No. H 218/07
For release - November 16, 2007

TRANSPORT MINISTER INTRODUCES AMENDMENTS TO THE CANADA MARINE ACT

OTTAWA — The Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, today introduced proposed amendments to the Canada Marine Act. These amendments will strengthen the operating framework for Canada Port Authorities (CPAs) by modifying the current borrowing regime, providing for access to contribution funding, and clarifying some aspects of governance.

The amendments would also include provisions regarding amalgamation of CPAs and introduce new provisions to make the enforcement of minor violations easier to manage. In addition, Minister Cannon will also be moving forward on a number of policy initiatives to modernize the National Marine Policy, streamline the process for borrowing limits and enhance flexibility in management of port lands.

"In recent years, the global economy has shifted dramatically and the transportation system must adapt to take advantage of these changes. The Government must ensure that the competitive position of our national ports is maintained or enhanced in support of Canada's trade objectives," said Minister Cannon. "These amendments would promote financial flexibility for the marine transportation sector, consider the long-term role of ports in their communities, and foster partnerships with other levels of government."

The Canada Marine Act governs the marine sector in Canada. It has improved the effectiveness of major ports by creating a National Ports System composed of independently managed port authorities for ports that are vital to Canada's international and domestic trade. It also provides Canada's major ports with the necessary tools to operate commercially and efficiently.

The Act, which received Royal Assent in 1998, was subject to a legislative review in 2003. Transport Canada undertook a number of studies to assess key recommendations before proceeding with any legislative action. With the rapid and significant changes in global marine trade, Transport Canada has reconsidered its amendment strategy to better reflect these changes and to ensure that it promotes the competitiveness of the marine transportation sector. Overall, the proposed amendments and complementary policy initiatives would help establish a framework for CPAs that promotes the development of necessary infrastructure, maximizes operating efficiencies, and fosters a more flexible, commercially based financial environment with increased accountability.

The Canada Marine Act implemented the federal government's National Marine Policy, and called for the modernization of the marine management and regulatory regime to achieve greater efficiency in the marine transportation sector.

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BACKGROUNDER

CANADA MARINE ACT

The Canada Marine Act (CMA), which received Royal Assent in 1998, established the first single, comprehensive piece of legislation to govern many aspects of Canada's marine legislation and allowed for the establishment of Canada Port Authorities (CPAs) along with continued divestiture of certain harbour beds and port facilities. The Act facilitated the commercialization of the St. Lawrence Seaway and contained provisions for the further commercialization of federal ferry services.

The Act has significantly contributed to the marine sector, and improved the efficiency of Canada's marine system. The CMA required the Minister of Transport to complete a review of the provisions and operation of the Act and report back to both Houses of Parliament during the fifth year following Royal Assent. A review panel undertook consultations with stakeholders and prepared a report that the Minister of Transport tabled in the House of Commons in June 2003.

The Review Report made two general recommendations and a number of specific recommendations concerning implementation issues related to CPAs, the St. Lawrence Seaway, public ports, pilotage and ferries. The report also included a number of observations on general marine issues.

Overall, stakeholders, and in particular CPAs, have reacted positively to the CMA Review Report. The principal concern identified during the review focused on the marine sector's financial flexibility (especially for CPAs) to maintain economic viability and respond effectively to changing market demand, as well as access to federal funding for infrastructure investment.

To address issues that are most important to the marine industry and to maintain Canada as a gateway for international trade, the department will not limit its activities to legislative amendments, but will also pursue other policy initiatives in key areas intended to improve the competitiveness of the Canadian marine industry.

Proposed amendments

Access to Contribution Funding
Canada Port Authorities would be permitted to apply for contribution funding related to infrastructure, environmental sustainability and the implementation of security measures.

Borrowing Limits
A tiered approach would be implemented that would permit larger CPAs — those with $25 million in operating revenues for three consecutive years — to move to a commercially based borrowing regime. Certain CPAs would be subject to a code that governs borrowings (in their Letters Patent) rather than a fixed borrowing limit, as well as enhanced accountability requirements.

Amalgamation
The legislation includes provisions that would allow for a consistent approach to facilitate any potential future amalgamations of CPAs and would complement the regulations established in May 2007 with respect to amalgamation.

Governance
The Act incorporates new proposed amendments related to governance that are more responsive to CPA needs and promote a more stable, long-term management framework.

Enforcement
An Administrative Monetary Penalty Regime has been introduced to make the enforcement of minor violations easier to manage.

Policy Initiatives

Modernized National Marine Policy
To complement these changes, the Minister of Transport, Infrastructure and Communities is planning to bring forward a modernized National Marine Policy as it relates to ports that better reflect the current global marine operating environment, following Royal Assent of the amending Bill.

Streamline Borrowing Limit Process
For thoseCPAs not moving to a commercially based borrowing regime, the process to obtain increases to borrowing limit capacity will be streamlined and a comprehensive set of guidelines will be provided to assist them in this process.

Land Management Letter Patent of CPAs will be revised to allow for a wider array of uses for lands that CPAs lease or license to third parties. This will allow for greater revenue generation in the short term while protecting the long-term potential use of these lands of port operations.

Our ports continue to handle more traffic every year, and the value of the goods handled at Canada's ports reached almost $144 billion in 2006. The combined approach of legislative amendments and targeted policy initiatives will support and enhance other major transportation policies brought forward by the department such as the National Policy Framework for Strategic Gateways and Trade Corridors released his year. The framework will guide investment and policy measures that respond to unique geographic, trade and transportation opportunities in key regions, and enhance infrastructure at key locations.

November 2007