$2.1 billion allocated to unclog border
The federal government said Tuesday it will spend $2.1 billion on infrastructure improvements aimed at bolstering Canada’s aging trade corridors, in a bid to free up long-standing trade snarls along prominent export and import routes.
Transport Minister Marc Garneau laid out loose plans to improve trade for Canadian businesses by investing in upgrades to existing ports, waterways, airports, roads, bridges, border crossings and rail networks. He also said a portion of investment would go toward so-called “information infrastructure,” such as data collection capabilities that allow firms to more effectively track and distribute goods overseas and across borders. “We need our trade routes to be as fluid as possible,” Garneau said in a luncheon speech.
The announcement is part of a broader $10.1-billion investment over the next 11 years to improve Canadian trade and transportation routes. The investment was announced along with the government’s most recent budget, which was released at the end of 2016. About $5 billion of the total $11 billion funding will go through the soon-to-be established Canadian infrastructure bank.
Congested trade routes have for years hobbled Canadian businesses, including oil producers and manufacturers of automotive parts.
A report by the Advisory Council on Economic Growth released in February said that improving physical trade routes between Canada and its allies was becoming increasingly crucial, especially as some major economies, including the U.S., have in recent years threatened to restrict open trade agreements. “For a small economy such as Canada, the costs associated with such an outcome cannot be overstated,” the report said. It specifically alluded to possible trade snarls that could be improved through the Asia-Pacific gateway, an initiative that aims to improve trade ties between Western Canada and potential buyers in the U.S. and Asia.
The advisory council was established by Canada’s finance ministry in early 2016.
The $2.1-billion injection will be distributed through a dedicated fund that will accept applications from public and private firms that wish to carry out the infrastructure expansions. The deadline for proposals is Sept. 5, according to the transport ministry.
Garneau said the “primary criteria” for bids will depend on whether proposals will ultimately improve the movement of goods by reducing bottlenecks. He also said companies that address risks associated with carbon emissions could have a higher possibility of winning contracts.
Much of the investment will target existing trade routes between the U.S. and Canada. Currently, 30,000 cargo trucks and 4,600 rail cars cross the Canadian-U.S. border every day, with total trade between the two countries totalling US$635 billion in 2016.
Garneau said China, India and Mexico are other major Canadian partners whose trade routes could be improved through sea and airport expansions.
“We must remember that we can have the best quality products and the most ambitious trade agreements in the world, but none of that will matter if we don’t move our goods efficiently and reliably to markets,” he said. “Our customers can always look elsewhere for their needs.”