The Western Canadian grain trade, with the support of the Prairie provinces, is launching a campaign to push for changes to “outdated and problematic” federal rules around the oversight of Canada’s ports, mainly driven by cost increases at the Port of Vancouver over the last few years.
The Western Grain Elevator Association (WGEA) says its concerns include “double-digit annual rent increases, large but sometimes unsubstantiated ‘improvement fees’, and questionable priority setting on infrastructure spending.”
“When we do a deeper dive into port authorities, what they do, what their role is, and how they function, we quickly realize port authorities are really statutory monopolies. They have sole decision-making power over all aspects of strategic importance with Canada’s marine gateways and the economies they serve,” notes Wade Sobkowich, executive director of the WGEA, in the interview below. “That’s why it’s very important we insure we have checks and balances in place…”
“We really need changes to the Canada Marine Act to A) reverse some of the things we’re seeing at the Port of Vancouver, and B) make sure the same thing doesn’t start happening in other ports,” Sobkowich continues.
As an example, he says annual lease costs paid by grain companies to operate port facilities on federal land in Vancouver have been rising as much as 30 per cent in a single year, as they’re based on local market values. “We’re arguing rent for a facility that moves grain for the benefit of the Western Canadian economy…shouldn’t be narrowly focused on the market values of the Vancouver metropolitan area.”
There are also concerns about transparency and who is benefitting from infrastructure fees paid on a per-tonne basis by grain companies, says Sobkowich.
“Really all of these issues link back to a governance problems that we have. We need to make sure Canada’s ports have a governance structure that lines them up with the objectives of the users and the good of the Canadian economy, and we think that’s not happening in all cases,” he says.
Ultimately, these costs reduce farmgate prices for grain in that they are passed down when possible, he notes.
The three Prairie provincial governments, as well as port operators from other sectors such as mining and forestry, are on-board with the grain industry’s port governance campaign, says Sobkowich.
In a post published on the Alberta government’s website on Thursday, coinciding with the grain industry’s campaign launch, Alberta Agriculture Minister Devin Dreeshen urged the federal government to update its port governance model to include more representation from the regions where exports through the port originate. Dreeshen noted Alberta, Saskatchewan, and Manitoba ship about 98.9 million metric tonnes or $78 billion worth of exports through the Port of Vancouver annually.
“Currently, the Prairie provinces are represented by 9% of the board (of the Vancouver Fraser Port Authority) – although these provinces are responsible for 85% of the port’s export value,” he writes.
Saskatchewan Premier Scott Moe also issued a statement calling for reform of representation on the Vancouver Fraser Port Authority (VFPA) board on Friday.
“We believe that model does not provide balanced representation for the prairie provinces and are asking for the VFPA board to be restructured,” noted Moe.
Both Alberta and Saskatchewan are proposing that British Columbia, Alberta, Saskatchewan, and Manitoba each appoint two members recommended by port users to the Vancouver port authority’s 11-person board. Currently, the Prairie provinces collectively have one seat on the board.
According to Moe’s office, the premiers from Alberta, Saskatchewan, and Manitoba have written to Prime Minister Justin Trudeau telling him they want to work together on reforming port governance.
While these cost and governance concerns have escalated in recent years, changes to port governance were among the recommendations that came out of the David Emerson-led review of the Canadian Transportation Act back in 2016-17, notes Sobkowich. At the time, the Prime Minister included a review of port governance in his mandate letter to the transport minister, and Sobkowich says they are trying to once again make it a priority for the federal government.
“This is having a large negative effect on our ability to unlock existing capacity and to grow the agri-food export sector,” he says.
Listen to Wade Sobkowich of the Western Grain Elevator Association discuss the grain industry’s campaign to change Canada’s port governance rules, and concerns about increasing costs from the Vancouver Fraser Port Authority:
Editor’s note: Updated on February 19 with comments from Saskatchewan Premier Scott Moe.