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GC No. 013/05 GOVERNMENT OF CANADA
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| Contacts: | |
| Irène Marcheterre Director of Communications Office of the Minister of Transport Ottawa (613) 991-0700 |
Renée Gillen Press Secretary Office of the Minister of Western Economic Diversification Canada Ottawa (613) 954-1110 |
| Christiane Fox Office of the Minister of Industry Ottawa (613) 995-9001 |
Transport Canada is online at www.tc.gc.ca. Subscribe to news releases and speeches at apps.tc.gc.ca/listserv/ and keep up-to-date on the latest from Transport Canada.
This news release may be made available in alternative formats for persons with visual disabilities.
As the most trade-dependent nation among the G7 countries, Canada’s prosperity depends fundamentally on international commerce.
Today, the dynamics of global trade are driven by rapid, seamless and secure movements of goods and people around the world in global supply chains. Much of the activity surrounding supply chains and changing trade patterns is concentrated in key geographic locations or “gateways,” which are linked to each other and to major markets by “corridors.” The efficient functioning of trade related gateways and corridors is central to the prosperity of trading nations like Canada.
The rise of emerging markets such as China and India makes it a national priority to maximize the effectiveness of the Pacific Gateway and ensure the Canadian economy is taking maximum advantage of it. That requires a new, integrated approach to a wide range of interconnected issues, including, but going well beyond, transportation infrastructure. This is the challenge and the national priority that Canada’s Pacific Gateway Strategy is intended to address.
Emergence of China
The emergence of China is realigning patterns of trade and investment internationally, shifting global supply chains and framing the pursuit of competitiveness and prosperity around the globe.
China is currently Canada’s fourth largest export market. Canada’s total exports to China grew almost 90 per cent, from $3.5 billion to $6.7 billion, between 1995 and 2004. During the same period, Canada’s imports from China grew more than 400 per cent, from $4.6 billion to $24.1 billion, making it Canada’s second largest supplier. China’s recent dramatic growth is expected to continue; while it is currently the world’s seventh largest economy, it is predicted to be the second largest by 2020, and largest by 2041.
Value of goods traded between Canada and China, 1988 - 2004
Note: Customs-based trade data; Preliminary data for 2004
Source: Transport Canada (adapted from Statistics Canada, International Trade Database)
While Canada China trade is likely to remain modest compared to the overall value of Canada United States trade for some time to come, our strategic interests clearly require new efforts to position Canada strongly in the Asia-Pacific context.
Canada’s Pacific Gateway
Canada’s Pacific Gateway is a multimodal network of transportation infrastructure focused on trade with Asia. It is comprised of interconnected public and privately owned assets, including ports, airports, rail and road systems.
Changing trade patterns associated with emerging markets are predicted to result in significant growth in traffic through Canada’s Pacific Gateway. By 2020, container cargo coming through British Columbia ports is projected to increase by up to 300 per cent, from 1.8 million containers to between five and seven million containers. The value of this trade is projected to reach $75 billion by 2020, up from the current $35 billion. This increase would contribute $10.5 billion annually to the Canadian economy, including $3.5 billion beyond British Columbia. The trade increases are also projected to result in 178 per cent growth in direct jobs by 2020, from 18,000 to 50,000.
Forecast Growth of Canada’s West Coast Container Traffic
Canada’s Pacific Advantage
The rapid rise of China as a trading power directs particular attention to both the challenges and opportunities associated with Canada’s Pacific orientation. Canada is uniquely positioned to take advantage of emerging opportunities in China and other Asia-Pacific countries including India and Korea. The Pacific Gateway also benefits considerably from a population that enjoys strong cultural connections with the Asia-Pacific through heritage, family ties, businesses and investments.
The proximity of Canada’s West Coast ports to Asian markets offers a sailing time advantage of roughly two days over all others in the Western Hemisphere. Canadian railways offer among the most affordable freight rates in North America and the country’s trucking sector is also highly competitive and efficient, both in Canada and in transborder markets. As a result, a significant portion of the goods handled in Canada’s West Coast ports are coming from, or destined for, the United States. In 2003, the Port of Vancouver and Fraser Port handled close to 250,000 containers that were destined to or coming from the U.S., and this is predicted to grow to almost one million containers by 2020. In addition, significant containerized traffic passing through the new container terminal being developed by the Port of Prince Rupert will likely be destined to or originating from the U.S. Midwest. Clearly, a strong foundation exists on which to further develop Canada’s Pacific Gateway as the crossroads between North America and Asia.
The Challenges Facing Canada’s Pacific Gateway
Despite the vast potential, Canada’s advantages are being jeopardized by freight congestion in the British Columbia Lower Mainland and points further east, and concerns exist about capacity to handle projected trade growth.
Recent trade flow increases have strained existing transportation infrastructure capacity on the West Coast. Specifically, the Port of Vancouver has experienced two periods of significant backlogs partly as a result of bottlenecks on the road network, causing slowdowns in the British Columbia Lower Mainland, and points further east. The rail network is also being challenged to meet rising demands. The port backlogs have resulted in freight diversion to other ports and are causing some shippers concerns about the future reliability of West Coast ports, road and rail services and infrastructure.
In addition to infrastructure capacity, gateway performance is also affected directly by a range of factors such as: labour market issues including skills shortages in critical fields such as long haul trucking; operating practices in the supply chain; increasing pressures in border management; the regulatory and economic policies of all levels of government; and municipal land use policies and practices.
A still broader set of issues, reaching well beyond infrastructure, will determine how well Canada takes advantage of its Pacific Gateway. These include trade promotion, sectoral cooperation, standards-related activities and harmonization in the Asia-Pacific context. Concerted efforts in these and other fields are required to ensure that the Pacific Gateway’s contribution to Canada’s prosperity is as great as possible.
Canada is also facing aggressive competition in attracting and retaining a healthy portion of growing Asian trade. Other countries are investing in infrastructure and related initiatives to seize trade opportunities. For example, the U.S. Government has recently approved the five year $286.5 billion Safe, Accountable, Flexible and Efficient Transportation Equity Act – Legacy for Users. It includes significant investment in the transportation system to improve trade flow.
It has become increasingly apparent that all of the issues affecting the gateway are interconnected. Canada’s Pacific Gateway Strategy has been developed to address the interconnected issues in an integrated way and accelerate the development of the Pacific Gateway, and its benefits for British Columbia, Western provinces and the entire country.
The strategy includes capacity investments to improve the performance of gateway infrastructure, as well as measures that will contribute to how well Canadian businesses take advantage of the Pacific Gateway. Federal commitments carry both near-term and long term benefits.
Canada’s Pacific Gateway Strategy consists of three key components: the Pacific Gateway Act; a package of immediate investments; and further strategic investments over the longer term.
Introduced in the House of Commons on October 20, 2005, the legislation sets out a new policy and governance foundation for further development of Canada’s Pacific Gateway. The Act also establishes Canada’s Pacific Gateway Council to promote consensus among a full range of public and private sector stakeholders, and advise decision-makers on priorities.
Preamble and Policy Declaration
The Act’s preamble and policy declaration articulate the national interest in the Pacific Gateway, establish the principles which will guide federal action, and then commit the Government of Canada to a clearly-defined strategy. Several elements of the Act also make clear the government’s commitment to work in collaboration with other orders of government and private sector partners to support development and use of the Pacific Gateway.
The Act’s policy declaration defines the essential elements of the strategy:
Canada’s Pacific Gateway Council
For over 10 years, committed stakeholders in the transport sector have advocated and worked toward a more integrated approach that addresses interconnections and synergies among policy and investment issues across all modes of transportation on Canada’s west coast. The Pacific Gateway Strategy seeks to build on those efforts, and takes the concept even further. The interconnections reach beyond transportation and so must the consensus building, advisory process and future decisions. Therefore a new body will be created to advise decision makers on the full range of transportation and other issues that impact the effectiveness of Canada’s Pacific Gateway and how well the Canadian economy takes advantage of it.
Canada’s Pacific Gateway Council and its secretariat will be based in the Vancouver area. The council’s mandate will be to develop advice for decision makers through a transparent process that seeks to integrate the views of the full range of stakeholders. The council will also be mandated to collaborate with existing networks of stakeholders active in relations with Asia-Pacific countries, for example the Asia-Pacific Foundation of Canada, and in gateway issues, for example the Greater Vancouver Gateway Council. The council will be comprised of governor in council appointees reflecting various areas of expertise, such as transportation, business, international trade, security, labour and municipalities. It will include individuals appointed after consultation with the governments of British Columbia, Alberta, Saskatchewan and Manitoba. The chair of the Asia-Pacific Foundation of Canada will also be a member. The council will create at least two committees to provide analysis and advice on strategic directions and its long term program of studies.
Up to $35 million over five years has been identified for the work of the council and for federal departments that will be interacting with the council to make the delivery of the Pacific Gateway Strategy a success.
Specific measures have been identified which will immediately advance the fuller development of the Pacific Gateway. These measures, which call for close to $155 million in new federal funding, will be implemented with the participation, where appropriate, of provinces and other stakeholders. Infrastructure initiatives will include cost sharing requirements. The measures are:
Transportation infrastructure investments (up to $125 million):
The Government of Canada is already making significant contributions to infrastructure improvements in Western Canada including port, highway, public transit and border investments. To address key capacity and congestion concerns in the B.C. Lower Mainland and points further east, the government will invest further funds in transportation infrastructure. Such investments will encourage increased investment by provincial, local and regional governments and by the private sector to promote more efficient and seamless connections between the various modes of transportation, while helping eliminate bottlenecks along strategic corridors.
All of the projects will be undertaken through cost-shared contribution agreements with provinces and other eligible recipients. Financial support will be conditional on meeting applicable federal and provincial requirements, including the successful completion of environmental assessments, detailed engineering design and other studies.
The proposed transportation infrastructure investments are:
1. The Pitt River Bridge and Mary Hill interchange (up to $90 million)
The Government of Canada will provide up to $90 million for construction of the new Pitt River Bridge and the Mary Hill interchange to replace a pair of swing bridges, which are already unable to handle current traffic volumes during peak periods. Given its strategic location at the heart of the Lower Mainland’s northeast sector, connecting key economic and transportation facilities, the Pitt River crossing is an integral component of the region’s transportation network.
This investment will improve the efficient flow of trade by reducing travel times and increasing reliability across the Pitt River. It will also enhance safety, improve service to the growing communities in the northeast sector of Greater Vancouver and support environmentally friendly transportation planning.
2. Deltaport road/rail grade separations (up to $30 million)
The Government of Canada will provide up to $30 million for the construction of a number of new road/rail grade separations within the rail corridor extending from Mission/Matsqui to Deltaport. This 65-kilometre track connects the major container terminal with the rest of the rail network, and currently has 39 level crossings. With trains frequently exceeding two kilometres in length, these crossings present major challenges to both rail operation efficiency and quality of life in the affected communities.
The Government of Canada will collaborate with the major railways, the municipalities and the provincial government to carry out a comprehensive study of the road/rail interface on the entire line, identify candidates for road closures and grade separations, and build grade separations. This would complement work that is being conducted by a multi-agency working group created by the Vancouver Port Authority. This project will enhance the efficiency of rail operations, improve the flow of community traffic, eliminate delays for emergency response vehicles and eliminate idling of vehicles at the level crossing.
3. North Portal, Saskatchewan, road/rail grade separation (up to $3 million)
North Portal, Saskatchewan, is a key location for the movement of goods destined for U.S. markets that originate from Western Canada and the Port of Vancouver. It is where CP Rail’s main line to Chicago crosses the Canada-U.S. border, and has seen a 20 per cent increase in traffic over the past six years.
This grade separation project, with a federal share of up to $3 million, will enhance the efficiency of rail operations, improve the flow of local traffic and eliminate delays for emergency response vehicles and idling of vehicles at the level crossing.
4. Intelligent transportation systems deployment (up to $2 million)
The Government of Canada will provide up to $2 million for the creation of a traffic management system for the British Columbia Lower Mainland. This project will bring together the many agencies responsible for various modes of transportation, including transit, roads, marine and rail, to maximize the efficiency of the Pacific Gateway transportation network by ensuring integration of the regional transportation network through coordinated information sharing and the promotion of the interoperability of technology systems.
This system will help act as a coordination point to monitor and share traffic conditions on the major highway networks and the transit system, with a specific view to improving the international and interprovincial flow of goods.
The federal government will also contribute to the environmental assessment of the proposed South Fraser Perimeter Road. While the federal government is not committing to fund the project at this time, it will support necessary environmental work and will continue working with the Province of British Columbia to compile and analyze data. The proposed project consists primarily of a new four-lane, 80 km/h route along the south side of the Fraser River, which would, among other outcomes, link three intermodal terminals (Deltaport, Fraser Port and CN intermodal yard).
Maintaining secure and efficient border services (up to $20 million):
Up to $20 million over two years will be allocated to the Canada Border Services
Agency to support expected increases in traveller and container volumes, courier
shipments, airfreight, commercial trucking and clearing of goods. Priority will
also be placed on increasing border management capacity at marine ports, airport
and land border crossings to ensure the
flow of lawful people and goods while ensuring public safety and security is not
compromised.
Deeper links with Asia Pacific region (up to $10 million):
International standards and technical regulations directly affect more than 80 per cent of the goods traded world-wide each year, with a total estimated value of more than $4 US trillion. The funding in this initiative will support Canadian participation in bilateral and multilateral standards harmonization activities and foster a greater understanding among implicated stakeholders of standards harmonization activities and developments and their impact on trade.
Mutually acceptable international standards, certification procedures and accreditation guidelines promote increased, reciprocal market access for Asian and Canadian firms. Standards result in technology diffusion, common certification approaches and testing procedures. They also increase product interoperability, encourage innovation and reduce trade barriers. In addition, harmonizing standards increases product safety and encourages environmentally sustainable activities.
An additional $400 million has been identified for future strategic investments, including those in response to recommendations of Canada’s Pacific Gateway Council, addressing the range of interconnected issues that affect the fuller development of the gateway. The future initiatives could include:
The interconnected challenges and opportunities in these four areas are included within the scope of the Pacific Gateway Strategy. Together with a range of transportation, economic policy and regulatory issues, they will be addressed over the long term in partnership with other orders of government and public and private sector stakeholders. Consensus-building and advice on priorities from Canada’s Pacific Gateway Council will be instrumental to future decisions and actions in this broad context.
Strengthening Canada’s position in the competitive world of international commerce is a priority for the entire country. The Pacific Gateway Strategy reaches beyond British Columbia – it is a pan Western initiative which will benefit all of Canada.
Improving the infrastructure linking Canada’s central and Atlantic provinces to the Asia-Pacific region helps reduce costs for firms involved in international trade. Central and Atlantic provinces exported $8.68 billion of goods to Asia in 2004, 82 per cent of which depended on marine transportation and port infrastructure. These provinces imported $40.5 billion worth of goods from Asia.
Improving logistics and security at borders while reducing transportation time are also key to attracting foreign direct investments in, and facilitating exports from, Eastern Canada. A significant portion of Canada’s imports of car components from Japan come through British Columbia ports for assembly in Ontario. A considerable number of Quebec companies also directly deal with China, including Bombardier, Alcan and Mitec Telecom Inc.
The Pacific Gateway is not the only Canadian trade gateway or corridor. There are a number of other potential locations where an integrated “gateway” approach may be warranted by trade volumes of national significance and transportation policy considerations.
Transport Canada is developing a national policy framework on strategic gateways and trade corridors that will guide future measures to tailor the approach to other regions. While this framework will be based on the principles of the Pacific Gateway Strategy, future measures will not be identical to it. Instead, they will be tailored to the circumstances and opportunities in the region concerned.
Initiatives are already underway in several regions to promote multi stakeholder gateway and corridor concepts, though they vary in their purpose, composition, and level of development. These include the Inter Regional Goods Transportation Committee (Comité interrégional pour le transport des marchandises) in Montreal, the Halifax Gateway Council, the Southern Ontario Gateway Council combined with infrastructure initiatives in the Windsor area, and the Manitoba Corridor Strategy.
Canada’s Pacific Gateway Strategy is an important part of the federal government’s efforts to secure and enhance the nation’s long term prosperity. It is consistent with other major policy directions including those that support sustainable development, the New Deal for Cities and Communities, and well established directions in transportation policy. The strategy will break new ground by confronting a broad range of interconnected challenges and opportunities in an integrated manner.
The Pacific Gateway Strategy reflects federal leadership that emphasizes both action and collaboration, and that recognizes the strength of one of Canada’s major regions and its contribution to the nation’s prosperity.
October 2005
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