PORT DIVESTITURE PROGRAM
The National Marine Policy, announced in December 1995, outlines the
Government of Canada’s intent to modernize Canada’s marine transportation
system. One initiative within this policy framework is the Port Divestiture
Program, under which Transport Canada is transferring the ownership and
operation of regional/local ports and harbour beds to provincial or local
interests. As of March 31, 2005, Transport Canada had divested 459 of its
original inventory of 549 ports and, in the process, saved Canadian taxpayers
more than $165 million in operating, maintenance and other expenses directly
related to the operation of public ports. The program is currently scheduled to
end on March 31, 2006.
The public port system supports the safe and efficient movement of vessels
and cargo and is integral to regional economic prosperity. Transferring
regional/local ports to local interests places decision-making responsibilities
in the hands of those best able to gauge local requirements. This allows for a
more effective and efficient port system with local accountability. The new
owners have the same rights and obligations of any property owner and are
subject to all applicable legislation.
Under the Port Divestiture Program, regional/local ports, including harbour
beds, owned by Transport Canada are first offered to other departments within
the Government of Canada and then to the provinces. If the province is not
interested in acquiring these facilities, Transport Canada then seeks
expressions of interest from local stakeholders, including municipalities. A
public tender may be used as a final option in the event that no expressions of
interest are received.
The Port Divestiture Fund was created to ease the transfer process. The fund
provides an incentive to local interests to assume ownership of the facilities
and to give operators flexibility to operate within the local business
environment. Contributions from the fund must be applied to eligible
expenditures directly related to the operation of the port or to eligible
capital projects designed to bring existing port property up to minimum safety
or operating standards.
Audits of contribution agreements help safeguard the efficiency and
effectiveness of the Port Divestiture Program. For each year of a contribution
agreement, the port operator must provide the Minister with evidence certifying
that the contribution funds have been applied to eligible expenditures directly
related to port operations. In addition, a port operator’s books and records
must be open for audit and inspection at the discretion of the Minister of
Transport, a requirement that continues for six years after the end of the
contribution agreement. The transfer documents also provide for the full
repayment of the contribution in certain instances, such as if the port operator
ceases to operate the port.
Under the National Marine Policy, the vast majority of ports in Canada were
classified as regional/local. However, the policy also includes two other
categories not covered by the port divestiture program:
- Canada Port Authorities (CPAs): These 19 ports that are vital to
domestic and international trade and are financially self-sufficient and
independently managed by boards of directors nominated by user groups
and various levels of government. CPAs are governed by the Canada Marine
Act (CMA), which enables them to operate in a more commercial, efficient
and timely manner.
- Remote Ports: The 26 ports that serve basic transportation needs of
isolated communities and which rely on the presence of an existing
Transport Canada wharf structure. Remote ports will continue to be
operated by Transport Canada unless local groups express an interest in
acquiring them.
While Transport Canada is transferring its property interests in the case of regional/local ports, the Government of Canada retains jurisdiction over lawful navigation on the water. As a result, the need for ships to obey all applicable federal statutes such as the Canada Shipping Act remains unaffected.
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