Montreal port mulls taking on debt to fund big expansion

$500M needed to boost container facilities

MONTREAL— Canada’s largest eastern port will consider tapping bond markets as it races to keep up with five straight years of record demand.

The Montreal Port Authority will need about $500 million for a proposed expansion of container facilities by the middle of next decade, said vice-president Ryan Dermody.

A potential debt issue would help pay for a first phase of infrastructure work.

“We absolutely have the capability to borrow, so debt could be an option,” Dermody, who has been overseeing the project since his appointment last year, said in a telephone interview.

“We will look at everything that’s required to make this project work. Nothing is off the table.”

Montreal, Canada’s biggest port by volume after Vancouver, is coming off five consecutive years of rising volumes.

After tonnage climbed 9 per cent last year to 1.6 million containers, the federally owned facility expects to reach full capacity within five years if the proposed expansion doesn’t proceed.

Montreal serves as a gateway between North America and Europe for imports of wine and electronic devices and exports of commodities such as lumber.

Its main competitor for shipments to the U.S. Midwest is the port of New York and New Jersey.

Key carriers with service to and from Montreal include MSC Mediterranean Shipping Co., Hamburg-based Hapag Lloyd AG and Denmark’s A.P. MollerMaersk A/S.

Having picked up a sixth shipper last year, Montreal is planning to add a seventh in April.

The new terminal would initially add about 500,000 20-foot equivalent units annually to Montreal’s current capacity of 2.1 million containers.

“We don’t have a choice but to grow with the customers,” Dermody said.