[Recorded by Electronic Apparatus]
Tuesday, October 29, 1996
.0929 
[English]
The Chairman: Order. Let's get going.
Mr. Keyes, you will not want to miss this. This is the prairie pool.
Mr. Keyes (Hamilton West): I wait with bated breath.
The Chairman: I'm sure you do.
Welcome. This is meeting thirty of this committee on this particular issue. We're considering the commercialization of the ports and the seaway.
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You already have been before a parliamentary committee, so you have some idea of how the process goes. We would like you to confine your remarks to about ten minutes so that members can have at you - in the nicest possible way.
Please begin.
Mr. Alex Graham (President, Alberta Wheat Pool): Thank you very much. Good morning, Mr. Chairman, and members of the committee. It's certainly a pleasure for us to have an opportunity to meet with you today.
I'm the president of Alberta Wheat Pool and I'm also the president of Prince Rupert Grain, the new grain terminal up the island at Prince Rupert. With me is Rick Dalgliesh from the terminal operations division of Manitoba Pool, and Rick Wansbutter, the manager of marketing and transportation of Saskatchewan Wheat Pool.
I'd like to take a second to talk a little bit and introduce you to the pool cooperatives. Together, Alberta Pool, Sask Pool and Manitoba Pool elevators handle very close to 60% of the grains and oilseeds and special crops delivered into the country elevator network through some 800 elevators on the prairies. More than 30 million tonnes of our western production of grains and oilseeds and special crops are exported annually. Therefore, the role of exports is important to us.
Either alone or in partnership, the three pools collectively own and operate grain terminals in the ports of Vancouver, Prince Rupert, Thunder Bay and Hamilton. We are major users of all of the marine services affected by the bill before us, Bill C-44.
A Prairie Pools brief was sent to your committee some time ago. I trust you've all had a copy. I won't be reading that submission given the short time available to us. What I would like to do is touch on the main points and go quickly to discussion with your committee.
I think that's what you are seeking, Mr. Chairman.
The grain and oilseeds industry and the business of handling and transporting grain and oilseeds has undergone significant change in the last few years. The Western Grain Transportation Act, with its regulatory protection for grain transportation, provisions for government car allocation and significant transportation subsidy was repealed on August 1, 1995. Before the grain industry even had a chance to get used to the National Transportation Act of 1987, the government amended it.
As many members of this committee will remember, we were here, and are still convinced that the shipper protection provisions of the act have been significantly weakened, leaving shippers without any effective means by which to counterbalance the monopolistic powers of the railways.
Certainly, Mr. Chairman, you know my disappointment at not being successful in getting the necessary amendments to that act.
All of these changes have resulted in the acceleration of consolidation and reconfiguration of the prairie grain industry. The pools and other grain companies on the prairies are now in the process of spending hundreds of millions of dollars tearing down old handling facilities and constructing larger, more centrally located multifunctional facilities.
Just as the industry is working to create efficiencies in the grain transportation system, so should the government play a substantive role. We believe one area where the government should provide leadership is in marine transportation.
We were very optimistic following the release of the committee's A National Marine Strategy in 1995. The strategy clearly identified many of the problems in the marine transportation system and proposed bold action to deal with them. However, Bill C-44 falls far short of the national marine strategy. Instead of creating efficiencies and reducing costs, this legislation may well actually increase costs to the overall system.
We do support the concept of commercialization of Canadian ports. The dissolution of the Canada Ports Corporation and the creation of Canada port authorities will give ports more flexibility to meet the needs of users. We hope it also means that commercially viable ports like Vancouver will be relieved from the requirement to pay large dividends to the federal government, essentially to subsidize the operation of less viable ports.
This will remove a cost, but other provisions, or more correctly, the lack of other provisions, in the legislation will offset this positive step; in particular, the area of pilotage. Despite the fact that the transport committee recommended that pilotage services be commercialized and that compulsory pilotage areas be reviewed to determine whether they are still required for safety and the protection of the environment, Bill C-44 does nothing to inject competition into pilotage. Pilotage accounts for in excess of 20% of port charges in Vancouver and Prince Rupert. It is higher for larger vessels and multiple-berth loadings.
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Shippers are required by law to use pilots and as a result are required to pay the high cost of this service with no requirement on the part of pilotage authorities to improve efficiency or services. This is not consistent with the direction set by the government for grain transportation.
As I have already described, our industry has undergone significant changes in the name of deregulation and commercialization. Commercialization of pilotage will result in savings for the industry and will also be consistent with the direction of the Government of Canada. We urge this committee to resubmit the recommendations of the national marine strategy in 1995 on pilotage to the Government of Canada.
We believe this legislation is lacking in some other areas as well. There is a need - a real need - for an effective dispute settlement mechanism to ensure that users have recourse when they believe they are not being treated equitably by a port authority or they feel their competitive positions are being compromised.
Subclause 42(1) says that Canadian port authorities must not discriminate among users or give unreasonable preference to any user. However, the legislation does not provide for any mechanism to ensure that the provision is respected.
Port authorities will also be required to finance capital development for the users of the port facilities. The legislation does not allow port authorities to pledge property as security. In our view, this creates two problems. First, the cost of capital development will be higher if property cannot be used as security. Second, all users will be required to contribute to the cost of the capital development even if they do not benefit; in fact, even if a competitor benefits. There is no mechanism to which shippers can appeal if they believe their competitive positions are being compromised.
Prairie Pools is concerned about the provisions of the legislation regarding the establishment of the board of directors for the new Canadian port authorities. The pool of potential candidates for the board of directors should not be restricted, and users should play an active role in the selection of directors. We would suggest that the model for establishing the board of directors of the not-for-profit group that will operate the St. Lawrence Seaway also be used for Canadian port authorities.
Regarding the seaway, we don't have any major concerns with the proposal for a not-for-profit organization to take over its operations. However, we would like to caution this committee and the Government of Canada that extra costs imposed on the industry as a result of this legislation and the recovery of coast guard costs could very easily push the seaway over the edge of competitiveness.
It has been estimated that had the legislation been in place in the past year, these costs would have added more than $2 per tonne to the cost of using the seaway. This would have been enough to make the use of alternate routings such as the Missouri-Mississippi River system economically feasible. That's how close we are to the line at the moment.
In conclusion, we think this legislation misses some real opportunities to create major efficiencies and remove major costs from the marine transportation system. We urge you, the committee, to use your own report of May 1995 as a guide as you make the necessary modifications to the legislation.
Thank you, Mr. Chairman.
The Chairman: Thank you very much.
Monsieur Crête.
[Translation]
Mr. Crête (Kamouraska - Rivière-du-Loup): Thank you for your presentation. I have taken a quick look at your brief and I would like you to clarify the question of cost-recovery a little. You claim that, if the government operation occurred, there could be a change in your choice of transportation routes for your products. You talk, for instance, about the Missouri-Mississippi line and about other effects of cost-recovery. I would like you to provide some clarifications in this connection.
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Would you be in favour of a provision in Bill C-44 for a mechanism that would require authorization from both the Department of Transport and the Department of Fisheries and Oceans before any changes to the present system came into effect?
[English]
Mr. Graham: Maybe you could clear up the second question a bit more.
[Translation]
Mr. Crête: With regard to the cost-recovery policy, I wonder whether a solution might be to include in Bill C-44 some sort of control for the Department of Transport, to make sure that the Department of Fisheries and Oceans does not go ahead with any changes through the Coast Guard without taking adequate account of the implications for the port system and the transportation network. Does that sound like an interesting approach to you or do you have any other solutions to propose to us?
[English]
Mr. Graham: Thank you very much.
Let me talk first about Paul's first question, which has to do with the issue of cost recovery. While we're not opposed to the users of our systems paying the appropriate level of costs, we are concerned that in many cases we don't have any control over what those costs really are. We're getting some first-hand experience of that in the pest management section of agriculture right now, where we have a structure with government cost-recovery that makes us so non-competitive in the world that it's a major challenge for us.
To come back to marine, there are a number of areas in which cost recovery can be passed on to us. Of significant interest to us is the fact that - it links into your second question - Fisheries have a significant say in how these cost recoveries are imposed or brought back. Secondly, they also have some control over what those costs really are. Ice-breaking and services such as that are certainly important.
We have a concern about the cost-recovery clause in that what this bill does not do is introduce any competition in the area of pilotage. We are obligated to use pilots. We don't have a problem with that. If it's deemed that pilots are necessary, then perhaps we should use them, for health and safety and environmental reasons or whatever. But surely we would be interested in introducing some type of competition in the pilotage sector so in fact as users we could have the choice of who we may wish to use and at what cost, and that is not apparent to us.
Could we have some type of control mechanism brought into the bill? Perhaps. Unfortunately I'm not an expert in that field. I'm not sure how you would create that linkage. But I have a concern when another department, in this case Fisheries, has the opportunity to pass costs on to the Department of Transport and we the users must bear the consequences, unless we have a very effective dispute-settling mechanism or some way to appeal those costs, if they are inappropriate.
[Translation]
Mr. Crête: The Parliamentary Secretary has already announced that the current cost-recovery study would be submitted to a joint Transportation and Fisheries and Oceans subcommittee. The subcommittee would examine the study which is currently under way and which will be tabled. I wanted to be assured that a permanent solution will be found in the future, because there will certainly be other operations involving the question of cost-recovery in the coming years. That is why I am seeking a more permanent solution. I wanted to know whether you had any ideas about this.
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[English]
Mr. Graham: Rick, do you have any comment to add in that respect?
Mr. Richard Wansbutter (Manager, Marketing and Transportation, Saskatchewan Wheat Pool): What I would really like to add to Mr. Graham's comments is this. Rather than trying to establish formulas or procedures that have to be administered by another government department, which is always complex because it always leads to interpretation, and with interpretation there's always a possibility of error, what we're suggesting is it's much more effective and certainly much more responsive to introduce competition. Competition has a way of regulating those costs, and again, it responds very quickly to the marketplace.
Mr. Graham: Let me just add one more comment, Mr. Chairman, with respect to the cost recovery and how you deal with those issues. We really must remember and recognize that all costs end up being reflected in the marketplace. Therefore, if we have an inappropriate cost structure in the country and if in fact the users of the system end up paying costs that are not directly associated to moving the commodity either on the seaway or through the ports, then ultimately we become non-competitive in our country. We really must find a way for this country to be able to compete effectively with the rest of the world, and the marine sector is one that has been really detrimental to us.
A perfect example of that is the high cost of Prince Rupert. Why do we have pilotage costs at $800 or so an hour compared to $300 an hour in Vancouver? It's because we don't have any competition. We need to have ways to address costs in an effective way.
[Translation]
Mr. Crête: If I understand correctly, there are not at present any adequate solutions in Bill C-44 in this respect.
[English]
Mr. Graham: Not under its current structure.
[Translation]
Mr. Crête: Thank you.
[English]
The Chairman: Thank you, Mr. Crête.
Mr. Scott.
Mr. Scott (Skeena): Thank you, Mr. Chairman.
My interest was piqued when you mentioned Prince Rupert because it's in the riding I represent. You probably are aware that Kitimat is also a major port. It's probably the third-largest port in terms of volume shipped, but it has never operated as a port per se.
There are three private shippers that make their home in Kitimat; they have their own docks and wharves and so on. Yet the three companies that operate there are required to pay Ports Canada - I believe the sum last year was about $150,000 - and they get virtually no service for that. They look at the changes here as a possibility of getting into something better. The system we have there right now is not what they want.
I have a couple of questions for you. First of all, in your brief I see where you've highlighted your concerns and observations, but I don't see anywhere that you've made specific recommendations for changes to the legislation. Do you have such specific recommendations for changes to the text of the legislation?
Mr. Graham: If you go back to our submission, you'll find that we have in fact made some recommendations for text changes in the legislation, and certainly we're more than eager to discuss those changes with the committee.
In reference to your initial lead-in comments about Kitimat, we too are very supportive of the bill and the need to have dramatic changes in our structure. For a long time we have had very significant concerns about Ports Canada and the transfer of dollars out of western Canada to other sectors of the marine industry on a subsidy basis. It's not that we don't recognize that at times we are going to have to assist each other in some way, but the current way is certainly inappropriate.
So we must have a mechanism that allows ports like Kitimat or Prince Rupert to be cost effective on their own. We clearly need some changes in how they're structured, a greater level of accountability through the boards, the selection of board members, and the need for users to be a part of that board structure. It's a whole host of things all put together, Mr. Scott, that makes this possible.
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The Chairman: Mr. Jordan.
Mr. Jordan (Leeds - Grenville): I think I could agree with you in theory on what you've answered to Mr. Scott's question. We as a government, though, have some other concerns.
If you're only going to base actions on a kind of dog-eat-dog mentality here, I think we have an obligation, something you might call nation-building, that has to go on, too. There might be situations in remote parts of this country in which you will not recover or recoup all of your costs, but you may go ahead with the port in the interests of maintaining a community, or something like that.
That wouldn't be terribly tolerated, I'm sure, by what I'm hearing you say this morning, but you do have to do that in a country such as ours occasionally. You wouldn't want it to become your mode of operation totally, or as a nation I don't think you could compete in today's standards in the world. But that's the dilemma governments face very often. You can't be totally looking upon it as a profit-and-loss situation, because there are other factors that have to be considered.
I notice you said here that your major disappointment was in reference to the pilotage thing, and I must say you're not alone there. I think the only people who like what we've done in this bill regarding pilots are the pilots themselves. They think the world of us; they think we're great guys here. So I think we're going to have to revisit that.
Mr. Keyes: That will change.
Mr. Jordan: Did you hear what he said?
Mr. Graham: Thank you, Mr. Keyes. I'm delighted to hear you say that may change, because that's not where you were a year ago, and I'm glad you're perhaps coming back to where you were.
But coming back to your question -
Mr. Jordan: These things move rather slowly sometimes, but as long as you're moving....
My question is specifically this. We hear these figures kicked around. Yesterday we heard from the pilots, and they were saying that the costs of their service reflected 2%, I think it was. Now we're hearing from you that it's 20%. I can go with 2% to 4%, or 2% to 8%, but I can't go with someone saying it's 2% and someone else saying it's 20%.
On what basis were those figures established? There must be some discrepancy here on how you determine.... To what do you attribute that great discrepancy from 2% to 20%?
Mr. Graham: I don't know what they would be basing their numbers on, and I'm not even 100% sure what specifically these numbers would have been calculated on. But my information from our management people indicate that pilotage costs, in Prince Rupert in particular and in Vancouver to a lesser extent, account for very close to 20% of the total port charges. So we're talking about port charges. Pilots can recalculate that number any way they want.
Let me just say to you, sir, that in terms of pilots, you require a pilot from the outer limits of Vancouver to the inner harbour for twice as long as you require a pilot in Prince Rupert - we have to go twice as far - and yet the costs in Prince Rupert are twice as high as Vancouver.
Mr. Jordan: Yes, but do you think it's quite fair to attribute all port charges to pilotage service?
Mr. Graham: I'm talking about the use of pilots and the cost of pilots, nothing else.
Mr. Jordan: But 20% includes some other things, doesn't it?
Mr. Graham: The pilots are 20% of the total port charges. All I want to do is emphasize that it must be addressed. We must introduce competition to the pilot sector.
Mr. Jordan: We agree with you.
Mr. Graham: Let me come back to your first comment, your concern about what I think you saw as my attitude of a dog-eat-dog world.
Please don't get me wrong; I don't believe in that mentality. I believe we as Canadians must work together. We must strive to be competitive together. We must solve these solutions together, and the way we're going to do it is by being very prudent and very focused on what our costs really are and not allow a system to be put in place that allows people to pass off costs that you can't do anything about.
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So if the Government of Canada believes for the general good of the Canadian nation that we must have a particular component in transportation, or marine, or whatever, I'm all in support of it, provided all taxpayers of Canada pay for the things that are deemed to be nation-building and not just the users of the system. It has to be spread, and it has to treat everybody equitably and fairly in this process.
So, Mr. Jordan, I'm not one who would suggest that we develop a dog-eat-dog mentality. That's not the Canadian way, and we won't survive in the long term.
Mr. Jordan: I'm glad you said that.
That's all I have.
Mr. Wansbutter: Mr. Chairman, I would like to add to Mr. Graham's comments regarding the pilotage charges, because there seems to be some confusion there. As to the numbers we have, if I can give you some of the total costs, for a 40,000-tonne vessel, when we're looking at, let's say, Vancouver, total costs are in the neighbourhood of $59,000 and pilotage represents $13,500. That's certainly in keeping with Mr. Graham's comments of in the order of 20% of total fees, and we can certainly provide those details.
Mr. Keyes: There was some confusion about port charges versus the total cost. I think the 2% is relative to the total cost of shipping grain.
There are a number of new concerns about costs to shippers in captive areas. Elevation, I believe, is one that has been raised by some people when you look at the total cost of shipping grain.
You raise something in your brief that I want you to clarify a little bit. On this idea of a mechanism for appealing fees, or a mechanism for users to go to if they have a concern or dispute over fee setting, are you suggesting that you would use the mechanism under the CTA, or you would ask for an additional structure that would mediate? Can you tell us a little about how that might work?
Mr. Graham: I'm not exactly sure what would be the absolutely best mechanism to do this. We could use the dispute mechanism under the CTA or the Canadian Transportation Agency, if the dispute mechanism under the CTA was effective. We feel so badly beaten in terms of how we got treated in the other transportation bill that we're not confident that mechanism is going to work for us.
Mr. Fontana (London East): How can you say it's not going to work until you find out how it's going to work? You weren't mistreated, excuse me.
Mr. Graham: We tend to believe we were, so we don't believe that mechanism is in fact going to work. If it was a linkage to this particular one, with some modifications perhaps...unless we need to deal with it in the Canada Marine Act itself, and I leave that for you to decide because that's your role in determining what kind of legislation we should have.
The Chairman: Absolutely.
There was one other thing, if I may, that was of interest to me as a newcomer to this particular process. When we went to the west coast, given the focus on pilotage, I was surprised at how little comment there was about it. In fact, I raised a number of questions personally with the harbour authorities and the port authorities. There was very little concern about it.
I've had more concern, along the lines you're raising, on the east coast and down through the seaway, but there was very little concern on the west coast. I think there was only one other presentation....
It struck me as odd because I had heard the issue raised, I guess, in the prairies. After the CPR and the banks, the pilots fit in there somewhere, but that wasn't what I heard from the industry on the west coast.
Mr. Graham: You're not likely to hear so much out of Vancouver, if you were right in Vancouver, because the pilotage services are spread over a much larger group of participants and users. The relationships in Vancouver are longstanding, so there's always concern about the potential of offending someone. They very much do not ever speak out against each other in a common audience, and I think you would expect that.
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Nonetheless, the issue is still very clear. There is a dramatic lack of competition. You really notice it when you are in Prince Rupert, trying to get pilots to come into Prince Rupert, and we can't have such a thing as a pilot living in Prince Rupert. Why can't we have a pilot living in Prince Rupert? Because the pilot authorities control the issue and they choose to let their members live in Victoria or Vancouver. Therefore, every time we need one we pay the air fare, we pay the hotel bills, we pay for their meals, we pay for their accommodation, we pay for their entertainment. We cover all of those things whenever the pilots choose to give us some level of service. We have a lack of a mechanism to introduce some competition to get there.
The Chairman: I'm dying to ask about the entertainment bills, but I'll pass.
Mr. Graham: You probably wouldn't want to know; neither would I.
Mr. Fontana: You want to talk about competition, and we all agree that collectively, as partners in trying to deliver our products to world markets...transportation is obviously a very important cost factor. That's why in essence the Railway Act we passed and a number of other things we've done were to lower the overall cost of transportation to the system. That's the only way we're going to be competitive.
But you also have a big part to play in competition, and that's the charges you impose on your users. Maybe you can tell me, because I think you tried to address, in terms of user fees and everything else...is that a government that can recover only 4% of the costs of the coast guard, as an example, 4% of about $700 million of services we give to the Canadian people, the Canadian users of the system.... Surely if you were to impose that kind of rationale on your own operation, that would be critical to you. Obviously the government has an important role to make sure we recover certain costs.
So maybe my first question should be this. Identify those user costs or user fees you believe are redundant. You said you can't establish what those costs are or have any say about what those costs are. Which are the costs you believe are unfairly borne by the users in the system?
Secondly, about your own costs to the producers, in Canada the elevation fees are greater than those in the United States, even though the transportation costs by railroad for our products are much less than those of the United States. I wonder if you can tell me how you're going to help our competitiveness by the charges you impose on your producers.
Mr. Wansbutter: I'll try to answer the latter question first.
You're absolutely correct, Mr. Fontana. We do have higher charges in Canada versus the U.S., but at times it's not a very fair comparison.
Mr. Fontana: Why not?
Mr. Wansbutter: First off, we are reducing our costs. What a producer sees in the tariff or what you may see in the tariff, as a published one, is not necessarily what is paid by the producer. Every single one of us, as grain companies, passes back significant dollars. When I say ``passes back'', we subsidize or cover off the cost of trucking to a significant amount. I know all three prairie pools as well as our competitors pick up trucking costs for producers to a significant amount, up to $5 and sometimes $6 a tonne. That has to be taken into account.
The other aspect that's very important is that the terminal charges, again, may be published, but for a number of commodities they are discounted for us to remain competitive. That's a very key element.
When I said it's unfair to compare us with the U.S., I meant the big difference between us and the U.S., certainly as handling companies, is that we may charge $7 for primary elevation and the U.S. may charge anywhere from $2.50 to $3.50 for primary elevation. Americans choose to forgo primary elevation but pick up significant marketing revenues. That's how companies such as Cargill, ADM, ConAgra, and Harvest stay in business. You don't see it at the primary end or the terminal end, but they have a major revenue on marketing fees. We as grain companies do not see that on the board grains. We receive revenue only through the tariff system, not through marketing fees. That tends to mask it a bit, Mr. Fontana.
Mr. Fontana: But you, like the Canadian government, are subsidizing some of your good customers.
Mr. Wansbutter: I wouldn't call it subsidization. I would call it competitiveness. To remain competitive, we choose to truck grain in.
Mr. Fontana: So would we, then, in some of the subsidies on the coast guard that we're applying to all taxpayers as opposed to the users.
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Mr. Wansbutter: I guess what's different, though, is that we have to be a self-contained system. The revenues we draw in have to cover our costs and pay something back to our member owners.
Mr. Fontana: Doesn't the government have that same responsibility?
Mr. Wansbutter: I'm not denying that.
The Chairman: Mr. Dalgliesh, do you have a comment?
Mr. Richard Dalgliesh (Manager, Administration and Marketing, Manitoba Pool Elevators): I was just going to comment on the first part of your question. You were asking about costs.
First of all, the navigational aids we use in the seaway system are in large portion used not for the commercial fleet but for private users of the seaway system, such as pleasure craft and non-commercial users. Also, I guess I have to speak on behalf of the taxes we're being assessed as compared with those in the U.S. - taxes we're being assessed in Thunder Bay. I'm going to touch just on Thunder Bay, but if Mr. Graham wants to speak on behalf of Prince Rupert he may do so. Those are also built into our tariff schedule. There's no way we can do it other than to put it into our tariffs. As Rick pointed out, we are discounting our tariffs for certain commodities to be competitive not only in Thunder Bay but in the country system.
Mr. Fontana: But when you're talking about taxes, let's keep the record straight. Those taxes are not our taxes. Those taxes are municipal taxes. So you ought to be hammering the municipal governments. We hammered the provincial governments yesterday for their excise tax policies and everything else. Let's get it straight.
Mr. Dalgliesh: But you were willing to address what we're building into our tax.
Mr. Fontana: So far you've talked to me just about navigational aids. To tell you the truth, we are imposing a user fee on pleasure craft, much to the chagrin of pleasure craft owners, who now will have to pay for the use of the public infrastructure. I understand that.
So navigational aids, in your opinion, are an unfair charge?
Mr. Dalgliesh: At this point, yes. We're not utilizing nearly what we're being assessed for in costs.
The Chairman: Mr. Graham.
Mr. Graham: Mr. Chairman, I want to wrap up this session and this discussion withMr. Fontana by recognizing that we all understand the need for those using the system to pay their fair share of the costs of system utilization, whatever that happens to be. Our concern in this bill is the frustration, as we see it...or the lack of ability to have input into the determination of what those costs really are. That's the issue. If you have to pay the bill, you should have some say about what the bill is in the first place. We're not clear that this legislation introduces that kind of a mentality and we're not clear that we in fact will be able to deal with it in an appropriate manner. We put it up as a caution because we're just moving into a whole new area.
I talked to you very briefly about the pesticide review and pest management group. There is one that is out of control. We must be able to address those kinds of things.
About GPS, or global positioning systems, in our view 5% is not an appropriate level. My goodness, if a vessel has GPS on board and it's coming into Prince Rupert or Vancouver, what's 5%? That's not an appropriate level. I think it should be at least 20%.
Out there on the west coast we employ pilots to bring a vessel in when the captain himself has made that passage through the strait more times than the pilot. Yet we have these restrictions. There's no balance between when you need it and when you don't and the managerial decision you should employ as to whether you need a pilot or whether you don't and when you should use it and when you shouldn't. And certainly GPS has a major role to play in safety and that kind of thing.
The Chairman: We've gone a bit over time on this, but I think it was an important discussion. There are a couple of elements in here that we will be looking at very closely. Your input into some of that service level-setting and rate-setting is something that will be considered, and the possibility of some sort of appeal mechanism is something we're considering.
Thank you. I appreciate the time you have spent here today.
I'd like to welcome back Mr. Caron.
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It's very nice to have you back. We've missed you.
I'd also like to call Ms Paquin and Mr. Dubreuil from Logistec Corporation.
[Translation]
Ms. Madeleine Paquin (President and CEO, Logistec Corporation): Thank you,Mr. Chairman. My name is Madeleine Paquin and I represent Logistec Corporation. My colleague, Serge Dubreuil, is President of Logistec Arrimage, which is Logistec«s main activity.
First of all, we wish to thank you for allowing us to share our comments with you concerning the proposed Canada Marine Act.
Logistec is a Canadian public company that provides industrial corporations with marine and environmental services. Founded in 1952, it offers berthing services and manages sea terminals. To meet the constant demands of its users, it has extended its activities by acquiring various specialized sea terminals. Berthing and sea terminal management activities account for 80 per cent of Logistec's annual revenue, some $95 million.
Furthermore, in navigation, Logistec is known for its involvement in coastal shipping and, in particular, the annual supplying of Arctic villages. Logistec also looks after the operations of a huge network of shipping agency services from coast to coast.
All in all, Logistec has some 350 permanent staff in Canada alone. The company also hires about 3,000 stevedores who work in the various ports of Eastern Canada. As you can see, Logistec's activities are mainly concerned with ports. For us, it is crucial for any change in the system to ensure a competitive and equitable business environment.
[English]
The federal government's objective in introducing this new law is to improve the efficiency of our port system. It must therefore adjust the changes that have taken place in the political and economic environment of our ports in such a manner as to ensure that the Canadian ports system is competitive, efficient and commercially oriented. Ports must be operated in a businesslike and transparent manner. We are glad to see this initiative being made by the government and support the objectives therein.
The concerns that will be raised by Logistec today have these objectives in mind. However, we have restricted ourselves solely to the ports policy sector. The foundation and future of our business depends on this piece of legislation, as it will lead to an environment from which we will make decisions, especially pertaining to our growth strategy.
We intend to first address our concerns with respect to CPAs. This pertains to the role and mandate the various port authorities have to ensure an efficient system that encourages user involvement and participation. Second, we will address the cost structure of CPAs and the impact of future fees. Third, we will make comments on the reporting policies and procedures as well as the composition of various boards.
Our last comments on CPAs will address the criteria of eligibility and the importance of enforcing this criteria. We will then put forward our comments regarding the regional ports and how these will be devolved from the federal government's responsibility. In closing, we will comment on the need for a regulator and enforcer of this legislation.
Our first point concerns the role of CPAs in relation to the role played by private enterprise in the provision of services within the port limits.
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As one of the largest operators of stevedoring companies, we believe terminal operators are key to the success of any port where commercial activity takes place. They play a role that should not be underestimated.
With fewer but larger customers, needs have become more specialized and requirements more costly. As does the port, we seek to maximize the volumes handled and strive to find the most technologically advanced solutions to serve these specialized needs. Like the port and unlike many of its customer users, our permanence is assured by the size of our investments, which are not easily moved.
Aside from increased specialization, the role of terminal operators has become more important to the success of a port for a second reason.
Because of the limited availability of government funding to build infrastructure, there is an increasing need to look to the private sector to replace or supplement these fund shortages. In the last year alone Logistec has been called upon to invest in warehouse facilities in Contrecoeur, Montreal and Saint John. In this context it is essential that the environment be one that attracts private investment and allows for fair competition.
With this in mind, the distribution of responsibilities between the port and terminal operators is one that must evolve and be precisely defined. To that effect, we believe you do not go far enough when in clause 24 you restrict the ports' activities to those within the ports directly related to shipping, navigation, the transportation of passengers and goods and the handling and storage of goods - the ports' mandate.
Ports' powers should be again further restricted. The ports' mandate should be restricted to the management, administration and development of land and other infrastructure for commercial shipping purposes as well as the regulation of traffic safety and environmental policies and regulations.
We believe the government's policy is whatever can be done by private enterprise should be done by private enterprise. This policy will be realized more readily if legislation prohibits ports from competing with private enterprise. This gives companies that have already spent large sums of money on providing specialized services confidence in the system and encourages entrepreneurialism, the foundation of job creation in Canada.
In summary, a port should not be permitted to engage in any activity that would see it compete with its users, that is, stevedoring or terminal operators, tug services, passenger or ferry services, etc. This is not to say, however, that land set aside for future development could not be leased to a third party on a short-term basis.
Furthermore, we do not believe exceptions should be made for existing operations. The directions and mandates must be clear. The exceptions to these restricted powers are stated in such a manner that these can continue to function as is. Should this rather not be the occasion to correct anomalies from the past? It is preferable to privatize and bring change.
If an activity is not within the mandate given to CPAs, there should be a mechanism to eliminate the exceptions. For example, if land is not being used for port activity and is not intended to be in the future, it should be classified as surplus land and taken out of the port's authority. Subsidiaries or the activity undertaken by the subsidiaries should be auctioned to a third party. A limited timeframe should be imposed to remedy the exceptions.
Ports must be cost-efficient and cost-effective. Ports must be competitive - competitive with U.S. ports and competitive with regional ports.
As agents of the Crown, ports had government immunity from certain taxes, which was somewhat offset by payments in lieu of taxes. Is there a way to limit exposure to substantial fee increases to ensure cost competitiveness? U.S. ports pay no or virtually no tax and for the most part are highly subsidized. We must compete with them in a continental environment and thereby suggest a certain resemblance to the U.S. neighbour in fee structures.
With respect to the stipend, we would recommend that it be a form of dividend as opposed to a fee on revenues. Although we do not question the introduction of a levy to the federal government for use of these vital port properties, we are concerned that a levy on gross revenues could in certain instances be inappropriate, as it may cause the port to be uncompetitive. After all, each port has its unique cost structure.
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For example, the Port of Saint John will now have to undertake significant dredging expenditures. Also, with the thrust of having ports operate in a more businesslike fashion, would it not be more appropriate to introduce a dividend pay-out ratio similar to those expected by owners of publicly traded companies? Although these ports are to be non-profit in status, they will be required to accumulate surpluses in order to undertake the significant investments to ensure their respective long-term viability.
Our third concern regarding CPAs deals primarily with the land use plan. We were glad to see a more structured reporting environment, which in essence is quite similar to the requirements of a publicly traded company such as ours. Also, we support the adoption of the notice when a substantial change in the plan is being recommended and believe this will be an assurance that the key objectives will be respected.
To support this even further, we would suggest removing clause 49, which provides for exceptions to the requirement that amendments to a land use plan be subject to public notification. We would encourage that an updated version of this plan be made available to the public anytime upon request. In essence, the land use plan is the single most important document outlining strategic commercial development. These plans map out the development of terminal facilities that should, in all cases, respond to a user need and be economically justified. This will promote transparency and create positive and open communications for all users.
Mr. Serge Dubreuil (President, Logistec Stevedoring Inc.): The fourth item we would like to comment on concerns the board's composition for CPAs, more specifically the size of the various CPA boards and the nominating procedure.
First, we feel strongly that the number of board members should be kept small and would encourage a cap of nine, as opposed to a minimum of nine and a maximum of eleven. As is happening to the port customer bases, they are fewer in number but they are bigger in stake and power. This is also happening to corporate boards across Canada, where fewer board members are being selected but each with increasing power and responsibility. A smaller board, but comprised of directors who have the ability to devote more time to understanding and directing the activities to ensure that the port meets the needs of its customers within its mandate, is more useful than a large board of directors who contribute little to its mission.
Second, in terms of composition, we understand the input from the three tiers of governments: federal, provincial and municipal. We are also glad to see a requirement for transportation or business experience. The fact that candidates cannot be public servants is also seen positively. However, appointments made should be qualified further. Paragraph 12(1)(e) reads as follows:
- (e) the Governor in Council appoints the remaining individuals nominated by the Minister in
consultation with the users.
First, to minimize the political aspect, we believe those nominated should come from specific recommendations of the users. To achieve this, users must have a mechanism to include one or more names on a list from which the remaining candidates should be selected.
Second, users should not be banned from board membership. To this end, we recommend strongly removing paragraph 14(e), which excludes users from participating on CPA boards. One seat should be occupied by a service provider and one seat by a customer carrier. This will ensure that users have a say directly and will not require going to their lawyer or a neutral party who does not have direct experience in port activities.
The issues of conflict of interest can be overcome proficiently as long as these are on the table and it is the desire of the users. Different categories of users and limited board term per user, say two years, could also be incorporated in the nomination process.
Thirdly, it seems important, at this point, to describe more clearly the definition of user. A user should be defined as a company that has paid either port dues, throughput, rent or wharfage, directly or indirectly, to the specific port authority within a given timeframe, say the last two years. It should clearly indicate terminal operator and stevedoring company as well as other providers of essential services.
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To conclude our remarks on CPAs, we support strongly the concept and subscribe to the criteria to become and retain CPA status. The criteria detailed in subclause 6(1), if strictly enforced, should lead to a strong, viable port system that will grow, based on Canada's trading need and in an efficient and effective manner. We stress, however, that the criteria must be enforced.
We would now like to touch upon the regional ports, which are of equal importance in the equation of creating a strong and viable port system that will support and enhance Canada's trade. The subject of smaller ports that are classified as regional are much less discussed in the proposed Canada Marine Act. As we understand it, the act will give the government the power to transfer or sell these properties outright. The act may, in some cases, even give government representatives the power to pay someone to take one or more ports. This is still a very grey area for us and is of great concern. It is even more confusing when we are led to believe that five ports have already been sold and some 70 letters of intent for other port facilities have been signed.
Should there not be a formal and open procedure to lead this divestiture process? Should a code of conduct not be drawn up to ensure that these facilities are operated in the best interests of Canadian shippers and maintained in the long term? If these ports are offered to the private sector, should this not be done through a formal bidding procedure or public tender?
Finally, we would like to briefly raise the issue of the port secretariat. Although the need for a high-profile Canada Ports Corporation is clearly not necessary nor favoured, Ottawa's responsibility as regulator of these policies needs to be enforced by a credible organization, without which this stated objective may never be attained.
[Translation]
In closing, we would like to summarize the comments we have just made. We applaud the government's initiative regarding the reform and modernization of the port system. We are prepared to participate and invest in it so that we can be sure that our port system will develop in accordance with user needs. This will occur as long as there are the provisions required to ensure fair, equitable and transparent practice.
Logistec, just like the government, thinks it has a definite role to play. We plan to work in partnership with port authorities and users to provide efficient and competitive services.
Mr. Chairman, distinguished members of the Committee, we thank you for your attention and for inviting us to share our comments on Bill C-44 with you. Thank you.
The Chairman: Thank you very much. Mr. Caron.
Mr. Caron (Jonquière): Thank you for your presentation. It was very clear as regards what directions you see the CPAs taking.
On page 9, you say that there are a certain number of criteria and that they should be met strictly or with a certain rigour. You know that the appendix to the bill already identifies a certain number of CPAs.
According to what I can see and according to your experience, you do not seem to be considering the possibility of increasing the number of CPAs in Canada beyond the number planned at present.
Mr. Dubreuil: The original bill talked about seven or eight CPAs, whereas, in the various public submissions made in recent months, this number has increased to 16. It seems that some criteria may have been added or that some criteria have not been completely modified.
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It is impossible, however, for us to say which ones have been met because we don«t know the names of the 16 ports. When they made their various public presentations, however, the Honourable Mr. Anderson and some of his colleagues from the Department of Transport referred to a larger number of ports. We tend to think that some criteria may have been broadened or narrowed, but we cannot comment unless we know the number of ports involved and their identity.
Mr. Caron: It's a matter of development. Some ports may not be eligible at present, but may become eligible in 10 or 15 years.
At first glance, you do not seem to me to like the idea of so-called political appointments being made to CPA boards of directors, of the government in power naming, for instance, a member who, though not a representative of the government, would sit on the board, since, in the CPA, the government has responsibilities in terms of property and so on.
We would thus end up with a model in which the government would transfer CPA administration to users or to those who pay the charges. Would we not then be limiting a little the government«s future ability to intervene with regard to the directions taken by some CPAs?
Ms. Paquin: Three persons have already been appointed by federal, provincial and municipal tiers of government. The other members will also be appointed by the government from a list submitted to it by users. We always take account of the importance of the federal government role in these ports. These ports are very important from a strategic point of view for Canada. We think that if we can get private enterprise to sit on these boards, we may end up with developments based more on user needs.
[English]
The Chairman: Mr. Scott, any questions?
Mr. Scott: Yes, Mr. Chairman.
In your remarks you talked about the fact that U.S. ports pay little or no tax and are in fact highly subsidized. Can you elaborate on that? Who is subsidizing them, government? What is the tax disparity between Canada and the United States? I'm really interested in that.
Mr. Dubreuil: You have a whole variety of situations in the United States. You have the public port and you have the private port, which is owned by private enterprise. But if you look at public ports, some of them are paying no municipal tax and some of them finance their capital investment through the issue of municipal bonds at preferential rates that are tax-free from the buyer point of view. You have a whole series of mechanisms whereby you can develop a port infrastructure at a lower cost compared with a private enterprise here. That's the difference.
Mr. Scott: As well, you talked about dividends versus fees. Your concern was fees applied to gross revenues. You would prefer a dividend on the other side. I guess profit-sharing is really what you're after there.
Can you expand on that at all, or is the way you've put it in your brief as far as you've gone with it at this point?
Mr. Dubreuil: One of the critical issues we're seeing in a fee based on gross revenue is the fact that ports will require a lot of capital investment in the future. Some of the ports are in very good condition whereby the structure is still very good for the next 20 years, but some of those ports need major repairs.
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What we're saying is that if we go on a fixed fee based on a percentage of gross revenue, it may impose a charge on a port administration that will require it to do major capital investment in its infrastructure. As long as the local port administration has a plan that is well presented and can justify building up some reserve to undertake major capital repair of the infrastructure, we see it as preferable for them to pay a dividend based on realistic profitability of the port, taking into consideration that they'll have to spend large amounts of money.
The Chairman: Thank you, Mr. Scott.
Mr. Byrne.
Mr. Byrne (Humber - St. Barbe - Baie Verte): Thank you for your presentation. It's an interesting perspective, and I don't think we've heard too much of it from your line of work.
One of the points you flagged on page 9 of your presentation was that of regional ports. The divesture process, you're suggesting, is not as open as it could be for regional ports. My understanding was that regional public ports were to be offered first to non-profit groups and municipalities. In the instance of rejection, it then would go to private-enterprise third parties.
How do you describe that process as closed?
Ms Paquin: Let's just say that we heard of the procedure informally. We certainly never saw anything in writing. It was basically said that first they had to offer it to the provincial government. If they decided they didn't want to take it, then it had to be offered to the municipal government, but after that there's no formal procedure. It's basically somebody going there and trying to make do with the best that's...the people who may show interest or maybe a group of users or maybe an association formed at the last minute. There's no transparency.
We've heard that five ports have been sold. I don't know which ports have been sold. We were never even told that these were on the auction block. They obviously weren't ones we were really interested in, because we probably would have yelled and screamed.
Mr. Byrne: Perhaps I can interject at this very point. One of the things you mentioned in terms of regional port governance is that it has to be done in the best interests of the shipping community that uses the port. So in the instance where, say, a provincial government rejects its interest in a particular port, the municipality rejects specific interest in ownership or maintenance of a particular port, wouldn't it be expected that Transport Canada and the harbours and ports officials would move first to those whom they know have a direct interest in the port?
You mentioned in your brief that these ports should be offered under a formal bidding procedure or public tender, in which instance they could be offered under public tender to an organization or company who would have no real interest in operating the port but would in essence be interested in shutting down a competitor, or something along those lines. I guess my point is, is it transparent in that Transport Canada may have been dealing directly with those whom they know have a direct interest in that particular port, and Logistec, whom they knew did not have a particular interest in that particular port, were not necessarily consulted?
Ms Paquin: I understand exactly where you're coming from. It's just that we've never even been told that our provincial government is not interested in a particular facility. Before it gets to the private sector there should be at least some kind of transparency, some kind of information, circulated, be it to the municipality, the users of the facility or the customers of the facility. It's just a question of having information. That's all it is.
Mr. Byrne: Point taken.
Is Logistec a major user of regional ports?
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Ms Paquin: Yes. We're a service provider in a lot of the regional ports. We have 20 facilities in Canada and we're expanding into the U.S. We have about 6 facilities there.
The Chairman: Thank you, Mr. Byrne. Thank you, members, and thank you very much,Mr. Dubreuil and Ms Paquin.
Mr. Dubreuil: Thank you.
The Chairman: Next, from the Canadian Industrial Transportation League, we haveMr. Robert Kalvaitis and Mr. Marc LeBlanc.
Mr. Kalvaitis, are you going to lead the presentation?
Mr. Robert Kalvaitis (Vice-Chair, Board of Directors, Canadian Industrial Transportation League): Yes, I will.
The Chairman: Will you confine your remarks to about ten minutes and let us get into questions?
Mr. Kalvaitis: Thank you, Mr. Chairman and committee members, for giving the Canadian Industrial Transportation League the opportunity to present our views on Bill C-44 to you. As you know, my name is Rob Kalvaitis. I'm the vice-chair of the Canadian Industrial Transportation League and I also work for Dofasco as a manager in the transportation field.
With me is Marc LeBlanc, who is the treasurer of the CITL and manager of logistics and customer service for JM Asbestos, of Asbestos, Quebec.
We've forwarded our report to you. We'd like to cover the following elements that directly impact shippers, where we feel there's an opportunity for some improvement. The areas are: proposed port authority structure, including board representation, port autonomy and the number of directors, pilotage, fees and tariffs in the St. Lawrence Seaway, and the users' group.
I'll go right to the recommendations. In terms of the board of directors for ports, we feel the users must be on the board of directors. It's imperative to ensure the ports remain cargo-focused entities and to ensure that shipping expertise is applied to the management. Both are key to the long-term success of the ports.
Our recommendation is that paragraph 14(e) be deleted to allow users to sit on the port board. Ports should determine how many directors they require, with a broader range than the proposed9 directors to 11 directors. We feel that's a little too restrictive. Each port has unique circumstances and unique customers that need to be looked at, as opposed to just arbitrarily saying that boards can have 9 directors to 11 directors.
Subclause 24(2), the port activity subclause, is too restrictive. Ports should be allowed to explore revenue-enhancing initiatives that don't strictly fall under the criteria set out. A port is more than just a wharf with a rail siding. Again, if there is user representation, it's in both the user's interest and the other community interests that the port be viable and that it serve the needs of the people using that port.
So our second recommendation is that subclause 24(2) be amended to encompass a broader spectrum of port services that will ensure ports remain financially self-sufficient.
I'll pass it over to my colleague, Marc LeBlanc, who will speak on the pilotage issue.
Mr. Marc LeBlanc (Treasurer, Canadian Industrial Transportation League): Thank you. With respect to the Pilotage Act, the CITL recommends that it be repealed and that pilotage certificates be made more accessible to ships' masters. The term ``pilot'' should become a professional designation earned after a nationally recognized process of experience, training and testing.
This bill offers the opportunity to finally restructure pilotage services for safe, efficient and cost-effective navigation throughout our domestic waters. The CITL urges this committee not to allow this opportunity to be squandered.
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Many ship's masters are fully qualified to pilot their ships throughout Canada's seaway and its coastal waterways. Many have been plying these waters for decades. The technology that exists today and ship masters' experience make pilots redundant, in many cases.
We further recommend that clause 137 be amended to require a minister's plan of action by December 31, 1997 rather than December 31, 1998. This issue has been well studied by several administrations now. We feel it's time to act.
Mr. Kalvaitis: Further, we feel Bill C-44 is silent on recourse if a dispute arises, or if not silent then somewhat inconsistent. Our fifth recommendation is we need a consistent, unbiased, and timely dispute-resolution mechanism that will apply to pilotage and seaway and port fees and tariffs.
The CITL is pleased with subclause 82(1), which disallows discrimination amongst users of the seaway. Our sixth recommendation is that the Government of Canada should continue to discuss seaway cost rationalization with the U.S. A binational agency may be able to cut costs further.
Those are all the recommendations we have. Again, we thank you for the opportunity to share those with you.
The Chairman: Thank you very much. Your efficiency should serve as a model to the rest of the presenters.
Mr. Scott, have you any questions?
Mr. Scott: I have just one.
I'm a little unclear on one recommendation you made. That's the one where you said you'd like to see subclause 24(2) expanded. Then in the brief you've presented it appears you're consistent with what the recommendations of other presenters here today have said, in that you would like to see government ownership of facilities limited to operations that have essential social or development objectives and to which private capital cannot be attracted. I just wonder what you have in mind about this subclause 24(2) you're referring to.
Mr. Kalvaitis: The way the clause is written we think it could restrict some of the activities ports are doing today. We give an example of the Vancouver port, where it's doing some light assembly work. We think to say you either grandfather that or no one can do that in the future would be wrong. It's of benefit to the people using the port. It's of benefit to the port itself. We need to ensure legislation allows things that make sense to happen. Part of the way of doing that is again the make-up of the board. If users are on the board, these things that make sense won't be just things that benefit the port but things that will benefit the users in the community of the port. That's why we feel that's important.
Mr. Scott: On balance, you're not supportive of the idea that ports would offer stevedoring services, tugging services, warehousing services, and so on.
Mr. Kalvaitis: Correct, but neither do we want to limit them strictly to having a ship come in and that's it. There should be some other avenues they can pursue.
Mr. Scott: I just wanted to clear that point up.
Mr. Kalvaitis: Sure.
The Chairman: Mr. Fontana.
Mr. Fontana: I want to follow up on the scope of businesses that would be allowed. Are you suggesting condo development is something that would be complementary to a port or a harbour? At which point do we ensure the port does not compete with the private sector for...or marinas, for that matter? Because of the preferential tax treatment we're perhaps going to allow ports, if they have federal agency status and they have all kinds of tax breaks, should they be allowed to develop marinas when just next door, on municipal or other lands, a private-sector marina wants to develop? So those two instances, condominium development or marinas: do you like that idea?
Mr. Kalvaitis: It's a very good question. Again, it comes back to representation on the board of not just the users but the community and other stakeholders in that port. The port isn't just the wharf where the ship pulls up; it's that area around the port. If the stakeholders in that area are involved, they're going to ensure those inconsistencies, that unfair playing field, does not exist, because that's not good for the community and it's not good for the users.
Mr. Fontana: Don't you think the legislation ought to give some guidance or some parameters for what is acceptable?
Mr. Kalvaitis: Sure.
Mr. Fontana: You talk about grandfathering. I hate retroactivity to a certain extent anyway, so I'm not sure we could do that, but we could set some parameters as to what's acceptable so that boards know what they can and can't do and don't put themselves in a difficult position, conflict or whatever.
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Mr. Kalvaitis: I agree. Wherever we can put guidelines into what makes sense, that should be in the legislation. But we don't want to tie the hands of the ports, because part of the legislation says we want them to be financially viable, and we have to allow that to happen in the best interest of that community and of that port.
Mr. Fontana: So do we want them to become financially viable, because we want a piece of the action?
Some hon. members: Oh, oh!
Mr. Fontana: That's what the stipend and the dividend are all about, so there's a vested interest for the government to do that.
On the seaway, I like your approach. The end result of all of this should be a binational panel. Ownership, or call it what you will, is what the SCOT committee had recommended before.
In the interim, though, the suggestion is that the user group per se run this until such time as the United States comes to the table and sees the value of this binational corporation, which I believe will bring great efficiencies and in fact fairness and equity to the Canadian side. We're getting a little tired of paying the freight for U.S. commercial operations. They get all the benefits without having to pay some of the costs. Hopefully we'll get to that point.
But in the interim, you say the user group is fine, except that there perhaps ought to be some.... Are you talking about further representation on the board to ensure the community interests are taken into account rather than just those of the user groups, of which you have some members, of course?
Mr. Kalvaitis: That's correct.
Mr. Fontana: What do you suggest?
Mr. Kalvaitis: We agree a good interim measure is the user group. The CITL does support the user group in what it's trying to do.
In terms of representation, we see the seaway as significantly different from a port. A port is very captive to a particular part of the country, and to represent all of the users in that area is much easier than for the seaway. It would be like trying to form a user group on the Trans-Canada Highway; it would be very difficult and probably wouldn't create the efficiencies we need.
If you have users who represent 80% of the goods flowing down that seaway, it's obviously in their best interest to keep it viable economically, environmentally and so on. So why wouldn't you give them control of it and let them run it as best they can - and we agree - until you can get the U.S. on board and gain all those other cost efficiencies?
Mr. Fontana: But you would agree that perhaps there's an opportunity besides the user group to insert some representation on the not-for-profit board that would look after the public interest, such as a federal representative and two provincial representatives or something?
Mr. Kalvaitis: Sure. I don't know what you'd gain there, because their main focus is on operations. In my understanding, what they're trying to do is streamline the daily operations and reduce what it costs to run it daily. They're not looking at the great long term, asking ``Should we build extra locks?'', etc. That's not in their mandate.
So I don't know that any other users would add a lot to the table. Personally, I wouldn't have any objection to their sitting on it, but I don't know that there's going to be anything added.
Mr. Fontana: Okay.
The Chairman: Thank you, Mr. Fontana.
Mr. Caron.
[Translation]
Mr. Caron: You seem quite harsh regarding the current pilotage situation in Canada. You foresee in a way the disappearance of the whole issue of pilotage. You wonder whether it should be entrusted to the people who own certain shipping companies, which would develop an expertise. Given today«s technology and equipment, you no longer see the importance of legislation respecting pilotage. You would have people specially formed into pilot corporations that would have to a certain extent a monopoly and would then have to do their pilotage work.
Account must also be taken of the costs that are currently incurred, because when there is talk of a monopoly or of people who must absolutely be on boats to act as pilots, costs are incurred. You clearly anticipate radical changes where pilotage is concerned, at least from what I«ve been able to see at a glance in your document.
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Mr. LeBlanc: Our remarks are very radical compared to those that you have heard up to now, to the research or recommendations by Mr. Keyes and those of other people interested in the issue.
Of course, we do not want a situation in which the shipper ends up with all the inefficiencies of the present system, or a monopoly, as you said, that would dictate my costs to me. We do not want the government to tell us that, from now on, the shipper must assume these costs and that we will have to get used to things as they are now.
If you want us to assume the costs, we ask that the situation be changed so that it is more efficient. Safe navigation in the system must be guaranteed, after all. We will always need pilots; I do not see a situation in which we could do without them altogether.
Several navigation companies, like the Canadian companies Groupe DesGagnés Inc. or Logistec Corporation, have been navigating on the St. Lawrence River for years, sometimes for even 30 or 40 years, and do not think that they will really need pilots.
Today«s technology is much more developed than it was in the past. At GPS, they say that today they know exactly where a boat is, within a metre or something like that. Technology is much more advanced.
This is why companies like Canada Maritime or CAST, which do not fly the Canadian flag but whose staff have acquired a lot of experience in navigating as far as Montreal, wonder whether it is really necessary to have a pilot accompany them. I don«t think that this is a radical point of view if we consider that the government is asking us to assume costs as shippers.
The Chairman: Is that all?
[English]
Very well.
Thank you very much, gentlemen. We appreciate the time.
From Ports Canada Police we have Mr. Art Ross, Mr. Richard Balnis and Mr. Robert Davidson.
It does not indicate here, gentlemen, which one of you is leading the group.
Is that you, Mr. Ross? Okay, then, perhaps you could introduce your colleagues.
You know the process. You have half an hour. We'd ask that you take about ten minutes to cover the major points you want to put before the committee and then give members a little time for questions.
Mr. Jordan: Mr. Chairman, we could put the two groups together. I notice Mr. Davidson is in both this group and the next group. There must be a lot in common there. Could we combine the two and have one hearing of half an hour, in the interest of time?
The Chairman: Perhaps I could ask Mr. Davidson that question.
Would that be appropriate from your perspective, Mr. Davidson?
Mr. Robert Davidson (CUPE Representative, Saint John, New Brunswick): We believe the perspectives are somewhat different. The issue is common, but -
The Chairman: Yes, thank you. Let's not take any more time.
Go, Mr. Ross.
Sergeant Art Ross (Ports Canada Police): Good day, members of the Standing Committee on Transport. My name is Art Ross. I'm a 22-year veteran of the Ports Canada Police. I hold the rank of sergeant and am stationed at the Saint John detachment.
With me is Mr. Richard Balnis with the Canadian Union of Public Employees, the Ottawa office, and Robert Davidson, the Canadian Union of Public Employees' representative for our local union.
Our modern history as a trade union representing the Saint John Ports Canada Police dates from 1968, when the National Harbours Board reorganized several previously autonomous police and security forces into a national force with port police detachments and headquarters in Ottawa.
Today there are ten employees remaining part of the Ports Canada Police service in Saint John, consisting of nine full-time police officers and one civilian employee. Of these, seven officers have over twenty years of service and have extensive experience and training in all aspects of port policing matters, including seaport security and anti-terrorism. It is from this perspective of over 150 years of practical, hands-on experience with port policing in a large Canadian seaport that we offer you our views and recommendations concerning Bill C-44, the Canada Marine Act.
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While the legislation and the government's new marine policy cover many issues, we would like to confine ourselves today to one very important aspect of the new regime, namely port policing. We offer our arguments under the following headlines: the lack of proper analysis and consultation; the specialized nature of ports police, private security guards being no substitute for ports police; the negative consequences for the municipality and its police force; the national role of ports and their financing; and recommendations for the powers of ports police and the funding for ports police.
I move now to the nature of ports police, or their specialized nature. This was precisely the conclusion of Judge René Morin in his September 1992 external review of protective services for the Canada Ports Corporation. The industry also argued that the problems of policing the ports differ in important respects from those encountered in other settings and demand the presence of a dedicated and specialized service, with a thorough understanding of the port operating environment.
In the case of the port of Saint John, more than 75% of the unit's time is spent in proactive policing, such as patrol and surveillance. It answers a wide range of calls each year, including harbour rescues, ship searches, pollution control, contraband, trafficking in stolen goods and narcotics, illegal immigration, and terrorist activities. For example, last year the Saint John Ports Canada Police, in conjunction with Canada Customs, detected and recovered over $300,000 in stolen automobiles shipped through the port of Saint John. Finally, the marine division is on the water an average of over 100 hours per year, dealing with oil pollution, customs searches, assisting vessels in distress, cruise ship security, trespassing, missing persons, and other situations within the harbour limits.
Policing a port is far different from policing a municipality.
I move to page 11. Table 1 shows that transferring port policing responsibilities to municipal police forces has not proven to be successful in other jurisdictions. In our view the lessons are clear: ports policing is a specialized service that requires more resources and skills than those possessed by municipal police forces.
Private security guards are no substitute for public ports police. While private security agencies and guard services may have a role to play at ports, they do not have the requisite training, orientation, access to national police services, or powers to replace port police. This was precisely the conclusion of Judge René Morin's September 1992 external review of port policing. His report rejected the idea of replacing ports police with private security guards. He stated that private security agencies are not adequately trained and experienced to perform the diverse functions of a police officer within the port systems.
The negative consequences for the municipality and its police forces will be dealt with by Mr. David Parks of the Canadian Union of Public Employees, Local 61.
We feel public interests cannot be sacrificed to the private interests of port administrators and users who do not necessarily concern themselves with criminal or other police matters that do not directly affect the employer's business interests. Without on-site public port police to do this essential work, the ports would once again become dirty, crime-ridden ports, losing their customers, as they once did in the 1960s. We believe this is not the objective of the current federal government. Transport Minister David Anderson, in his March 25, 1996 address to the Canadian Police Association, stated that he wanted to maintain the same level of enforcement or better at Canada's ports.
Our concluding section offers a number of amendments to Bill C-44 to ensure it reflects the commitment we share with the federal government to have safe and secure ports. In order to preserve Canada's safe, low-loss, and low-crime ports, the following amendments to Bill C-44 are necessary, in our view.
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On the role of ports police, as we have tried to show in our submission, there is an ongoing requirement for public and fully empowered policing at Canada's national ports to protect the public interest. We therefore agree with the Canadian Police Association's recommendation for a single unified and cohesive nationally coordinated ports police force based on the retention and even expansion of the current federal Ports Canada Police.
This is the most cost-effective option. At the very least, we must have public ports police location-dedicated and specialized to the port. Under no circumstances can we rely on a fragmented, reactive policing structure based on current local municipal policing agencies that already lack the resources to meet their existing mandates.
Clause 126 of Bill C-44 proposes to dissolve the Canada Ports Corporation and with it its dedicated Ports Canada Police. This is a mistake. We feel this clause cannot go ahead.
In addition, Bill C-44 does not provide for clear lines of authority or public accountability for its replacement enforcement officers. We therefore support the recommendation of the Canadian Association of Chiefs of Police to maintain the Ports Canada Police as a national entity and a federal responsibility. This force can be continued separately or in the longer term as part of a larger, integrated and properly funded national enforcement agency as long as existing collective agreements and bargaining rights are protected.
In addition, we support the recommendation of the Canadian Police Association to amend clause 3 of Bill C-44 as follows:
- b) provide adequate and effective law enforcement so as to ensure a safe and secure port facility
consistent with public safety and public interest generally in Canada;
We therefore support the recommendation of the Canadian Police Association to amend clause 96 to continue a ministerial responsibility for the appointment, employment, supervision and funding of public, fully empowered peace officers at Canada's national ports.
In terms of funding for ports police, Bill C-44 does not require the new port authorities to pay for ports policing or indeed any other municipal services. A legislated funding mechanism for ports police is required, however, in the case of the port of Saint John. The port has ignored the need for such payments, despite the Minister of Transport's July 8, 1996, commitment to us that if municipal police force services beyond those available to the public are provided at port facilities, ports will negotiate appropriate compensation for those services.
But we believe ports should not bear the total cost of ports policing alone. Given the larger public interest served by the ports police and the enforcement of Canadian laws, the expenses of ports policing must continue being charged to the federal government, with the major ports paying 50% of the cost under a cost-recovery program.
Our proposal has the following advantages: port policing serving the public interest would be preserved at the port of Saint John; the city of Saint John's municipal police force and firefighters would be able to maintain their current levels of service to the city's municipal taxpayers; the citizens of Saint John would not be exposed to higher crime rates or higher municipal taxes to subsidize the port; and at least seven jobs of skilled and experienced ports police would be saved.
No solution is possible unless Bill C-44 mandates our funding mechanism for a national ports police. We respectfully request that our amendments to Bill C-44 be given favourable consideration by this committee.
Thank you.
The Chairman: That was a remarkable accomplishment - a 25-page brief in precisely10 minutes.
Sgt Ross: As you can see, sir, it was a fairly lengthy brief. I had to cut it down pretty tight.
The Chairman: I would be prepared to recommend you to any other group that wishes to make a presentation at any time. I can tell you, it's very difficult, and I appreciate your efforts. I know there are a number of questions on this issue.
Mr. Fontana.
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Mr. Fontana: Thank you, Mr. Chairman, and thank you for your presentation, Mr. Ross. I understand it's a difficult situation for you. Unlike Mr. Jessop, who was here last week or the week before, who in fact...I'm not sure he was very complimentary either to the committee or to the government, nor do I expect anyone to have to be. But he bordered on threatening the community or the country with civil insurrection if this committee or this government did what we were considering doing in terms of disbanding the ports police.
That unfortunate rhetoric doesn't wash with me. I think you're from a very professional organization and that's why I want to talk about some of the things that you've talked about today.
You're the only organization calling for the retention of the Canada Ports Corporation, and I can understand why. The corporation is your employer.
No other organization in this country, save and except the police, has talked about retaining that bureaucratic nightmare, which has caused an awful lot of problems.
So it's gone. It's not going to be there. I think you can read the writing on the wall.
If that structure isn't there and you still want to maintain the police function, it's going to have to be through negotiations directly with the ports that you now operate. The fact is that there are 85 of you, as I understand it, and you operate in 6 ports. I tried to get an answer from Mr. Jessop and the other people who were here two weeks ago, because in trying to promote your own services I got the impression that they were diminishing the value of municipal police forces and of those other police forces who in fact work as your partners in ports.
I think you started to do the same thing in the sense that you said municipal police forces aren't capable of doing policing functions, yet they're very professional people themselves, or that the RCMP has no part to play, and I'm sure they do. You don't handle everything that happens in a port. Surely you have to call on the RCMP or on immigration or what have you to assist.
So in those 16 or 17 other major ports in this country that have the same problems as the Saint Johns, the Montreals, the Quebecs and the Vancouvers - the only ones you're located in - what's the difference between the policing functions you are doing now in those ports and the functions in the whole range of ports that in fact had municipal police forces and other police? I get the impression that you're the only ones who can do policing functions, whereas in the majority of ports you're not even there.
Convince me that what you do is so unique and so different that other police forces can't in fact do it, because they are doing it now in Hamilton, in Windsor, and in the others that are border ports and have the same problems and the same challenges as the ones you work in.
Sgt Ross: Sir, when I look at that and at the statistics on the amount of cargo that flows through ports, and when we look at the six or seven major ports in Canada, of which Saint John is one, over 50% of the cargo moves through them. Because of that they deemed in 1968 that it was necessary to consider placing the police in the ports under one national police force because of the problems they had at that time. They were major ports, large ports, as they are today, and I believe this is one of the reasons why they were there.
As I said, I have been with the Ports Canada Police for 22 years now. It's been a very credible organization, as you've indicated, and they've done their jobs very well. I've even been told that maybe they've done their job too well to this point because of the statistics relative to each port-if you consider them being down.... When we get back to proactive policing, the Ports Canada Police have been able to accomplish that proactive policing structure over the years whereas some municipalities have had a problem with manpower.
Mr. Fontana: But in the ports where you operate, you don't have sole and exclusive authority over what happens in those ports. In other words, you sometimes have to call in the RCMP. You sometimes have to call in other support. Because of the nature of the crime that may or may not be happening there, you don't have that exclusive authority. You have to call on other police forces to help you out.
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Sgt Ross: The only services that we would require from another police force dealing in our particular area would be forensics, like a dog or I.D. services, or things like that, through the City of Saint John. We work closely with the immigration department, of course. As you said, we are not the sole lead agency pertaining to immigration or customs, but we work very closely with them, and with this close-knit operation, I think we work very well together, too.
Mr. Fontana: Excuse me. I might be wrong, I might be ignorant in this matter, but if a murder occurred in a port, can you investigate?
Sgt Ross: We will investigate.
Mr. Fontana: Yes, but you can't charge. Can you charge a person?
Sgt Ross: Yes.
Mr. Fontana: Don't you call in a municipal police force or the RCMP if it is drug-related? Do you have exclusive authority to do everything you need to do to investigate and prosecute, or at least charge?
Sgt Ross: Yes, sir. The only thing we would require at times are specialized services. That would deal again with identification services that we might use from the city or municipalities, including I.D., forensics, a dog. The sole responsibility to investigate would be ours, if that's the case, and we could lay criminal charges, yes.
Mr. Fontana: Thank you for that.
Secondly, with regard to creating a structure with the CPC gone, if you could convince an individual port.... The whole thrust of this marine legislation is to give autonomy to the individual ports so that they can run their ports in the way they see fit, therefore giving them the option to look at policing in a number of different policing functions. Even you yourself indicated that sometimes there are different functions. There are security functions that can be undertaken by someone other than police, because obviously those costs would be less. There are obviously policing functions that could be done by the municipalities, because in some cases ports straddle a number of different jurisdictions. Would it not be possible for your organization and your police people to contract out those services directly with the particular port?
Sgt Ross: I think anything is possible, sir, in that degree. However, when we get back to the nature of port policing and the type of training we have had over a number of years, in our opinion - again, I come from the position of being a police officer - we are the best agency. Whether it's in the present position or not, we are the best trained to handle the major ports in Canada.
Mr. Fontana: That's my very point. If you are the very best and Saint John or Vancouver or anybody else wants to hire you, your police force, your police officers, then why not allow them to do so?
The problem, of course, is that they're going to say they don't want to have to pay the full cost. Well, excuse me, if you want the service, there's an awful lot of economic activity that occurs in ports that are of great benefit to municipalities. I get tired of municipal leaders essentially saying, ``Give us the money if you're going to give us the responsibilities''. The fact is they get big benefits from having ports in their municipalities, and there's an awful lot of jobs and economic activity raised by virtue of those economic engines. So that argument about who should pay for it is irrelevant to me if the question is whether we really require good policing functions in ports.
Mr. Davidson: If I may augment what Mr. Ross said, what we have seen in our area is that there will be no negotiations directly with the local port authorities. They have gone on record saying they are not interested in that. They believe ports are like any other industrial site.
I think that's the fundamental issue before you. If everybody here believes that a port is like any other industrial site, then I think we're in big trouble in this country. It's not like any other industrial site. Mr. Ross and all the other port police receive specialized training over and above municipal police because they look after the public interest at the port, not just the users and the tenants.
That's the fundamental thing. There will be no negotiations. Everything is coming to you to.... For example, in our port the debt has been written off provincially, locally. The request is coming in to amend Bill C-44 to say we should be an agent of the Crown and not pay municipal taxes.
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The list of what these people do is at the back of your brief, where it describes the protective services program. It's clearly over and above the municipal police force. It seems the ports, the users and the tenants there, want to protect their own private property and hire security guards. But clearly that leaves a void, and if this committee and this government do not recognize it, it's going to have the public interests of the ports not looked after.
The municipal police forces are strapped. I will deal with that in a second. If you lose your site-dedicated police force to a drive-by police force, the public interest is clearly going to be in jeopardy.
The Chairman: Mr. Keyes.
Mr. Keyes: Thank you, Mr. Chairman.
Gentlemen, I represent the great port city of Hamilton - half of it, anyway - Hamilton West. It's a port at Hamilton that is larger than the port of Saint John. It's a port that has a greater number of users than the port of Saint John. It's a port that is one of the top ten movers of tonnage in the country.
I read your report and I read things such as ``port and community protection will be lost''. You say things such as that without the on-site police force, ports would become ``dirty, crime-ridden ports''. I read things such as that we can't rely on a ``fragmented, reactionary police structure based on current local municipal policing agencies''. That's what you're describing Hamilton to be, because the port of Hamilton, larger, with more users, more tonnage than your port, is policed by the Hamilton-Wentworth Regional Police, paid for by the port. You've just described my police service as ``fragmented'', ``reactionary'', ``creating a dirty, crime-ridden port''.
How do you respond to that?
Sgt Ross: When we wrote the brief, sir, I don't see that we were referring to Hamilton as a ``dirty, crime-ridden port''. I think if we go back to the history of a number of ports where Ports Canada police detachments are today there were major problems, as indicated by Mr. Don Cassidy, the former director general, in his study prior to 1968. They were referring to the major ports we now have under the Ports Canada Police umbrella as major problems at that time. We weren't by any means, sir, referring to Hamilton as being a ``dirty, crime-ridden port''.
Mr. Keyes: Okay, Mr. Ross, let's move it out of the 1960s and into the 1990s, where regional police forces such as the one in Hamilton do augment their manpower and their service in the community and at the port. They're able to do that because the port pays for the service. So Hamilton, larger than the city of Saint John, can look after the policing needs of the port at, I dare say, a fraction of the cost of what CPC charges for the same service.
Mr. Davidson: The point is that since Bill C-44 came out the port users in Saint John have been saying they're not prepared to pay 1¢ to the City of Saint John for municipal protection of the kind you have in Hamilton. That's the key point that will come up in the next brief.
Mr. Keyes: Let me argue that with you.
Mr. Davidson: May I finish? The point is if the users would pay, as they're paying in Hamilton, for some sort of municipally dedicated function at the port, that would be another argument. But they have gone on record in Saint John as saying they are not paying the municipality any money, period, for a municipal function at the port.
Mr. Keyes: But now let's look at that whole argument, Mr. Davidson. The whole argument is that without the CPC and without the Canada Ports Police at the port, the port will save the money the users pay in order to facilitate and pay for Canada Ports Police to look after service at your port. The policing budget, of course, is financed by rents and charges paid by port tenants and users to provide the service you supply.
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We have examples in the ports of Quebec and Montreal in which they have already signed agreements with their municipal police forces - they're ready to be signed off - whereby the port users and tenants will pay less money for its policing because that money will go to the municipality instead of Ports Canada Police or the Canada Ports Corporation.
Instead of paying $1.7 million for policing - I can't remember which port this is, Quebec or Montreal; it's Montreal, I think - they'll pay $380,000 to the municipal force in order to have better policing services than that provided by your force.
Mr. Davidson: There's where it differs. This is why we're asking this committee and this government to ensure that we do not have a hodgepodge at the ports across this country. The port of Saint John is not prepared - it has gone on record to that degree - to do exactly what you are saying is being put together in other areas.
That's why there has to be some consistency for the policing of ports, because if not, you'll have a group of users saying that they will take advantage of Quebec or Montreal by using security guards and having a lower cost. If the ports of Montreal or Quebec are going to pay municipal police officers and you're going to have a hodgepodge and a different level of security and policing at the ports of Canada, then the criminal element will soon know which one is the easy port and they'll start pumping their criminal product through there.
Mr. Keyes: Do you think for one moment that a major port in this country would create an atmosphere in which they would want to solicit that kind of activity you're speaking of? Not one port in this country - Vancouver, Halifax, Hamilton, St. John's, Montreal or Quebec - would want that kind of activity to happen. If they need to enhance their police services, they'll be able to do so and still pay less than what they're paying for Ports Canada policing.
Mr. Davidson: The record will reflect that in pre-1968, when the local port management had that autonomy - they had security forces - that resulted in crime being very much an issue.
Mr. Keyes: We're not talking about security forces now, Mr. Davidson. We're talking about -
Mr. Davidson: We are talking of it in Saint John.
Mr. Keyes: - municipal forces augmented by the RCMP and private security.
Mr. Davidson: But in fairness, Mr. Keyes, in Saint John, New Brunswick, they are saying no to that proposition. Unless you have something in the legislation that ensures that some port doesn't have that ability to say no to dedicated ports police and no to municipal payment for policing and yes to security guards only, then Judge Morin's fears, as Mr. Ross pointed out, would come home.
You would have a port in Saint John saying it was sorry, but it didn't care what you people think. They'll go with security guards only to lower the bottom line some more.
They have gone on public record, Mr. Keyes. We can produce it if you like. I have it with me. They have said that they do not want anything more than security guards.
Mr. Fontana: He may not have the last say.
Mr. Davidson: Well, that's why we're urging it.
The Chairman: Might I make a suggestion? Given that we're going to pick this discussion up with the next set of presenters, why don't we thank Mr. Ross and Mr. Balnis?
Mr. Ross, if you'd like to make a last, very brief comment, I will allow you to do that. Then we'll pick this up with the Saint John Police Protective Association, and ask Mr. Parks to join us at the table.
Sgt Ross: Thank you, sir. I want to thank the committee for having the opportunity to appear before you again to express our views and opinions and concerns concerning the policing in the major ports of Canada. Again, I'm sorry, Mr. Keyes, if you indicated to me that Hamilton was a crime-ridden port.... We weren't referring to Hamilton by any means, sir.
I want to note again, sir, that I am a 22-year veteran of the Ports Canada Police service. I've been a very proud member. Our members, over the past year and a half, have worked under extremely hard conditions. They've carried out their jobs faithfully, and responsibility has been there every day. I can account for that, sir. I think I appear before you not only for Saint John, but for the rest of our detachments too.
Thank you, sir.
The Chairman: Thank you, Mr. Ross. I would like to say that, coming from a police family, I know how hard members do work to uphold those responsibilities they have, even in very difficult times. I think the committee would like, through you, to thank your members. I would like to also assure you that, as we go through this process, the interests of the members will be considered.
Sgt Ross: Thank you very much, sir.
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If I could have Mr. David Parks at the table, we will discuss the wonderful port city of Saint John. Mr. Parks, are you going to lead this particular section and start us off?
Mr. David Parks (President, Saint John Police Protective Association): Yes, I am, sir.
The Chairman: Then I would ask you to do the same thing: try to confine your opening remarks to about ten minutes. As you can see, the discussion will be lively.
Mr. Parks: I'll probably do much better with the discussion than I will with the presentation. I don't know if I can follow Mr. Ross's lead here, but I'll certainly do my best.
I'd like to thank the committee for this opportunity to come forward to speak to you on this matter. My name is David Parks. I am the president of the Saint John Police Protective Association. I've been a member of the Saint John police force for more than 17 years. I hold the rank of constable in the general patrol division.
We stand before you today representing the police officers of Canada's first incorporated city, Saint John, New Brunswick. It was established by royal charter on May 18, 1785. From its inception, the City of Saint John ensured that a form of community policing was in place to protect and serve its citizens. In 1826, the present-day police force was established, three years before London's modern-day police force was created in 1829 in England.
The history of the port of Saint John predates Confederation, and the role it has played in the history of our country and its people is one of significance. As a city with a major port steeped in history but one that will not be visited by your committee, we can only point out to you that it gives the impression that the public concerns of Bill C-44 are being unfairly drowned out by the operators and users and their paid agents. We sincerely hope this is not the case. I would refer you to the three news editorials attached, which reflect the general feeling of the community of Saint John.
In the late 1960s, Saint John, like most major ports, had a security force that was unable to cope with the policing requirements of a national port. Smuggling, theft, drug offences, moral offences, assaults, wilful damage, impaired driving, liquor and traffic offences, etc., were the order of the day.
The serious escalation of crime at the major commercial ports was very detrimental to Canada's international trade reputation. It raised public concerns for the safety and security of ports.
The Cassidy report on policing and security on National Harbours Board property in 1967 traced the problem of the neglect of port policing to port management. The National Harbours Board adopted the Cassidy report in 1968 and reorganized its locally managed and autonomous police and security forces into a national force.
The Saint John police officers, the citizens and the port users witnessed a complete turnaround as the port of Saint John gradually gained the reputation of a safe, low-cost, low-crime port at home and worldwide.
I refer you to the letter to the editor from the export director.
Page 5. However, we cannot allow the sole wants and interests of port operators/users to completely overshadow that of the public interest and safety. Through Bill C-44, the operators/users of our port want to use public assets to make more profits but ignore the public interests. The port operators/users are attempting to sell their agenda on the basis that the port is just like another industrial site in the city, where public interests are of little concern and are seen as impeding maximum profits.
The operators/users want local autonomy returned so they can again replace a dedicated professional police force with security guards. This proves they only want to secure their own private property and have little regard for the public's interests.
A number of American ports have tried replacing their dedicated ports police with private security guards and found it to be a disaster.
I refer you again to the quote by the Honourable René Marin.
We would not want to see a return to the conditions that existed in the late 1960s as described earlier.
Page 7. The site-dedicated ports police have stood the true test of police efficiency with ever decreasing number - 27 in 1975 to 9 in 1996. This is mainly due to their specialized training, national coordination, site-dedicated officers, and ability to perform proactive policing in the interests of the public and private users/operators. Our municipal police force is not in a financial or manpower position to meet the extra demands in the areas of federal responsibility. The City of Saint John does not even own a boat to perform the marine policing being done presently.
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We therefore add our name to the impressive list of individuals and groups experienced in police protection services who unequivocally support a site-dedicated national ports police force to ensure that public and private interests are protected.
With only a few security guards stationed at the port, all policing functions will be transferred to the City of Saint John police force. This would create an impossible drain on the already depleted city police force. The city police force has over 60,000 calls for service each year, in addition to the many thousands of self-initiated activities, and cannot function at a level required to protect the citizens of Saint John if they're going to be required to handle policing requirements at the port.
We have witnessed the Saint John police force shrink from 197 to only 169 officers now policing a city of 125 square miles. There is absolutely no way the Saint John police force can absorb the police calls for service that will be generated at the port when the 9 officers are disbanded. Response times to all citizens would increase to unacceptable levels.
The port operators/users want unfettered use of public assets. They want full autonomy - get Ottawa out of their business. They want to become an agent of the Crown for immunity on zoning and taxation, on environmental laws, and so on. Port operators/users want the port to be exempt from municipal taxation, but they want the policing functions at the port to be performed by the municipal police officers.
If Bill C-44 is going to allow the responsibility of policing of the port to be shifted to a municipal police force, then the local board authorities cannot be granted the status of agents of the Crown.
The extra police officers and special training required for a municipal police force to take over policing is substantial in cost. Therefore the privately operated local port authorities cannot be exempt from fair taxation and paying for adequate police protection.
Let it be clear that our municipal police force presently only provides limited specialized services to the port, such as identification, police dog services, and breathalyser technicians.
Even the 1995 Standing Committee on Transport stated:
- ...individual ports should negotiate with their respective municipalities appropriate fees for the
services they use.
The chief of police in Saint John did sit on a committee. However, the entire exercise of that committee was based on ``meeting port safety and security requirements, absent a dedicated police force''. Our chief has stated publicly, and we concur, that there isn't enough staff to fill the department's patrol cars, let alone a handful of donated bicycles. Attached is a newspaper article on that.
It has come to our attention that the Hell's Angels organization is attempting to purchase property in the vicinity of our port in anticipation of disbanding the site dedicated to the national police force. In addition, our city budget is being reduced by $6 million for 1997. Our police department is being requested to reduce the 1997 budget by a further $500,000. As you can plainly see, the municipal police force is not in a position to take on added policing duties at the port.
There's a letter from the Honourable David Anderson that I'll refer you to.
On the point of fair taxation we state that the port, as a crown corporation, presently pays only 47% of the assessed value of the marine facilities to our municipality; the Saint John port companies have had their property assessment lowered by $1 million, which has lowered the municipal taxes collected from the port companies; and the Province of New Brunswick is expected to reduce its portion of the property taxes collected from businesses that own buildings at the port. You can refer to the attached news article there.
Ports Canada authorities will be exempt from the payment of federal and provincial corporate income tax. The port companies and the users want the new local port authorities to be agents of the Crown and to be exempt from municipal taxation. Spokesmen from our local port have stated that they are not prepared to negotiate appropriate compensation for municipal police services.
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Bill C-44 is absolutely silent on the issue of taxation. This is why we appeal to you in the strongest possible terms not to grant the new port local authorities agent-of-the-Crown status, allowing them to be exempt from municipal taxation and intergovernmental immunity on zoning and environmental laws.
In closing, the interests of the public, that is to say, a safe and secure port, absent from smuggling, terrorism and organized crime, must always prevail.
I defer to Mr. Davidson to state the amendments we wish you to consider in Bill C-44.
Mr. Davidson: The amendments we're bringing forward from our area are the following:
That a site-dedicated national police force be maintained, continuing to employ the highly trained CPC police officers under the terms of their collective agreement, even if Canada Ports Corporation is not an entity;
That the site-dedicated police force be funded by the operators and users of the publicly owned ports from profit-generated revenues;
That local port authorities not be allowed agent-of-the-Crown status;
Clarification that the local port authorities not be subject to the Municipal Grants Act;
That local port authorities pay their market levels of taxation, that is, municipal taxes based on assessed value, like all other taxpayers - city taxpayers should not subsidize the port operators and users;
Require local port authorities to pay municipalities for specialized police services, marine unit, at the port from profit-generated revenues if a national police force is not maintained;
That provision be included requiring municipalities to establish a marine unit from amounts paid by local port authorities; and
That the present trained police officers of CPC be hired and form part of a municipal marine unit.
Our closing statement is this. We believe that safe ports are in the interests of all Canadians.
The Chairman: Thank you, Mr. Davidson.
Mr. Jordan.
Mr. Jordan: I don't think anyone is questioning how essential and how highly specialized your work is. I don't think that's the thing we're questioning at all. The work you're doing would have to go on by someone else, and as for this idea that if the harbour police weren't in existence then nobody would be doing the work, I think it would be totally irresponsible to even think that way.
I think our questioning here is who your employer will be. The police work will have to go on. I know you would have questions there with negotiated contracts, and so on, but supposing we could solve all that, supposing that could be addressed and you could reach a satisfactory conclusion with all parties concerned, don't you think the movement today would be toward...?
I heard this morning on the news where, in Halifax, I think, they have now a police sergeant, I think he was, whose specialized responsibility is in the area of the Internet and the crime that's radiating from it.
Using that as an example of the direction in which the Saint John police would go in specializing, having with Saint John police a very specialized group of individuals like yourselves who would do port police work, I don't see any reason why your employer couldn't be the Municipality of Saint John and you could do that very specialized police work. Why do you have to have this national police association that you belong to?
How many belong to this association?
Mr. Parks: I think you're confused. That question should be more directed to Mr. Ross.
I am an employee of the City of Saint John and a member of the Saint John police force. I can assure you, sir, that the Saint John police force is more than capable, with the proper training and funding, of looking after the duties of the port.
Mr. Jordan: So if we can get around the funding part of it, you would agree with what we're proposing in Bill C-44.
Mr. Parks: I can tell you, sir, from experience, being from the city of Lancaster before it was amalgamated with the city of Saint John, we had one sergeant and ten police officers per shift on the west side of the city of Saint John. Now we have four constables.
Without you people requiring these people to do certain things, you're going to end up the same way we did when they amalgamated the city of Lancaster with the city of Saint John. The present four officers who work on the west side right now are going to spend 90% of their time doing the port policing and the citizens of Saint John are going to suffer as a result of it.
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Mr. Jordan: Well, if that's the way you visualize it going, I would sympathize with you. I don't see it going that way. I think it would be irresponsible to think all we're trying to do is grind the police forces down to save money. I don't think that's -
Mr. Parks: I never meant to imply that at all, sir. But I can assure you, from history repeating itself, that in 1967, when the city of Lancaster amalgamated with the city of Saint John, there were nine or ten officers per ship. Now there are four. Unless proper things are put in place, the funding is not going to be there and we are going to have to police the port whether we like it or not, and the citizens of Saint John are going to suffer as a result of it. The time of response to their calls is going to suffer. I can't come and protect you from a break-and-enter if I'm down in the middle of the port of Saint John.
Mr. Jordan: No, but I don't think we're talking about the same thing.
How many ports police are there now in this organization, nationally?
Mr. Davidson: I believe there are around 100.
Mr. Jordan: What was the highest number you ever had in history?
Mr. Davidson: It goes back to 1968, when there were 300, I believe. It has come down quite a lot.
The reason is that the determination of how many ports police were needed at the port was shifted some years ago to the local management of the port - the local port corporations. The local port corporations had a big role in lowering the number of Ports Canada Police over the last years because the local autonomy allowed that.
All we're saying to you is this. I think we're on the same page here, but what we're saying is that unless something in the legislation specifically allocates proper funding for policing, we will have at least one port in this country, Saint John, New Brunswick, use security guards, because they don't seem to be as concerned about public interests as everybody in this room does, and they'll be back to the security guards because they will lower the bottom line.
So all we're urging on you, I guess, is to make sure in your legislation there is some mechanism to have proper funding allocated for proper policing; i.e., to include the public interest, not just looking after my containers or my building at a port. That's where I guess the fine line is crossing over, because our people in our area have said no, we're just like the Canadian Tire, we're just like the Sears warehouse, we at the port. That's all we need; we just need the policemen to come when they're called. Well, that completely ignores a port being a port of entry and exit and all the public interest that's there.
When they say that in open session of council, along with the attorney general of our province, we get very concerned. If people think the port is like any other industrial site, that mentality is going to put security guards there, and I'll tell you, we are going to have a big problem.
So I think everybody in this room is on the same page, but you have to ensure something is in that legislation, because if it just says they're an agent of the Crown, they don't pay municipal taxes and all those things they want to affect their bottom line, who is protecting the public interest here? We believe we're here arguing very strenuously that the public interest must be maintained at those ports, as well as the interest of the local port users and tenants. That's where we are.
Mr. Jordan: So we have to do some educating of the Municipality of Saint John.
Mr. Davidson: But the municipality is on the same page. They are saying they would like to do it, but they have been told by the port users they're not going to give them any more money. They're saying they are getting only 47% of the assessed tax on that property over there. That's wrong. The city is saying they are taking the short end of this because they are getting only 47% of their taxes from that property over there under the grant structure right now. They want agent-of-the-Crown status so they don't have to pay any municipal taxes, but then they want us to do the policing. The users are saying, we don't care about your marine units or any of that stuff, we'll have our own fences, our own security guards, protecting our properties, and that's all we care about.
That's as cold as we can make it to you. That's what they have said in open session of council in Saint John.
The Chairman: It's very interesting, because what you're saying is somewhat different from what we've heard in some other communities. I'm very pleased you're here, Mr. Parks. If I understand what you're saying, you're not arguing that only the ports police can police ports. You're saying with the proper support and the proper training the municipal police force could provide proper police services at the port, but in this particular case the issue is the relationship between the port authorities and the City of Saint John.
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If I understand what you're saying, if the port authority had gone forward like the port of Quebec or the port of Montreal, had sat down with the local police forces and had gotten into a negotiation with them about how those services were going to be supplied, and, within that, had considered some of the very important issues around the current membership of the ports police, that would address your public safety concern.
Mr. Davidson: What we're saying, Mr. Chairman and members, is this. We put together a package as plan B. The number one position in Saint John is that we think the national-dedicated port police have done an excellent job and should remain, maybe not under the Canada Ports Corporation, but as a site-dedicated force.
We put together a package with the city and with the Ports Canada people. The package asked whether or not the users and tenants at the port would entertain the idea of taking things over from Ports Canada and making them into a municipal police force, and x was the amount of money. Their answer was that they would not. We have been told, flat out, that the proposal is not acceptable, and that's why we're very concerned, Mr. Chairman. If you are being told one thing at this level, and the citizens of Saint John and the police officers are being told that the port is like any other industrial site, then let me assure you that you people have not been told what's being said locally.
The Chairman: Mr. Keyes, did you want to pick up on this?
Mr. Keyes: Mr. Chairman, Mr. Davidson, this sort of runs contrary to what I heard yesterday from the mayor of Saint John. She sat in that very chair where you're sitting and said she's prepared to enter into talks with the municipal police force in order to get the necessary policing for the port.
Mr. Davidson: But in her brief, Mr. Keyes, the same mayor said that if the police are going to do more than they are doing now, they have to get more remuneration. That's in her brief, on her one page about the policing.
Mr. Keyes: That's reasonable. That's understandable.
Mr. Davidson: But the City of Saint John and the ports police have been told by the owners, the tenants and the users there - and let's make no bones about the fact that the Irving interest is a big one there - that they only need security guards and are not interested in entering into that. That's what we've been told.
Mr. Keyes: Mr. Chairman, I think it has been important that we hear from Mr. Davidson and Mr. Parks, because for the majority of the future Canada port authorities in this country, from Vancouver to the great port city of Quebec, all are of the understanding that they need a solid security system at their ports. All are of the understanding that it would work in concert with the RCMP and the private security agencies that all the different users employ on the port to watch their own properties, etc.
I want to assure you that the government's stated intention is to ensure that any transition between where we are today and where we might be tomorrow - depending on whether this legislation passes or not - will ensure the safety and security of the port, with the necessary RCMP enhancement that would have to come as a result of that changeover process, and that includes your municipality. I'm glad you were here to tell us this story, because the committee will certainly be interested in dialoguing with the municipality of Saint John to get their assurance that they are prepared.
Quite frankly, let's face it that the make-up of the Canada port authorities board that would take over that port is going to have to certainly indicate that it is prepared to ensure that safety and security is not only maintained at the level at which you presently have it, but may even be enhanced as a result of this change. I look forward to hearing from the municipality on how they're prepared to ensure this is going to happen on their part. I look forward to seeing the City of Saint John, through its community work that comes through its councillors, sitting down at the council table and saying it has a valuable asset here, it has a jewel, economically speaking, in this region. The way the port goes, the way the community goes, and if that security and safety isn't ensured at our port, we all suffer for it.
Mr. Davidson: We welcome your statement. It's interesting, because Halifax, Nova Scotia, and Saint John, New Brunswick, have always been very competitive. The users in Halifax are supporting exactly what you're saying. Our understanding, our feedback, is that they are talking to the metro police force to set some sort of marine unit together or what have you.
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On the other hand, Saint John is 180 degrees away from that. The mayor and council are saying they would like to enter into discussions with the users and owners of the port, the facility. But unless you put something into the legislation to bring this about, the users have gone on public record that it's like any other industrial site and only needs fences and security guards.
The difference we bring to your attention is that the Irvings are a big user at the port of Saint John - they're not at Halifax - and they have a security firm of their own. We lay this right on the table because we didn't come all this way to beat around the bush. It is why we're saying to you that when the security reviews took place, our chief sat down with the security review committee and the list of duties and responsibilities of the harbour police were discussed in a conversation that went something like: ``Could the police do this?'' ``We could, I guess.'' ``Could the police do that?'' ``Well, I guess we could.'' There was no discussion about the finances needed to bring it about, but it was then sent in to your government and your minister that it's been rubber-stamped by the chief of police, the RCMP, the harbour police, and what have you.
We're here to tell you that the image being projected in Ottawa is not the same one that we're being told about by the users and tenants in Saint John. If you allow this legislation to go through loosely, there will be security guards in Saint John, and that will be detrimental. I don't know whether or not it's felt in some minds that this will give us an advantage over Halifax because they will have municipal costs and we'll only have security guard costs. I hope that's not the case, but nothing else makes sense to us.
We feel it's incumbent upon you as the guardians of the public interest, if you will, to make sure that the public interest is protected by saying somewhere in the legislation that dedicated money has to go to dedicated policing. That's all we're asking.
Mr. Keyes: Thank you very much for your input.
The Chairman: Yes, thanks very much, Mr. Davidson and Mr. Parks. I appreciate that you took the time to come down here. It's a tough issue, it's an interesting issue, and we have many ways of intervening. We will be appointing the boards of these corporations and will be negotiating with them on their letters patent, etc.
Mr. Davidson: Thank you.
Mr. Parks: Thank you very much.
The Chairman: For your information, members, we are now adjourned until 3:30 p.m. in this room.