| Gateways to Canada & North America |
 By William Atkinson
International commerce is key to Canada’s economic success. In order to maintain this pre-eminent position, Canada continues to improve commercial offerings in key areas such as transportation and commercial gateways. Two of the most important initiatives in these efforts are the Asia-Pacific Gateway and Corridor Initiative (APGCI) and the Atlantic Gateway.
Asia-Pacific Gateway and Corridor Initiative
Over the last 20 years, the transportation sector has helped Canada drive its economic growth. However, policies in this area (such as commercialization, privatization, and deregulation) tended to be mode-specific. However, in a modern international economy, the best way to achieve continuing productivity gains is to focus on treating the major multiple modes of transportation as an integrated system. To this end, in October 2006, the Canadian government launched the Asia-Pacific Gateway and Corridor Initiative (APGCI), an integrated set of investment and policy measures related to trade with the Asia-Pacific region.
The initiative is timely. Between 1995 and 2005, for example, Canada’s exports to China more than doubled, from $3.5 billion to $7.1 billion; and Canada’s imports from China grew almost 550 percent, from $4.6 billion to $29.5 billion. China’s dramatic growth is expected to continue, and Canada will be a part of it.
The primary goals of the APGCI are to boost Canada’s commerce with the Asia-Pacific region, increase the Gateway’s share of North American-bound container imports from Asia, and improve the efficiency and reliability of the Gateway for Canadian and North American exports.
The APGCI includes almost $1 billion worth of current and future public investments in infrastructure, transportation technology, border security, and competitiveness initiatives, with $800 million going to projects in British Columbia.
There are five elements of the APGCI:
1. Strategic infrastructure
2. Private investment and innovation
3. Security and border efficiency
4. 21st century governance
5. Policy renewal
Strategic infrastructure: In May 2007, David Emerson, Minister of International Trade and Minister for the Pacific Gateway, announced $492 million in funding for 10 strategic infrastructure projects for the Asia-Pacific Gateway and Corridor Initiative. These are designed to increase transportation capacity, reduce congestion at key locations, and improve connections between and among modes (port, highway, rail, airports). Some of the infrastructure projects include expanding the size and capacities of the ports, constructing new road and rail grade separations, expanding highways that would have the potential to become bottlenecks, and constructing new roads to link transportation facilities.
There is a network of transportation infrastructure — that includes ports, rail connections, highways, airports, and border crossings — stretching from the Pacific Ocean to the heartland of Canada. The APGCI is focusing on two routes: One runs from Vancouver, B.C., through Calgary, Alberta, and Regina, Saskatchewan, and as far as Winnipeg, Manitoba. The other begins at the Port of Prince Rupert, and runs through Edmonton, Alberta; Saskatoon, Saskatchewan; and to Winnipeg, Manitoba. From Winnipeg, shipments can be sent to other parts of Canada, as well as to the central and eastern United States. In fact, the nickname for the initiative is the “Shanghai to Chicago connection.”
“Most of the goods coming by ship to the ports and then entering the United States would be shipped by rail, because most of the shipments would be coming into the ports on large containers,” explains the director of the Pacific Gateway Coordination Branch for Transport Canada (Ottawa). “The goods coming through the two lower ports have access to both Canadian National and Canadian Pacific, which cross the U.S. border at various points,” the director notes.
One particularly innovative element of the APGCI is called the “Smart Corridors Strategy.” Of the APGCI budget, $2 million has been committed to the development of the Smart Corridors Strategy, which is designed to guide the deployment of a range of technology-based systems to improve the movement of people and goods along corridors.
Ports are also critical to the strategic success of the APGCI. The new Fairview Terminal in Prince Rupert officially opened on September 12, 2007, complementing the vision to create an efficient world-class transportation system linking Asia to the economic heartland of North America. The first vessel to dock in Rupert (owned by Cosco Shipping Company, one of the largest shipping lines in China) arrived in port on October 30, 2007. Following the offloading and security check, Canadian National’s (CN) 9,000-foot-long train carried 360 containers to Chicago within a record time of 92 hours.
This event highlighted a key competitive advantage with Canada’s West Coast ports and the Gateway Initiative — fast access to key markets. The port of Vancouver is two days closer to Shanghai than California ports, and the Port of Prince Rupert, B.C., is the closest North American port to Asia (three days closer to Shanghai than California ports; more than 1,000 nautical miles closer to Hong Kong than Los Angeles).
Despite the economic advantages related to distance, these Canadian ports currently account for only 9 percent of the container traffic along the West Coast of North America. The Canadian government’s goal is to increase the percentage of port traffic from 9 percent to 14 percent.
To further improve service and cost efficiency, the three British Columbia Lower Mainland port authorities (Vancouver, Fraser River, and North Fraser) amalgamated on January 1, 2008, combining into a single port authority. The new Vancouver Fraser Port Authority's (VFPA) will coordinate port planning more efficiently and expand capacity from 2.8 million to 5.5 million TEUs by 2020.
Private investment and innovation: Private-sector firms have committed almost $6 billion in investments in the Initiative through 2010, involving port, rail, and airport facilities. The Canadian National and Canadian Pacific railways are investing at least $2.5 billion in their systems to boost capacity and increase productivity.
Security and border efficiency: Initiatives here include improving rail and transit security, highway transport security, air and intermodal cargo security, and marine security.
21st century governance: Since issues impacting the APGCI are interrelated, the Canadian government recognizes the need for various federal departments to work together to deliver leadership that meets the needs of business, communities, and investors.
Policy renewal: The Canadian government has focused on policy issues that directly impact the efficiency of the transportation infrastructure. These include land use planning, macro-economic policies, labor market policies, targeted trade and investment promotion, standards harmonization, security and border facilitation, and tourism policies.
An example of the success of this approach occurred in early 2007, when Canadian Minister for the Pacific Gateway David Emerson signed an agreement with the Chinese Minister of Communication to foster cooperation on intermodal transportation gateways to support international trade. Cooperation in air services, an important element of intermodal transportation gateways, was the focus of a follow up delegation mission to China by Mr. Emerson in January 2008. Accompanied by airport authorities, carriers, and manufacturers, the delegation was able to advance cooperation in areas including bilateral air agreements and infrastructure.
The Atlantic Gateway
The Atlantic Gateway, which includes the four eastern provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island, is being modeled after the APGCI.
Opportunities: Due to its competitive transit times, reliability, and cost-competitiveness, the Atlantic Gateway has the potential to facilitate access between North America and the emerging economies of India, Thailand, Malaysia, Indonesia, Bangladesh, Pakistan, Singapore, and the Middle East. Additionally, a rail corridor links the region to markets in central Canada and the U.S. Midwest. Furthermore, there are also two trucking corridors: one between Atlantic Canada and the U.S. Northeast, and the other linking the Atlantic region with central Canada.
“We are seeing a huge advantage for the region because of where we are positioned,” notes Debbie Windsor, vice president for the Nova Scotia branch of the Atlantic Canada Opportunities Agency (Halifax). “We are well-positioned to get a larger share of international traffic, especially because of transit times and costs. Reports we have done show that the Atlantic Gateway has the potential to generate $3.4 billion in GDP.”
The Atlantic Canada Opportunities Agency (ACOA), a regional economic development agency, has a Federal-Provincial Working Committee, which Windsor co-chairs. The committee is currently analyzing a number of new opportunities and identifying ways to capitalize on them. “We are also working to increase our connection with the private sector, because we realize that this needs to be a private-sector–driven initiative,” she adds.
Ports: The first and most obvious opportunity for the Atlantic Gateway, according to Windsor, relates to overseas containers arriving at ports. “We are currently looking at how we can build on this opportunity,” she says.
The primary ports in the Atlantic Gateway are the Port of Halifax (Nova Scotia), the Port of St. John’s (Newfoundland), and the Port of Saint John (New Brunswick). From 1995 to 2006, container traffic at these ports increased from 492,000 TEUs to 693,000 TEUs.
The Port of Halifax, Canada’s third-largest port, is considered particularly important. It is a deepwater port that does not need dredging. In fact, it is one of the deepest and largest natural harbors in the world that remains ice-free in the winter.
Most of today’s vessels can carry 4,200 40-foot containers, and can enter the ports of New York, Montreal, and Vancouver. However, newer vessels can carry 9,500 40-foot containers. They are so large that they exceed the maximum capacity of most ports — but not of Halifax.
The shipping industry is also moving toward a “hub and spoke” network, which means that these container ships are docking at a fewer number of large ports that are capable of accommodating these giant vessels. Their containers are then transported to their final destinations via rail and road links. Halifax offers double-stack Class 1 rail service to central Canada and the U.S. Midwest. Halifax is currently operating at about half of its capacity. However, there is room in the area for the port to expand to an even greater capacity as demand and usage increase.
Perspective: The Atlantic Gateway is a hub that provides a central meeting point for large and small ships, railways, highways, and air transport. In fact, Canadian National Rail offers daily double-stack departures from Halifax to Montreal, Toronto, and Chicago. In sum, the Atlantic Gateway is poised to be able to provide service to all of eastern and central Canada, as well as the eastern and central United States. |
