroft: I hope that answers your question.
The Chairman: Mr. Gouk.
Mr. Gouk (Kootenay West - Revelstoke): Thank you, Mr. Chairman.
Gentlemen, I'm going to quickly go through the main headings of your points. I'd like you to comment afterward if you could.
First of all, with regard to property taxation - and I look at this in a general sense, not in a Hamilton sense, because we're going to deal with Hamilton later on - I basically agree. Ports have to pay something for the services they use. I disagree a little bit with Mr. Keyes' rationalization that because ports are net generators of wealth and net generators of jobs, they should have.... I think there is a reason for some consideration, but not that. I would like to think that any successful business is in that same situation.
However, I also disagree with what you have said to the extent that property owners can't negotiate, or whatever. Property owners, in their own way, can negotiate, because they can decide to live in Hamilton, or they can decide to live in a suburb. In my area they can decide to live in town and accept city services, or they can decided to live in a regional district - and they often do because of the tax differential - but they take lesser services because of such a decision.
We have a responsibility at the federal level. Believe me, I am a great advocate of less federal government, of reducing those federal services. But there is a role for the federal government. In the greater perspective of ports, we have to worry about whether or not those ports are successful, because it has a tremendous impact far beyond the area where the ports are located. As in the case of homeowners who can decide to live in a lower tax district, port users can decide to go to a lower-cost port, in many cases. I don't know how exactly how that works for Hamilton, but I know in the case of Halifax and in the case of Vancouver that's certainly an ongoing consideration.
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So I think they have to pay, but not necessarily full tax. There has to be a negotiation process between municipalities.
In the case of policing, I agree primarily with your position that there is a responsibility, given that they do pay some tax...that they're entitled to normal police services. Like any other industry, if they're saying they need something beyond the norm, then it has to be negotiated upfront and that extra cost has to be paid for. I think there has been general agreement on that when we've been travelling.
In the case of the governance of port authorities, I believe there should be a plurality. No one should have the majority, absolutely no one. So I would like to see a modification of the formula as it sits right now - a minor modification, but a modification nonetheless.
On land use, I agree in principle with what you're saying, but keep in mind you do not have control right now. One of the things we need to look at is whether we are making you any worse off with this legislation. Are we taking something you have away from you or forcing you to take something you didn't want? Those are areas I think we would have to look at.
About your part on section 24, I'm inclined to go almost in the opposite direction, in all honesty. We have some ports that operate businesses that do not fall under the definition of the bill as being directly transportation related but that produce revenues for the ports, which keeps their costs down, which brings in revenues, which I don't think is at odds with the districts or jurisdictions they are under. That is a consideration a lot of people have been very concerned about, certainly on the west coast.
On the payment of stipends, again, I primarily agree. I think it has to be in that vein. There has to be some kind of return for the investment. Now, maybe you have a unique situation in Hamilton or Toronto, but overall there has been a huge investment by the Canadian taxpayer in each facility, so there should be some return, but again, as in the case of taxes going out, that return has to be manageable and it should not create difficulties for the port.
Rather than go any further than that, I would invite you just to make what comments you have and we'll take your brief into further consideration.
The Vice-Chairman (Mr. Comuzzi): Ms Phinney.
Ms Phinney (Hamilton Mountain): Are they going to provide an answer?
The Vice-Chairman (Mr. Comuzzi): Was there a response? I thought that was a statement.
Mr. Gouk: It is, but certainly I would invite a response to it, Joe.
The Vice-Chairman (Mr. Comuzzi): Sorry. Please respond, Mr. Hopcroft.
Mr. Hopcroft: On the issue of taxation, we feel port authorities are in the position of many resource industries in their ability to relocate. They don't have the opportunity to move around. So we really don't see them as being in a very different position from that of many of those industries, which have, I guess, the choice of doing business or not doing business. Obviously there are competitive pressures everyone has to look at.
When you look at the system of taxation we have in this country and in many of our provinces and territories, we have many situations where people don't feel they're getting service for their taxes. The one I hear most constantly is that in Ontario many people are paying education taxes, in fact the majority of their taxes are for education purposes, yet they don't have children in school. That's one of the quirks of our system of taxation. We feel the principles are the right ones and they should be observed here.
We appreciate your supportive comments in a number of areas. On the issue of land use, I would comment that we recognize there needs to be an opportunity for the federal government to provide an override on the paramount federal powers in cases where there is no agreement locally or there cannot be a satisfactory arbitrated situation, but we think there needs to be recognition of municipal land use authority, particularly given your comments on clause 24. We're simply asking for the federal government to make it very clear in Bill C-44 what kinds of activities will be permitted, and obviously to the extent that there are broader activities permitted, there should be the ability to recognize those as business operations, which would be subject to the same taxes as any business in the private sector would be paying as well.
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The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Hopcroft.
Ms Phinney.
Ms Phinney: Thank you very much. I would like to comment about the committee as a whole and congratulate you on the work you've done in the past, Mr. Keyes, and the others on the committee.
I have the minister's speech here from September 26, and I've noticed very little mention is made in that at all about taxes, and yet in your report taxes are number one. I think that's noteworthy. What services are paid now, and do the ports pay enough to cover the cost of the services that the cities are paying in the various areas across Canada?
Mr. Daniel McGregor (Senior Policy Analyst, Federation of Canadian Municipalities): It depends on the kind of port you're talking about, of course, but the major Canadian port corporations, the current federal port corporations, make payments in lieu of property tax, according to federal law. Those federal laws have a number of exclusions such as piers, wharves, and various kinds of structures that wouldn't apply in the private sector. In addition, the current rules that govern those payments are stacked in favour of the federal government or the federal port corporations, and in some cases the port corporations haven't finalized their payments to municipalities for years.
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Furthermore, there's no appeal process for municipalities. The port corporations can unilaterally set the amount that they decide they will pay to the municipalities, and the only appeal currently is to petition politically the minister responsible.
So we're seeking all kinds of improvements to that system now, and we hope those would apply to the future port authorities.
Ms Phinney: From your report here, I presume you're saying that you're presuming the municipalities will be able to make more money if you are able to tax, through property taxes.
Mr. McGregor: Our biggest concern with respect to payments in lieu is not a matter of the amount of money so much as it is the fairness of the system, and there are a number of improvements that are hopefully in stream and will be coming to fruition, more in terms of the fairness of the system, the appeal mechanism, and the timing.
Ms Phinney: Would you insist on this fairness in the system if whatever they're paying is covering all the expenses of the services that you're providing?
Mr. McGregor: That is not the basis of property taxation. The fairness of the system would be that the federal government put itself in the same shoes as all other taxpayers. That is what they accepted to do in 1949. We would see any attempt to unilaterally exempt federal ports as a major erosion of the federal government's commitment to behave as a responsible corporate citizen in this regard.
I should say that the federal Government of Canada is the largest property owner, as there are some 50,000 buildings in 2,200 municipalities, and we feel it has a major role to play in behaving as a good example for all taxpayers.
Mr. Hopcroft: If I may make one brief comment on that as well, I think we need to recognize that a payment in lieu system that's truly value-based recognizes the economic viability of a port corporation, and if the economic viability is in question, that's reflected in the value on which payments in lieu are based. Those ports that are truly in need of economic relief, regardless of the services they consume, may in fact see tax relief in situations where they have been paying based on other arrangements to date. It can work both ways. Those that are successful will see that reflected in value; those that are less successful will see that reflected to their benefit as far as the tax burden they would pay goes.
The Vice-Chairman (Mr. Comuzzi): Mr. Hopcroft, I think we've canvassed the issue of taxation.
Your point on governance of Canadian port authorities outlines your feel of non-user-aligned representatives from the community and so on. I point out to you, sir, that as you are aware, there is a movement to turn over the Great Lakes and St. Lawrence Seaway to a complete user group, five or six users exclusively. Are we to take from this report that there is no double standard and your governance principles apply not only to the harbour of Thunder Bay but also to the Great Lakes-St. Lawrence system?
Mr. Hopcroft: I really don't feel qualified to respond to that question this morning,Mr. Chairman.
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The Vice-Chairman (Mr. Comuzzi): But if that's your philosophy in this instance, it would apply to another instance, regardless of the factual situation. If this is your philosophy on the make-up of the governance of a harbour commission, it would be your philosophy on the make-up of the governance of a seaway authority. Is that correct?
Mr. Hopcroft: That would be a logical conclusion, but -
The Vice-Chairman (Mr. Comuzzi): Thank you.
Mr. Hopcroft: - again, the specific issue of the seaway has not been discussed.
The Vice-Chairman (Mr. Comuzzi): No. If you have a philosophy, if you believe in a certain thing, you believe it for this and for that, so there is no double standard. Is that correct? You're consistent in your philosophy.
Mr. Hopcroft: We try very hard to be consistent, Mr. Chairman.
Some hon. members: Oh, oh!
The Vice-Chairman (Mr. Comuzzi): Thank you. Thank you very much, gentlemen.
Mr. Keyes: Sterling consistency -
A witness: It's just not fair to ask us to comment on something that we haven't discussed within our federation.
The Vice-Chairman (Mr. Comuzzi): Next we have the Hamilton Harbour Commissioners, please, with Mr. Scott Smith.
Welcome, gentlemen.
Mr. R. Scott Smith (Counsel and Secretary to the Hamilton Harbour Commissioners): Mr. Chairman, the submission this morning will be made by our chairman, Duncan Beattie, and our port director, Bob Hennessy. We have representatives from our user group with us, and I'll let our chairman introduce them to you.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Smith.
Welcome, Mr. Beattie.
Mr. Duncan Beattie (Chairman, Hamilton Harbour Commissioners): Thank you,Mr. Chairman.
I'd like to introduce our port director, Bob Hennessy, who will be replying to some of the questions today, as well as Peter Baumgartl, from Stelco; David Mothersill, from Dofasco; Mark Roe, from CanAmera Foods; and Blair McKeil, president of McKeil Marine Industries.
Members of the committee, some eighteen months have passed since the Hamilton Harbour Commissioners were afforded the opportunity to address the committee with the commissioners' perspective on the future of Hamilton Harbour.
Our position at that time was based on the premise that the primary purpose of the port of Hamilton was to move cargo. Since February 22, 1995, the commissioners have moved approximately 20.5 million tonnes of overseas and domestic cargo through the port and have been doing so under the Hamilton Harbour Commissioners Act of 1912.
Our 1995 presentation brief to the committee provided a succinct overview of the operational successes the commissioners have achieved over the last 84 years. Following up on this success, our request to the committee was simple: the Hamilton Harbour Commissioners would prefer to keep the existing act. The port works well under this existing regime and consequently it is our position that no changes are warranted. In fact, the committee recommendations for changes to the marine sector contained in the national marine policy recommended that the 1912 act remain in place while Hamilton's status was reviewed.
The commissioners suggest that with respect to Hamilton our status has not changed over the intervening eighteen months, and we once again request that we retain our existing legislation.
The major overhaul of the marine sector envisaged by the national ports policy has been realized through Bill C-44, the Canada Marine Act. The CMA, of which committee members will hear much over the course of their travels, is in our opinion a significant step forward in addressing the concerns raised by the SCOT report. On balance, Bill C-44 provides viable Canadian ports with the autonomy and independence they find so necessary in order to compete in the global market, autonomy and independence that they currently lack.
Hamilton, on the other hand, already functions with this independence and operates as a successful model for others to emulate. The commission, under its act of incorporation, has attained the requirements to be a national port under the proposed CMA, which are these: financially self-sufficient, strategically significant to international and domestic trade, diverse in its traffic base, and linked to major rail lines and highway infrastructure. In order to build on these achievements, the only further required amendment to the CMA the commissioners will make today is for the deletion of clauses 169 through 171, the clauses that repeal the Hamilton Harbour Commissioners' Act.
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In summary, after significant study and the development of both policy and legislation, the commissioners' position has remained constant. We maintain our belief that the Hamilton Harbour Commissioners' Act of 1912 does serve the interests of the community, the national ports system, and the movement of cargo. This request to maintain the status quo is strongly supported by the port of Hamilton users group, who are represented, as I said before. We would recommend you to review the group's comparison between maintaining the status quo and Canadian port authority status, and ask that the committee support our collective position of maintaining the Hamilton Harbour Commissioners' Act of 1912.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Beattie.
Mr. Cullen.
Mr. Cullen (Etobicoke North): Thank you, Mr. Chairman and gentlemen.
I had a question that was really targeted to the group that presented before you, but perhaps you could help me with it. If you look at the types of services a harbour or port draws from the municipality, can you differentiate among the services used by a commercial or real estate user or a residential real estate user or some other public body, in the kinds of services they would obtain from the municipality? And to come back to this position on the payment of municipal taxes, is there a theoretical argument or a public policy argument for maintaining that system as opposed to some other system which moves more towards compensation on services? We heard some of that earlier, but I wonder if you could expand on that.
Mr. Bob Hennessy (Port Director, Hamilton Harbour Commissioners): Yes, sir. The services we consume are largely identical to those consumed by other industries and residences.I would put two caveats on that. First, in the case of the Hamilton Harbour Commission we have rather extensive land holdings across the entire waterfront, and the services on those lands are provided by the port authority and not the municipality; that is, the system of roads and sewers, the distribution of power systems, etc. So in fact they are already paid for by the port user. As for the hook-ups back to the municipal system, obviously we draw our water and put our sewage back into the mains, but we pay for that at a metered rate, the same as anyone else.
The other thing I would add is that the port also provides services to the municipality. It's a two-way street. We dredge the channels that private industries use. A lot of that material comes down from municipal sewers. There's no charge back for that service. We maintain the buoys, aids to navigation, which are used by recreational boaters who live in the municipality. So shippers are paying for services that are also consumed by the municipality.
Those are the two caveats I would put on my answer.
The Vice-Chairman (Mr. Comuzzi): Mr. Gouk.
Mr. Gouk: Mr. Beatty, it's interesting that your Hamilton port commission, which I have talked to in the past and I know favours a relatively small board, has the biggest group of presenters of all the ports I've talked to thus far.
I would like you to comment on three things. I have talked to you in the past about size of board, and it's an issue that has come up with several of the port authorities we've talked to - the nine to eleven size. Many are favouring something smaller. I would ask for your comment on that.
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In terms of subsidiary operations, a lot of things are basically banned in the new bill. I haven't had time to read your whole presentation yet, but I notice you're involved in things like waterfront parks, building wildlife areas. All that would be banned under the current interpretation of Bill C-44 in the section on subsidiary activities, and also the payment of fees, whether it should be on gross, as is indicated right now, or whether or not you have some different idea as to what fees, and in what manner you would pay them, would go to the federal government.
Mr. Beattie: With regard to the size of the board, we feel the three-person board we have now works well. We have no position if we do gain CPA status. We haven't given any thought, really, to what our recommendations would be with regard to the five-member board.
The other question was on...?
Mr. Gouk: The subsidiary operations and the things this act, as it stands now, would ban you from doing.
Mr. Hennessy: Interestingly enough, that is one of the reasons we wanted to keep our own act; we're such a broad-based commission, involved in so many other activities. It is an opportunity for the authority to take an overview and to balance out these interests, which I think is very important for any successful port operation, as opposed to having it divided up among different groups and coming into conflict.
The way we operate, right now you have one agency responsible for all of those activities within the port, able to dollop them out. That's one of the reasons we're so effective.
Interestingly enough, that position is also supported by our commercial users. They don't want the port to operate in isolation. They think their interests are better served having the commission look at environmental and recreational matters in balance with shipping.
Mr. Gouk: I've just one comment. I've quickly looked through your brief, looking for your specific concerns, or for your recommendations, and thus far - mind you, it's a very large brief to skim through this quickly - I haven't found those. Am I gathering that you haven't done that because you've taken just the primary position that you want to stay as you are, and if you are, then all of these problems don't exist for you, as opposed to saying that if we're changing, here are the specific concerns? Am I right that I won't find those specific concerns in there?
Mr. Beattie: There are concerns expressed by the users here in relation to which way we're going. But it's fairly clear that from a user standpoint - and you'll be hearing from the Chamber of Commerce and the Hamilton Harbour Commission this morning - we feel that the status quo is our best option here, but not the only option. We're open to a CPA, of course.
Mr. Gouk: It's an all-or-nothing sort of presentation.
Mr. Beattie: It's not an all-or-nothing situation, only with regard to the repeal of the act. To elaborate on your question, if the repeal stays in the act then we feel it isn't the status quo. The status quo is the status quo without any repeal of the act. That's our position.
The Vice-Chairman (Mr. Comuzzi): Thank you. Mr. Keyes is next.
Mr. Keyes: Thank you, Mr. Chairman.
I'm going to address your request for deletion of clauses 169 through 171. The repeal sections of Bill C-44 are necessary to achieve the objectives of consolidation and rationalization within the entire ports and harbours system. If the repeal sections of this bill, as so far has been indicated to us, would not be repealed, what would then the Hamilton Harbour Commission do?
Mr. Beattie: As explained not in this submission but in perhaps an earlier one, we would have no choice but to make application for CPA. We make all the criteria for that.
Mr. Keyes: I wonder, Mr. Chairman, if I could get an opinion from one of the users as well. One of the big users on the port, of course, is Dofasco, and Stelco.
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Mr. Mothersill, if the repeal sections are not withdrawn from the bill and the Hamilton Harbour Commission is moved to CPA status, much of the community of Hamilton.... Other communities where there are harbour commissions located have looked at the governance of the board, and it's been suggested that the number be dropped to seven rather than nine or eleven. In your opinion, could the community and the harbour commission that would become a CPA, given the governance of the board, work hand in hand in order to accomplish the goals of both what the port hopes to achieve and the greater good of the community?
Mr. David Mothersill (Manager, Raw Materials, Dofasco): If we did have to go to CPA, and if you look back at the way the Hamilton Harbour Commission has worked over the last number of years, we'd try to push the CPA towards that model. We have lived in coexistence with the boaters, the commercial traffic, and we've made money. We haven't been in debt to the federal government or the provincial government or the municipalities.
So it's actually a role model for you to follow, and that's why we're pushing hard to appeal those things and to use it. It seems to make a lot of sense to us. Anywhere you look, there are some imperfections. We're never going to get everything right and keep everybody happy, but this one seems to be working fairly well. A hundred percent of our users are in concurrence.
We've had numerous meetings, as you well know, to try to drive this process forward in a meaningful manner for Hamilton. One of the biggest issues with the CPA, as Scott has mentioned, is that there are certain things that we can't do anymore. We can't be looking after the bird sanctuaries, we can't be trying to be something to all people, and still maintain a profitable shipping operation here in the port, which is, I think, very important to all the user groups.
Mr. Keyes: If this bill were to be amended to look a little more like the SCOT report.... The bill itself, quite frankly, does not address some key areas because the government wanted to leave it open to hear from the ports and harbours across this country. But it's becoming increasingly clear that the board would be at seven or nine if federal agency status, which would exempt the ports and harbours from municipal taxation and provincial capital gains grabs, etc., was included in this bill; and if the municipality was provided with some grants in lieu at the same time, but those grants in lieu were, of course, appreciative of the bottom line of the port.
If the list that was to be presented to the minister for appointments beyond the three government appointments, included some community representation and some user representation - not users directly, but representatives of those users - do you think we could have a successful port system in that configuration and with those types of amendments, including in Hamilton Harbour?
Mr. Mothersill: It sounds very much like you're trying to make the CPA look exactly like what the Hamilton Harbour Commission is today.
Mr. Keyes: Exactly, or very close to it.
Mr. Mothersill: That's why we've asked for the status quo. Abolish those sections and let's get on with it. And if you want to change the rest of the CPA to be similar to that, then go ahead.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Keyes.
Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman. I'd like to come back briefly to this notion of payments in lieu of taxes.
If you're a municipality, you might argue that a port authority is taking up a certain chunk of real estate. It's very difficult to start differentiating between levels of service, as was pointed out by the people before you, I believe. You therefore really need to stick with that system and not really go to any kind of service-based taxing system.
Do you find that argument persuasive, or not?
Mr. Hennessy: I can only speak for Hamilton. In our case we're not named in the grants in lieu of taxes act, so we don't pay grants in lieu of taxes. Hamilton pays full taxation on all our tenanted property.
The commission itself operates very little. We lease out all our wharves, and they pay full taxation once we lease them out. It's only on our vacant lands that we don't pay taxes, and we don't want to pay taxes on them because we're an economic development agency to a certain extent. We're not making any revenue off of vacant lands. We're holding them for future development. Our view is that once we develop them and get customers on them, the customers will pay the taxes, as they are now, up and down the waterfront. As long as they're vacant we don't want to pay taxes on them, because they just become another tax on the existing users.
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The Vice-Chairman (Mr. Comuzzi): Ms Phinney.
Ms Phinney: I have just a short question. What impact will the coast guard cost recovery program have on the Hamilton Harbour Commission and the users of the seaway?
Mr. Hennessy: It has some, but perhaps not as much in Hamilton as in other areas, because in Hamilton we always had our own aids to navigation within the harbour. The port authorities always put those out and paid for them, as opposed to the coast guard. So the downloading of the aids to navigation, which is the first stage of cost recovery, has no effect within the port limits. We always did that anyway.
The next stage of it, which is yet to come, as I understand it, is ice-breaking. We do very little ice-breaking in Hamilton Harbour. What does need to be done could be accomplished by our existing commercial tug fleet.
The final item of coast guard cost recovery is dredging. We always did our own capital dredging in Hamilton; that is, the port authorities paid for it. Until a number of years ago the Government of Canada used to assist us with maintenance dredging. They haven't done that for about ten years. We've been paying for our own for the last ten years. So there is no net impact on dredging; we paid for it anyway.
In summary, very little.
The Vice-Chairman (Mr. Comuzzi): Mr. Beattie, I want to thank you and your group for coming. I have a couple of questions myself.
It seems to me the Hamilton harbour act has been in force since 1912, or around there. AmI correct? During that time you haven't had any obligations to the federal government in a monetary way.
Mr. Beattie: No, none at all.
The Vice-Chairman (Mr. Comuzzi): You don't have any obligations to the municipality?
Mr. Beattie: Well, we do. We are trustees of surplus profits.
The Vice-Chairman (Mr. Comuzzi): I see. But you don't owe them any money.
Mr. Beattie: We don't owe them any money.
The Vice-Chairman (Mr. Comuzzi): You don't owe the province.
Mr. Beattie: We don't owe anyone.
The Vice-Chairman (Mr. Comuzzi): And as for your governance, the way your board of governors has been formed over the 85 years of operation, you've had no particular problems with that over the period?
Mr. Beattie: We've had some minor skirmishes.
The Vice-Chairman (Mr. Comuzzi): But no fatal battles.
Mr. Beattie: No, no blood.
The Vice-Chairman (Mr. Comuzzi): No blood was on the floor - differences of opinion. And you could very well carry on with that type of structure.
Mr. Beattie: Indeed.
The Vice-Chairman (Mr. Comuzzi): You've handled your own affairs, and you've made a contribution to the municipality through the way you've leased all your properties.
Mr. Beattie: Yes, we have.
The Vice-Chairman (Mr. Comuzzi): What I'm getting at is that the Hamilton Harbour Commission has worked very well for 85 years -
Mr. Beattie: We think so.
The Vice-Chairman (Mr. Comuzzi): - and you don't want the government to come in and mess it up.
Mr. Beattie: That's correct. That's basically it.
The Vice-Chairman (Mr. Comuzzi): When something works well and we've been able to do that through local.... That answers my question.
The other question I have is that as you're aware, sir, a move is afoot...and there's some opinion of a group of companies that wants to take over exclusive operation of the Great Lakes-St. Lawrence Seaway system. Those companies are Louis Dreyfus, Cargill, Richardson Terminals, Upper Lakes Shipping, Fednav, and the two steel companies here in Hamilton, Algoma Central and Canada Steamship Lines. They want exclusive operation of the Great Lakes-St. Lawrence Seaway, and they've signed letters of intent with Transport Canada. There's another group that has an opinion on how the seaway should operate with a different philosophy. Then there's the status quo.
In one of your reports I notice you're saying you're very happy with the way the St. Lawrence Seaway has operated in the past. What is the Hamilton Harbour Commission's position on turning over the Great Lakes-St. Lawrence Seaway exclusively to users?
Mr. Beattie: We have no argument with their request, Mr. Chairman. As a matter of fact, we have supported their request.
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The Vice-Chairman (Mr. Comuzzi): Thank you.
From the Hamilton and District Chamber of Commerce, we have Mr. Kirkby, the executive director. Mr. Kirkby, would you be good enough to introduce your colleagues?
Mr. Lee Kirkby (Executive Director, Hamilton and District Chamber of Commerce): Thank you, Mr. Chairman. I'll be happy to introduce my colleagues.
As has been my privilege in the past, I would like to welcome you and the members of the committee to Hamilton. We're very pleased to be able to appear for the second time on this particular issue. Certainly it's an issue of great concern to our members and to the community.
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With me are two members of our transportation committee. On my left is Leo Laviolette, who is -
[Technical Difficulty - Editor]
Mr. Leo Laviolette (Hamilton and District Chamber of Commerce): ...to the government. We suggested that the businesslike operations of the port of Hamilton should be the model for reform of the system across the country.
The provisions of the act meet many of the challenges this submission presented. We find, however, that when applied to Hamilton, and based upon the knowledge currently available, there are several key deficiencies that cause us to be unable to endorse the application of the Canada Marine Act to our port.
The proposals in the new act do not specify the impact with regard to taxation that will occur under the Canadian ports authority provisions. Under the current status, HHC lands used for port operations do not attract taxation. To date we have not been able to ascertain what the status would be under the CPA. Nationally significant port operations are, like roads, a component of the infrastructure used for broad economic gain, and we would submit they should be treated in a similar manner and be exempt from taxation.
Provisions for the port to pay to the federal government a stipend for the use of federal lands in its operations also cause us concern. This is really a tax on such lands, and as the Port of Hamilton does not owe the federal government funds and does not utilize federal funds for its operations, the imposition of such a fee simply becomes an indirect tax on the users of the port.
The Hamilton Harbour Commission has been an active participant in all areas of operations of the Hamilton Harbour, including environmental clean-up, recreational planning, marine operations and the development of adjacent industrial and commercial lands.
Under the CPA provisions, it is not clear what restrictions would be placed upon these activities. If read in a very strict manner, the limitations of the CPA's activities spelled out in the act could severely curtail the role of the newly formed authority in participating in the broad-based activities currently undertaken.
The Port of Hamilton's role in carrying out the community's long-term vision, as outlined in the region of Hamilton-Wentworth's Vision 2020 plan, is critical in social, economic and environmental terms. To limit the scope of the authority for the port's operations to one aspect of this mix could be highly detrimental to the full realization of the port's potential to be a key contributor to the realization of the community's stated goal.
We endorse the attempts of the new Canada Marine Act to bring Canada's marine transportation systems into line with current fiscal and economic realities. We support the intent of the act to bring a more businesslike discipline to the operations of our ports and to involve the users of the ports in their governance. In the case of Hamilton, however, we are not convinced by the information currently available that our port, our community or the users of the port will be better served under the revised structure than they are currently.
We recommend that the repeal provisions of the Canada Marine Act as they relate to the Hamilton Harbour Commissioners Act be deleted from the bill. Until there is more clarification of the important elements of the new proposals as they relate to the matters we have referenced above, we are unable to support changes to our current port operations.
In the event that the repeal as requested is not granted, we would recommend that the Port of Hamilton be established as a Canadian port authority. But before any changes are made to the current operating status, we recommend that the concerns we have outlined be addressed and that the ability be provided for the new authority to fulfil a complete mandate for our community.
Our final thought is to ask the committee to ensure that the Port of Hamilton is not asked to sacrifice the freedoms and capabilities that have helped it become one of North America's important ports in order to implement a new strategy for other Canadian ports. We wish to move forward through this process.
Ladies and gentlemen, that concludes our recommendations and comments. We would invite questions. Certainly we'll rely heavily on Lee, the executive director of the chamber, to answer most of those.
The Vice-Chairman (Mr. Comuzzi): Well, we already assumed that, Mr. Laviolette. That's why you bring your executive directors.
Mr. Laviolette: That's right.
The Vice-Chairman (Mr. Comuzzi): Mr. Mercier.
[Translation]
Mr. Mercier: Mr. Laviolette, you seem to believe that the Act would constrain your freedom of action and ask that Hamilton Harbour be exempted from its application. And yet the bill is intended to increase the freedom of action or autonomy of Canadian ports. I imagine that that would also be the intent if the Act were applied to Hamilton.
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Would you explain to me how, according to you, the Act would constrain your autonomy?
[English]
Mr. Kirkby: Mr. Chairman, in response to the question, I think the issue of restriction of the autonomy of the port is fundamentally the definitions of responsibility under the letters patent for the CPA, and as we read the bill right now, that's highly restrictive in terms of land use. It's highly restrictive in terms of the other operations the port may be able to undertake.
In our case, the Hamilton Harbour Commissioners have been able to participate in many ways. They've been the managing partner for the fisheries clean-up operations in the harbour. As we read the bill, they would be barred from doing that under the CPA structure. They were major participants in joint operations with the city, the region and the provincial government in the development of the Pier 4 Park and the Bayfront Park, as well as in improving the fishery habitat and in part of the remedial action plan for the port. Our read of the CPA provisions is that they would be barred from doing that.
They hold surplus lands in the industrial zone that they rent out to small businesses at rates as low as $1.50 a square foot. Many of these businesses are supporting new industries that support the major industrial operations, but I don't think you could define them as purely marine-related. The buildings happen to be on the docks, and it allows those buildings to be retained for future marine use. It also allows some businesses to get up and running that may not be able to survive in the community in other locations.
We think those kinds of opportunities that have been taken onto the shoulders of the harbour commissioners through their ability to look at the bigger picture would be highly restricted under the current provisions of the CPA. We feel it's a very serious restraint on what has been going on in our community.
The Vice-Chairman (Mr. Comuzzi): Thank you. Ms Phinney.
Ms Phinney: Thank you, Mr. Chairman.
Welcome. Bill C-44 provides for the CPA boards to have nine to eleven members, with the majority of users appointed by the minister. Do you agree that the majority of appointments should be made by the minister? Do you agree that there should be a majority of users? And because our next witnesses are from the province, should there be provincial appointments to the board?
Mr. Kirkby: We have not given strict consideration to the numbers. Our sense is that perhaps nine to eleven is larger than necessary. We just heard the chairman of the harbour commissioners say that they have found their current three to be a good working arrangement.
We see no problem with representation from users. Certainly we don't see a problem with representation from the province.
As I understand the provisions of the bill, the appointments by the minister are made on recommendation of the various groups so they're all Order in Council appointments from the minister anyway. The current appointments are all made by the minister - or two are made by the minister and one by the municipality - so, really, all we're doing is cutting it and dicing it a little differently.
The number of people and, perhaps, the direct representation are, in our opinion, probably not as critical are the terms of reference under which the organization is permitted to operate.
Ms Phinney: Thank you.
The Vice-Chairman (Mr. Comuzzi): Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman, Mr. Kirkby, Mr. Laviolette, and Ms Lyne.
Picking up on your earlier point, Mr. Kirkby, about this notion of land development within a harbour commission or a port authority, can you see a situation - or has it happened in the past - where you could get into a conflict with the municipality if the authority actually begins to develop commercially viable businesses within their real estate and the municipality begins to say they're taxable? It goes along with your earlier premise that the authorities should be tax exempt. Do you see this sort of commercial crawl being a potential factor and commercial profits, if you like, becoming exempt from municipal taxes? Is that a concern the municipality should have?
Mr. Kirkby: Certainly under the current provisions of the operations in Hamilton any third-party operation - in other words, if a business operates on lands leased from the harbour commissioners and is in a building on those lands, etc. - attracts full business taxes and full property taxes from the municipality. There is no exemption. The only lands that are exempt are those lands that are not being utilized or those lands that are specifically under the control of the harbour commissioners for pure port operations.
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So there isn't any exemption implied. Certainly we don't support an exemption from that standpoint.
Again, the analogy used in Mr. Laviolette's presentation is that we don't tax provincial roads that happen to go through the municipality, because we see them as contributing to the greater economic good of the whole community. We would suggest the specific port operations are in exactly the same situation, and we would just be adding another burden to the user fees, which could affect our competitive status.
Mr. Cullen: Thank you.
As a short follow-up, for vacant or undeveloped land, can you see an argument by the municipality that says there's an opportunity cost to them in the sense that it's land that otherwise could be developed and therefore would be subject to taxation? What would be your views on that?
Mr. Kirkby: If we were living in a world where every square acre of land that might be developed was developed and someone was sitting on vacant lands and not paying any taxes on them, that would be interesting.
We know already that a substantial amount of development lands are operated as farm properties, because they're exempt from most forms of property tax. It's a little difficult, perhaps, for the lands in the harbour to become garden plots quickly, but I would suggest people would find other provisions to be able to avoid the tax burden until such time as it could be made productive.
We need to understand that this isn't land banking for land banking's sake. If you think of the east port development, we're dealing with a land-filled area that was part of the clean-up of the harbour and that eventually will be developed and have productive use on it. Should we tax the authority for having carried out a responsible operation within the community? It's a question of when the community gets its dollar.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Kirkby. Mr. Keyes is next.
Mr. Keyes: Thank you, Mr. Chairman.
I want to thank the chamber of commerce - Lee, Leo and Kay - for their constructive input to the bill.
I particularly want to thank you for your focus on clause 24 in this bill. Personally, I have to agree with you that this particular clause needs fewer restrictions, that the CPA board should be given a broader scope, that in fact the CPA board should be trusted to know and make decisions that may not just be port-related but responsive to the public or the community good overall.
This is a recommendation, Mr. Chairman, that I would like to take in hand and bring back to the minister.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Keyes.
Thank you, Mr. Kirkby, Ms Lyne and Mr. Laviolette.
Oh, you weren't here for the presentation.
Mr. Gouk: I can read, though, Joe. I actually read the -
The Vice-Chairman (Mr. Comuzzi): I didn't know that. I was just going to adjourn until -
Mr. Gouk: I apologize to the witnesses for not being here. Unfortunately, arriving from the west coast at midnight and getting up at four o'clock in the morning on my clock did not give me a lot of time to check -
The Vice-Chairman (Mr. Comuzzi): I apologize, Mr. Gouk. I certainly would not have thought for a moment that you couldn't read.
Mr. Gouk: Some of your colleagues might question my abilities, but not you.
I just want to clarify one point that was brought up by Mr. Cullen. The Port of Vancouver, as an example, operates a restaurant. They do it because they say it is the highest, best and perhaps only use of that particular land, and it does bring revenues for the port, which they use to offset their costs.
Under those circumstances, would you agree that when the port authorities are operating in a commercial manner, but not leasing it out, that operation should be subject to full taxation, the same as a tenant lease?
Mr. Kirkby: I don't think we have a particular problem with that. In my understanding, in Hamilton, that probably would occur.
Mr. Gouk: Yes, okay. I just wanted to clear up that one point.
Thank you, Mr. Chair.
The Vice-Chairman (Mr. Comuzzi): Is that all you wanted?
Mr. Gouk: That's all I wanted, Joe. See how easy I am to deal with? I just like to keep you guys off guard.
The Vice-Chairman (Mr. Comuzzi): Thank you.
There are no further questions. I thank you again, Mr. Kirkby and your group, for making this presentation.
Mr. Kirkby: Thank you, Mr. Chairman.
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The Vice-Chairman (Mr. Comuzzi): The meeting will adjourn until 10 a.m. for the next witness. I expect full attendance.
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The Vice-Chairman (Mr. Comuzzi): Can we reconvene?
I welcome the Hon. Al Palladini, Minister of Transportation for the Province of Ontario, and his associates, Mr. Hudak and Mr. D'Onofrio.
Welcome, Mr. Palladini. It's all yours.
Hon. Al Palladini (Minister of Transportation of Ontario): Thank you very much. Good morning, ladies and gentlemen. I appreciate the opportunity to speak to you.
First of all, I know you've been spending a lot of time on marine policies, but with all due respect, I would like to give you my input and feelings about ground transportation, specifically about a national highway system, and also about the relationship it has to trade and tourism. I believe it is an important one.
A national highway program is something this country definitely needs, and I take this type of hearing as a sign that the federal government is prepared to reopen the question of funding our national highway system.
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As my ministry prepared its presentation for you today - I believe everyone has a copy - several concerns became quite evident. If our common goal is towards a transportation system that better supports and promotes trade and tourism, we have many obstacles. In Ontario four of those obstacles are the lack of funding for a national highway program, clear and objective funding guidelines for such a program, a fair share of funding for Ontario, and federal recognition for all Ontario highways of national significance.
The document I've submitted to the standing committee contains the details of our recommendations. However, this morning I'd like to outline some of our findings.
As you know, more than 60% of Canada's imports get here on our roads and half of all exports leave the same way. Our highways are crucial for trade.
Tourists spend more money in Canada on transportation than on any other expenses. They spend 50¢ out of every dollar on cab fares, car rentals, bus tours, train trips, flights. Some people say transportation is tourism, and I certainly do endorse this.
Much of the travel in the tourism industry takes place on the national highways system. In fact, last year nine out of ten visitors to and from the U.S. travelled on roads to reach their destinations.
Amazingly enough, Canada is the only major industrial nation without a national highway program. We trail all other countries in the percentage of our road-related revenues reinvested in the road system.
Considering the size of our great country, these statistics are alarming. Ontario's major highways are among the most heavily used for trade and tourism in Canada. They carry one-third of Canada's exports and almost half of all imports. Our highways also carry much of the train traffic from neighbouring provinces. In fact, close to one-third of Quebec's exports pass through Ontario. Yet even though Ontario's highways are critical to Canada's economy, we receive virtually no funding from the federal government.
Last year Ontario's provincial auditor told us 60% of our highways were in need of immediate repair. In response, my government invested a total of $628 million in our highways. This is more than any other Ontario government has done in the past six years. It is still not enough. We need federal support.
If Canada is to compete within the North American Free Trade Agreement, our highways must be in equal or better condition. The federal government should establish an investment program to support the national highway system. If we want to continue to promote trade and tourism in Canada, the integrity of our highway system is critical. All Canadian jurisdictions must work together to establish clear and objective funding guidelines for the national highway system.
Ottawa could use the revenues from its existing fuel taxes to fund its share or perhaps the federal-provincial infrastructure program would be an appropriate source of funding.
Since Ontario's major highways are among the most heavily used for trade and tourism, Ontario should receive a fair share of any federal investment program.
I'd like to make another recommendation to the standing committee. While the current definition of the national highway system excludes many of Ontario's multi-lane highways, many of these routes are the very ones that are critical to Ontario and Canada's economic well-being.I strongly urge that any national highway system include these major highways and allow them to become eligible for funding. Ontario's highway system is crucial to Canada's economic well-being. Therefore, the federal government must invest in Ontario to maximize the benefits to the entire country.
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In the private sector, if you have a business and a certain entity of that business is functioning well and giving you a return in revenue, wouldn't that be the first place where you would reinvest? Ontario, and southern Ontario in particular - excluding the national highway program - is the heart-throb of Canada's economy, and yet we get virtually no funding whatsoever. Even with all of the revenue that's generated because we have these highways here, we get no support from the federal government. I must say that whether it's a Conservative government, as in the past, or a Liberal government today, this is not partisanship; this is investing wisely in something that's going to give you a return.
We need your support. Thank you.
The Vice-Chairman (Mr. Comuzzi): Thank you very much, Mr. Palladini. Mr. Hudak is next.
Mr. Tim Hudak (Member of the Legislative Assembly of Ontario (Niagara South)): Thank you, Mr. Chairman, and I'd like to thank the members of the committee for coming to southern Ontario. I'm the member of provincial Parliament for Niagara South and it's a pleasure to have you close to my home.
I'm here today at the invitation of the minister to reinforce his comments about the importance of Ontario's highways in the context of the national highway system. I believe, and I think my constituents strongly support me in this, that the federal government must recognize Ontario's key transportation role. The federal government must also recognize the extraordinary opportunities presented by a national highway system through Ontario.
On a typical day in the province, vehicles travel some 200 million kilometres on Ontario's roads and highways. That's the equivalent of about 5,000 trips around the world, so imagine for a moment the wear and tear this must cause on the system.
But as the member for Niagara South, I'd like to speak primarily about the opportunities that a national highway system presents in my riding. I'll share this information and it will make the opportunities clear to you.
Already, 64% of the $150 billion in land trade between Canada and the United States flows through Niagara and through Windsor. One of Ontario's major highways, the Queen Elizabeth Way, runs through my riding from Niagara Falls across the Peace Bridge at Fort Erie, which is Canada's second-busiest border crossing. The Peace Bridge will soon be twinned with an aggressive capital investment plan of $200 million, beginning in early 1999. This sets the stage for a six-lane corridor across the Peace Bridge to the Niagara Peninsula and across the Burlington Expressway into the rest of southern Ontario.
This expands the main artery of trade between Canada and the United States significantly. As we speak, the United States is already proceeding with improvements to Highway 219, creating a major north-south corridor that will join Toronto via the QEW to Buffalo, and then down the 219 to the massive northeastern trade corridor from Boston to Washington and south to Atlanta.
The folks in my riding envision another major trade corridor. There would be a mid-peninsula link from the 219 across the border at the Peace Bridge, through southern and southwestern Ontario to Michigan, and from there to Mexico, creating a NAFTA highway of prosperity.
It seems to me that the United States has a strong interstate network. Mexico is building a national highway system, and I fear that without a strong Canadian national highway system Canada will become the poor partner in the NAFTA. To help make the Canadian national highway system a reality, I'm not asking this committee or Ottawa to come up with a pot of gold, but only to commit money it already collects from Ontario road users.
Last year Ontario motorists, including my constituents, contributed almost $2 billion in fuel and GST levies to the federal coffers, yet the federal government did not reinvest that money into Ontario's highway network. Later this week at Queen's Park I will be introducing a resolution on behalf of the Government of Ontario and Ontario's taxpayers. The resolution will request that the federal government invest at least 2¢ of the 10¢ per litre it already collects from Ontario in its taxes.
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This province is the hub of Canada's economy. Not only does its transportation system deserve fair treatment but it will prove to be the linchpin in any successful NAFTA trade strategy.
I hope you will help promote this vision for Niagara, for southern Ontario, for the rest of Ontario and for Canada. Thank you, Chair and members of the committee, for your time and attention.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Hudak. Mr. Gouk is next.
Mr. Gouk: I have a couple of comments. I'm going to go backwards down to your 2¢ becauseI want to discuss that a little more.
Weights and dimensions are something we've heard about, particularly in the prairies where they were looking for some kind of standardization. I can understand that, however, you have to keep in mind that what you can run in terms of weight, and more particularly dimension, across straighter, flatter highways - certainly in the prairies and to a somewhat lesser degree in Ontario - you can't necessarily do in British Columbia. When we talk in terms of standardization, it's all well and good to put huge trucks across the country, but all of sudden they come to our very mountainous, twisting terrain, and we have some constraints that certainly need to be addressed in that area as well.
I have a problem in your recommendation 3, which you've sort of addressed in a way, with what could end up being a selective program. When a government, be it federal or even provincial - but the higher up you go the more problematic it becomes - has a selective program, it is left to decide on a variety of bases, political and otherwise, where it's going to put money. I would rather see it controlled at a more local level, and certainly come down from the federal level to the provincial level in the case of your transprovincial highways.
With respect to the 2¢, as I'm sure you're aware, the Canadian Auto Association has started a big drive across the country on that exact thing - put your 2¢ worth in at the federal level. It started last week in British Columbia.
The Province of British Columbia has now dedicated 2¢ and is calling on the federal government to match it. The CAA is in Alberta today, so we'll see what comes out of that.
You've called on the federal government to commit at least 2¢. Is the Ontario provincial government prepared to do likewise?
Mr. Palladini: Thank you very much for the opportunity to at least speak on that.
First, I just want to touch on the weights and measures. I think the federal government should take the lead role if we are going to have harmonization throughout Canada, but I have to make sure we protect Ontario's trucking industry. Harmonization is certainly something I would accept, but not at the expense of driving businesses out of Ontario.
To answer the other part of your address with regard to the gas, I'm here pleading to be treated fairly. I want the fair share of Ontario's money to be reinvested in Ontario. Ontario is the one that's contributing nearly 50% of that fuel and gas fund. So $4.5 billion is being generated, and Ontario is responsible for nearly 50% of that. I just want to be treated fairly. I want to be treated as fairly as the federal government has treated other provinces. I don't want more; I just want our fair share.
As far as my asking you specifically to give me x number of dollars and your wanting us to match it, that's not being fair. We made the commitment. we've shown you how committed we are to rebuilding our infrastructure, and that's why we put $160 million more into our highway infrastructure this year. The provincial auditor told us that 60% of Ontario's roads were in need of repair, and that's because of the lack of support we've been given over the last 10 years.
I can't agree to that, I'm sorry. I just want to be treated fairly. We make a contribution and, darn it, Ontario also makes a major contribution to the federal coffers. Just give us some money so we can continue to make money for you, because that's what a road infrastructure is going to do.
Mr. Gouk: I agree with you in terms of wanting funding from the federal government. British Columbia puts in almost $1 billion, although we're much smaller than Ontario, and we have some real road constraints.
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I want to see a dedicated fund in terms of federal government money taken in from the highway sector, and then I want to see it returned to the highway sector regionally after it has been been put in, which is what you were asking for. But the provincial governments also collect tax revenues on gasoline. It's a tremendous supply of revenue.
I am saying that if we want the federal government to do that.... I'd certainly do it. This policyI wrote for my party has been adopted by the party. Will the provincial government do the same thing? If you're already spending that money, then you have nothing to lose with this. But will you commit that the revenues, or at least an applicable portion of it, that you collect directly from the automotive industry in the form of gas taxes will be put back into Ontario's highways? It's not necessarily because you're matching what the federal government does, but because you're agreeing to the very policy you're asking the feds to do.
Mr. Palladini: Let me answer the question in this manner. There's no way I could commit to having a dedicated fund specifically to address highway infrastructure, but yes, I will commit. Ontario is going to be spending the money it requires to make sure we do protect the future of our highway infrastructure. Yes, I will commit. I'm speaking on behalf of Mike Harris, because he will commit.
Mr. Keyes: Thank you, Minister, for coming before us.
Just for the edification of those who are attending our hearings, Mr. Chairman, we're here primarily, of course, on Bill C-44's legislative process, but the minister is very interested in formulating some kind of a report on the renewal of a national highway system and the contributions that would come to it from the provinces. I believe you're the only witness we have today on what we call the triple-T study, and I want to thank you for coming forward because of a tight agenda only, of course.
Mr. Minister, given the sensitivities of the electorate today, the taxpayers who pull out their pockets and pay their taxes to Ontario, any other province in this country, or the federal government, the governments have a responsibility to get their deficits and debts down. There's been much discussion across the country on a share relationship between the federal government and the provinces. Am I getting your drift that the federal government should take the lead on this particular issue?
Mr. Palladini: It is my understanding the federal government has already been there as far as taking the lead on a national highway program goes. I certainly do feel the federal government should stay at the helm.
Mr. Keyes: Look at the experience you've had with Highway 407. It has a remarkable history vis-à-vis it being the largest civil engineering project in the country, I believe, maybe even in North America, when it comes to highway construction.
As for the public-private partnerships that developed, wouldn't this also be part of your thinking, not just to request that the federal government should give us money, but that the process should involve not just the delivering of moneys from federal-provincial coffers but an inclusion of the private sector in the development of a national highway system?
Mr. Palladini: Mr. Keyes, I'm here to talk about present infrastructure needs, not new capital expansion. We cannot drop what we already have invested and just let it deteriorate in coming up with new projects like Highway 407. I'm here to plead for help in making sure we protect the present infrastructure on which we've spent over $23 billion. This is the key.
I certainly do agree with the other part you're saying, about private sector involvement with government involvement and so on. I think that is the strategy we might have to consider for any future expansion and new highway programs. It might even have to be a toll road.
But I'm here because I want some help from the federal government to make sure Ontario gets its fair share so we can contribute by protecting the present infrastructure, which is in very bad need of repair.
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Mr. Keyes: I heard some of the answer you gave to my colleague Mr. Gouk across the way. To make it clear, do you believe in a dedicated tax? And if so, should that dedicated tax be in addition to the revenues already being collected by Ontario, or would it come out of existing revenues?
Mr. Palladini: I think everything used to be dedicated in the old days. Then a whole bunch of other programs became prominent that were in need, so certain funds were no longer dedicated to a certain service. So we came up with a general fund.
I cannot speak for Minister Eves. I really can't. As far as coming up with a dedicated tax is concerned, I think Ontarians and Canadians are already overtaxed. We have to come up with efficiencies to make sure the funds we do have are geared or streamlined towards the highest priority. Highway infrastructure today is a key priority. And I want to say it again -
Mr. Keyes: One of many priorities.
Mr. Palladini: It's one of many priorities, but it's also a priority that makes a direct contribution back. You cannot turn your back on that.
Mr. Keyes: Agreed. But at the same time, there is only so much money in the pot, and as you have said, there are many priorities. So you are going to prioritize your priorities and try to do as much as you can from your coffers in order to pay for something that is going to be a net benefit, a net contributor for jobs, a net contributor to the economic well-being of the province. But there's only so much money in the pot.
Mr. Palladini: But as I said earlier, I think if you have a business and you have an entity that makes the biggest contribution or a large part of the contribution to the overall requirements, why wouldn't you want to reinvest in it?
Mr. Keyes: What percentage is the Province of Ontario prepared to pay back into the pot for a national highway structure?
Mr. Palladini: We're spending $700 million this year on highway infrastructure. I'm not talking about new capital. I'm talking about $700 million. I am not prepared to match whatever money you're going to commit, or if you're able to commit, or you won't commit -
Mr. Keyes: And I don't think the federal government has asked that yet.
The Vice-Chairman (Mr. Comuzzi): Let the witness answer, please.
Mr. Palladini: I think I've answered Mr. Gouk's question. We are committed to making sure that highway infrastructure will be protected and we will invest. The Mike Harris government is willing to commit to investing money in highway infrastructure.
The Vice-Chairman (Mr. Comuzzi): Thank you. Mr. Mercier.
[Translation]
Mr. Mercier: You have stressed, minister, the importance of Ontario highways both for interprovincial trade and for tourism. You have also stressed the fact that Ontarians account for at least half the overall total of gasoline taxes. Based on that twin argument, you ask that the federal government contribute financially to the maintenance of Ontario highways. You must understand that what you consider to be an equitable measure would be seen by the other provinces as a total privilege; politically, that would be very difficult.
Minister, what do you think of the toll-system that we find in other countries and that we've had in the past on certain highways in Quebec? Under such a system, highway maintenance is paid for by those who use the roads. That means that road users who come from other provinces or from the United States also contribute to the maintenance of your highway system.
[English]
Mr. Palladini: Thanks very much. It's a very good question. I think I understand where you're coming from. First, I believe all of the provinces should be treated fairly. Based on their contributions, there's a dedicated amount of money for the federal government to reinvest into highway infrastructure.
Yes, I believe tolls are going to be the future. I believe any future highway expansion must come through toll roads. But presently, Canadians and Ontarians have already paid for highway infrastructure. You could therefore not easily make a toll highway out of an existing structure. So I have a concern about unilaterally tolling every highway in the province of Ontario, but I must admit that the thought has entered my mind. Presently, however, I am not in a position in which I could really give any advice or support to the premier for contemplating the possibilities of tolling all the highways.
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Tolls are going to be the thing of the future for any new highway infrastructure that's going to be developed. I do agree that it has to be brought forward through tolls, and I certainly endorse the concept.
[Translation]
Mr. Mercier: Minister, you also make the point that every province that pays taxes should receive federal assistance. You realize that if that were the case, poor provinces such as certain Maritime provinces or the Northwest Territories would almost never have any decent roads?
[English]
Mr. Palladini: Thank you. I certainly do not mean that the poorer provinces have to be there fending for themselves. I believe the Constitution in place right now is a very good and fair one.I think distribution throughout the poorer provinces is adequate, and I do believe that some of the provinces that have more are making that contribution so that the ones that do not have as much at least get a fair opportunity. And no, I don't feel Ontario should get more than a fair share of whatever revenues have been generated. I just want Ontario to get its fair share of the potential earnings that are going to be derived from reinvestment of those funds. Poorer provinces that don't have the industrial base that Ontario has obviously would not need as much infrastructure money to maintain their needs.
I guess there's a happy medium here. I'm basically saying to you that I just want to be treated fairly, and I believe the federal government has to once and for all take the initiative in coming up with a national highway program, and in making sure that all the provinces get treated based first on their needs, but also on a sense of fairness.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Mercier. Mr. Cullen is next.
Mr. Cullen: Thank you, Mr. Chairman, Mr. Palladini, Mr. Hudak.
I have a question in relation to the state of the highways in southern Ontario. Mr. Palladini, is there a way in which you could characterize that in very simple terms? Are the highways all in need of major rebuilding? Are we looking at a certain mixed bag in terms of maintenance, preventive maintenance, minor maintenance? I wonder if you could characterize that for us.
Mr. Palladini: Thank you, Mr. Cullen. I had the pleasure of getting to know my province after so many years. In some ways, I'm a little embarrassed that it's taken getting into politics for me to realize what a beautiful province we do have.
I have had the opportunity to drive on some of our so-called national highways, and to put it bluntly sir, I was literally embarrassed. There's a stretch of road between North Bay and Sudbury that is just an embarrassment, and it is part of our national highway. As a provincial government, these are some of the things, some of the concerns, that I believe we are committed to addressing. We just want some help from the federal government to do it.
Mr. Cullen: Thank you.
The Vice-Chairman (Mr. Comuzzi): Do you have further questions, Mr. Cullen?
Mr. Cullen: No, that's all.
The Vice-Chairman (Mr. Comuzzi): Thank you.
Mr. Palladini, I just have one question. I know there have been attempts by the federal Department of Transport to meet with all provincial ministers of transport in order to come up with some unanimity of thought. I think it has been fairly successful. But I'm also advised - as is the committee as a whole - that when things have gone from the transport level to the finance level for approvals and commitments, there has been some difference of opinion in terms of determining what contribution the provinces should make towards the reconstruction of the national highway system.
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I do not want to put the province of Ontario in any predicament, but if there is some consensus of opinion with respect to highways, would you suggest that such a consensus should follow through? Whether you have equality between the provinces.... I'm sorry, ``equality'' is not the right word. If you cannot get a consensus on what a national highway system is in this country, but there are some provinces that are in agreement that there should be a federal-provincial contribution, should the government proceed on that basis while hoping the other provinces will come onside?
Mr. Palladini: I certainly do believe the federal government should be at the helm, should be driving this thing.
I can't define a better word than ``equality'' either, but let me try to simplify it as best I can here. Again, everything should be done based on priority and on where the needs are the greatest.
I do respect the federal government's position. There is certainly nothing wrong with it. I wish that other governments in the past had acted in the same manner. We might not be in a position as critical as the one in which we presently find ourselves.
As far as the needs from a province-wide perspective are concerned, maybe Ontario is the one that needs the most help right now. Maybe Manitoba might have to be second on the list, and maybe Quebec might have to be third on the list. I don't know, and I really can't say which is the best way. But prioritizing the needs that are going to make a direct contribution back into the system certainly has to be considered. The way we've been going certainly has not done the job.
The Vice-Chairman (Mr. Comuzzi): Thank you.
The other area is on page 6 of your report. I'll just mention it because I want it to be known that of all the national governments - mainly the G-8, including one other - the Canadian federal government contributes only 6% of the national highway expenditures. I just draw this to the attention of the committee in order that it's on the record. The United States makes a contribution of 31%. If you look at those percentages of funding, it's an untenable position for our federal government to not accept its responsibility with respect to a highway infrastructure.
At this point in time, Mr. Palladini, the federal government is divesting itself from its airport obligations, its navigational obligations, and its air side in terms of what we do with NAV CANADA, and we're in the process of divesting ourselves from some of the aspects of marine transportation. At the federal level, as a transportation agency or transportation department, this leaves us in a position of being regulatory, of providing for the safety of Canadians. I therefore think now is the time at which we can concentrate our entire efforts on developing a national highway program for all Canadians.
I thank you very much for taking the time to present your thoughts this morning.
Mr. Palladini: I thank you.
The Vice-Chairman (Mr. Comuzzi): And I thank you for coming, too, Mr. Hudak.
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The Vice-Chairman (Mr. Comuzzi): Welcome, Ms Taylor, chief executive officer of the Oshawa Harbour Commission.
Ms Donna Taylor (Chief Executive Officer, Oshawa Harbour Commission): Thank you.
The Vice-Chairman (Mr. Comuzzi): They sent you alone? You must be very competent.
Ms Taylor: I don't know if it's that. I have a lot of different titles and a lot of personalities, so actually there are a lot of us here today.
Thank you very much, Mr. Chairman and members of the committee.
In order to meet the timeframe for my presentation, I'm going to read directly, because if I start to ad lib, I'll go all over the map and I won't get all the points in. So please just bear with me, and perhaps those of you who have the copies can read along.
I appreciate the opportunity to come today to talk about the future of the port of Oshawa and the initiatives you have taken to develop a competitive, efficient and commercially oriented system of Canadian ports under Bill C-44. I appear before you today on behalf of the Oshawa Harbour Commissioners, after consulting with our port users and our colleagues in other ports on the contents of Bill C-44.
My comments will be confined to part I, which pertains to the Canada port authorities.
The Port of Oshawa has operated as a harbour commission since 1960 and currently operates under the Harbour Commissions Act of 1964, along with six other harbour commissions.
The port is located approximately 35 kilometres east of Toronto and is capable of handling full seaway-size vessels. Dry and liquid bulk carriers, heavy lift ships and barges all call at the port. Domestic cargoes handled include salt, liquid calcium chloride, liquid asphalt and potash, mill scale and coal. International cargoes, such as import and export steel coils, billets and rebar; bulk import cement; and projects of various size and scale have been imported from or exported to China, Russia, Germany, Japan, Chile, Norway, Greece and many other countries through the port. So we are truly an international port.
Tonnages have fluctuated annually, ranging from a high of 500,000 metric tonnes to a low of 110,000 metric tonnes, but the average annual tonnage is approximately 300,000 metric tonnes.
Cargoes have come and gone over the years, but even with these changes, the port has been profitable enough to always ensure that sufficient internal reserves are on hand to maintain and expand the facilities. Day-to-day maintenance and capital expenditures are paid for out of revenues generated from port users. We have spent almost $2.5 million on capital improvements in the last10 years and have not required outside financing.
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We understand that Bill C-44 is intended to make Canadian ports competitive, efficient and commercially oriented. However, harbour commissions already operate effectively under those same criteria. We have been able to operate viably under the harbour commission structure and would like to retain this structure. At best we would like to see improvements to the Harbour Commissions Act, but at least the port should not be worse off under new legislation
Hence, we make our first recommendation, an amendment to Bill C-44 at clause 8 and the deletion of clauses 169, 170, 171, 172 and 175 would allow harbour commissions to continue while still allowing for change in other structures that have not been efficient.
However, if that does not occur, we should not be subjected to criteria that could have a negative impact on our potential for ongoing self-sufficiency. We would like to offer some recommendations on clauses throughout Bill C-44.
The Oshawa Harbour Commission has just completed a lengthy eleven-week hearing at the Ontario Municipal Board. The commission was opposing the rezoning of commission lands by the City of Oshawa. These lands were being held in reserve for industrial port development.
While a certain portion of the land is immediately adjacent to wharves and would be used for activities directly related to shipping and navigation, there is a potential to develop prestige industrial uses, perhaps ancillary to the port, further back on the property. These uses could include light manufacturing, warehousing and office space.
We believe it is essential that the ports retain some federal agency status in order to ensure that they are not subjected to the vagaries of other levels of jurisdiction that would restrict the ability of the port authority to maintain a viable commercial facility. In this respect, we make our recommendation number 2, that Bill C-44 provide the ports with federal agency status.
Secondly, we believe ports should be permitted to generate revenues from any activities they deem appropriate without restricting them to just ``shipping, navigation, the transportation of passengers and goods and the handling and storage of goods''. This will be necessary in order to respond to the stated objective of the national marine policy to be responsive to local needs and priorities.
For example, the revenues generated by the commission from potential prestige industrial development, such as an office building, will be ultimately utilized to build two new docks on the east side of the harbour in the industrially designated area. The commission can then vacate the west side of the harbour and cooperate with the city to convert those lands to commercial recreational uses.
This change of use would combine the objectives of the national marine policy, the port and the city in a self-sufficient and commercially viable manner. Therefore we make recommendation number 3, that subclauses 24(2) and 37(3) be amended to enable the ports to generate revenues from activities not directly port-related or transportation-related, with the proviso, if necessary, that such revenues shall be used in port operations and development.
In addition, the port should be able to maximize the return on those revenues and have the flexibility and autonomy to enter into agreements with outside partners to achieve growth and development.
Hence, we have recommendation number 4, that subclauses 24(7), 27(1) and 27(3) and clause 28 be amended to empower the port to pledge property, land being developed, the subsequent assets after development and other assets such as machinery, that we have flexibility in our investments, that we are able to enter into joint ventures, and that we have the ability to incorporate a wholly owned subsidiary, subject, if necessary, to ministerial approval upon submission of properly documented proposals.
It's recognized that there should be some remuneration to the Crown for the federal agency status and use of the federal lands. Therefore we accept the premise of paying a stipend or a dividend to the minister, but in our recommendation number 5 we suggest that paragraph 6(2)(h) be calculated on net income or out of retained earnings after all standard operating expenditures have been met, and that there be some flexibility introduced to allow the minister to suspend or change the amount as financial circumstances in the port dictate.
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With respect to taxation, the harbour commissions have not been subjected to taxation in the past. In Oshawa our tenants or purchasers of land pay taxes directly to the City of Oshawa. In 1995 this amounted to approximately $170,000, and this will increase as development occurs, especially in the prestige development area.
In addition, the Oshawa Harbour Commission pays directly to the city and the region for water and electrical services. We receive no snow clearing or garbage pick-up; we contract with private companies for those services. The only outstanding services rendered by the municipality are fire and police protection. We've seldom needed the fire department and only call on the police periodically.
Hence recommendation number 6: rather than subjecting port operations to municipal taxation, a fee could be negotiated between the municipality and the port that would reflect the reality of the services rendered, but tenants of the port would continue to pay taxes directly to the municipality.
In addition to the two new potential expenditures the port may face by way of a dividend and a municipal fee for service, there is also the additional expense of dredging, which has been downloaded onto the port. Until 1995, dredging at the port of Oshawa had been provided by the coast guard, including the construction of the confined disposal facilities.
The Oshawa Harbour Commission is not averse to starting to share in the cost of dredging. However, the national marine policy states:
- base the marine infrastructure and services on international practices and approaches that are
consistent with those of Canada's major trading partners.
- What I am doing is making certain that U.S. ports have the opportunity and the tools to keep up
with the competition and to adapt to change.
- And further:
- one of our top priorities is port dredging and disposal of dredged material -
Therefore we recommend that the federal government accept continued responsibility for main channel dredging and construction of disposal facilities in order to ensure, under the national marine policy, that marine transportation services are organized to satisfy the needs of the users and are available at a reasonable cost to the users. Once that philosophy is adopted, individual ports can negotiate a cost-sharing arrangement directly with the coast guard, or perhaps this service could be reflected in the calculation of the stipend payable to the minister.
We would also like to address the governance issue. Bill C-44 states that a CPA should have a board of between nine and eleven members. The Oshawa Harbour Commission has operated with a board of only three members, but we recognize that a larger board would provide for more input, especially from port users, and this would be very beneficial.
However, a board of nine, ten or eleven people would be cumbersome for the Port of Oshawa and disproportionate to the size and scale of the operation, even with future growth. Five people would be more practical here. However, we recognize that the bill will have to cover other ports, and therefore recommendation number 8 is that clauses 3 and 12 of Bill C-44 be redrafted so as to provide flexibility in the creation of boards consisting of between five and nine members, depending on local circumstances.
Finally, it is not clear whether a harbour commission's cash reserves would be retained by the new CPA. These reserves have accumulated from port user fees and have been used for and are designated for development and maintenance. They should remain with the port. Hence recommendation number 9, that the bill clearly specify that a harbour being continued as a CPA shall retain its reserves.
In closing, we ask the committee to be cognizant of the cumulative effect of the new fees being forced on the port, such as the stipend, dredging, and fees for services, and not look at them in isolation. In order to assure the continued commercial viability and self-sufficiency of the ports, the bill should be sensitive to local needs and resources and should provide the ports with sufficient autonomy and flexibility to operate and remain competitive under changing circumstances.
We believe that our recommendations, which are listed separately and attached for your convenience, will assist you in reaching your goal of a system of competitive, efficient and commercially oriented ports.
Thank you.
The Vice-Chairman (Mr. Comuzzi): Thank you, Ms Taylor.
Mr. Gouk.
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Mr. Gouk: Thank you. I have a couple of things.
Primarily, when you get into the recommendations that deal with it becoming a port authority,I support - in some cases, not quite fully - stronger ones, except that I have a little problem with recommendation 7, which deals with dredging and its cost.
Obviously there has to be a transition, a period of time for you to accept that certain costs are going to fall back. But it is very hard when we are trying to provide a user pay system, and we're saying that you shouldn't have to pay for some services if you don't use them. By the same token, when the federal government is paying for them, then you're looking at someone else paying for services you use.
You don't want to get into ice-breaking, for example. If you're not doing ice-breaking, then you shouldn't be paying for it. But by the same token, if there's another port that isn't using federal dredging, then they shouldn't expect that a different port is getting funded for that when they have a cost of their own that they're expected to look after.
There are a couple of areas I did want to touch on.
As for your recommendation 3, with regard to subsidiary business, I agree with it.
Would you agree that any business, even though the port itself is operating it - this is anything that is commercially viable that the port operates - should pay full taxes to the municipality, which is the same as for any tenants you may rent out to?
Ms Taylor: I just want to understand this completely. The tenants we have do pay the taxes. But you're suggesting that any operation the port authority -
Mr. Gouk: That's a commercial operation. For example, if you get into any kind of value-added business as Fraser port does, operating a restaurant as Vancouver port does, those commercial entities that the port is directly involved with should pay full taxes. That's because they're not just part of maintaining the port, but in fact they're part of a revenue stream for the port.
Ms Taylor: I would certainly agree with the restaurant. I'm not familiar with the value-added thing in Fraser River. But if the port was going to run something like a restaurant, I would expect that restaurant would be subject to taxation, but anything with shipping and navigation would not.
Mr. Gouk: I have one other one. On your recommendation 4, you're looking at the ability to pledge port assets. Would you agree that perhaps that could be written so you can pledge property you own, or acquire outright on your own, including any improvements to that property, and that you could pledge Crown property with the authority of the minister?
Ms Taylor: I would agree.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Gouk. Ms Phinney.
Ms Phinney: I have a question on two of your recommendations.
On recommendation 3, could you expand on why you feel it's necessary to do the change? What restrictions are you working under now?
Then you've recommended that the ports be able to generate revenues from activities not directly port or transportation related. Why you need that in there? Also, looking at the number of sections you've deleted in recommendation 1, do you feel this particular bill is necessary?
Ms Taylor: I'll do them in the order you asked them.
I cite the example in my presentation of prestige industrial, which would be perhaps an office building or something on property we own in the name of the Oshawa Harbour Commission. The City of Oshawa, for example, would like to build a second marsh interpretative centre. They would like to build the centre potentially on the property owned by the harbour commission within the area designated now for prestige industrial.
The way this reads, we would not be able to enter into an agreement to sell the land and retain the revenues, or to lease the property to the City of Oshawa, yet it would be a very profitable opportunity for the port authority. It would be very productive and helpful for the city. The zoning would allow it, but we are precluded from doing that.
As for that example, with other prestige industrial examples, if there could be a joint venture on the west side of the harbour, where we want to convert to commercial-recreational, ideally we'd like the private sector to take over the operation. We would either lease the land or divest it to the city, whatever would happen. But if we got into a joint venture, it may very well be that a waterfront restaurant would be something we would like to look at. It would help the city. It would help the port. But we are precluded under the very strict wording of clause 24 at the moment.
We would always utilize the funds generated from any of those activities, and we would specifically apply them to direct port operations. That would be a caveat that would be logical to us.
But in any environment, I think especially ours, where we have so many various interests across the waterfront, we could participate in a very healthy way in a lot of different ventures. We have no problem with it being focused such that the moneys generated would be poured directly into port operations.
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The Vice-Chairman (Mr. Comuzzi): Does that answer your questions, Ms Phinney?
Ms Phinney: It answers the first one.
Ms Taylor: The answer to the second one is that we would prefer to retain harbour commission status and not change at all.
All we're suggesting is that the appropriate amendment to Bill C-44 would be to change clause 8 where it applies to harbour commissions, and delete the other ones, which said the Harbour Commissions Act would be repealed. Our preference is to retain harbour commission status.
Ms Phinney: So you could not have this bill and you would just make amendments to the Harbour Commissions Act?
Ms Taylor: Yes.
Ms Phinney: Thank you, Mr. Chair.
The Vice-Chairman (Mr. Comuzzi): Mr. Keyes.
Mr. Keyes: Mr. Chairman, we can always count on the chief executive officer of the Oshawa Harbour Commission to bring us a very detailed and thorough examination of any bills we've brought forward, along with solid recommendations.
I have just one question, Ms Taylor. If your recommendation 2, on federal agency status, and your recommendation 3, on the enhancement of clause 24, which broadens the opportunities and capacities of the harbour commission to do what you have suggested, were accepted, would the Oshawa Harbour Commission be prepared to move to and make application for CPA status?
Ms Taylor: The Oshawa Harbour Commission already has notified of intent to apply for CPA status. Our success is questionable under the present draft.
With these amendments we would certainly have more potential for success in achieving CPA status. Our ideal is to maintain and improve the Harbour Commissions Act and not go through a transition. I think these amendments and the suggestions on dredging would all affect the bottom line of the Oshawa Harbour Commission very dramatically, and if the bill were structured that way we would not be adverse to operating under it.
Mr. Keyes: Thank you very much, Ms Taylor.
Mr. Chairman, it's not unlike what we're hearing from Hamilton and from Fraser River, etc.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Keyes. Mr. Cullen.
Mr. Cullen: Ms Taylor, I would also like to come back to your recommendation 3, and the notion of a port authority being exempt from municipal tax. Could this, in your view, potentially create a situation where, for example, a port authority could acquire new lands and develop them, not being subject to municipal tax? I suppose not being subject to municipal taxes creates a slightly lower threshold for a developer in terms of their payback. You could develop properties within a port authority and actually expand the operation to generate more revenues.
I guess one constraint is simply the need for the port and the ability of the port to put that money to use. Your recommendation said, ``provided such revenues shall be used in port operations and development''.
Port operations is fairly straightforward. Port development - how do you see those things interacting? Do you understand where I'm coming from? Could you get into an expansionary mode with more property development to create these revenue streams for future development?
Ms Taylor: I think I understand -
Mr. Cullen: I guess my question is whether it could start encroaching on the normal private development of adjacent land, given that there's some kind of tax-free status, at least from the point of view of municipal taxes.
Ms Taylor: I would not expect that type of development to enjoy tax-free status. The industrial development, the port-related development and the shipping and navigation would maintain the status quo of being tax exempt, but on the prestige development, for example, anyone purchasing the land or leasing the land would be subject to municipal taxation.
Under the Harbour Commissions Act we have a section that speaks very strongly about social, economic and local objectives. We're there to generate jobs and taxable assessment, not necessarily from the wharf and piers, which also serve another purpose - one of a national importance - but from the activities we undertake on surrounding lands.
It is my expectation that the purchasers of harbour commission property and the tenants of harbour commission property would still pay municipal taxes, even if they are involved in port-related functions. Even if we bought the land, which we've done - we bought 60 acres of land adjacent to the port, which is the property we're talking about - it's always been our intention that as it developed the people who take those five-acre parcels or two-acre parcels would be subject to both business and property taxes.
I don't see that changing. Putting us into competition with the municipality over the private sector would not be the objective. However, taxing the wharves where we must maintain competitive rates and assist people in their national objectives of trade would be an unnecessary restriction.
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Mr. Cullen: Thank you.
The Vice-Chairman (Mr. Comuzzi): Ms Taylor, the port of Oshawa has been operative since 1954.
Ms Taylor: Since 1960.
The Vice-Chairman (Mr. Comuzzi): And it came into being with the Harbour Commissions Act.
Ms Taylor: Yes.
The Vice-Chairman (Mr. Comuzzi): And you're analogous to Windsor, Hamilton, Thunder Bay and other harbour commissions.
Ms Taylor: Yes.
The Vice-Chairman (Mr. Comuzzi): There's no difference between them.
Ms Taylor: There are seven of us that operate under the Harbour Commissions Act of 1964. Toronto and Hamilton have different acts.
The Vice-Chairman (Mr. Comuzzi): Yes. So what you're saying, in essence, is that you're doing pretty well.
Ms Taylor: We certainly have been charged with a lot of autonomy. We've been charged with self-sufficiency. We work towards the bottom line, but we also look after the social objectives of the local requirements. We own and operate a marina. We run the public launch ramp. We've designated a 120-metre zone of our property as a buffer zone for the second marsh. When we aren't using property on the west side, we give it to the city for overflow parking at no charge. We try to do all of these things, but I've still always been very conscientious of the bottom line. And right up until 1994, we have always made a profit. We had a little trouble in 1994, but we rebounded in 1995.
So the structure is there to allow us to be responsive to the shippers' needs. At the same time, though, we can be totally self-sufficient.
The Vice-Chairman (Mr. Comuzzi): So you've done pretty well, and you're a good corporate citizen.
Ms Taylor: We believe so.
The Vice-Chairman (Mr. Comuzzi): And you're saying to us...?
Ms Taylor: Don't fix what ain't broke.
The Vice-Chairman (Mr. Comuzzi): Don't fix what ain't broke. Thank you very much,Ms Taylor. I appreciate that very much. Thank you for your submission.
Ms Taylor: You're welcome.
The Vice-Chairman (Mr. Comuzzi): From Hamilton Harbour Remedial Action, we haveMs Knox.
Ms Knox, you're familiar with the process.
Ms Louise Knox (Coordinator, Hamilton Harbour Remedial Action Plan): Yes, thank you.
Good morning and welcome to the watershed of Hamilton Harbour. Your presence here is very much appreciated, as is your work in ensuring that the taxpayers' investment in transportation infrastructure provides the best possible return.
As I'm sure Mr. Keyes and Ms Phinney may have told you, this community has a vision of its harbour as a vibrant centrepiece. This community understands the contribution that its harbour can make to the sustainability of Canada's economy, Canada's environment, and Canadian society, and it wants to optimize its contribution.
I'm here today to represent the views of the implementers of the Hamilton Harbour Remedial Action Plan, a copy of which I've brought with me so that you can see it. I'd like to tell you what the remedial action plan for the harbour is about, and who is implementing it. I'd also like to explain why Bill C-44 is relevant and important to the achievement of the goals in our plan, and how it could be modified to help us even more. I've submitted a three-page brief, but I'll not repeat its contents here. I would, however, like to offer some contextual information that may help you to appreciate the spirit in which our brief is offered.
You may be aware of the somewhat sorry environmental reputation that Hamilton Harbour had during the first half of this century. You may also be aware of the great progress that has been made in the period between 1970 and the present. During the twenty-year period from 1970 to 1990, industrial and municipal improvements to environmental performance totalled about $600 million and produced a marked improvement in water quality. Toward the end of that twenty-year period - in 1986, to be precise - the federal and provincial governments sponsored a process to identify local people with a stake in the harbour's restoration, and to decide with them whether there were any remaining environmental problems in Hamilton Harbour and, if so, what they were and how they could be resolved. This process was called the remedial action planning process, and it was ultimately established in 43 ports and harbours from both sides of the Great Lakes Basin where environmental problems were thought to persist.
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Around Hamilton Harbour, local stakeholders included city, regional, provincial and federal government representatives, Stelco and Dofasco, the Royal Botanical Gardens, McMaster University, the Hamilton Harbour Commission, naturalists, shoreline residents, labour representatives, voters and environmental groups. Most of these stakeholder organizations are still involved in implementing the plan ten years later. My brief to you today is presented on their behalf.
Back in 1986, to decide whether any problems remained when the group was formed, it was necessary to have a community vision about the desired future of the port - you need to know what you're trying to achieve before you can identify what's stopping you from getting there - so the stakeholders got together and hammered out a consensus on their vision. They then had an all-out public consultation on the vision and the plan to achieve it. The public endorsed the vision and the plan, and later so did all but one of the major implementers. Federal and provincial agencies, including Environment Canada, by their ministerial and corporate endorsement of the plan, signified their acceptance of it as an expression of community desires and aspirations.
So what was the vision in the plan? Let me read it to you:
- People living in the harbour's watershed have a vision of Hamilton Harbour as a vibrant
centrepiece in their community's life. They look toward a time when the environment will be
balanced, friendly, accessible, clean and humming with diversity. They see the pleasure of
recreation mixed with prosperity from use of the harbour as an essential marine transportation
link. They hope that what is a vision for them will be reality for generations to come.
It was dominance of commercial and industrial interest over all others that led to the degradation of Hamilton Harbour in the first half of the century. This was perhaps understandable during an era when people believed that they had to chose one or the other - either a job or a healthy environment. But in our era, we know better. We have a remedial action plan that is based on sound science and confirms for us that we can have both. We know that all our interests can be served through good management and through setting the right priorities.
Today, in 1996, the Hamilton Harbour Commission is among the strongest of partners in pursuing this multi-use vision for the harbour by implementing the recommendations of the remedial action plan, and they are also very successful on the commercial front. What we really want is for this fruitful partnership to continue, and we believe that if Bill C-44 were modified in the way that we have suggested in our written brief, there would be legal acknowledgement and administrative formalization of a relationship that we're proud of and that we think is serving the public well. The mechanism by which we propose the integration of these interests is that of a broadening of the definition of ``user'' in the act to include non-commercial users, who would then be represented on the board of the port authority if one were to be created.
We hope you will give serious consideration to our suggestions, not only because they may serve our purposes in Hamilton Harbour but also because we're sure that other Canadian port communities share similar interests vis-à-vis their commonly held port property. They may benefit from our intervention as well.
Thank you. That concludes my presentation.
The Acting Chairman (Mr. Keyes): That was very articulate and very thorough. Thank you very much, Ms Knox.
Ms Knox: You're welcome.
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The Acting Chairman (Mr. Keyes): Ms Phinney.
Ms Phinney: I'm impressed with the remarks you've put in here about the Hamilton Harbour Commission. You said it has demonstrated its acceptance of your vision by playing a leading role in implementing recommendations of the remedial action plan. It's a great vision, by the way.
Ms Knox: I'm glad you like it. I'd say it has demonstrated its acceptance of our common vision because it helped us express it in the first place. It was part of our team when we wrote it.
Ms Phinney: You've partly answered my question by your recommendation of the broader use of the word ``users'' to include non-commercial users. How do you see that happening in a bill like this? Would it be through the naming of commissioners and making sure one of the commissioners was specifically involved that way?
One of the statements the minister has put in here is that the government will maintain its regulatory role for safety. Do you think statements like that should also be in there regarding the environment and pleasure use, or other uses of the area? I wonder how you see that being put in there. It's very important, as far as I'm concerned.
Ms Knox: I'm glad you see it as important. We were reluctant to be very prescriptive about exactly how this should be done, because we thought there might be people better equipped to work out the details than we were. But one way we did see integrating users was to appoint someone with that specific designation, a non-commercial user, to the board of the port authority, if one were to be created. There may be other ways of doing it, which is why we didn't want to get into too much detail. That's what our specific recommendation says in our brief.
Ms Phinney: Would the chair or the researchers have any idea how we could do that?
The Acting Chairman (Mr. Keyes): They're being presented by suggested amendments to the bill. As a committee we will sit down later and take a look at all these particular amendments that are being brought forth, but there are specific amendments to particular clauses of the bill. They would require amendments to Bill C-44.
Ms Phinney: How would that be possible to do?
Mr. Gouk: Anything's possible.
The Acting Chairman (Mr. Keyes): Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman.
Ms Knox, maybe taking that line of discussion a bit further in terms of outcomes, if these changes were made and it was broadened in a way you've suggested, can you paint a picture for us of some possible outcomes in the future, not only in the sense of restricting certain uses but maybe in a more proactive way? Do you see some ways in which the port authority could be developed that would be in line with your goals, other than just stopping certain development that would not be in line with your goals?
Ms Knox: I wish you had been present at our implementation team meeting when we discussed this item, because it was a very interesting discussion. We believe our interests are being well served currently, but this was not always the case. What we're seeking is some formalization of the status quo, in a sense, or formalization of our existing very fruitful working relationship.
I don't know whether anyone around the table had a specific development in mind that he or she was trying to oppose circuitously through this mechanism. It's simply that we would like to ensure that for prosperity the discussions around the harbour commissioners' table include some representation of the interests of the non-commercial users.
Mr. Cullen: I didn't mean to suggest there was some devious plot here. I was more interested in whether there was some proactive thinking in the sense of looking at - I'll be the devil's advocate - things such as a marine park, a beach or a beach development that takes into account tourism needs, etc. Was that in mind as well, or is it simply to make sure that development in certain areas does not proceed, or are there some proactive ideas that could float out of this as well?
Ms Knox: Maybe the best way I could illustrate it is that through our remedial action plan, one of our six major areas of activities is to create habitat in the harbour. The harbour commissioners have taken a lead role in putting out tenders for, administering tenders for and constructing a habitat island. We want to make sure they can continue to do that kind of thing. We don't want them to be restricted or held back from doing that kind of thing on behalf of the community.
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Mr. Cullen: So it's more than a preservation of the status quo?
Ms Knox: Essentially, and a formalization of it.
We don't want it to slip away. We've our bad days and our good days. Our good days are here now and we want to keep them in place.
Mr. Cullen: Thank you.
The Acting Chairman (Mr. Keyes): Thanks, Mr. Cullen.
Mr. Mercier, do you have any questions?
[Translation]
Mr. Mercier: I was interested in hearing you describe the environmental degradation that has hit the Hamilton region, and the fact that until now commercial interests have prevailed while the concerns of environmentalists have been ignored. Would you give us some examples of the degradation resulting from the fact that economic development has failed to take environmental considerations into account?
Mrs. Knox: During the first half of the twentieth century, the Harbour suffered enormously. That has been noted, both nationally and internationally, by the Joint International Commission as well as by the governments of Canada and of the United States. The Harbour has been identified as one of the 43 most polluted areas of the Great Lakes. It is obvious that the Harbour was very polluted, that it held a very high concentration of toxic contaminants, that the fish was contaminated and that several species of fish could no longer be eaten. Such was the situation in the first half of the century, as Hamilton was developing its grain industry, but I know that the situation has changed.
The situation was much the same in all Great Lakes ports. Changes began to occur in the 60's and 70's, when people saw the effects of the excessive importance they had placed on industry and commerce. They stated that this was no longer acceptable to them. Regulations were changed and managers modified their approach and, since then, the state of the Harbour has improved. All this is documented in the report and I would be glad, Mr. Mercier, to give you a copy.
Mr. Mercier: The Hamilton Harbour commissioners have told us that they would not so much like to see the bill improved as be exempted from its application. They believe that the Act of 1912 is sufficient for their purposes. Are you simply asking for the Act to be amended whereas they would like to be exempted from its application? Do you not agree with them on this point?
Mme Knox: We are interested in formalizing our present relationship. It is not that the status quo is bad in itself, but we would like the opportunity to give more definite shape to our present administrative relationship.
[English]
The Acting Chairman (Mr. Keyes): Thank you, Mr. Mercier.
That's another opportunity the CPA would provide, of course, for ports and harbours across this country to formalize.
Just for your own information, if you haven't been following any of the minutes of the committee, the biggest port in this country, the Vancouver port, has gone on record saying that beyond the user representation on a board, that board really should be cognizant of public interest.
So you're not alone, I can assure you.
Ms Knox: I'm happy to hear that.
The Acting Chairman (Mr. Keyes): Great.
Mr. Comuzzi (Thunder Bay - Nipigon): Mr. Chairman, could I ask Ms Knox a question?
The Acting Chairman (Mr. Keyes): Sure, Mr. Comuzzi.
Mr. Comuzzi: Ms Knox, we've heard some evidence here this morning that although users should not be excluded from the operation or the direction of harbours, they should not be exclusive on boards of directors or boards of governance. There are other considerations. Every port-related facility should have public policy considerations with respect to what you represent here this morning. Yet we heard from the Hamilton Harbour Commission this morning that this principle of non-exclusivity of users on a board of directors is acceptable.
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On the other hand, when it comes to the operation of the Great Lakes-St. Lawrence system, exclusively the St. Lawrence system and every harbour commission on the Great Lakes, it's very important that the Great Lakes-St. Lawrence Seaway work in harmony with the harbour commissions. The harbour commission said this morning that they adopt the principle of turning over the complete administration of the Great Lakes-St. Lawrence Seaway to an exclusive group of users.
That's where I'm having difficulty. There seems to be a double standard here. I'd like you to comment on that.
Ms Knox: I'm at a bit of a disadvantage, I'm afraid.
The Acting Chairman (Mr. Keyes): Excuse me. I have just a brief correction, Mr. Comuzzi. It wasn't Hamilton Harbour Commission that said that. It was FCM that you asked that question of, and they responded with a juxtaposition vis-à-vis philosophy.
Mr. Comuzzi: That was a follow-up question, Mr. Chairman, with respect. I asked that question directly of Mr. Beattie of the harbour commission. He said they endorse wholeheartedly that the St. Lawrence Seaway Authority be given control of it exclusively.
The Acting Chairman (Mr. Keyes): I see. I must have misunderstood. My apologies.
Go ahead, Ms Knox.
Ms Knox: I'm afraid I'm at a bit of a disadvantage, because I'm here representing a team of implementers of our plan and you're asking me a question that the team hasn't discussed. So I don't feel it would be appropriate for me to answer.
Mr. Comuzzi: You're very competent in what you've already said, so what would your personal opinion be?
Ms Knox: Not that personal opinion question again.
Some hon. members: Oh, oh!
Ms Knox: My personal opinion is consistent with the interests I've expressed, in the sense that however the seaway is administered, the non-commercial users' interests need to be balanced with the commercial users' interests.
Mr. Comuzzi: I appreciate that. Thank you.
Ms Knox: You're welcome.
The Acting Chairman (Mr. Keyes): Thank you, Joe.
Mr. Gouk has one brief question for you.
Mr. Gouk: I just want to clarify one thing. You talk about wanting to have representation on the board that reflects the interests of your organization. In the list you have on the front cover, with few exceptions, most of those are either municipal, provincial or federal, and all three of those entities have representation on the board. Would you not get representation that way through these - ?
Ms Knox: Maybe I'm at fault. I wasn't asking for representation for our group. Our group is asking for representation from someone who represents non-commercial interests. It may not necessarily be a member of our group.
Mr. Gouk: Okay.
The Vice-Chairman (Mr. Comuzzi): Thank you, Ms Knox, for that representation.
Ms Knox: You're very welcome.
The Vice-Chairman (Mr. Comuzzi): Mr. Mercier thanks you very much for being able to speak French without the aid of translation services. It was very good.
The Vice-Chairman (Mr. Comuzzi): Our next presenter is Mr. Goodchild from the City of Oshawa.
We've previously heard from the Oshawa Harbour Commission, Mr. Goodchild.
Mr. Ted Goodchild (Commissioner, Development and Planning Services, City of Oshawa): Thank you, Mr. Chairman.
My name is Ted Goodchild. I'm here as the commissioner of development and planning services representing the City of Oshawa.
The council of the City of Oshawa wanted me to come and speak about four or five major points. This is not going to be a clause-by-clause review of the bill.
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The first point the council really agrees with is the designation of Oshawa as a local regional port. There have been extensive studies done on the Oshawa Harbour by both the City of Oshawa in 1992 and the Oshawa Harbour Commission in 1995. Based on these very expensive and extensive studies of both the marine activity at the harbour and the potential at the harbour for industrial and other uses, and indeed hopefully moving to more of a mixed-use port away from its more single-purpose function as an industrial port, the city really agrees that the Oshawa Harbour does not meet the criteria set out for a Canada port authority.
The first major point is that the council would want to be involved with any future administrative structure that is set up at the Oshawa Harbour.
The second point relates to the process for the repeal of the Harbour Commissions Act.
Under Bill C-44, various clauses of the proposed legislation do not come into force until a day or days fixed by an order of the Governor in Council. This includes the repeal of the Harbour Commissions Act. The city would really like greater certainty in Bill C-44 regarding the timing for this repeal.
There is also a concern that in the period leading up to a repeal of the Harbour Commissions Act, the possibility exists that the Oshawa Harbour Commission could potentially make long-term legal, financial, or operational commitments that could constrain any future port authority or stakeholders.
To ensure that any future port authority or stakeholders are not adversely impacted by any long-term commitments, it is requested that the city be given the opportunity to review all such proposed long-term commitments to which the OHC may wish to agree during the period leading up to the repeal of the Harbour Commissions Act. It is also requested that the city be given a similar review opportunity for all proposed long-term, non-port-related commitments in this time interval.
The third point relates to lands that will not be required for harbour uses in the future. The future disposition of lands not utilized or required for harbour uses is an issue that should be addressed as part of any new port authority introduced to replace the Oshawa Harbour Commission. Upon the creation of the Oshawa Harbour Commission, the City of Oshawa deeded 61 acres to the Crown to be used for harbour purposes under management of the OHC until such time as the lands, or any part thereof, ceased to be used for harbour purposes by the OHC.
Certain portions of these lands have not been used for harbour purposes, while other portions are vacant and not required by the port. Upon the repeal of the Harbour Commissions Act and the disbandment of the OHC, there are legal issues related to these caveated lands that have to be reviewed by the city.
There are other lands within the control of the OHC that are owned outright or administered on behalf of the Crown that are not utilized for harbour uses at this time. Regardless of the future port authority, the city believes that the critical assessment of the port's land use needs must be undertaken based on the recent studies completed by both the city and the harbour commission. Those lands identify the surplus to the port function today, and the foreseeable future, such as the former Gifford Farm lands to the east of the Oshawa Harbour, which should not be controlled by any port authority.
These types of lands should be utilized for other uses that are compatible with the port and adjacent lands. The question of their ultimate ownership is important, and the city requires to be directly involved in any divestiture of these lands.
The fourth point relates to environmental constraints. There are a number of environmental constraints from past activities within the Oshawa Harbour that should be appropriately addressed as part of the emergence of a new port authority. The $125 million set aside by the federal government to ease the divestiture of its responsibilities for over 200 local or regional ports is insufficient to meet the needs for the environmental clean-up of contaminated port lands and harbours, in addition to the other intended uses of these funds.
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In the case of Oshawa, lands and sediments have been contaminated over a long period of time by numerous port and harbour uses, including certain actions undertaken by the Oshawa Harbour Commission. It is important to the future viability of the port and use of other harbour lands that environmental issues be addressed as part of the creation of any new port authority and divesture of any lands by the federal government.
As part of any divesture process, the federal government should allocate specific funding for participating with the city and other stakeholders in resolving environmental constraints within the Oshawa harbour.
Mr. Chairman, that concludes the comments council wanted given to the committee today.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Goodchild. I'll turn to Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman.
Mr. Goodchild, is it fair to say that what is good for the port is good for the city of Oshawa? If you're looking at the port, is making an investment in the port or the harbour more of a defensive investment? Or can you actually have a port or a harbour invest well? If it's a good harbour or port, can it take market share from other ports or other modes? In other words, if you have a good port or harbour, is it linked inextricably to the economic well-being of the city? How do you see them interacting?
Mr. Goodchild: The studies in the 1990s showed that the Oshawa Harbour does contribute positively to the economic well-being of both the city and the region. However, any future investment that's made in the upgrade of the Oshawa Harbour certainly has to be very strategic in its placement. And by ``strategic'' I mean that it has to be done in such a way that it takes into consideration other legitimate uses for the harbour, uses other than its essentially uni-functional purpose right now, which is primarily as an industrial port, and not a very active port at that.
The sense of the city's council is that the harbour has much more to contribute to the economic, social and even recreational well-being of the city than it does right now. Council's sense is that there is a bright future, but that the investments made have to be made within the context of total community needs and away from what I think the council has perceived to be a very narrow function in the past.
Mr. Cullen: So there are conflicts or potential conflicts in terms of the highest and best use of the land and the lands adjacent.
Mr. Goodchild: I think there are certainly very different opinions on how the land in and around the harbour should be used. In fact, we have just spent hundreds of thousands of dollars of taxpayers' money at an Ontario Municipal Board hearing trying to sort that out.
Mr. Cullen: Thank you.
The Vice-Chairman (Mr. Comuzzi): Mr. Gouk.
Mr. Gouk: Thank you.
It's interesting to hear your submission. I certainly would like to hear one from the Oshawa Harbour Commission to see where they fall into this.
Do I understand correctly that in essence you're saying that the harbour in Oshawa has very little commercial viability, that the city is primarily looking at maybe retaining some nucleus of it, and that they want to use the lands for other things, for a better return or for better utilization for the people of the area?
Mr. Goodchild: Yes. I think the city perceives a role for some limited industrial port activity at the harbour, but the harbour as a harbour is underutilized in terms of the contribution it could be making to the economic life of the city and the region.
We feel the mandate of the harbour has been far too narrow in the past. The mandate really has to be opened up to encompass the opportunity to deal with the Oshawa Harbour through the introduction of uses other than industrial port-related uses.
Mr. Gouk: When you talk about environmental clean-up, are you talking about the harbour commission lands in general or the federal properties in particular?
Mr. Goodchild: It's pretty hard, really, to distinguish one from the other. There's general contamination around that port on the lands that are operated by the harbour commission and the right of the Crown and on privately held lands as well. There's a big job to be done with that harbour in terms of clean-up.
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Mr. Gouk: Do you agree that if someone takes it over, if it's there...? It's just like a gas station. If a gas station is there, when they shut down and cease to operate as a gas station, there's invariably the environmental clean-up because of tank leakage. They have to aerate the ground and so on. If someone takes it over as a gas station, unless there's a real environmental problem, a leak that's causing major disruption, it continues as a gas station and that doesn't occur.
In the case of the Oshawa Harbour Commission, if somebody takes it over and operates it as a harbour commission, then they would take that responsibility with them. But if you're asking for basically a discontinuance of a harbour operation on a portion, significant or otherwise, of lands and asking for the Crown to clean that up, would you not also then be in a position where you would have to agree that the Crown then had the right to dispose of that non-harbour land to the highest bidder basically for the highest and best use, whatever that might be and whoever it might be who buys it?
Mr. Goodchild: I think the Crown may find that a lot of the lands in around the harbour itself have a net negative value and that the cost to clean up those lands probably exceeds their market value. The Crown may find that in order to make those lands marketable at all and also to contribute to more efficiency and effectiveness of the use of the land itself, there is going to have to be a clean-up or that land will continue to sit vacant.
Mr. Gouk: That's what they thought of the Expo lands in Vancouver too, but it turned out to be quite different.
Mr. Keyes: Mr. Goodchild, has the community of Oshawa sat down with the Port of Oshawa to try to work out what is clearly apparent to be a difficult opinion on what direction the port should take?
Mr. Goodchild: I think there certainly have been attempts to get the stakeholders together. We had Mr. Crombie of the waterfront regeneration trust involved at one time, and there certainly have been attempts to get all of the parties involved, but I think it's fair to say that the council found a fair bit of resistance from the harbour commission, particularly until the harbour commission got some greater certainty regarding non-port lands that it has control of east of the harbour.
They seemed to be somewhat resistant in the past to entering into the kind of stakeholder dialogue that you're referring to in order to determine the future of the port until such time as they've totally cemented down what their uses might be for non-port-related lands.
So there certainly has been a lot of talk about it. There certainly has been willingness from year to year, depending on the year you're talking about. But has there been a meeting of minds or has there been any sort of institutional mechanism put in place? No, there hasn't.
Mr. Keyes: That is indeed unfortunate, because a community that recognizes the importance and the role that a port can play within its own jurisdiction beyond the opportunities for jobs, beyond the opportunities for economic growth and using the port as an economic development tool, beyond the $94,000 the municipality of Oshawa collects in municipal taxes from tenants and the $84,000 it collects as municipal taxes from private property owners.... The Port of Oshawa, if, as they have indicated, they get their amendments to the bill, would apply for Canadian port authority status, which would develop into an opportunity where the governance would consist of not just the three levels appointed, but six individuals - or in some cases they have asked that it be reduced to a seven-member board - where not just the users in that particular area but community representatives and the public good would also be served. It would be a board that looked after the best interests of Oshawa not just as a port community but also as a development tool.
Mr. Goodchild: Could I respond to that?
Mr. Keyes: Yes, please.
Mr. Goodchild: We looked at the governance aspects of a Canada port authority. It hasn't really been put to the council, but my personal opinion on this is that the council would not be very enthusiastic about that particular structure just because it does not appear to allow enough community participation from other non-port stakeholders in the decision-making about the port. It seems to be the son or daughter really of the Harbour Commissions Act.
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Certainly, there is widespread support for having a community-based government body dealing with decisions at the Oshawa Harbour, but it did not strike us that the one being proposed under the Canada Marine Act was one that was going to be particularly responsive to the needs of Oshawa in that regard.
Mr. Keyes: There is an opportunity there, certainly, with a municipal appointment on the board and then a list drawn up by the Oshawa port community that could include someone from the port community who had maybe less interest in the user stand than they do in the community good stand on that particular board. There are opportunities there.
Mr. Goodchild: Yes, but they seem fairly limited in terms of the numbers. If there are11 members...I didn't look into this aspect very closely, but it seemed that the opportunity for the council to have a real meaningful say in that kind of decision-making body was quite limited. I think the council really has become very frustrated over its very limited ability to have something to say about the way the Oshawa Harbour Commission is run and has been run since 1964.
Mr. Keyes: But you base that on a perception that a particular user rep would have no interest in making a contribution to the community.
In our own community, if Dofasco decides to put forward a name on the list that would be presented to the minister for appointment - you don't need eleven, you can have as little as nine currently and there's an amendment being considered for seven - a particular user on that harbour would have just as much interest in serving the community as they would their own industry.
Mr. Goodchild: They may, but when it comes down to a vote, our experience is that the interest of the community becomes very quickly swamped by the interest of the industrial function of the harbour.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Goodchild. Ms Phinney.
Ms Phinney: When the names are put forward, does not the minister in Ottawa have final say on anybody who's picked and he would not necessarily have to pick anybody who had been put forward on a local level? Could not the minister say no to whoever he wants to say no to and then put somebody else on it?
Mr. Keyes: The way the legislation is structured is that beyond your federal-provincial-municipal rep you have your other appointments to this particular board. The communities at large choose to put together those names on a list and that list is then presented to the minister. The reason that is there -
Ms Phinney: It's not that, though. The minister can consult with the users as to who they would like on there, but he does not have to listen to them and can say, I don't like this list and I want another list. Is that not correct? The minister has the final say and does not have to take the advice of somebody else.
Mr. Keyes: And the direct reason for that, Beth, is that there has to be some protection not just for the CPA board but also for the minister in terms of who is appointed to that board because of potential conflict of interest situations and the vetting of particular individuals who might be put forward who might be in conflict with the user community.
Ms Phinney: I can understand that, but I was also thinking of the previous witness.... Of the people who are put forward by the users, there may be nobody there who is concerned at all about the environment and public usage of this area. It could happen that the minister's list, after the final appointments, might not include anybody who was interested in the community or the environment. It could happen that there is no one the users want. It wouldn't happen in Hamilton, of course, I know that, but it could happen in some areas that there is no representation from public usage.
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Mr. Keyes: I think the minister would be loathe not to take the representations made by those who would come forward and present him with a list that would have been discussed completely by the community, vetted by the community and put forward by the community. The minister would be very hard-pressed to turn around and say he didn't like those names and wasn't going to use them.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Goodchild.
I have a few questions I would like to ask. Let's say we went down the road your council wanted to go down and took over the function of the harbour commission because it didn't meet the threshold of becoming a national port. I know there is some difficulty with your airport. Would you consider putting your airport and harbour under one exclusive port authority? Have you given that consideration?
Mr. Goodchild: I know it's not a question the council has examined. I've certainly heard some discussion about it, but it has never been specifically put to it. I wouldn't want to leave anyone with the impression that the council has expressed a desire to take over the port, because it hasn't. It has really expressed the desire to be a full participating member in any future administrative structure. Certainly the parallel that might be drawn from the administration of the Oshawa airport is that it does not operate under a commission that reports directly to the council. I suppose that would be an option to be examined in the future.
The Vice-Chairman (Mr. Comuzzi): Thank you.
Maybe I should have asked Ms Taylor this, but perhaps you can answer.
The reason for part of the success of the Oshawa Harbour is because Toronto has vacated its role as a harbour, basically. There's very little movement of goods into the city of Toronto through the Toronto Port Authority, and as a result I think historically we'll find that Oshawa has increased its tonnages because of the lack of a role played by the Toronto Harbour Commission, and so have Hamilton and other places.
We heard evidence earlier in the day that the harbour commission was working very well and was a good corporate citizen. I don't think you could disagree with that, or you may want to disagree with that.
Mr. Goodchild: I think there are many members of council who would not support that statement.
The Vice-Chairman (Mr. Comuzzi): Do you have a member of council on the harbour commission?
Mr. Goodchild: No.
The Vice-Chairman (Mr. Comuzzi): How is its commission formed?
Mr. Goodchild: The commission has two appointees, one by the federal government and one by the local council.
The Vice-Chairman (Mr. Comuzzi): So you do have a member?
Mr. Goodchild: We have a citizen appointee, a lay appointee, not a member of council.
The Vice-Chairman (Mr. Comuzzi): I phrased the question wrong, I'm sorry. Do you have the ability to influence a decision-making process on the harbour commission?
Mr. Goodchild: Yes.
The Vice-Chairman (Mr. Comuzzi): Although the other two members are appointed federally, they don't come from Ottawa, they come from Oshawa.
Mr. Goodchild: That's true.
The Vice-Chairman (Mr. Comuzzi): So fundamentally you have three people from Oshawa who are interested in the development of Oshawa as a whole.
Mr. Goodchild: I think there are many members of council who would dispute the assumption that all members operate for the betterment of the entire community. That has been at the centre of the frustration the community has experienced with the operation of the Oshawa Harbour Commission. It does not seem to operate in the interest of the total community when it makes decisions.
The Vice-Chairman (Mr. Comuzzi): Does it operate, in your opinion, with the general consensus of what the citizens of Oshawa would want it to do?
Mr. Goodchild: No, not in my opinion.
The Vice-Chairman (Mr. Comuzzi): I see.
This isn't the first time this situation has arisen. Let me just finalize this by saying that harbour commissions have acquired tracts of land over the years since their inception. I've often felt that if they had been faced with a municipal tax structure they wouldn't have expanded their land holdings as much as they have. That's obviously something we're going to have to consider. I don't want to refer to other harbour commissions, but there are some in the system that have acquired huge tracts of land and are sitting on them.
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But by and large, I'm sure Oshawa is no different from any other community that has a harbour. Harbour commissions are providing a service, but on top of that they have become industrial complexes or industrial sites for the development of industrial projects. Would you agree with that?
Mr. Goodchild: Yes.
The Vice-Chairman (Mr. Comuzzi): There's just one added criterion. Because this industrial site happens to be located on the water, anyone who wants to locate there must have some aspect of their business that deals with marine transportation. Do you agree that has been the pattern in Oshawa?
Mr. Goodchild: Yes.
The Vice-Chairman (Mr. Comuzzi): Looking now as a councillor, you have an industrial park designated for marine transportation that offers a facility from which the municipality can derive taxation and business tax at basically no cost to the municipality for providing the services to that site. Do you agree with that?
Mr. Goodchild: I wouldn't say there's no cost. We do have the costs of arterial roads that service the site, water, sewer, police and fire, even though they're apparently not often used. So there are definitely municipal infrastructure costs associated with the harbour that connect the harbour to other critical transportation links, without which it would not function very well at all.
The Vice-Chairman (Mr. Comuzzi): But what I'm saying, Mr. Goodchild, is at the point of entry onto those lands designated as harbour property, does your municipality provide the sewer service into those areas right to the point, or does the harbour commission undertake the responsibility of providing the road and infrastructure requirements for that business to set up?
Mr. Goodchild: Once you leave the municipal right-of-way, the harbour commission or its tenant would be responsible.
The Vice-Chairman (Mr. Comuzzi): So your services go up to the edge of the harbour property, and from there on in you have no further responsibility other than to collect money.
Mr. Goodchild: Well, I guess we'd have responsibility for fire and police protection as well.
The Vice-Chairman (Mr. Comuzzi): That's very good, because the harbour commission should enter into a negotiation with the municipality to pay for those particular services it requires. Would you agree with that?
Mr. Goodchild: That would be fine.
The Vice-Chairman (Mr. Comuzzi): So what we have in essence is this harbour commission, like all other harbour commissions, that is an industrial park that provides the benefit of the land mass to be used for marine transportation, or marine-supported services, that's available for expansion and economic development of the community with basically no cost to the community. Is that correct?
Mr. Goodchild: That's essentially correct, except that I think there are many parcels of land in any municipality in this country that are fully utilized, partially utilized, or underutilized. It's certainly been the position of the council for a long time that the Oshawa Harbour itself is underutilized as a resource. Although it does return some tax money to the city, it's far from what it might return if we had a more comprehensive and global perspective on the development of the harbour.
The tax money the city derives from the Oshawa Harbour is certainly appreciated, but is not significant. It's certainly not significant in terms of what could return to the city if other uses were introduced into that harbour, other than industrial port uses, such as recreational, commercial and residential uses. Indeed, the council has sponsored redevelopment plans to show that is possible. So in the Oshawa harbour we really have a terribly underutilized resource.
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The Vice-Chairman (Mr. Comuzzi): Do you have any other industrial parks in Oshawa that are underutilized?
Mr. Goodchild: Yes, we do.
The Vice-Chairman (Mr. Comuzzi): So what we have is a land bank of service land that's waiting for use. Your argument with the harbour commission that they're not functioning well may be that they should regenerate themselves and try to make better use of the land they have under contract?
Mr. Goodchild: Well, that has been the whole thrust of our studies. There's an opportunity here that should be seized.
The Vice-Chairman (Mr. Comuzzi): Thank you very much, Mr. Goodchild, for coming here today and presenting Oshawa's position.
Mr. Goodchild: You're welcome.
The Vice-Chairman (Mr. Comuzzi): The mayor of Hamilton is next. There's a familiar-looking face.
Mr. Keyes: Mr. Chairman, I have to brag while I can. I have to tell you that Mayor RobertM. Morrow is now the longest-serving mayor for the community of Hamilton. He is probably the biggest Hamilton booster you'll get inside Hamilton, outside Hamilton and in fact right across North America and internationally with our twin cities. We're very fortunate to be able to have some time from a very busy individual, Bob Morrow.
Joining him is Joe Pavelka, and along with Joe is Alderman Don Drury, who's a hard-working member of the council as well as a regional councillor.
Mr. Gouk: If I didn't know where you came from, I'd almost think you came from Hamilton.
Some hon. members: Oh, oh!
The Vice-Chairman (Mr. Comuzzi): Your Worship, I want you to know that in that whole introduction, you were referred to as the longest-serving mayor. You were never once referred to as the oldest mayor.
Mr. Morrow: Thank you very much. Again, as I was able to do this morning, a very warm welcome to you.
[Translation]
It is for me a great honour to welcome all the members of the committee to our fair city. We believe it is important to speak our country's two official languages. Seven percent of Hamiltonians are Franco-Ontarians. Our city is twinned with Shawinigan, in Quebec. Approximately three months ago, 300 citizens of Shawinigan came to Hamilton for a visit.
[English]
on the July 1 weekend to celebrate our sesquicentennial, the 150th anniversary of Hamilton.
We have had this delightful relationship with the good people of Shawinigan since 1956. It is the oldest of our nine twin cities, and 300 people in all - families - came and stayed with people here. We had a marvellous celebration. It is part of a wonderful relationship this city has with people across Quebec.
We've also sought to raise money for the people hurt so very badly in the events of this past summer. We have a thermometer in front of city hall that goes up slowly, measuring local contributions towards the extreme difficulty there, which will be ongoing for them for a long time.I know the federal government saw to it that aid was forthcoming immediately, and we're hoping to follow along, much slower, but to do our bit as well.
I do want to say again, welcome.
[Translation]
Welcome to the city of Hamilton.
[English]
The brief is before you. I'll go through it, if you wish. If it starts to take too long, cut me off. I'm used to getting cut off.
I should say our distinguished CAO was married on Friday. Mr. Cullen is an old friend of his new wife and of him, so Mr. Cullen is a frequent visitor these days to Hamilton.
With me is my esteemed colleague Alderman Don Drury, who is the chair of our planning and development committee and has taken a personal interest in harbour matters throughout his career in city council.
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The City of Hamilton first approached the government in its adolescent years, in the first part of this century. With every review of the national harbour centres, the City of Hamilton has been the prime spokesperson for its harbour.
The statute of 1846 incorporating the City of Hamilton and proudly remembered in this, our sesquicentennial year, vested title to the harbour - or, as it was then called, Burlington Bay - in the city. This fact is well recorded in the archival records of the Department of Justice and in Hansard. Look back to the 1940s issue of the Catherine Street Wharf and the federal purchase of lands for naval reserve as well.
In 1911 we applied for recognition of federal powers in the operation of the bay or harbour as an active shipping and navigational port. Parliament concurred with that request, albeit it out of the norm, and through the Hamilton Harbour Commissioners Act of 1912 delegated federal powers to our first municipal-federal public partnership.
You recognized our port.... I say ``you'' loosely, because none of you were born then, but your predecessors were, and we lump the esteemed members of Parliament into one magnificent group of people who have served our country since Confederation. You recognized our port operator as reflected in the act, namely the Hamilton Harbour Commissioners. You participate with us in the appointment of the directors of this operating company and support us in our joint venture with our operators.
The special status and nature of our harbour has survived and prospered for the 150 years we have existed. The first and primary user of our bay was and is our citizens, call them what you may - taxpayers, residents, businesses, visitors. From as early as 1867 this city has devoted special attention to its bay as a municipal resource to be properly developed.
As we presented to you in 1963 and 1977, it remains true today and reinforced by the Deputy Prime Minister's request to allow continued recognition of Hamilton Harbour's special status. This was also mentioned by the Federation of Canadian Municipalities this morning at 8:30.
The special status enjoyed by the city with its harbour has three principal attributes.
Number one is investment by the city in its harbour commission by land and water lot grants.
Number two is the accountability of the Hamilton Harbour Commission to the city through its financial reports and our own appointee. This bill, with no reference to the continued participation of the city, would attempt to strip us of our interest as grantor and beneficiary. While our demands upon the HHC for a return to the community on the assets, through profits or improvements, continues to be the art of dentistry, it is better than the proposed unilateral abolition and repeal of the Hamilton Harbour Commissioners Act of 1912 in Bill C-44.
Number three is cooperative federalism, the unique cooperative venture between a local municipality and its federal government.
The 1912 act recognizes the delicate balance necessary between the constitutional division of power, with paramountcy of shipping and navigation over local provincial planning. This has been vigilantly observed and defended by the city.
It is this area that is also threatened by Bill C-44, with the appearance of grandfathering current activities, whether or not they are federally regulated under shipping and navigation, and by overstating the role of CPAs in port development and operation. With only the turn of a phrase, the floodgates of litigation will open between provincial bodies and CPAs.
I'll ask Alderman Drury to continue.
Mr. Don Drury (Alderman, City of Hamilton): As chair of the planning committee for the City of Hamilton, I've had ample opportunity to deal with the various legal battles that have gone over in the past with the harbour commission and the City of Hamilton, resulting in federal appeals as well as two Ontario municipal boards.
We've witnessed this firsthand. We've faced the courts and had the provincial rights upheld, as in the Griffiths decision, which was upheld by the Court of Appeal. And we'll face them yet again for an interpretation of the constitutional division of powers.
To allow the bill to go forward as drafted will create ambiguity where none exists, will support those who seek to undermine the fabric of our Constitution, and will keep litigators busy.
The notion of such a direction has already been picked up in our locality. Our Hamilton Harbour Commission currently challenges the provincial courts to relinquish those powers on land use to them.
We have a case in point before the court, created by the Hamilton Harbour Commission's refusal to accept provincial jurisdiction over non-marine activity. The Hamilton Harbour Commission appealed the city's official plan by-laws and zoning by-laws to the Ontario Municipal Board, even though those by-laws specifically exclude shipping and navigation.
The crucial point is the belief of this corporation, recognized by a special federal statute, that they derive all of their powers from and exist only in federal spheres and yet are subject to none of the federal-provincial agreements, such as grants in lieu of payment of taxes, building permit fees, etc. The erroneous belief of paramountcy in all activities they pursue must be corrected.
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When the City of Hamilton and the federal government united in 1912 to establish the Hamilton Harbour Commissioners, the federal government delegated to the commission authority over shipping and navigation and the City of Hamilton granted the land and the harbour bed to the Hamilton Harbour Commission. It took both actions to enable the success of the harbour today.
The Hamilton Harbour Commissioners prefer to ignore the city as a full partner and, when it suits them, to cling to the clothing of the parent, the federal government, with paramountcy. When it doesn't suit them, such as with grants in lieu of taxes, they claim independence from both partners.
Beware the authority you bestow on the CPA. Limit it to shipping and navigation and directly reference provincial jurisdiction in non-marine activities. Any commercial enterprise that has ever received goods via ships or that could possibly use ships may be claiming the federal paramountcy to avoid taxation and land use control. The arguments to expand the federal jurisdiction of port development will be a constant legal battlefield. This is an unnecessary and perhaps inadvertent drafting error in Bill C-44.
The City of Hamilton has requested the Hamilton Harbour Commission to return the legal title of the recreational lands in the west harbour to the city. This will remove some of the lands not being used for shipping and navigation from the cloud of paramountcy but also will allow the management to continue. The original grant of land and the harbour bed from the city to the harbour commissioners did not require external approval, and neither does their return. We suggest you also limit the land holdings of the CPAs in a similar fashion to active port development.
In addition to the land or water lot return, the city has requested a designation of some of the profits from the Hamilton Harbour Commission that were diverted to capital funds for beautification of the eastern entrance to our city from the Skyway Bridge. The financial statements of the Hamilton Harbour Commission demonstrate a surplus of over $2.5 million in 1995 alone.
The city has very clear and consistent policies with respect to its harbour. We are prepared to continue our vigilance in the operation of its port and in the proper planning, development, and taxation of all property within its bounds.
Mr. Morrow: The city requests that we be given the latitude and federal support to structure a Hamilton solution to the changing harbour environment. The status quo is not an option for us.
Clause 8 and clause 169 of Bill C-44 should be amended by deleting reference to the Hamilton Harbour Commission or tabled until the city has concluded its land transfers and improvements with the HHC and when the city, as a pivotal member of the transition team, develops acceptable letters patent for a Hamilton Harbour port authority that will protect the special status of our city and our harbour.
I would just add, Mr. Chairman, that the significance of the port and the harbour to this community cannot be overstated. We contribute greatly to the fabric of this province and this country. We do so in what I might hopefully suggest, without sounding silly about it, is a more pan-Canadian spirit than any other community I know, and I've been in practically every community in our great country. I talk to my colleagues across the country all the time.
We were built from the first explorer, La Salle, who came through in a canoe when we were part of the French empire. Prior to that, of course, it was a major settlement for native peoples. It's been the way people have come here to this thriving community, which has the lowest or second lowest unemployment rate in the country. It's been the home of Canada's industrial capital for many years. It's now the reason we've been given a designation by the United Nations - the only one in Canada - declaring us to be a model sustainable community, in large part because of the clean-up of our harbour, the work of the city and its parks in the west harbour.
There was always much support from our MPs, and that can be seen in the fact that you can swim in the west harbour all summer now while you couldn't at all 20 years ago. There are over60 species of fish while 25 years ago there were fewer than 10. We want to keep that going. We also want this thriving local economy to go on producing for us and for all Canadians and contributing as we do to people and circumstances and situations around the world. It's a hotbed of activity and we think it can be run a lot better.
We're very proud of the work you're doing, and now is a tremendous opportunity for our national government and ourselves to get together in a new partnership that's going to provide for an even better city and a better port and ultimately a better seaway and country in the future.
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So we're just thrilled that you were able to include us in your hearing today. We're very pleased to welcome the opportunity to speak to you. Thank you for your time.
The Vice-Chairman (Mr. Comuzzi): Thank you, Your Worship. Thank you, Alderman Drury.
Before I turn to the questioning, gentlemen, members of the committee, and ladies and gentlemen in the audience, I don't know who to thank, but all in the room have been invited for sandwiches, refreshments, coffee and what have you. Let's conclude the presentation and questioning first, though.
Let me carry on with questioning from Ms Phinney, and after this presentation is finished we'll take a break for lunch and then go on to the next presenters. Does that meet with everyone's approval? Thank you.
Ms Phinney.
Ms Phinney: Welcome to the hearing.
You've mentioned several problems you have with the harbour commission, such as legal title on certain lands, and designation of some of the profits from the HHC. If we didn't have this bill - and I'd certainly like to know whether you'd like us to have this bill or not - how would you go about changing regulations so that you, as a city, would be happier with the harbour commission?
Mr. Drury: For the past ten years, the city has been on record as asking for an increase in the size of the commission to five members, with the city having two appointees. That would also give the federal government an opportunity to expand the governance of it by including other non-commercial users, such as a representative from BARC - the Bay Area Restoration Council - or some other person representing non-commercial users.
We also want the harbour commission to respect the zoning by-laws of the city of Hamilton, just as the federal government does, just as the provincial government does, just as all the churches do - yes, even God respects the city's zoning by-laws. For example, when they were building a courthouse or were building another institution, they came to the city and asked what the zoning laws are, and we presented them. We looked at what they had planned, and then they were allowed to go ahead and build, doing so with a building permit and in accordance with the Ontario building code. With the harbour commission, that does not happen.
To my knowledge, the railways respect our rights. The airport respects our rights. As I mentioned, even God comes to us. But the harbour commission doesn't come to us. They have their own planning and they want to keep it separate so that in no way, shape or form can the be beholden to anyone.
The reason this is important is that I represent an area that borders the harbour. There are a lot of commercial landholders down there - for example, Stelco or Dofasco - who may say they want to build something there, such as a warehouse. I, or the building department, may say to them that it's not in the code, that the code doesn't recommend it, but there is a procedure they can go through to get it amended so that it is included. And most likely it would pass.
The harbour commission right across the street, however, doesn't require any of this because they just go ahead and do it. They then come in and tell our building department that it's for shipping and navigation, even though it may be for something that has nothing to do with shipping and navigation.
Ms Phinney: But do you need this bill to make these changes?
Mr. Drury: Well, I believe clause 40 of the bill excludes land use planning from any municipalities or any of the CPAs. We'd like that to lead it, definitely, but we'd like to see a modified Hamilton Harbour Commissioners Act.
Ms Phinney: So you'd rather have that instead of this bill.
Mr. Drury: That's right. Don't repeal the Hamilton Harbour Commissioners Act; modify it instead.
The Vice-Chairman (Mr. Comuzzi): Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman, Mayor Morrow, Alderman Drury.
That was a great wedding on Friday night, Joe. Congratulations again.
I have a question on the tax status of some reinvented partnership between the City of Hamilton and the port authority, or however one would configure it. Could you comment on what sort of tax status you foresee for this new port authority in terms of municipal taxes? Do you see payments in lieu or tax-free status or negotiated fees for service? Maybe you could describe that for us.
Mr. Drury: I think the chairman pointed out, quite rightly, the developing role in the evolution of ports. They have turned from just being strictly wharves and warehouses and dredging to being commercial development areas and industrial development parks. That's what they're becoming now, in conjunction with shipping activity. Why should the government say we're going to set off this group on a different playing field from every other industrial enterprise in the country?
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I think they should all be on exactly the same level playing field with regard to property taxation. It's the position of FCM and us that full property taxes should be paid by a harbour commission just as an airport does, just as a trucking terminal does, just as the railway lines and the federal government do.
They pay their taxes because they recognize the value of the municipal government, and ports should not be any different. There's no reason for them to be different.
Mr. Cullen: So as it stands now, if the harbour commission doesn't pay taxes and it's reconfigured along the lines you're talking about, this would create some new revenue streams for the municipality.
Mr. Drury: No, our harbour commission collects taxes in our stead for all the leased lands on the harbour here in Hamilton. Those are then remitted to the city. Apart from a few disputes, that's worked very well. The harbour commission's been very good in terms of being a corporate tax collector on behalf of the City of Hamilton. We appreciate their efforts, and they do a very good job. We want that to remain as it is.
Mr. Cullen: Thank you.
The Vice-Chairman (Mr. Comuzzi): Mr. Keyes.
Mr. Keyes: Thank you, Mr. Chairman. Gentlemen, thanks for coming and thanks for your report.
I noticed in bold print at the end of your presentation you make it clear that the status quo is not acceptable. It is not an option for the City of Hamilton. In other words, let's repeal the repeal clause of this particular bill or table it until the city has concluded its land transfers, etc.
If it was clear that the status quo is not acceptable and that a repeal would not be kicked in immediately, that it wouldn't be tabled until such time as there was a negotiation with the City of Hamilton and the federal government; if it was clear that a five-member or seven-member board had at least two or three municipally minded representatives on that particular board; if it was clear that the municipality could get a return on its investment in the port of Hamilton via, say, grants in lieu; and if it was also clear that the city was provided with the options to further empower itself so that the community could participate in such matters as land use planning - is that the kind of structure we're talking about?
Mr. Drury: Yes.
Mr. Keyes: What I've just described to you -
Mr. Morrow: You're doing great. Just write that down and -
Mr. Keyes: - is a Canada port authority status, because in the bill the repeal of that particular bill only comes about at such a time as an Order in Council repeals the current Harbour Commissions Act after negotiation is done. We're going to make the suggestion that there be a minimum of seven members on that board up to a maximum of eleven.
On that board, there would be at least one municipal appointee, for sure, as part of the three government appointees. That should be followed by a list drawn up by the community in the public interest, as stated by the biggest port in this country, Vancouver. With federal agency status, the applicable grants in lieu would come from that port back to the municipality. There should be a strengthening of clause 24 of the bill not only to empower the harbour commission to come forward and make its presence and attitudes known in trying to keep the viability of that port alive in any particular municipality in the country, but also to empower the municipality to take part in the land use planning.
So you see what I've just given you and what you've responded yes to is exactly what a CPA does.
Mr. Drury: Clause 40, in my humble opinion, does not even mention shipping and navigation - and that's the land use planning mechanism.
Mr. Keyes: Don, that's a great amendment.
Mr. Drury: It doesn't seriously take that amendment in hand -
The Vice-Chairman (Mr. Comuzzi): Let them answer, please.
Mr. Drury: - and it doesn't allow an opportunity for an appeal to any external body. I imagine one would have to go to the Federal Court of Appeal to get leave just to challenge one of the plans, and it could be whether or not to put in a rendering plant or something like that. Those things are just not available. Our harbour commission would never do that, and we have the chairman on record as saying that.
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I'm saying there is no external way of doing that, but there is one that exists right now. It's called the Ontario Municipal Board. It's right through the Ontario Municipal Act. It's very simple. The development industry understands it very well, and it's all right there.
If that paramountcy or that land use control was acceded to in this bill, or in any variation of the bill, and it said yes, harbour development corporations, you take your law on land use planning from the province in which you're located, I think that would be acceptable to FCM and the vast majority of municipalities -
Mr. Keyes: It's a good policy -
Mr. Drury: - and non-port industries and industrial parks.
Mr. Keyes: We'd have to somehow define what ``non-port'' is versus ``port activities'', etc.
Mr. Morrow: We'll get you an even more concise list of the things that we see as not included. Don's described it very well - including a time for your drafting stage - but we do feel very strongly about the point just made. We really should not have to go on any longer under the present format.
Mr. Keyes: Thank you.
The Vice-Chairman (Mr. Comuzzi): Mr. Mercier.
[Translation]
Mr. Mercier: Thank you, your Worship. As a Quebecer, I congratulate you and thank you for the help that you sent to the people struck by disaster in the Saguenay region. As a former mayor myself, I'm very pleased that you are twinned, in Quebec, with Shawinigan, even though I have not developed a very close relationship with the federal member from Shawinigan.
Since the beginning of the morning, much has been said about the Hamilton Harbour Commissioners Act of 1912. Would you tell me, purely for my information, what particular situation Parliament was addressing when in 1912 it passed a special law concerning Hamilton Harbour.I would also like to know whether that particular situation continues to this day and whether it is such as to justify keeping the present Act while modifying it along the lines you have mentioned.
[English]
Mr. Morrow: We believe so, et merci, monsieur le député, pour les paroles. They made one hell of a solution as we've attempted to describe it. There are unique features here, not the least of which is the mammoth amount of business done by this port. In pointing out the points we think are important for a successful future, we hope this can be treated uniquely and, if necessary, differently from the others.
We were delighted that our national municipal federation, the FCM, also saw fit to include that reference in their brief. They, as you, have to deal with all circumstances across a huge and sometimes unmanageable country. We would hope you can approach it the same way. Likewise, I've mentioned Toronto as another case in point.
So the answer is yes, we see a specificity here and a need for special treatment.
Mr. Drury: It was our land and we paid for it.
Mr. Morrow: I appreciate the question.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Mercier. Mr. Gouk.
Mr. Gouk: Thank you. Gentlemen, it's been a different experience for me this morning, because what we've heard is that Hamilton is in a unique situation compared to the other ports we've heard from so far. Also, there's a little more of a conflict of opinion between the city and the port authority, although we have heard some differences of opinion certainly as we have gone along.
There's just one point I wanted to clarify on dealing with land holdings. On page 6, you talk about the need for us to limit land holdings of CPAs to active port development. Can I take it from this that you are suggesting that ports are not likely to ever grow beyond their current need?
If there was a need for more piers, more docks, and an expansion of warehousing directly related to the port, and they were to give up any lands that weren't active right now, would they therefore have no land reserves with which to deal with the growth of a port not only in Hamilton but, the way this is written, in any port in Canada?
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Mr. Drury: I would suggest there would have to be a manageable reserve there whereby you would still have the lands. However, I think what we're trying to suggest is that we won't have the ridiculous situations in which you may have the port of Hamilton, for example, where the harbour commission has title to the bed of the harbour.... Even though that water may be only four inches deep, they still own the land as well as extensive holdings around the shoreline that they'll never use, or at least that they hopefully will never use, because right now they're being used as park and recreation areas and fish habitats. That kind of stuff should be surrendered to conservation authorities, where it properly belongs, and not held by harbour commissions, which do a good job of running our harbour, but they should be running the port area and concentrating on that, while letting others develop the other things that are for conservation or recreation.
Mr. Gouk: I just wanted to clarify that, because there are some things in the bill whereby the intent may be different from the wording. In this case, you're basically saying it's active, or they don't hold it. I understand better now what you mean.
That's all. Thank you, Mr. Chairman.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Gouk.
Mr. Morrow, the question I keep coming back to is one of basically what your presentation has said today: what is the public policy with respect to the holding of lands? What should it be? Can it be changed in this act, as you and Mr. Keyes discussed?
My question has to do with the importance of the Great Lakes-St. Lawrence Seaway. As you know, Hamilton is a cog in that. We're impressed in this committee with how fragile this waterway is, how important it is to Hamilton in its employment, and with the intricacies involved in getting the iron ore down from Labrador and other areas to go into the city and its steel mills. It can do it in a competitive way so that the boats can then carry on and bring stuff out of the ports in Lake Superior back down. When that system works, it's so important that it works very well.
There is a move to turn the operation of that very important seaway over exclusively to users. There are huge tracts of land associated with it when you look at the Niagara escarpment and so on.
I'm wondering whether your policy for Hamilton wouldn't also include the policy for the seaway. Although users are very important to giving their input into how the seaway or Hamilton Harbour should operate, they should not be exclusive in its operation because of so much public policy involved. I'd appreciate your comments on that.
Mr. Morrow: Thanks, I'll make some of them, and then my colleague will make some.
What you said is music to my ears. I am the past-president of the International Great LakesSt. Lawrence Mayors' Conference, which meets back and forth between here and the United States. Every year in June we host the conference. Quebec City had it this June. Toledo, Ohio, will have it next year. The mayor of Chicago is a member.
If I'm not mistaken, Duncan, 25% of percent of seaway cargo is ours here in Hamilton, so no one is more acutely aware of what you've just described: the interdependence of the whole system. If ships go one way with iron ore, they have to go the other way with grain. It's an oversimplification, but their economics depend on the kind of cooperation, feasibility and viability you described.
No community in the system understands that more than this one. We want to be facilitators and nothing but, because it's going to benefit and keep this economy blooming, which it has been. In a very real sense, at the heart of that boom is what happens at our harbour. So we were very conscious of that.
I think we want to be a positive force for the whole system, because these great cities that have been built on both sides of the border are only there because of the waterway. The action of opening it up in 1959 by both of our countries was no small feat. We're part of it, and we rise or fall with it. So we're very much aware of that.
We're very much aware of the importance of the industrial users, but I think you can gather from the tenor of the brief that we are reasserting the municipal role and how important it is for not only expressing the vision we have for our community, port and harbour, but how we, too, know that it must fit into the broader scheme of things, and that we have a job to do for Canada in that process.
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Mr. Drury: With regard to the seaway, I think you asked other presenters the question about who should be running it, the users or not. I think that's the crux of the matter.
The Vice-Chairman (Mr. Comuzzi): I'm sorry, Mr. Drury; it was not the users or not. The question really is whether it should be run exclusively by users. I think that's it.
Mr. Drury: The seaway is different from the harbours, because the harbours are used by more than just the commercial users. They expect water quality and everything else in the immediate area surrounding the municipality, which is of importance to all the citizens of the municipality, whereas the seaway was built by the government and yet has been used primarily for the benefit of the users, and the users want to pay for the upgrades and for the ongoing operating. If that's the case, they might as well own it.
But with regard to the harbours, this is a community partnership. It's not just the commercial users.
The Vice-Chairman (Mr. Comuzzi): I'm getting two answers there.
Tomorrow in the House of Commons will be tabled an alternative to the users group where the users are not exclusive. It will deal with what your role has been, Mayor Morrow, with respect to the formation of a binational panel, a not-for-profit corporation that could bring the costs of the operation of the seaway down, we think substantially.
I appreciate your reading that report. Would you mind commenting directly to me on it?
Mr. Morrow: I will.
The Vice-Chairman (Mr. Comuzzi): I'll have to make sure a copy is sent to you.
Mr. Morrow: Thank you.
The Vice-Chairman (Mr. Comuzzi): Thank you very much. We'll close now. We'll have lunch. I think we're right on time.
When you were talking about your harbour commission and the role Hamilton has played, I couldn't help but think of the area I come from, where the movement of products by marine transportation is not only an industrial function, but it's really symbolic. It's the essence of the communities from which we come. We've had it there for 100 years, and to think of anything drastic happening to it really goes to the marrow of our bones.
I very much enjoyed the enthusiasm and the empathy as you talked about the situation. Thank you very much, all of you, for coming.
Mr. Morrow: Thank you.
The Vice-Chairman (Mr. Comuzzi): The meeting is adjourned until after lunch.
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The Vice-Chairman (Mr. Comuzzi): I hate to interfere, ladies and gentlemen, with the great dessert, but it's either this or spending the rest of the night in Hamilton - which may not be a bad option.
I welcome Mr. Ashenhurst.
Mr. Peter H. Ashenhurst (Individual Presentation): Good afternoon.
The Vice-Chairman (Mr. Comuzzi): Do you have a brief, Mr. Ashenhurst?
Mr. Ashenhurst: Yes. It has been delivered.
The Vice-Chairman (Mr. Comuzzi): Are you familiar with the format?
Mr. Ashenhurst: I've been here since 8:30 a.m., so I think I have acquired some general understanding.
The Vice-Chairman (Mr. Comuzzi): And you're still here.
Mr. Ashenhurst: Yes, I am still here, actually.
The Vice-Chairman (Mr. Comuzzi): We'll give you an A for perseverance.
Mr. Ashenhurst: Maybe A for Ashenhurst.
The Vice-Chairman (Mr. Comuzzi): Carry on.
Mr. Ashenhurst: I guess I'm your dessert.
I thank you, first of all, for allowing a citizen to come before this committee. I do come before the committee as a recreational boater with over 40 years' experience. In addition, I am concluding my term as the treasurer for the LaSalle Park Marina Association, which is located on the north shore of Hamilton Harbour. I am also the port captain for Hamilton Harbour for the Great Lakes Cruising Club, an organization of over 2,500 boaters active in cruising the Great Lakes.
More importantly, I am a citizen of the city of Burlington, although I do not represent that corporation in any way. I am also a business citizen of the city of Hamilton. That is where my principal business is located. I wet-berth my boat along the Burlington shore on LaSalle Park Marina, and I patronize the Hamilton Harbour Commission's excellent facilities at Harbour West for both marine work and winter storage. I bring this to you because I would say I thus am not biased toward any one entity or the other.
I had the pleasure of being invited to the July 25 public meeting at the Hamilton Chamber of Commerce facilities to hear the presentation with respect to Bill C-44, chaired by Mr. Stan Keyes. During this presentation, senior Transport Canada staff gave an overview of what the proposed bill would accomplish.
At the same meeting, Deputy Prime Minister Sheila Copps and His Worship Mayor Morrow of the City of Hamilton spoke together at an assembly. In both cases there was a strong fact given, that Hamilton has a unique position in that it is a commercial port and has active recreational content.
The thrust of both speakers was the fact that a recreational port is entirely separate from and different to a commercial port operation. Thus, the conclusion was that any future evolution of the port of Hamilton should address this uniqueness.
I would hardly concur with that assessment. The preamble to Bill C-44 advises that it is for the improvement of the competitiveness and commercialization of ports. From that, as I understand it, Bill C-44 does not include recreational activities or in fact activities that do not directly relate to the industrial commerce of a harbour.
This idea was further advanced by slide 10 of the presentation, with the third item stating that under a CPA, land use directly linked to port-related purposes would be under their jurisdictions. A corollary to this was itemized in slide 9 at that time with respect to Canada Ports in that it is intended to ``get out of sites that have no facilities or commercial traffic''.
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The separation of commercial and recreational facilities' activities is obviously tempered by the interrelationship between the two as it relates to safety and security. The rules for the creation of a new entity to replace the Hamilton Harbour commissioners has not been well defined. If the commissioners restructure to become a Canada port authority under clause 8, then the CPA would still control the whole surface of Burlington Bay and whatever lands adjacent to it that are now included in the Hamilton Harbour Commissioners Act of 1912.
This, I would suggest, is contrary to the implication by the Deputy Prime Minister and the Hamilton mayor that a commercial port operation does not include recreational pursuits.
In addition, I would suggest it is contrary to the preamble of the bill itself. Should a new entity evolve to replace the commissioners, the same question would arise. However, to my mind, there are further complications, as noted during the July 25 presentation.
Dissolution of the Hamilton Harbour commissioners was not provided for in their act. Thus, all the property and assets under the control of the harbour commissioners would revert to the Crown. It is understood that a preliminary legal opinion suggests that the right would be in the name of the province and not the City of Hamilton.
Does this also mean the shoreline property of Burlington Bay that encroaches upon the territory of the city of Burlington would also revert to the province? I suggest an affirmative answer would inflict incredible problems on many homes fronting on the water and any municipality-owned facilities in existence now, such as LaSalle Park Marina. The same can be said about private lands and facilities on the Hamilton side.
Under either endeavour are some fundamental questions that should be addressed. Under the CPA, the federal government is expecting to receive a stipend from the CPA on an annual basis. As was alluded to earlier today, and during that meeting, Mr. Duncan Beattie inquired what the formula for this stipend would be.
Whether it is new commissioners as a CPA, or a third-party entity, it is very difficult at this stage to comment on the viability of the bill if such a fundamental item is not part of the act. No body can intelligently evaluate the credibility of the act or possible submissions under the act if this item is not clarified before promulgation.
Not in my text here, as noted earlier this morning, is that harbour commissioners pay absolutely nothing to the federal government, for they receive nothing in kind or in service from them. Really, why should they pay anything? They are doing all the harbour commercial work, such as the dredging and this type of thing. It seems rather absurd to pay somebody for the sake of existing.
Finally, there is the question of representation on the board of directors of the new CPA. Currently, the proposed legislation states there shall be nine to eleven directors responsible for the CPA. In general, of these, three are specifically identified as being nominees appointed by the federal, provincial and municipal governments. However, as stated earlier in reference to the statements by Deputy Prime Minister Copps and Mayor Morrow, Hamilton was such a unique port that it required a made-in-Hamilton solution.
I would suggest that this narrow interpretation is unfounded. The bay, excluding man-made piers and slips, and islands, consists of approximately 29 kilometres of shoreline. Of this, approximately 11.8 kilometres, or 40%, is within the city of Burlington, yet we keep hearing about a ``Hamilton'' solution. I would respectfully suggest that Burlington, representing a rather large stakeholding, should also be represented on any future board of governance.
The statement is made on the assumption that no change will be forthcoming with respect to geographical areas of jurisdiction. However, if, as it has been pointed out before, the CPAs are for commercial ports, then those areas of water and land that are not within that commercial definition should be left out of the jurisdiction of a CPA. It is recognized that Burlington does not have any commercial/industrial port activities.
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Within the municipal interests of Hamilton and Burlington, those areas of water fronting on the respective municipalities should be removed from CPA jurisdictions. You have just heard from Mayor Morrow suggesting the west end of the bay be returned to Hamilton title.
This is in keeping with points illustrated in slides 12, 13, 14 and 15 of the July 25 meeting, which all relate to commercial/industrial port activities as it relates to the ``strategic significance to Canada's trade''. I do not believe that pleasure boating fits these criteria.
In the final analysis our harbour, be it Hamilton Harbour or Burlington Bay, depending on which side you live, is too important for many interest groups to be governed within a very narrow interpretation. As such, a board of directors that represents all stakeholders is of paramount importance.
As stated in so many words in clause 3 of the proposed act, the national marine policy is to foster, improve and ``promote and safeguard Canada's competitiveness and trade objectives.'' Again, I suggest that recreational boating has no place in these objectives.
Therefore, I would suggest the following recommendations as applies to Burlington Bay, Hamilton Harbour or the port of Hamilton as the case may be: one, removal of all recreational facilities, activities and water interests from the jurisdiction of a CPA; two, the board of directors should be represented from both municipalities of Hamilton and Burlington; and three, that recreational facilities should be subject to the zoning and development regulations of their respective municipalities.
Thank you.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Ashenhurst.
The report must have been very thorough; there are no questions the members of the committee want to ask. I'll just assure you that the transcript is in the record and that your concerns will be taken into consideration.
Thank you very much for taking time out to make this presentation to the committee this afternoon, Mr. Ashenhurst.
Mr. Ashenhurst: Thank you.
The Vice-Chairman (Mr. Comuzzi): We're now going to have a joint presentation from the Ontario Grains and Oilseeds Group. They include the Ontario Corn Producers' Association, the Ontario Soybean Growers' Association, and the Ontario Wheat Producers' Marketing Board.
Mr. Doidge and Mr. Whitelaw, if I have it correctly, you folks are going to talk about corn, soybeans and wheat.
Mr. Brian Doidge (Ontario Grains and Oilseeds Group): That's correct.
The Vice-Chairman (Mr. Comuzzi): Anything else?
Mr. Doidge: Anything that comes up.
The Vice-Chairman (Mr. Comuzzi): And anything else that comes up. That's very important. Since all of your presentations have been consolidated we're allowing more time on this. I want to say at the outset that throughout any hearings I've attended I've always been impressed with the perspective you folks bring.
Let me tell you, when we're trying to establish what it costs to ship a bushel of grain in this country I always come back to what you folks pay, because that's the true value of shipping a bushel of grain. Nobody else wants to tell you what it costs to ship a bushel of grain, so I appreciate that a lot.
Mr. Doidge: Thank you, Mr. Chairman.
I think part of our presentation you're going to enjoy this afternoon, because we're going to get down to dollars and cents.
The Vice-Chairman (Mr. Comuzzi): Good stuff.
Mr. Doidge: Thank you, Mr. Chairman.
On behalf of the Ontario Soybean Growers' Marketing Board, the Ontario Wheat Producers' Marketing Board, and the Ontario Corn Producers' Association, I want to thank you for giving us the time and taking the time to hear us.
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You have our presentation in front of you, I believe. There are a couple of points we want to make first. We represent roughly 64,000 primary producers in the province of Ontario. I think, as our brief points out, we produce crops - and now when I'm just talking crops, I'm talking corn, beans and wheat - in excess of $1 billion. We exported in 1995 over one million metric tonnes of grains and oilseeds, so we have a vested interest in the seaway and making sure it's economic.
Our primary belief is that it's the producer that in the end analysis foots the bill. So whatever regulations or whatever costs are incurred by the system, we pay. So we have a vested interest in making sure it's as efficient as possible.
That said, we do support most of the thrusts of the proposed Canada Marine Act. We do support the move to decreasing regulation and improving efficiencies.
We come before you today basically onside with the thrust, but there are several points we want to make and there are a couple of severe reservations we do have and which we will point out as we go through here.
In our brief we talk about the value of the exports of Ontario grains and oilseeds. In 1995, for example, it was over $350 million. That's export of bulk grains and oilseeds. It does not include the value of the end products or anything beyond the bulk product. It's important to us. Cost-effective transportation is key to competing in world markets.
Our basic premise is this. If you're going to reform the seaway and make it a user pay entity, our suggestion is to cut the costs first and then charge for it. Do not do it the other way around. You must cut the costs before you charge for the service you're providing. If you don't do it that way you end up with a system, in our opinion, that is going to be cost prohibitive, that will not be competitive, and we're going to have a big problem down the road competing.
Among the things we would like to suggest to you - this starts on the second page of our presentation - is that as a general principle any move to user pay should be preceded by deregulation and systematic cost reduction. We think the national marine policy as enacted by the Canada Marine Act may eliminate key components of the marine system that are important to the movement of grains and oilseeds. So we have a longer-term concern as well. If you're going to divest several ports - and most in the seaway - there are some we are worried about, and we'll get to that.
As far as the Canada Marine Act itself is concerned, we have three basic recommendations. The Ontario Grains and Oilseeds Group believes that system inefficiencies costs and user fees are ultimately paid by the producer of the goods being shipped. The Ontario Grains and Oilseeds Group supports efforts to reduce the burden on the taxpayer. However, we believe public expenditures on key infrastructure are in some cases an investment in future economic viability and global competitiveness and that the federal government should take a long-term strategic approach to this infrastructure.
The Ontario Grains and Oilseeds Group opposes any reforms that effectively pass the cost of unnecessary services and systematic inefficiencies on to shippers. User pay should not be instituted until meaningful reform and cost reductions have been realized. The primary one is pilotage. We believe that the current structure has institutionalized a monopolistic situation. We believe that because of that the cost of pilotage in the seaway is exorbitant. We believe it is increasing the cost of throughput.
Any meaningful reform must address the cost incurred as a result of this monopoly situation created by the Pilotage Act. The Ontario Grains and Oilseeds Group is concerned that the legislation effectively passes cost overruns by pilotage authority on to shippers.
Before you divest yourself of the seaway, or the operation of it, we're asking you to do something about the pilotage authority just so we can reduce the cost of pilotage. It's our opinion that we don't need pilots in the first place. So before you turn it over to a user pay situation, give us the flexibility to do away with that particular component.
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The Minister of Transport should ensure that real cost reductions are made to the system before the federal government absolves itself of any financial responsibility for the monopoly situation it has created.
Therefore, the Ontario Grains and Oilseeds Group requests that inefficiencies related to pilotage be addressed before full cost recovery is implemented. Our suggestion is, do away with the pilot authorities.
As to the commercialization of the seaway, again, we're onside with this. We think anything that improves the efficiency and lowers the cost is a step in the right direction. Therefore, on the bottom of page 3, the Ontario Grains and Oilseeds Group supports the concept of management of the seaway by a not-for-profit entity. However, we believe there needs to be some assurance that there will be equitable access to the seaway and that any operating entity not be allowed to charge unreasonable tolls.
Our concern comes down to this. We're onside with privatizing the operation of the seaway, but many of the players who are going to operate the seaway also own most of the terminals, which are the access points to the seaway. So we have some concerns that we will be excluded or prohibited economically from the use of the seaway, in that the people who operate it also own the access points to it.
We're a little concerned with that, as you can appreciate. It's as if you're going to turn Highway 401 over to a privatized company to operate and maintain it, and give them also the authority to restrict who gets onto it. So we have some concerns.
We are in favour of a joint Canada-U.S. seaway working group. We think that's the proper way to do it. U.S. volume through the seaway is a significant player. Therefore the Ontario Grains and Oilseeds Group is supportive of binational efforts to produce a more efficient and competitive Great Lakes-St. Lawrence Seaway system.
The next issue is ports. We're intrigued that the largest single port in Ontario on the seaway is not covered by the Canada Marine Act. The Port of Thunder Bay should be identified as a Canadian port authority in the schedule included in the national ports system.
You might ask why the Ontario Grains and Oilseeds Group is concerned about Thunder Bay. We don't ship grains and oilseeds through there, but we recognize the fact that it's western grains and oilseeds that carry the bulk and constitute the volume through the seaway. Anything that can be done to enhance that flow will increase the efficiency of the system and probably reduce tolls down the road. So strategically we think Thunder Bay should be an identified port.
We are concerned about the ports on the system in Ontario, and we've listed them in our presentation. In particular we have concerns about two: Prescott and Port Stanley. The other ports of interest, mainly Goderich, Sarnia, Windsor, Port Colborne and Hamilton, are well on their way to having municipal support or a large commercial support interested in their maintenance. We do have concerns about Prescott and Port Stanley.
In the Prescott situation, it's our opinion that it has never really been given a chance to operate properly. It's been under a federal bureaucracy. We do not believe there has been a marketing plan developed, implemented or put forward with any kind of strategic direction.
In eastern Ontario there has been a move towards production of grains and oilseeds as opposed to the livestock industry, so there are more grains and oilseeds being produced in eastern Ontario that use or could use Prescott as an export terminal. In fact, they have. To divest Prescott quickly will not serve eastern Ontario very well.
Another point that Jim is going to get to shortly is that Prescott is the only port between Hamilton and Montreal. If Prescott went under for any reason, a whole segment of agriculture in Ontario would be landlocked.
We are very interested in Port Stanley because of its location. Wheat in particular uses it as an outlet into Buffalo, and Jim can get into some of the logistics of that move. But also a lot of fertilizer comes into southern Ontario through Port Stanley. So we're very supportive of any move that keeps Port Stanley viable.
That brings us to our next recommendation. The Ontario Grains and Oilseeds Group remains concerned that future marketing opportunities may be denied if these ports are lost, these ports being Prescott and Port Stanley.
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The federal government is urged to proceed slowly with its port divestiture policy. What we're asking is for Prescott to be last on the list. Give it the six years. It should take its time.
There are some moves afoot. There's a meeting scheduled shortly with interested parties. The big problem in Prescott is taxation from a municipal viewpoint. That takes time to resolve. All we're asking is for Prescott to not be first on the list. Reforms that are aimed at reducing public expenditures in the short run may only serve to compromise long-term economic growth.
On the coast guard, we don't have too many points other than that the Ontario Grains and Oilseeds Group is very concerned about the necessity and cost of the number of coast guard services.
We'd like the users of the seaway to review what services are actually required. We propose that the necessity of these services be reviewed and the delivery cost be reduced before user pay is fully implemented. Again, cut, and then charge.
In conclusion, as users of the marine system, we're not averse to paying our fair share of legitimate costs, but we call on the federal government to ensure that real reform and efficiency gains are made to the system before user pay in instituted.
I'd like at this time to refer to our presentation on February 22, 1995. I believe it was made to the same committee. It's in your package, I believe. We made three recommendations at that time. We would like to read them into the record again.
We think there's a need for a review of the cost per tonne-mile for either water or rail shipments, in particular the Mississippi River versus the seaway, versus direct rail. Before we make substantive moves on transportation reform in Canada, we have to know what those costs are. To our knowledge, that has not been done yet.
We need to calculate the indirect charges to the seaway of such things as the coast guard, pilotage and maintenance. We think they're too high and that they need to be reduced, and that the regulations are causing them to be high.
Our third recommendation was to study the potential of ports within the system to increase tonnage if costs for usage were reduced. We think Prescott fits into that scenario.
Before we get to your questions, I want to turn it over to Jim Whitelaw. He is the marketing manager for the Ontario Wheat Board.
Mr. Chairman, you asked for some direct costs. Jim has them all worked out.
Mr. James Whitelaw (Ontario Grains and Oilseeds Group): Thank you, Brian.
I'm the marketing manager of the Ontario Wheat Board. I've been with the board for more than 20 years. I've been in the grain business for more than 28 years. I charter the vessels, do the trucks and the rails, pay the bills, stamp the bills and negotiate all the tariffs from the primary country point to the export.
I want to break this down into a unit. I'm glad the chairman suggested that.
A laker that we charter is approximately 25,000 tonnes. That represents about 835 truckloads. The elevation cost anywhere between Goderich, Sarnia, Port Stanley or Port Colborne is about $162,500 to put that 25,000 tonnes onto a laker.
The Vice-Chairman (Mr. Comuzzi): What was that figure? Is that elevation loaded -
Mr. Whitelaw: That's $162,500, in and out, with elevation at a transfer elevator.
Berthage, wharfage, top wharfage and side wharfage are about $25,000. Inspection for the Canadian Grain Commission - all our export cargoes have to be inspected - is another $25,000. Freight, from anywhere in the Great Lakes to Montreal, Trois-Rivières or Quebec City is about $250,000, or $10 a tonne.
Mr. Keyes: I would like to ask a question for clarification. As for this figure of $162,000, first you said it was for putting it on a ship.
Mr. Whitelaw: That's in with elevation and from the spout.
Mr. Keyes: Okay, so that's up the elevator and then onto the ships.
Mr. Whitelaw: Correct.
Mr. Keyes: Thanks.
The Vice-Chairman (Mr. Comuzzi): Cleaning is not included in that process. Is that correct?
Mr. Whitelaw: No, I didn't want to burden you with all those other miscellaneous charges of cleaning and drying, etc. I think this has enough impact itself. The seaway tolls, lockage fees in the Welland Canal and a marine tax we're now amenable to would be about another $50,000.
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So in order to have one laker movement from the Great Lakes to a port in Montreal, just to put up alongside the port, is $512,500. That comes to $20.50 a metric tonne, or as the chairman mentioned earlier, 58¢ a bushel for the raw transportation through the system.
When we look at the system, you cannot separate cost from efficiency. At this time, the current system we have had is extremely efficient as far as moving large volumes of grain from Ontario into export position goes. On that laker movement, in peak years we've averaged between 30 and 35 laker movements just with Ontario wheat, not mentioning corn and soybeans.
I have participated since 1976 in no less than 12 or 14 studies efficient transportation and movement on the Great Lakes in eastern Canada. In 1980 I participated in a provincial study on the seaway and where it was going in 1990. So I'm well versed in the history of the seaway but, more importantly, in the cost and the functionality of the seaway.
As a Canadian, and representing the producers I represent, I've always been proud of having a through-Canada export movement. I've not been involved in any studies of the Mississippi or any alternative. I solely look at exporting through eastern Canada.
To give you some comparisons - these are figures you'll need to work with - on the railways, if we went that same route I mentioned with all the costs incurred, it's currently about $5 per tonne higher. So at the current level, the water system is still an economic viability.
What will be known in our forecasting for five and ten years is not what the economics will be as far as the cost of going through is concerned, but the functionality of going through.
An example I'd like to use is Port Stanley. In current and previous years, there were about2,000 truck movements into Port Stanley. If the elevator is not available, that means that some other segment of an Ontario roadway is to receive an additional 2,000 trucks. It will go through Windsor, Sarnia, or Port Colborne. The wear and tear on the highways and the local traffic disruptions will be increased.
If the 2,000 tonnes simply represents the wheat that is handled through Port Stanley, Port Colborne - this has not been mentioned - would handle another 2,000 trucks. It has not been brought up in the brief. To me, the linkage with the elevator at Port Colborne is with Prescott, because if Prescott becomes redundant and Port Colborne becomes redundant, then you'll have at least 10,000 to 12,000 trucks moving west along Highway 401 and Highway 402 to Sarnia. The grain will have to move west before it can move east. There are no inland terminals. The facility we use in Hamilton is a temporary facility. We simply use small volumes to move down river.
On the functionality of the seaway, it's an intermodal linkage. The current access for most primary producers is less than 60 miles to a water facility In the case of Port Stanley - then I will move east - in 1976 that elevator moved approximately 20,000 tonnes. In recent years I think it moved 122,000 tonnes. That was done with hard work, lots of shoe leather, and marketing.
The brief mentions Buffalo. The way the Ontario Wheat Board can compete in Buffalo is by water. The board moves approximately 45,000 tonnes, or less than 2 million bushels, to Buffalo. The primary way of receiving at Buffalo is by water, not by truck or rail. That's the functionality of Port Stanley.
Coming down to Prescott, I've been involved with Prescott for at least 20 years under different ministers. People ask questions. They say that if Prescott is so viable, why doesn't someone take over the elevator? It comes down to simple taxation. It's taxed as a federal site now. I don't want to be quoted as giving exact figures, but someone will jump up if I'm wrong. Currently the municipal taxation on that elevator is about $225,000. If a private interest were to take over, it would be more than twice that.
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With the elevator handling 100,000 tonnes of Ontario wheat, with elevations of about $7 a tonne...that would barely cover the taxation on the elevator for someone buying into it. There are those who are extremely interested in privatizing and running Prescott. What they're asking for is not to hit it on a running start. The marketing to try to contract for specialty crops or other business has not been done out of Prescott for a number of years, not since Elders Grain was involved back in the 1980s. Any new corporation or private business going into it would also need time to develop the core structure.
So that I don't commence rambling and for the sake of the time of the chair and the others, I'll wait for your questions.
The Vice-Chairman (Mr. Comuzzi): What's the capacity of Prescott?
Mr. Whitelaw: Under the Canada Grain Act the licensed capacity is about 110,000 tonnes.
Mr. Keyes: You mention 58¢ for the cost of a bushel of wheat on the movement. What does that bushel of wheat get - $4, $5?
Mr. Whitelaw: We'll go back to 1995, because the 1996 crop has not yet been sold. In Ontario it was about $5 a bushel. But the costs are fixed, the returns are not.
Mr. Keyes: Sometimes the returns are greater.
Mr. Whitelaw: And sometimes -
Mr. Keyes: Hopefully in 1996 it will be more prosperous.
The Vice-Chairman (Mr. Comuzzi): Ontario basically grows white wheat.
Mr. Whitelaw: There has been a transition to different varieties, but it is still 90% white wheat.
The Vice-Chairman (Mr. Comuzzi): You have set markets for that, don't you? Just to refresh my memory, that's what they use to bake cookies -
Mr. Whitelaw: In North America it is for cake, pastry, and breakfast cereal. Outside North America it's for pita bread; a lot goes into the Middle East and North Africa.
The Vice-Chairman (Mr. Comuzzi): I see, but the United States is a pretty healthy buyer of white wheat.
Mr. Whitelaw: We have developed that market in the last five years.
The Vice-Chairman (Mr. Comuzzi): Where does the competition come from for the white wheat?
Mr. Whitelaw: In the world market it would be Argentina, Australia, and France. In the United States it's simply Michigan and Ohio.
The Vice-Chairman (Mr. Comuzzi): Thank you for those thoughts.
We'll go to questioning with Mr. Gouk.
Mr. Gouk: Thank you, Mr. Chairman. I have just a couple of areas I wanted to touch on.
When we were talking about pilotage, basically you said you wanted to do away with it. I agree that there are a lot of captains on the Canadian lakers who know the water as well as the pilots do. Is there any commercial shipping there where that may not be the case? Are some ships that use the system not knowledgeable enough to go without a pilot?
Mr. Whitelaw: Yes, foreign-flag ships sometimes have ocean tonnage. They will come into the port of Sarnia, load half a load, and top off the St. Lawrence. They would need some type of escort.
Mr. Gouk: I sympathize completely and agree by and large with what you've said, but to do away with pilotage in its entirety...now all of a sudden you don't have anybody for these types of ships coming in. You can't keep a stand-by system on the basis that someday somebody might need them. So we have to try to find a balance.
Mr. Whitelaw: Am I allowed to ask a question, Mr. Chairman?
The Vice-Chairman (Mr. Comuzzi): You can ask whatever you want.
Mr. Whitelaw: Currently, where do the pilots come from? Who are they and what are their backgrounds?
Mr. Gouk: Again, I'm well aware of the background of the pilotage and how many pilots come from these people who in fact continue to operate. I have a real problem with that. They claim now that a captain can in fact get pilotage licensing, but the process by which he would do so is so convoluted that it doesn't make it practical. So I bow to the direction you're going in except for the concern that we still have to have someone qualified in the event a pilot is needed.
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Mr. Whitelaw: Yes. In our review, most pilots are former lakes captains, who come through a system. Therefore pilotage, as the compulsory system we know now, could be privatized, whether through Dreyfus or the other companies we've mentioned. They could provide pilots when necessary.
Mr. Gouk: There may be a solution, but we'd have to look at the frequency.
There is one other thing I wanted to touch on with regard to the St. Lawrence, something that's particularly near and dear to me. You mentioned in general terms the amount of use the American shipping makes of it. The Americans pay - and I stand to be corrected - something like 15% of the cost of the operation of the system because they own 15% of the facilities, when they're in fact using 50% or more of the system. Are you in favour of fairly direct negotiations to ensure - not to ask or beg or plead - that the American's pay their fair share of the operation of that system?
Mr. Doidge: You're asking us whether there should be a customer who gets through without paying his fair share of the load? No, of course not. Our belief is that the system has to stand on its own and operate in a commercial entity. If one of the major players is the U.S., they should pay their fair load for the thing. We don't have a problem with that.
Mr. Gouk: Okay.
Mr. Whitelaw: I think we should point out that a contract is a contract, and I guess it would have to be between the parties whether it is renegotiated. It does involve the locks up through the Sioux and back to Thunder Bay. We can't just view the Welland and the seaway.
Mr. Doidge: To go back to your pilotage question, our main point is to free up the system so that if a salt ship, for example, needs a pilot, the pilot is there on a commercially available basis. But don't force pilots onto every ship, and in particular onto the lakers that have been up and down there.
Mr. Gouk: The only thing I'm concerned about - and you may have provided a possible solution - is this. If you say a pilotage authority has to be self-sustaining and if we have to maintain a pilotage authority for those ships that do need it, but if very few of them use it, their costs are going to grow to the extent that those who require a pilot simply really can't afford it. If it's unaffordable now it will be doubly unaffordable later, and that in itself will create problems. I'm going to look at the approach you gave, which may in fact be a good solution.
Mr. Doidge: The other thing I think you should consider is that the number of ocean-going vessels that can make it into the seaway is declining steadily over time. We had our concern about that. Obviously we're not going to do anything about it, but if we had a system whereby the pilotage charges were really only applied against salties, we may make it prohibitive for any seaway-size vessel to come into the seaway to deliver fertilizer, pick up wheat, or whatever. We're concerned about that. Our immediate concern, though, is making the pilotage much more flexible, so that if you don't need it and you're licensed such that you don't need it, there's no expense there.
The Vice-Chairman (Mr. Comuzzi): Mr. Doidge and Mr. Whitelaw, in the next day or so a report from this committee is going to be tabled in the House of Commons. That report talks about the very thing you talk about, a binational.... The users of the system are not excluded from the proposal that's coming forward. They're included in the process, but they're not exclusive to the...you know, you folks ship over a million tonnes through the seaway a year. Am I correct in saying that?
Mr. Doidge: That's right.
The Vice-Chairman (Mr. Comuzzi): Is it up to 2 million tonnes?
Mr. Whitelaw: I think our brief states about 1 million tonnes.
The Vice-Chairman (Mr. Comuzzi): Say you're 1 million of 40 million, so you're responsible for 4% of the action on the seaway. All this report says is that in the interest of reducing costs on the seaway, a not-for-profit binational corporation should be formed with the United States.
To answer Mr. Gouk's question, if it costs whatever it costs to run the seaway now, there are going to be some substantial changes because of the intermingling and consolidation of the expense. So if it costs, for example, $100 to run the seaway for a year and you have a not-for-profit corporation, you would expect that not-for-profit corporation to contribute $50. That's $50 from the United States and $50 from Canada. That's fundamentally what the report says and it's fair. Then the people who operate the seaway will find a way to get reimbursed by those who use the seaway. It's a great, fundamental business principle.
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The report also addresses the issue of pilots, especially on the river. It looks at the load that the United States has implemented with respect to their pilots. The pilots are employed by their St. Lawrence Development Corporation. They administer it.
We agree with you. There have to be some substantial changes, and that may be part of the remedy in addressing the pilotage issue on the Great Lakes.
I would like to go through Mr. Whitelaw's numbers.
Elevation, you said, was about $7. The elevation on the Mississippi is about $1.50. Is that correct?
Mr. Whitelaw: That's correct.
The Vice-Chairman (Mr. Comuzzi): Given that disparity, there is no way we can compete. If I get a load of grain and want to figure out whether I'm going down the seaway or the Mississippi, and if I look at elevation and see $6 in the cost of freight, it's game over, isn't it?
Mr. Whitelaw: Not necessarily, Mr. Chairman. Ocean trading is a big part of the final destination cost. We are very fortunate to have the corridor in Montreal; dry freight comes into Montreal, Quebec, and is quartered by containers through to Chicago. So there's an availability of ocean tonnage compared with a charter or returning trip, so to speak.
Yes, the cost of getting it to the Mississippi may be that, but there are a lot of fences between Sarnia, for instance, and the Mississippi that will not make it practical. In other words, we cannot receive a U.S. inspection in Mississippi. Canadian shipments would have to be sealed through the entire linkage, and we do not know where we would be as far as it concerns how much tonnage is allowed through the Mississippi, if it's at peak capacity or low water.
As I said at the start, I'm a Canadian and want to export through Canada, even with the cost of $20.50 a tonne. If I can book ocean freight to Korea for about $22 U.S., combining the two, that's about $38 U.S. to land in Korea. By going through the Mississippi, depending on the availability of dry ocean freight, the cost may be only $2 to $3 a tonne more to land at Korea. It should always be cost to the final destination.
The Vice-Chairman (Mr. Comuzzi): We're going over those costs again. You just said something absolutely interesting. This committee has been led to believe that we can't ship to the Pacific Rim, that using the seaway to ship to the Pacific Rim is so expensive we are no longer competitive. Now, you've just said to me and to the committee that you consider shipping to Korea part of the Pacific Rim.
Mr. Whitelaw: I didn't say it was part of the Pacific Rim, you did.
The Vice-Chairman (Mr. Comuzzi): Well, Korea is -
Mr. Whitelaw: I still stay with Korea when we go to Iran, Pakistan, India, North Africa.
The Vice-Chairman (Mr. Comuzzi): Exactly, but did you say you shipped to the Pacific Rim? Do you ship to Korea?
Mr. Whitelaw: We ship to Korea, yes.
The Vice-Chairman (Mr. Comuzzi): From Ontario?
Mr. Whitelaw: From Ontario.
The Vice-Chairman (Mr. Comuzzi): Using the seaway?
Mr. Whitelaw: Using the seaway.
The Vice-Chairman (Mr. Comuzzi): Using the Panama Canal?
Mr. Whitelaw: We ship 55,000 tonnes of 1996 crop to Korea, yes.
The Vice-Chairman (Mr. Comuzzi): And you found it only $2 to $3 more expensive a tonne?
Mr. Whitelaw: Than using the Mississippi.
The Vice-Chairman (Mr. Comuzzi): Than using the Mississippi?
Mr. Whitelaw: Don't try to compare that with the Pacific northwest.
The Vice-Chairman (Mr. Comuzzi): How much of a difference a tonne would it be with the Pacific northwest?
Mr. Whitelaw: Well, we would probably be at a disadvantage at that point. It's probably$12 U.S.
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The Vice-Chairman (Mr. Comuzzi): Without a guess on it, Mr. Whitelaw, would you be in a position to send the committee some costs?
Mr. Whitelaw: Those costs are probably for freight by the International Wheat Council, but yes, we can provide those.
The Vice-Chairman (Mr. Comuzzi): Let me get back to your numbers. Perhaps we can reduce the cost of elevation. There must be some happy medium in there; $7 a tonne is a high cost of elevation.
Mr. Whitelaw: As I said, I was involved in that Grains 2000 study on our costs head-to-head with the U.S., and I think Brian was as well. Please remember, the shorter the distance.... Cost doesn't really reflect the overall picture.
I don't want to simply pick on the elevator. The cost is $7, and you say that can be peeled back. At Port Stanley the wharfage rate that we pay to the Government of Canada went from 27¢ a tonne to 51¢ a tonne in 1995. That's almost a 100% increase in cost there, and I didn't receive anything across my desk to tell me why.
I'm just making the point that I do not mind taking a look at each portion as we go along, but I don't want to pick one particular item.
The Vice-Chairman (Mr. Comuzzi): No, we're going through it and then we're going through inspections and so on. That's the Canadian Wheat Board, the Canadian Grain Commission, and so on.
Just looking up and down here, I'd like very much to find out from your experience where you think it is reasonable to expect some reduction in the costs of shipping and how best to achieve those.
Mr. Whitelaw: First of all there are the trucks. In the province of Ontario average trucking is about $7 a tonne. Whether you go to Sarnia, Windsor, etc., that's the benchmark. If it can't go to Windsor for $7 it definitely could go to Sarnia or Port Stanley, the way Sarnia is in its triangle.
I know the trucking situation does not fall under this committee's jurisdiction, but that is being reviewed on the basis of the type of trucks and the size and weight they can carry. So there's a potential increase there.
As for the elevations, all the transfer elevators are licensed under the Canada Grain Act, and as such publish maximum tariffs. In working with each of those elevators individually, the elevation they are charging in essence is what they need to pay their taxation, costs, etc. I see no reason at this time to enter any of those to try to have them reduced. The cost of going through Port Stanley is only $6.60 a tonne, but that cost is needed for the viability of that elevator. I think grain producers are prepared to pay those costs.
Berthage and wharfage are costs we pay to maintain the facilities alongside the elevator. The inspection fee is what is required by law for any export grain out of Canada. Not only do we pay the inspection fee, but we pay all costs incurred with it, such as overtime. Unfortunately, vessels are not something you can schedule to go from 8 a.m. until 4 p.m. They load consecutively, around the clock.
I stand to be corrected, but I think we dealt with 16 to 18 different unions from start to finish of loading the vessel. I'm not prepared to say which, if any, of those would be prepared to give up those costs. I guess I can say before you that I can see an economic benefit in paying 58¢ a bushel going through the seaway, provided that we have free access and that those costs are maintained. I don't look at decreasing costs but at maintaining them.
I was going to say ``fair trade'', but that was a previous administration. That was a cliché.
If open market does what it's supposed to do, then those elevation costs, such as storage, cleaning and other such things, will be kept in line by competition. When it hits the point of being in the water we find ourselves at the behest of the government. The government currently dictates costs for berthage, wharfage, lockage tolls and seaway, etc. In other words, there's a government demand as to what we'll pay to go through there. Up to the point of the vessel loading, open market will take care of that. I see no need to negotiate elevation or discuss it. Those other costs afterwards, which now are terrifying - the ones we talked about, of pilotage, etc. - they're the ones we'd like to open up to competition.
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The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Whitelaw.
Mr. Keyes, do you have any questions?
Mr. Keyes: You were more than thorough, Mr. Whitelaw.
Mr. Whitelaw: It is my area.
The Vice-Chairman (Mr. Comuzzi): Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman. I think you essentially dealt with a question I had, and that was to ask where you'd wring the efficiencies out of the system if you were going to make it more efficient, and I think that has been dealt with.
I had a more general question. Excuse my naivety, but how does the Ontario Wheat Producers' Marketing Board fit in with the Canadian Wheat Board? What is the relationship?
Mr. Whitelaw: Our legislation is provincial. We're legislated under the Ontario Government Farm Products Marketing Act. We are a producer board, and so I don't take up 15 minutes of your time, think of us as a producer-driven co-op.
We operate on a parliamentary system, where we have approximately 16,000 producers broken up into 10 districts. From themselves they elect delegates and there are 10 producer-directors who are the directors for the board, ones I meet with and we go over operational details.
Our legislation is provincial, but we do fall under some federal legislation, such as initial payment guarantees, etc., but we are a producer-driven board.
Mr. Cullen: Do you have any working relationship at all with the Wheat Board?
Mr. Whitelaw: On a professional level, yes. I personally worked with several members of the Canadian Wheat Board and attend with them from time to time. Some of our directors attend with the commissioners from time to time. It's not a day-to-day operation. We do not cooperate in sales or marketing strategies, but we do cooperate in the functions of freight forwarding and general communications, as I guess two people would.
Mr. Cullen: But you're not subject to any sort of cooperative pricing with them or any of their -
Mr. Whitelaw: None whatsoever.
The Vice-Chairman (Mr. Comuzzi): Mr. Cullen, Mr. Gouk, do you have anything further of anyone?
Just let me carry on since we have a few minutes left. Tell me what you do about moving your grain on rail. Do you have designated grain cars in Ontario?
Mr. Whitelaw: No. I think, Brian, you are more qualified for that, being on the committee.
Mr. Doidge: No, it's a free market entity. In the west - I think you're very familiar with it - it's a regulated system. In Ontario and the east it isn't. It's totally free market.
So the demand as it comes out from the customers or the buyers is how we generate the need and the need is communicated to the railways to supply the rolling stock. I think, as stated in our previous presentations to this committee on rail cars, our suggestion is that it be left as an open market entity. All we're saying is to give us our fair kick at the cat to supply rail cars in the east.
The Vice-Chairman (Mr. Comuzzi): So you commit to a railway to move your product. They supply the rail cars.
Mr. Doidge: Sometimes they do; sometimes it's supplied by the buyer.
The Vice-Chairman (Mr. Comuzzi): Is that Cargill?
Mr. Doidge: Cargill does. CSX in the U.S., which supplies large poultry and pork operations in the eastern seaboard, has designated 1,000 hopper cars to the use of these large buyers in the U.S., some of which are on dedicated runs into the CSX lines in southern Ontario.
The Vice-Chairman (Mr. Comuzzi): I see. Do you find that easy to administer?
Mr. Doidge: Since we don't administer it, yes. It's no problem at all.
The Vice-Chairman (Mr. Comuzzi): Let me put the question a different way. You don't have any difficulty getting your grain to market.
Mr. Doidge: No, that's not what I said. We do have serious concerns about rail car supply, particularly in those situations - and this year is emerging as one - where there's a constraint on rail car supply in the west and there's a constraint on rail car supply in the U.S. In the east, because we survive in an open market system, if the cars are there we can move product. Our problem is because you have a regulated system in the west that dictates there shall be x number of cars supplied and effectively taken out of the North American marketplace, we're left to hang.
So all we're saying is give us free and equitable access to rail car rolling stock and that's all we're asking for.
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The Vice-Chairman (Mr. Comuzzi): Let me put a hypothetical to you, Mr. Doidge. We have got 27,000 rail grain cars. At any given time we can go to Chicago and find a third of them. What if you found yourself, as you're going to find yourself this year, where you come and say you've got to have a 30-day lead time? If you were to say to this new committee they have formed now to allocate grain cuts that you're going to be short and don't know how you're going to get your sold product to market, your sold orders, and ask if they can give you 500 grain cars for the month of November, what kind of reaction would you get? Do you have that association?
Mr. Doidge: We're not on CAPG. We're not recommended.
The Vice-Chairman (Mr. Comuzzi): I know that.
Mr. Doidge: Our eastern concerns aren't even in the formula. We're not one of the designated corridors.
The Vice-Chairman (Mr. Comuzzi): Yes, I know that. But I'm talking about if you needed 500 cars to move your product to market. I mean, the taxpayers of Canada paid for these 27,000 cars.
Mr. Doidge: That's right.
The Vice-Chairman (Mr. Comuzzi): We didn't say you're from Toronto so you don't have to pay for those cars. If you needed 500 cars, you couldn't get them.
Mr. Doidge: No. Eastern Canada has been serviced by the commercial fleets of CN and CP in the past, which for talking purposes are 750 cars in total.
Our concern is, as the two class I's divest themselves of interests in eastern Canada, those cars are going to go west. There won't be a hopper fleet in eastern Canada provided by the class I's. We'll be left with a system of short-line railways that do not own rolling stock. So we are going to be at the mercy of buyer-supplied cars out of the U.S., leased cars when they're available out of the U.S., or we won't have them. And that's the concern in eastern Canada.
The Vice-Chairman (Mr. Comuzzi): That leads me to my final question and then I'll shut up.
As you know, the Government of Canada is in the process of selling its designated fleet, the designated cars. Would it not be appropriate for some organization in Ontario to say they want 500 or 1,000 of those cars to be used exclusively for the eastern market? Has that been considered?
Mr. Whitelaw: Yes. The Ontario grain industry is part of the coalition and is part of the ongoing plan to seek availability for eastern Canada.
One thing is a bit different. In eastern Canada I can go out and get 500 rail cars to move wheat. We've done that many times. What comes first, the rail cars or the contract? In my case, I'd say here's 20,000 tonnes I want to move from Goderich to Montreal and ask them to come back with a rate. They do, we sign a limited freight tariff, and away we go.
With the corn, it's getting that unified body to place the orders, because there are so many independents. It may be 10 cars here, 20 cars there. So the coalition is saying they need access to500 cars, to give them the access to 500 cars and the people will come forth and use them. Of course, the other side, and quite rightly I guess, is give them the contracts of business and they'll bring the cars in. It's been that way for many years.
Mr. Doidge: I think, too, Mr. Comuzzi, if you're asking us why we don't buy the cars, part of the answer is the federal government as yet can't sell them because of the right of first refusal for CN and CP. If you get rid of that, I think there's going to be a whole lot of buyers who line up for those cars, and at a good price. So if you can get rid of the right of first refusal, or negotiate it away, I think there would be a lot of people interested.
The Vice-Chairman (Mr. Comuzzi): There would be interest from the Ontario producers of the products you represent, in order to ensure delivery of their product to market.
Mr. Doidge: To buy cars?
The Vice-Chairman (Mr. Comuzzi): I'm not talking about buying cars. The whole system is not who buys cars or who doesn't buy cars. The whole system is how the cars are allocated and access to the cars. If there was to be some assurance for the Ontario producers for the allocation of those cars to help them to get their products to market, isn't that what it's all about?
Mr. Doidge: That's our whole point. We have 10 terms and conditions that we would like to see included in the sale of those hopper cars.
Really, all it says is that there be 500 cars on a priority call basis for an as-needed leasing arrangement. If they're not needed, leave them in the west. If we need them, all we're asking for is to let the commercial entity come forward and speak for x number of cars on a two-month lead notice. That's all we're saying.
The Vice-Chairman (Mr. Comuzzi): I thank you very much. I have kept you far too long.I apologize to the members of the committee for carrying on that line of questioning.
I thank you very much, Mr. Doidge and Mr. Whitelaw.
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Gentlemen, the floor is yours. Have you been around here? Do you understand the format or do you want me to go through it? There's a 10-minute presentation and questions.
Mr. James E. Olmstead (Director, Parks and Recreation Department, Corporation of the City of Burlington): Mr. Chairman, I think we understand the format very well. Thank you very much.
The Vice-Chairman (Mr. Comuzzi): I promise that I'll shut up.
Mr. Olmstead: Mr. Chairman, I'd like to introduce Mr. Leo DeLoyde, who is the assistant director of planning for the City of Burlington. My name is Jim Olmstead. I'm the director of parks and recreation for the City of Burlington as well.
We'd like to offer our thanks to you for hearing us this afternoon. We have for you a preliminary position on behalf of the City of Burlington. Council, in their agendas over the last couple of months, have been extremely busy with a number of business matters and therefore will not be able to present to you an official position until later this month, at which time we would respectfully request that it be directed to the clerk for the committee's consideration.
Just as a way of a short introduction, Mr. Chairman, I'd like to introduce you to the bay area, which includes the city of Burlington. The city of Burlington is a community of 140,000 people. It's on the north shore of Burlington Bay-Hamilton Harbour, and as well it extends along the north shore of Lake Ontario. We call the area of water that's between Hamilton and Burlington, Burlington Bay, as it has its historic designation. As well, the same body is labelled as Hamilton Harbour.
Today we would like to comment on Bill C-44 and share with you some of our preliminary positions. Mr. DeLoyde and I will present this in a back and forth method. Therefore I would like to ask Mr. DeLoyde to continue on.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Olmstead.
Mr. Leo DeLoyde (Assistant Director of Planning, Corporation of the City of Burlington): Mr. Chair, the City of Burlington supports the repeal of the 1912 Hamilton Harbour Commissioners Act and the creation of a local port authority for Burlington Bay pursuant to Bill C-44, providing that four things take place.
Before I describe each of those, I'll point out to the committee members that the issues we identified in the review of Bill C-44 are outlined on pages 2, 3 and 4 of this report.
The first issue relates to ensuring that port authorities act in ways that are consistent with community well-being. So drawing your attention to the very first page, recommendation 1 for amending Bill C-44 reads:
- The narrow emphasis on shipping and revenue generation in Bill C44 should be significantly
broadened to recognize the multi-use aspects of Burlington Bay such as recreational boating
and fishing, residential use, wildlife viewing and nature trails thus ensuring that the port
authority undertakes its operations in a manner consistent with community needs and
ecosystem well-being.
- Bill C44 Section 3(f) and 6(2)(f) should be revised to allow for the appointment of directors
who represent all affected municipalities and the broadened interests and multi-use aspects of
the Burlington Bay described above including municipal representatives from both Burlington
and Hamilton.
The third issue relates to the geographic extent of the jurisdiction of the new port authority. There's a map 1 attached on page 5 of this brief. Basically that deals with water only and it shows an estimation of what the area now uses for commercial shipping purposes. You can see that there's a large area, the white area basically, along the north shore of the bay that is not used for commercial shipping purposes.
We're not recommending that this committee take any action on that, but we are suggesting that when the letters patent are developed for the new port authority, there be a multi-stakeholder group put together to deal with the geographic extent. Item 4 in the recommendation on the first page deals with exactly that.
The last item, number 4, is the need for integration between the land use planning activities of the port authority and area municipal governments. So item 3 in the recommendation reads:
- Pursuant to Bill C44 Section 3(d)(e)(f) which sets out the goals of the National Marine Policy,
Burlington requests that Bill C44 and the ensuing letters patent should require that the new Port
Authority consult with, and integrate its port land use plan, port development programs and
remedial actions with local and regional municipal plans affecting lands surrounding the Bay.
Mr. Chairman, in conclusion, we welcome this opportunity to participate in the restructuring of a port authority for Burlington Bay. The recommendations in the brief recognize the need for a successful port facility, which is of vital economic importance to the greater bay area. The recommendations propose changes to Bill C-44 to ensure there is a direct local involvement in the decision making, which in turn will ensure that environmental and community well-being are given adequate priority in a well-balanced regulatory system for the port.
The recommendations contained in this brief should be considered as preliminary since they will soon be presented to Burlington city council for endorsement. The council's final position on Bill C-44 will be forwarded to the clerk at that time.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Olmstead and Mr. DeLoyde.
I'll turn to Mr. Mercier. Do you have any questions, sir? No questions.
Mr. Gouk.
Mr. Gouk: Just one area. We get lots of input of course from people who all want to have participation in the board. We hear from most of the ports that they want to get the board size down and we hear from most of the other people that while they don't necessarily want the board bigger, they want their representation on others and others.
The board make-up, for example, might be set. Right now it has one provincial, one federal, one municipal, and then the users. I don't happen to like the idea of anyone at all having a majority. If that formula was amended so it became one federal, one provincial, two municipal - and the definition of municipal is from those municipalities bordering on the port - and then three users in the case of Hamilton, would that go a long way towards dealing with the concerns you have? In other words, would you accept that if the municipalities, perhaps one from Hamilton and one from Burlington, were on that board, that would in fact represent those interests you are concerned about?
Mr. Olmstead: Through you, Mr. Chairman, we would support that concept.
Mr. Gouk: Good.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Gouk. Mr. Keyes.
Mr. Keyes: I'm not so sure it's so clear. If it was just the Hamilton-Burlington situation, it would be great, following on Mr. Gouk's question, but what if you have a municipality like the Fraser River Harbour Commission, where you are bordered by 12 or 14 communities?
Mr. Gouk: They were the ones who actually first proposed that.
Mr. Keyes: No, but 12 or 14 board members.
Mr. Gouk: I didn't say one from each, no, I said in this particular case not the formula as it applies in your case but the formula I propose all the same.
Mr. Keyes: I still don't understand how that addresses it.
Mr. Gouk: I'll explain it to you later.
Mr. Keyes: The 12 municipalities that would surround -
The Vice-Chairman (Mr. Comuzzi): We'll have to keep these two guys apart.
Mr. Olmstead: I think you're doing a good job, Mr. Chairman, at keeping them apart.
Mr. Chairman, we would like to express the fact that the users in our definition are broader than the users defined in the act and would include stakeholders who are not necessarily industrial or commercially based people as well. Therefore, representation from the community would be necessary.
The Vice-Chairman (Mr. Comuzzi): Mr. Cullen.
Mr. Cullen: I'll pass on this round.
The Vice-Chairman (Mr. Comuzzi): You're going to pass at the end of the day then, because this is it.
Mr. Cullen: I've got one more.
The Vice-Chairman (Mr. Comuzzi): I know that.
Thank you very much, Mr. DeLoyde.
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Mr. DeLoyde: I appreciate it, Mr. Chairman. Thank you, gentlemen.
The Vice-Chairman (Mr. Comuzzi): For the position of the Burlington Sailing and Boating Club, we have Mr. Bailey.
Mr. Keyes was just outlining to me the area in which you're responsible. Do you have a written presentation?
Mr. Ian Bailey (Commodore, Burlington Sailing and Boating Club): Yes, I do.
The Vice-Chairman (Mr. Comuzzi): Please continue.
Mr. Bailey: Mr. Chairman, my proposal is that the Hamilton Harbour Commission regulate only the commercial shipping inside Hamilton Harbour. The recreational portion of the harbour would be regulated by the adjacent municipalities.
The water area of the harbour, we think, should be split into three pieces. The westerly one mile of the harbour would be owned and administered by the City of Hamilton. The one-quarter mile wide strip of water adjacent to the north shore would be owned and administered by the City of Burlington. The balance of the harbour water area would be owned and operated by the Hamilton Harbour Commission or some such similar authority.
Our three basic reasons for this proposal are, number one, that the vast majority of parkland in the harbour area, both newly made and refurbished, has been paid for by federal, municipal and provincial funds. Any increased public access to the water would allow the expansion of some excellent accomplishments at the west end and on the north shore of Hamilton Harbour. Additional parkland made available by the relocation of the CN marshalling yards would make the west end of Hamilton Harbour a truly magnificent recreational facility.
The second reason is that we feel the Hamilton Harbour Commission should not be in the recreational boating business. Their access to outside funding gives them an unfair advantage over the private marinas and yacht clubs. The landlord should not be in direct competition with the tenants.
Finally, the Burlington Sailing and Boating Club have been negotiating with the harbour commission for two and one-half years, and we have been without a lease for one and one-half years.
Over the next 10 years we're being asked to pay an increase in rental fee of 250%. No limits have been placed on the years 11 to 20. We already pay more per acre of land and water than the yacht clubs in Toronto. All of the Toronto yacht clubs have fully protected moorings, either natural ones or moorings constructed at great cost by various levels of government. In Burlington we have to provide our own wave breakers, which will cost some $500,000 to renew in the next few years. We feel the rental costs, therefore, are grossly unfair, but we have no means of appeal and no recourse against any of the conditions imposed by the Hamilton Harbour Commission.
I thank you for this opportunity to address the committee. I speak not only as the commodore of BS and BC but as a homeowner at the western end of the harbour, as someone who has rented a slip from the harbour commission for a number of years, and also as a member of another yacht club in the southwestern area of the harbour.
I would be pleased to answer any questions.
The Vice-Chairman (Mr. Comuzzi): Thank you, Mr. Bailey. Mr. Gouk.
Mr. Gouk: This is a specialized area, and I'm sure Mr. Keyes will have some thoughts on it one way or the other.
The Vice-Chairman (Mr. Comuzzi): Do you have a question, Mr. Gouk?
Mr. Gouk: Yes, I just like to ramble a bit at the beginning.
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You indicated that you feel you're not being treated totally fairly by the harbour commission and that you'd rather be under the City of Burlington than under the City of Hamilton. Have you had any discussion with either of those bodies on what your rentals would be, what kind of lease operations you would have and what conditions you would be a tenant under if it were transferred to them instead of the harbour commission?
Mr. Bailey: No, I've had no talks directly in that area.
At the present time we have to negotiate through the City of Burlington with the Hamilton Harbour Commission for Burlington. I can only compare with what the City of Hamilton have just done for the Macassa Bay Yacht Club on the southwest corner of the harbour. Compared to the 250% we've been asked to pay over the next ten years - or a straight 25% every year - the City of Hamilton have just granted them a 20-year lease for the first four years, with 5% in the first year and 0% in years two, three, four and five.
After that, they have stated they will be tied in some manner to inflation. For a good part of the two and a half years we've been negotiating with the harbour commission, the harbour commission have refused to tie our lease to any form of identifiable inflation. They will not do that.
Mr. Gouk: How is your mooring spot directly comparable to the one you described through the City of Hamilton? How would the costs compare right at the onset of these adjustments?
Mr. Bailey: The yacht club in the southwest corner, the Macassa Bay Yacht Club, has fully protected moorings. They're protected by the new Bayfront Park on the west side. They're protected on three sides by land.
Mr. Gouk: How do the costs compare right now with the onset of these increases? They face the minimal ones that you described and you face the high ones. At the onset of these adjustments, how is a comparable moorage charged right now?
Mr. Bailey: There are approximately equal rental costs for the chain total for the clubs today.
The Vice-Chairman: What does it cost you to park a boat?
Mr. Bailey: It depends. At the Macassa Bay Yacht Club - it's a self-help club - its costs are less than $1,000 per year per boat. On the north shore, it would cost about $2,000 in total per year, including roughly $1,500 during the summer and $500 for storage over the winter.
The Vice-Chairman (Mr. Comuzzi): Are there any other boat clubs in Hamilton?
Mr. Bailey: Yes, five.
The Vice-Chairman: How do those rates compare? Are they private clubs?
Mr. Bailey: Yes, they are private self-help clubs. They are slightly less than the Hamilton Harbour Commission and slightly more than another marina on the southwest corner.
The Vice-Chairman: Mr. Keyes.
Mr. Keyes: Mr. Bailey, thank you very much for your submission.
I guess it boils down to two. It depends if you want to moor your boat at the Cadillac yacht club or you want to moor your boat at the Volkswagen yacht club, correct?
With some of these clubs come certain advantages. At one particular club I know of you take your boat out of the water, you set it on land, and that's the last thing the club is going to have to do with it until the next season.
Security is very limited. There are many break-ins, etc. The harbour commission properties, for example, are completely fenced in, security guarded, regionally policed. You're paying for services that you might require.
Mr. Bailey: That's absolutely correct, yes.
Mr. Keyes: So the choice is there for a boat owner to decide whether to pay an increased fee for better services at one club over another. Isn't that just competition?
Mr. Bailey: That's correct, provided you can afford it. But if you want to go into the least-cost self-help club, which is what we're talking about at Burlington, then your only choice is to join the BS and BC. There is very little choice now. It's the only place you can launch your boat in Burlington. Other than that, you have to go on the north shore, you have to go all the way to Bronte, before you can launch your boat.
Mr. Keyes: I thought you could also launch your boat down by the hospital. There's a launching pier by -
Mr. Bailey: No, Spencer Smith Park is closed for launching small boats.
Mr. Keyes: I beg your pardon? I saw boats being launched there this summer, beside Joseph Brant Hospital.
Mr. Bailey: It's been closed approximately two years, maybe even three.
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Mr. Keyes: Well, we're in disagreement there, because I saw boats going in there. I run by it every weekend.
Mr. Bailey: No, they must have been very tiny boats.
A voice: Mr. Chair, if I could interrupt, I think Mr. Keyes is talking about Fisherman's Pier. That's what I think it's called.
Mr. Keyes: Yes, that's it.
A voice: It's at the side of the canal, and it launches into Burlington Bay/Hamilton Harbour. I believe it was originally constructed by the Hamilton Harbour Commissioners to provide another access to the harbour for launching, but the only thing on the north shore - or anywhere in fact in the city of Burlington - is LaSalle Park.
Mr. Bailey: Yes, that's in Hamilton; it's the harbour commission launch ramp on the south side of the canal. There is nothing on the north shore apart from -
Mr. Keyes: So why would the municipality of Burlington provide some kind of access to that water on one of the lots they own?
Mr. Bailey: I have no idea.
The Vice-Chairman (Mr. Comuzzi): Thank you, sir.
If the gentleman at the back with the blue suit wants to talk -
Mr. Olmstead: Mr. Chairman, [Technical Difficulty - Editors] ...in the department of recreation and parks of the City of Burlington. Since we are the operators of the previously mentioned launch, and no longer operate it, maybe I can shed some light on it.
Would you mind just rephrasing the question so I can answer.
The Vice-Chairman (Mr. Comuzzi): No, we thought you had the answer to the question.
Mr. Keyes: Why would the the municipality of Burlington not work with the sailing community of Burlington to provide another access opportunity for the bay?
Mr. Olmstead: The city does work with the aquatic clubs, the marinas and the Burlington Sailing and Boating Club in LaSalle Park, and there is a public launching ramp there.
The point was that there was one other one into the lake, and it's the only one that's on the north shore of either Burlington Bay or Lake Ontario.
The previous one the city had was Spencer Smith Park at the west end. It has been closed due to the fact that it was a very inefficient operation. With the wave action coming in from the lake, the silt being washed in, and so forth, it was a very inappropriate type of launching ramp.
So we direct people who want to launch to Fisherman's Pier, which is only about 2 kilometres away across the canal.
Mr. Keyes: Okay.
The Vice-Chairman (Mr. Comuzzi): According to your evidence, we are led to believe that the price of docking a boat ranges between $90 a month to $170 a month, and that includes...... Is that the range of rental rates for boat dockage in Hamilton Bay and Burlington Bay?
Mr. Bailey: It's in that range, although normally we don't go by the month; we go by the season, either summer or winter.
The Vice-Chairman (Mr. Comuzzi): That's cheaper than parking a car.
Mr. Bailey: Yes, it is, in downtown Toronto.
The Vice-Chairman (Mr. Comuzzi): I always said that basically what we got was the publicly funded, privately run yacht clubs.
Mr. Bailey: I think our big argument has two elements. First, there is the fact that we're paying more than all the Toronto clubs, all the way from Scarborough to Mimico. Those are the figures I just received last week.
The Vice-Chairman (Mr. Comuzzi): But you have to admit, regardless of whether you get the waves or the silt, or don't get them, that it's a hell of a bargain. Parking your boat in a place for $90 a month is like parking an airplane for - what is it now? - $60 a month at the airport.
Mr. Bailey: Well, it's not just that; it's the actual cost of protecting those boats. We have to put up a series of tires around the outside. That's the cheapest method, the method we have right now. Over the next few year, you're going to have to replace that at a cost of about $500,000. And then the fees for the marina -
The Vice-Chairman (Mr. Comuzzi): Should that be on the back of the general taxpayer, if we got a user fee philosophy?
Mr. Bailey: We'd love to do that. Every other marina does that. The Scarborough Bluffs...it must cost a fortune for all the dumping out there, to make the five clubs out there.
The Vice-Chairman (Mr. Comuzzi): Are there any more questions?
Thank you very much. We're adjourned.