At­lantic Gate­way - rhetoric or re­al­ity

Lead­er­ship needed to breathe life into huge op­por­tu­nity

Cape Breton Post - - EDITORIAL - Barry Sheehy Barry Sheehy is co- owner of Har­bour Port De­vel­op­ment Part­ners, which has ex­clu­sive rights with CBRM to mar­ket Syd­ney as a com­mer­cial gate­way to North Amer­ica for two years. He lives in Gabarus.

Trade and trans­porta­tion may seem like dull sub­jects but make no mis­take – they de­ter­mine how well we live and how much we pay for prod­ucts.

Poor coun­tries have gen­er­ally poor in­fra­struc­ture and this in­cludes in­ad­e­quate trans­porta­tion sys­tems like road, rail, air and sea. Rich coun­tries have ef­fi­cient in­fra­struc­ture in abun­dance. The con­trast is stark. The qual­ity of a coun­try’s in­fra­struc­ture, along with its ed­u­ca­tion sys­tem, is prob­a­bly the best gauge of a coun­try’s stan­dard of liv­ing. Whole­salers of soy­beans pay a dol­lar more per bushel for Cana­dian soy­beans than Brazil­ian beans.

Why the price dif­fer­ence? The an­swer is trans­porta­tion. Brazil’s trans­porta­tion in­fra­struc­ture is sim­ply not as well de­vel­oped as Canada’s. Sixmile-long traf­fic jams of trucks can be seen on any day wait­ing to load or un­load prod­ucts out­side Brazil­ian ports. The long trek on in­ad­e­quate roads re­sult­ing in de­lays, idling costs and spillage make the Brazil­ian prod­ucts less at­trac­tive to the whole­saler who would rather pay a lit­tle ex­tra for on time and un­dam­aged de­liver- ies. Even though the ini­tial pro­duc­tion costs of Brazil­ian soy­beans are lower than that of their com­peti­tors in Canada, the lack of ef­fi­cient in­fra­struc­ture in Brazil and the re­sul­tant de­lays and spoilage neu­tral­ize Brazil’s ini­tial cost ad­van­tage and the pro­ducer’s abil­ity to com­pete. Thus, in the con­text of eco­nom­ics, we can see why ad­e­quate in­fra­struc­ture is so im­por­tant.

This brings us to the At­lantic Gate­way and why we should care about it. The Gate­way was con­ceived al­most a decade ago as a cor­ri­dor for han­dling im­ports and ex­ports from Europe and Asia. It made sense then and still does to­day. With the Com­pre­hen­sive Eco­nomic and Trade Agree­ment (CETA) and the ex­pan­sion of the Suez Canal, con­tainer traf­fic is set to boom. Traf­fic com­ing to (and from) the east coast of North Amer­ica will dou­ble in the next 15 years. Al­ready, 500,000 con­tain­ers sail past Syd­ney ev­ery month on their way south to other ports, and in 10 years that num­ber will nearly dou­ble. These ships reach Syd­ney first on the Great Cir­cle Route and then sail right past us on their way to Amer­i­can ports like New York or Nor­folk. The goal of the At­lantic Gate­way should be to cap­ture 10 per cent to15 per cent of this traf­fic – and it can be done. Amer­i­can ports are suf­fer­ing chronic con­ges­tion and de­lays in mov­ing con­tain­ers in­land from both the east and west coasts. These de­lays are cut­ting into Amer­i­can eco­nomic growth and ag­gra­vat­ing both ship­pers and their cus­tomers who are, as a re­sult, look­ing for al­ter­na­tives. This rep­re­sents an op­por­tu­nity for Cana­dian ports on both coasts. With fed­eral and pro­vin­cial help, Prince Ru­pert is plan­ning to dou­ble ca­pac­ity and Van­cou­ver has just com­pleted a ma­jor ex­pan­sion.

Here on the east coast, Mon­treal, Hal­i­fax and Syd­ney are po­si­tioned to ben­e­fit as well – only if we get our act to­gether. Syd­ney’s plans for a deep wa­ter trans­ship­ment hub, de­signed specif­i­cally to ac­com- mo­date Triple E class ul­tralarge con­tainer ships, is crit­i­cal to this strat­egy. These su­per- large ships rep­re­sent the fu­ture of con­tainer ship­ping and no east coast port is re­ally equipped to han­dle them. Therein lies our op­por­tu­nity. How big is the op­por­tu­nity? In just 20 years, Prince Ru­pert has grown to where it presently sus­tains more than 2,000 jobs. Port re­lated ac­tiv­ity adds $ 290 mil­lion to the province’s GDP and $550 mil­lion to Canada’s econ­omy. That’s big money. Syd­ney’s eco­nomic im­pact could be ev­ery bit as big.

If, how­ever, we are wait­ing for the fed­eral gov­ern­ment to act, we will wait a long time. In the 1990’s, un­der the pres­sure of un­sus­tain­able deficits, the Cana­dian gov­ern­ment pretty much got out of the trans­porta­tion busi­ness. They sold off air­ports, har­bors, rail­ways, air­lines, etc. This pri­va­ti­za­tion im­proved ef­fi­ciency but it also left Ot­tawa with few tools for shap­ing trans­porta­tion strat­egy, ex­cept writ­ing checks. For ex­am­ple, $ 68 mil­lion was re­cently given to the port of Saint John. Hal­i­fax re­ceived a new $ 30 mil­lion run­way. Syd- ney re­ceived $38 mil­lion for a vi­tally needed dredge.

But where does all this fit into a larger At­lantic Gate­way strat­egy? No one knows. And it’s not Ot­tawa but the Mar­itime prov­inces and Que­bec that must an­swer this ques­tion. We must pro­vide the lead­er­ship needed to breathe life into the At­lantic Gate­way. Note that Que­bec just an­nounced its own $ 9 bil­lion mar­itime strat­egy.

The goal for the At­lantic Gate­way is sim­ple: cap­ture 10 per cent to 15 per cent of the con­tainer traf­fic ar­riv­ing from Europe and from Asia through Suez. To re­peat – it can be done.

All we have to do is make the nec­es­sary in­vest­ments in mar­itime and rail in­fra­struc­ture, free trade zones and reg­u­la­tory re­form. Prince Ru­pert shows it can be done. In build­ing the Cana­dian Pa­cific Rail­way, John A. Mac­don­ald un­der­stood he was do­ing more than build­ing a rail­road – he was build­ing a na­tion.

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