Now is not the time to hit the pause button on building trade-enabling infrastructure in B.C.
A reported 5.9% drop in container traffic in the Port of Vancouver for the first half of 2016 is almost certainly a blip in the otherwise upward trend B.C. ports have been experiencing over the last few years.
Container traffic has been a consistently good news story for the province, particularly in 2015 when B.C. hit record-breaking figures. Despite the recent downturn, the latest container traffic forecasts by U.K.-based Ocean Shipping Consultants project an annual 4% growth for both Vancouver and Prince Rupert ports from 2016 to 2030. However, unless B.C. ports have the necessary infrastructure to manage our growth capacity, B.C. risks losing out to our fiercely competitive American counterparts.
In recent years, B.C. ports have been reaping the benefits of major service disruptions caused by labour strife in U.S. ports. By contrast, B.C.’s eight-year signed agreement with longshoremen offers labour stability, making our ports more reliable and prompting shipping companies to divert U.S.-bound vessels to Canadian waters.
This rosy situation could change quickly, however, as Western U.S. ports are investing heavily in infrastructure upgrades to recapture lost container trade. Most notably, the Los Angeles-Long Beach port complex is undergoing a US$7 billion, 10-year terminal infrastructure and technology rebuild.
Expansion of container-handling facilities is critical to B.C.’s ability to maintain and grow its container cargo market share, and the ports of Vancouver and Prince Rupert are well positioned to dramatically bolster our province’s cargo-handling capacity.
Not only is the Port of Prince Rupert the shortest trade route between Asia and North America (36 hours closer than Vancouver and more than 68 hours closer than Los Angeles), the shipping channel depth and an efficient rail service to Chicago and the rest of the American heartland make this port increasingly attractive to Asian container-shipping companies.
The Roberts Bank Terminal 2 Project proposed at the Port of Vancouver gives B.C. the best opportunity to capitalize on global container traffic. The project is currently under environmental assessment and, if approved, construction is expected to take about 51/2 years.
The economic value during the construction phase would be substantial. It could add approximately $1.3 billion to the province’s GDP, contribute to $3.65 billion in total economic output and generate government revenue of approximately $300 million.
Job creation would also be significant, generating an estimated total of 12,719 person-years of direct, indirect and induced employment, worth approximately $1 billion in wages. The benefits of the project go far past construction, as not only would the new terminal continue to generate high economic return for the province, it would support over 12,400 person-years of well-paid employment annually and ensure that Canada is better able to compete on a global scale.
Although container traffic has slowed globally, we need to remain mindful that decisions shouldn’t be made off a six-month trend.
The long-term trajectory for B.C. is growth in shipping traffic, and when the demand hits, we need to be ready for it. Otherwise, our claim to the Asia-Pacific Gateway is lost and B.C. will miss out.
Maureen Kirkbride is the interim CEO of the BC Chamber of Commerce