Five years of infrastructure and trade-oriented initiatives targeting B.C.’s Asia-Pacific Gateway are coming to some fruition, despite the dampening effects of the recession.
Since Canada’s Pacific Gateway project launch in 2006, its alliance of government and private-sector partners have spent and committed $22 billion to projects to expand and enhance B.C.’s port, rail, road and airport infrastructure, in order to connect the province to Asian and world markets.
Simultaneously, the provincial government has looked to bolster Asia-Pacific trade by, for example, opening six trade offices in Asia in efforts to promote B.C. as an investment destination.
And while the recession has impacted B.C.’s ability to fully capitalize on these developments, there are signs that the efforts are paying off.
New investments at the Port of Prince Rupert are starting to gain international attention, according to Shirley Bond, B.C.’s minister of transportation and infrastructure.
On a trade mission to China, Korea and Japan last fall, Bond said, it became apparent that Prince Rupert’s international reputation has changed.
“It was interesting to hear the world’s largest companies saying,‘We used to think of Prince Rupert as a fishing village – but no longer,’” she said.
Port improvements include the $170 million Prince Rupert Container Terminal – Phase 1, which has a capacity of 500,000 20-foot equivalent units (TEUs) and started operating in October of 2007. In 2009, the port handled more than 12 million tonnes of cargo, including 265,000 TEUs.
Phase 2 of the Prince Rupert Container Terminal, projected to open next year, will add 1.5 million TEUs of capacity at an estimated cost of $650 million. A second terminal, slated to open in 2020, would add a further two million TEUs of capacity.
Further improvements in B.C.’s northern corridor include rail improvements to CN’s Northern Corridor rail line, including extended siding, upgrades to signal systems and increased bridge and tunnel clearances to accommodate double-stack container cars.
To accommodate exports headed toward Asian markets, CN has further established a $6 million Chicago grain transload operation, which allows grain to be containerized for export. Two other facilities, a $20 million B.C. forest products intermodal terminal, and distribution centre in Prince George and a $4 million Alberta grain transload terminal also allow containers to be prepared for export to Asia.
Port Metro Vancouver, which is Canada’s largest port and is responsible for creating nearly 130,000 Canadian jobs plus $10.5 billion in GDP, gained new capacity when the $400 million Deltaport third berth opened last January. The berth added three new quad cranes and increased cargo-handling capacity at Deltaport container terminal – Port Metro Vancouver’s largest container terminal – by 40%.
Going forward, further infrastructure investments, including Port Metro Vancouver’s proposed three-berth project at Roberts Bank, will increase the shipping capacity of the Vancouver Fraser Port Authority to six million by 2020.
Besides rail investments that add capacity and efficiency, new operational agreements have been established between Canadian Pacific Railway and CN, as well as between CN and BNSF Railway Co. The agreements target maximizing capacity on the existing infrastructure in the Vancouver area.
A $1.4 billion expansion of Vancouver International Airport was completed in 2009, adding capacity for five million passengers. Four new gates are open in the international building. Further expansion plans, which call for airport capacity to accommodate 28.4 million by 2020, would add a new international building with up to 25 gates.
Also in 2009, the $1.9 billion Canada Line was completed, providing a rapid-transit connection between the airport and Vancouver.
Since 2007, the B.C. government has opened six Asia-based trade and representative offices in Beijing, Guangzhou, Shanghai, Seoul, Tokyo and Bangalore. The provincial government estimates that these trade offices, together with two in Europe and one in California, have facilitated 700 introductions of B.C. companies into foreign markets and 120 business deals since 2008.
“We believe that we can take at least some credit for about $1.6 billion in foreign investment [in B.C.] since 2008,” said Margaret MacDiarmid, B.C.’s minister of tourism, trade and investment.
The provincial government has also established the Asia-Pacific Business Centre in Vancouver’s Robson Square as a resource to connect Asia-based investors with business opportunities in B.C., as well as to help B.C.-based businesses pursue opportunities in Asia.
“We’re going both ways,” MacDiarmid said, noting the advantages to both attracting foreign investment and helping B.C. businesses expand internationally. “And both directions are really contributing to a healthy B.C. economy.”
Despite the impacts of the recession, growth in port cargo suggests that Gateway investments are starting to pay off.
“All of the ports on the West Coast suffered as the result of the downturn in the economy,” Bond said. “But what we saw at the Port of Prince Rupert and the Port of Metro Vancouver is that the decline was less significant than it was at other ports in the U.S.”
Since 2006, Bond noted, B.C. has seen a 22% increase in container traffic and a 15% increase in bulk trade.
She added that 2010 saw a very significant recovery, as coal exports reached almost historic levels despite the downturn. In fact, with major Asian steelmakers looking to double their requests for coal, she said, a potential challenge ahead for the Gateway is capacity.
“We’re going to have to look at how we can manage the demand on the bulk side,” said Bond. “The demand for B.C.’s raw and natural materials is unprecedented.”