Feds announce intent to merge Hamilton, Oshawa port authorities

The amalgamation would see a new entity formed

The federal government’s intention to merge the Hamilton and Oshawa port authorities makes sense for “economic reasons,” according to Canada’s transport minister.

Marc Garneau said the amalgamation, which would see one new entity formed, would allow for synergy between the two ports — both of which are primarily focused on cargo.

“We believe that by amalgamating both we will actually have an even more efficient port authority that will get even more business, will be able to optimize its supply chain and will attract more investment,” he said in a phone interview Tuesday.

The Hamilton and Oshawa port authorities carry similar commodities, including steel, project cargo and bulk cargo like fertilizers, asphalt and grain, according to a government news release.

If the amalgamation happens, the newly-formed port authority would have a single board of directors and be responsible for all assets and liabilities, despite the lands being physically separate, Garneau said.

While PortsToronto — formerly the Toronto Port Authority — is geographically sandwiched between the ports of Hamilton and Oshawa, it is smaller and responsible for managing the Billy Bishop Toronto City Airport in addition to the harbour. The federal government created the Hamilton Port Authority, which is the largest port in Ontario, in 2001 to replace the 89-year-old Hamilton Harbour Commission.

In 2012, Oshawa’s Harbour Commission became a port authority. The Oshawa Harbour Commission, which had been in place since 1960, was the last harbour commission in the country. The move toward amalgamation comes after Garneau announced a review of Canada’s port authorities in March 2018 — 20 years after they were first established.

Mayor Fred Eisenberger, who served as chair of the Hamilton Port Authority board in the early 2000s, said the possibility of a merger was raised then as the government looked to create efficiencies.

Amalgamation could help the land-starved Hamilton Port Authority with space, he noted. While it has 630 acres of land, its president and CEO Ian Hamilton has previously stressed they need more room to grow.

“I think the challenge for the Hamilton port has been and continues to be available land to bring new businesses to,” said Eisenberger. “I think that in part is a rationale for them having a look at other locations where they could actually bring that list of businesses that they can’t place in Hamilton to another location under their management.”

During Tuesday’s planning committee meeting, Coun. Chad Collins put forward a motion to have staff report back on the legalities and financial information related to the possible merger. The Ward 5 councillor pointed to the Oshawa port authority’s recent financial statement, in which it reported a net and comprehensive loss of $230,306 in 2017, and expressed concerns about whether proceeds generated in Hamilton would end up “subsidizing” other ports elsewhere.

A certificate of intent to amalgamate, which formally announces the government’s intent, is expected to be published in the Canada Gazette Feb. 9.

From there, a consultation period will begin in which interested parties have until March 11 to submit comments.

Following the consultation, the government will comb through those comments and may decide to confirm the merger through the publication of a certificate of amalgamation in the Canada Gazette — a process that could

“I think the challenge for the Hamilton port has been and continues to be available land to bring new businesses to.” FRED EISENBERGER Hamilton mayor

take months, Garneau said.

The Hamilton Port Authority said in an emailed statement it is “supportive” of Transport Canada’s process.

“We believe it makes sense to reflect on the structure of maritime assets in southern Ontario to ensure they are sustainable, and able to meet the needs of the growing GTHA economy,” the statement reads.

While there’s been chatter for years about possible amalgamations, Oshawa Port Authority chair Gary Valcour said Tuesday’s announcement came as a surprise, and he hopes to learn more in the coming weeks.

“It’s unclear to us what really the implications are because it’s new,” he said.

McMaster University business professor Marvin Ryder speculated that, given the size of Oshawa’s port, the government may decide to reduce overhead costs by having them report to a boss in Hamilton.

“This is very much the whale swallowing the minnow,” he said.