The Port of Prince Rupert should be a major beneficiary of Ottawa’s $10.1-billion pledge to revamp transportation routes to international markets, says one of the world’s biggest pulse exporters.
“Prince Rupert is a major opportunity — when we look at Pacific gateway access, we need a balanced approach between Vancouver and the Port of Prince Rupert,” said AGT Foods president and CEO Murad Al-Katib. “These are very critical elements for the next 40 to 50 years.”
Major grain companies have invested heavily in grain terminals at Vancouver, but more needs to be done, said Al-Katib, who in addition to heading one of the world’s largest pulse trading companies was a senior adviser to the panel that reviewed the Canada Transportation Act (CTA).
“We need to ensure the continued investments and port infrastructure improvements that have been undertaken by large players like Richardson’s, Viterra, and Cargill are continued,” he said. “They’ve done a great job of creating material changes in capacity at ports.”
In his recent economic update, federal Finance Minister Bill Morneau pledged to spend $10.1 billion over the next 11 years on “more efficient transportation corridors to international markets.” The details won’t be known until the next budget, but the goal is to fix congestion and bottlenecks along essential corridors, transportation hubs, and ports that access world markets.
Rail lines to the Vancouver fit that bill.
“My understanding is that some of the areas that could use some attention have to do with the (Port of) Vancouver,” said Wade Sobkowich, executive director of the Western Grain Elevator Association. “We understand that there’s a tunnel and a bridge that need some work. I’m not hugely familiar with the specifics of what they need to debottle them. My understanding is that most of that would fall into Vancouver or just outside Vancouver and that’s where the focus would need to be in terms of debottlenecking the system with infrastructure dollars.”
But fixing problem areas to Vancouver isn’t enough, said Al-Katib. Rather, Ottawa should think strategically and long term, and that means moving more grain, oilseeds, and pulses through Prince Rupert.
“We need to utilize all corridors,” he said, adding, “it’s not just about the railways.”
“We have a tendency in our business where everyone just points at the link in the supply chain directly ahead or behind them,” he said. “Farmers need to plan and market into windows in the entire crop year. We’re not necessarily going to have the infrastructure to move the entire crop in four months a year. We have to use all the ports.”
The federal government should also look at leveraging its infrastructure investment by partnering with the private sector, said Al-Katib.
“One of the things we recommended in the (CTA) report was that the government should be looking at whether they can partner with industry on tax credits that would be aimed at first- and last-mile improvement infrastructure in rail,” said Al-Katib.
The CTA panel, led by former cabinet minister David Emerson, also controversially recommended lifting the revenue cap on CP and CN to encourage them to invest more, such as renewing the hopper car fleet, which is nearing the end of its useful life. Rail sidings, newer locomotives, and track improvements could also boost the capacity of the railways to carry more grain and other bulk commodities.
But the biggest requirement is a new mindset in the entire supply chain — one that encourages participants to work together and ensure everyone profits, said Al-Katib.
“Canada is a major supplier of grains, oilseeds, and pulses to the world and we’re going to grow further,” he said. “If we want to prepare for the next 30 to 40 years, we need to ensure that those infrastructure bottlenecks, policy, information, and surge capacity are all aligned to give us that predictable, efficient access to the world markets.”
And standing still could be costly.
Economists who conducted a study for the Saskatchewan Wheat Development commission found producers could lose about $10 billion if capacity isn’t improved over the next 10 years.
“Farmers uniquely feel the effects of inadequate capacity,” said Harvey Brooks, general manager of the Saskatchewan Wheat Development Commission. “It reduces the on-farm price that they receive when capacity is rationed out.”
Morneau’s budget, which will spell out details of the $10.1 billion in transportation corridor spending, will be delivered in the spring.