Prolonged permitting process fuels concerns
Overall cargo shipments increased by 4.4 per cent in first six months of 2018
The chief executive of the Vancouver Fraser Port Authority says he is concerned that prolonged permitting processes may lead to a capacity crunch at Canada’s busiest port, which is on pace to see a record amount of volume flow through it this year.
Robin Silvester, the Port Authority ’s president and chief executive, said in an interview that at a forecast growth rate of four per cent per year, additional capacity will be required on the West Coast by 2025. And with growth on pace to surpass that in 2018, he says he is concerned that the permitting processes for proposed projects that would help meet forecasts — specifically the Roberts Bank Terminal 2 project — are taking too long.
“We need to be able to properly permit those projects in a responsible way, protecting the environment while enabling trade growth, but I’ve got to say I’m worried that the processes are getting even more difficult,” Silvester said.
“It’s critical that we protect the environment but we need to, as a nation, find a way to make those decisions in a more timely way.”
Statistics released by the Port Authority on Tuesday showed that, despite lingering uncertainty surrounding trade and protectionism, the Port of Vancouver is on pace to see a record amount of volume flowing in and out of it this year. Overall cargo shipments through the port increased by 4.4 per cent in the first six months of 2018 across a range of commodities.
The Port Authority also said container trade increased by five per cent, to 1.64 million twenty-foot equivalent units (TEU) in the first half of 2018 “as a result of the growing demand for Canadian resources and products and the increasing demand for consumer and manufacturing goods from Asia.”
China is currently the top trading partner through the Port of Vancouver. The pending ratification of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is expected to bring billions of dollars of increased trade with Asia, with much of it likely flowing through West Coast ports.
The proposed Roberts Bank Terminal 2 project would help meet that growth, Silvester says. The yet-to-be approved three-berth container project would provide 2.4 million TEU of container capacity to meet forecast demand, which is largely expected to come from Asian countries.
The project is undergoing a federal environmental assessment, a process that began in March 2015. If it is approved, the project would take approximately 5.5 years to complete.
Silvester said that to meet forecast demand, the Roberts Bank Terminal 2 project would have had to have been approved two years ago.
“It looks very likely that we will be late with that capacity, which has consequences for businesses all across Canada,” Silvester said. “It means imports suffer from congestion for two or three years while waiting for capacity, which tends to add costs to the supply chain, and it means exports have less reliable access to global markets.”
Still, Silvester said this year’s volume growth is a sign that the Canadian economy is strong.
Bulk liquid shipping was up by 28.3 per cent in the first six months of 2018 when compared to the same time last year, the result of a 40.3 per cent increase in volume of petroleum products flowing in and out of the port. Volumes of potash increased by 23 per cent, while autos and coal were up by 8.3 per cent and nine per cent, respectively.
At the same time, shipments of grain declined by 10 per cent, which Silvester credited to a mix of factors, including a capacitycrunch at the Canadian railways that led to a grain backlog, and tariffs in India.