CIIT Committee Meeting

     This is meeting 102 of the Standing Committee on International Trade.

    Before we begin, I would like to remind all members and other meeting participants in the room of the following important preventative measures.

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    I'm not going to read the rest of the message, because it's the same one I read to you every week.

    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, October 17, 2023, the committee is resuming its study of Canadian businesses in supply chains and global markets.

    We have with us today, from the Buffalo and Fort Erie Public Bridge Authority, Ron Reinas, chief executive officer. Welcome back, Ron.

    From the City of Port Colborne, we have William Steele, mayor, by video conference.

    From the Federal Economic Development Agency for Southern Ontario, we welcome Steve Masson, acting vice-president.

    From the Hamilton-Oshawa Port Authority, Ian Hamilton, president, is appearing by video conference.

    From Naviga Supply Chain, we welcome Matt Weller, founder.

    Finally, from the St. Lawrence Seaway Management Corporation, we have Jean Aubry-Morin, vice-president, external relations, by video conference.

    Welcome to you all. I believe there's one witness who is not online yet. Mr. Hamilton has not been able to connect yet, so we'll hold those questions until he's able to join us.

    Thank you for taking time out of your busy day to come share your information and your thoughts with us.

    We will start with Mr. Reinas, please.

    I invite you to speak for up to five minutes.

     Thank you, Madam Chair.

    Good afternoon.

     The Peace Bridge between Buffalo, New York and Fort Erie, Ontario is a critical land-border crossing, with 1.1 million trucks and 4.5 million cars crossing annually. Its public authority is governed by a 10-member international board, with the five Canadian members appointed by Privy Council upon the recommendation of the Minister of Transport.

    Canada has invested heavily in trade-related infrastructure—almost $5 billion through the national trade corridors fund, or NTCF, and another $6.5 billion for the new Gordie Howe bridge, as well as other initiatives, such as the Niagara trade corridor. However, since the year 2000, truck traffic across the Canada-U.S. border has declined by almost 25%. In 2023, Mexico surpassed Canada as the top U.S. trading partner. Overall, as a share of all U.S. trade, Canada has declined from 21% in 2000 to 15% in 2023.

    Infrastructure investment is negated if other government actions or inaction prevent the border from being as seamless and free-flowing as possible.

    Here are three examples.

    First, because Immigration, Refugees and Citizenship Canada does not have reasonable service standards for processing the paperwork associated with maintaining or changing status for temporary Canadian residents, it forces people to drive hours to the border, where they must cross the border, be denied entry to the U.S. and return to Canada, where they then receive immigration services immediately. This process has been termed “flagpoling”.

    What happens at the border when some 35,000 annual flagpolers arrive? At the Niagara River and Champlain crossings, it takes at least 30 minutes for a flagpoler to be processed by U.S. Customs and Border Protection, translating to eight officers a week dedicated to this process. This means they are unable to staff primary inspection lines, resulting in delays for cars and trucks carrying Canadian exports to the United States. This process is repeated when these temporary residents return to Canada, tying up a similar number of CBSA officers. This process simply should not be happening at the border. During the COVID-19 pandemic, it couldn't because of travel restrictions and it didn't have to, because IRCC granted what was called “implied status” if a temporary resident applied online before their status expired.

    Second, the Peace Bridge is the recipient of a $5-million NTCF grant to construct an innovative commercial pre-arrival project. We are constructing infrastructure in Canada to support technology supplied by U.S. customs, allowing all trucks to be scanned and manifest data to be collected while in motion, then adjudicated during the two- or three-minute transit across the bridge. The result is a much shorter stop at the U.S. primary inspection booth. It's a game-changer for the border in terms of enhanced security while at the same time significantly expediting Canadian exports to the U.S.

    Why is this project so critical? In 2021, the United States passed the Securing America's Ports of Entry Act, requiring CBP to plan for 100% non-intrusive inspection for all land ports of entry within six years. At the Peace Bridge, it would be impossible to implement that mandate in the United States. Regardless, it is common sense to collect that data in Canada and take advantage of the time and space, resulting in a clearance process that is so much quicker than is currently the case.

    Unfortunately, we are not able to realize the full potential of this project because, thus far, Canada has not approved facial identity verification to allow CBP to make inadmissibility determination for the U.S. in transit, even though every truck that goes through the non-intrusive scan in Canada must, in fact, enter the United States.

    Third, Treasury Board and Canada's Customs and Immigration Union are at an impasse and there will likely be strike action this summer, seriously impeding the border. The union is telegraphing that it will “bring international borders to a standstill through work to rule action”, even though the union states that work to rule is considered a strike action and Treasury Board states that most CBSA officers are considered essential and “prohibited from participating in a strike”. This happened in 2021 when the border was essentially shut down, with truck queues longer than seven miles entering Canada, and supply chains, trade, tourism and travel all hopelessly gridlocked.

     If a free-flowing border is as important as everyone says it is for the well-being of Canada, this simply should not be allowed to happen.

    Thank you for the opportunity to make these remarks.

    Thank you very much.

    We'll go to Mr. Steele for up to five minutes, please.

     Honourable Chair, members of the committee and fellow witnesses, good afternoon.

    I want to start off by saying that I'm honoured to be here before the House of Commons Standing Committee on International Trade. Thank you for the invitation to speak and share my views on Canadian businesses in supply chains and global markets.

    I think most Canadians will agree with me when I say that we're fortunate to be citizens of such a resource-rich nation. Having easy access to raw materials and bulk commodities makes Canada an important link in the whole supply chain system.

    Every day when I look out my window, whether it's from my truck as I'm driving to work or from my office at city hall, the bustling traffic on the Welland Canal always reminds me just how much Canada is connected to the rest of the world. As far as I'm concerned, the cargo on the ships passing through Port Colborne is precious cargo, and, without any of it, our lives would not be the same.

    It took a global pandemic for us to realize that we often take the transportation of goods for granted. Since being elected and re-elected as mayor, one of my main priorities has been championing this message, that positive relationships between the public and private sectors are essential. I know I'm not the only one who believes this.

    The four mayors along the Welland Canal, Matt Siscoe in St. Catharines, Terry Ugulini in Thorold, Frank Campion in Welland and me in Port Colborne, have all provided our support for partnerships that will position the Niagara region as a strong, multimodal transportation hub.

    For the past 200 years, Port Colborne's residents have rolled up their sleeves, started businesses and worked hard at making sure that the Great Lakes stay a vital trade route for Canada. We are incredibly proud of all the progress that's being made today to revitalize our waterfront and transform hundreds of acres of industrial land along the canal. We may be a small town with a community of just over 20,000 people, but we prioritize economic development in a big way. An independent report in 2022 showed that maritime shipping in Port Colborne generates an economic impact of $64.5 million annually.

    The Great Lakes—St. Lawrence region is the industrial and agricultural heartland of both the United States and Canada, with a combined GDP of more than $6 trillion U.S. This output would represent the third-largest economy in the world behind the U.S. and China if it were a country. Ontario is the third-largest trading partner with the United States after Mexico and China. Now, imagine what that number could be for all Lake Erie ports if, under a warming climate, year-round shipping became a reality.

    I've been a long-time advocate for expanding marine shipping on the Great Lakes, and for good reason. First, it would reduce the number of trucks in urban areas, leading to less strain and congestion on our roads or highway infrastructures. Second, it's a more environmentally friendly option, contributing to lower carbon emissions. Finally, increased shipping activities creates new jobs in the marine industry and allows truck drivers to be closer to home.

    In saying all of this, it may sound like I favour marine shipping over other modes of transport. Truthfully though, when it comes to optimizing supply chains and ensuring that Canada is a leading trade partner, I believe that different modes of transport need to work together and be complementary, not competitive.

    The global marketplace offers Canadian businesses incredible opportunities, but it's not without its challenges. We saw this during the COVID-19 pandemic. Disruptions and inefficiencies in any supply chain won't just hurt the Canadian economy, but also the everyday lives of Canadian consumers.

    Through my involvement with the Great Lakes and St. Lawrence cities initiative, I've had productive conversations with fellow mayors as well as government officials about how cross-border supply chains—that is, at land borders and between Great Lakes ports—are the backbone of Canada's reputation on the world stage.

    I'll wrap up by putting emphasis on the importance of collaborative supply chain relationships. We need supply chains to be sustainable, reliable and multimodal if we want Canada's place in the value chain to improve.

    There is no doubt in my mind that the federal government should lead by strategically investing in key supply chain infrastructure and by working towards modernizing policy to boost the competitiveness of Canadian businesses.

    Thank you again for this opportunity to appear before the standing committee.

     I'd be happy to take questions.

    Thank you very much.

    Now we go to Mr. Masson for five minutes, please.

    Good afternoon, Madam Chair and members of the Standing Committee on International Trade.

    Thank you for the invitation and the opportunity to be here today.

    My name is Steve Masson. I'm the acting vice-president of policy, partnerships and communications for the Federal Economic Development Agency for Southern Ontario, which I will refer to as FedDev Ontario or the agency during my testimony.

    Before I begin, I would like to acknowledge that the land on which I join you today is the traditional unceded territory of the Algonquin Anishinabe people, specifically the Algonquins of Pikwakanagan.

    FedDev Ontario is one of seven regional development agencies. Our area of focus is southern Ontario. With offices in Waterloo, Toronto, Ottawa and Peterborough, the agency provides economic growth programs and services to small and medium-sized enterprises, communities and organizations. Its mandate is to strengthen the capacity for innovation and clean, inclusive economic growth across a region that is a significant driver of Canada's economy, accounting for more than a third of Canada's population, gross domestic product and employment.

    Ninety nine per cent of all businesses in Ontario are SMEs, of which there are almost half a million across the province. Ontario also has the largest amount of international trade of all the provinces and territories, valued at $760 billion in 2023, amounting to half of Canada’s international exports and imports of goods and services.

    Helping SMEs to scale up, expand to new markets and integrate into global supply chains is key to fuelling economic growth in the region. FedDev Ontario coinvests in projects that help SMEs to develop, commercialize or produce innovative products, processes and services; improve productivity, capacity and competitiveness; and scale up and expand to develop new business opportunities, including diversification into new global markets.

    In addition to directly supporting SMEs, we also invest in cluster building projects across our innovation ecosystem that can act as magnets for attracting international talent and investment to the region. We also work with not-for-profit organizations, such as business accelerators and incubators, to provide tailored support to our scaling firms to help them along their growth journey and enter new markets.

    In 2022-23, FedDev Ontario invested $154 million in 135 projects through its ongoing programs. These projects helped create and maintain more than 13,000 jobs and facilitated growth opportunities.

    Many of these growth-oriented investments have helped SMEs enter new domestic and international markets and reach new customers across a diverse range of sectors, including digital technology, food and beverage manufacturing, and aerospace.

    As in other regions of the country, the pandemic highlighted the vulnerability of our supply chains. Through its investments, FedDev Ontario has supported companies to onshore key capabilities and thereby build a more resilient domestic supply chain. In fact, this was a key priority under the jobs and growth fund that we recently delivered.

    Southern Ontario's economy is highly integrated in both North American and international supply chains, including in the automotive industry. The region is the second-largest vehicle manufacturing jurisdiction in North America, with more than 1.8 million light-duty vehicles produced annually in eight vehicle assembly plants. As this industry evolves and demand shifts to zero-emission vehicles, southern Ontario's automotive supply chain will be required to adapt and transform to continue to grow.

    FedDev Ontario is helping to position the region's SMEs and communities to capitalize on this once-in-a-generation opportunity, with over $83 million invested to date in the companies and communities at the epicentre of this transition. Closely linked to the growth of this sector is the importance of maintaining fluid and efficient trade corridors to move parts back and forth across these globally integrated electric vehicle value chains.

    Thank you again for the opportunity to be here to discuss FedDev Ontario's role as it relates to the committee's study of domestic and global supply chains and Canadian businesses in global markets.

    I will be happy to answer questions from the committee.

    Thank you very much.

    Mr. Hamilton, I understand you're with us now. I'll turn the floor over to you.

    Thank you very much.

    Thanks for the opportunity to speak on this important topic. I am here on behalf of the Hamilton-Oshawa Port Authority, the largest Canadian port authority on the Great Lakes. I am happy to be presenting this afternoon alongside our partners from the great city of Port Colborne and the St. Lawrence Seaway.

    I'll focus my remarks today on the goal that I think we all share—trade-enabling, efficient, reliable supply chains, supply chains that Canadians can rely on to get the goods where they need them, when they need them. The key to delivering on that goal is ensuring that we have adequate supply chain capacity. Two of the most important barriers we are faced with right now are customs clearance support and our ability to build new trade-enabling infrastructure quickly and efficiently.

    The region that HOPA serves, southern Ontario, is Canada's most populous and economically powerful region. It is highly integrated with our most important trading partner, the United States. If the binational Great Lakes region were a single economy, it would be the third-largest in the world. This region is growing in population and economic activity. The time to build new supply chain capacity is before existing systems fail. As we have seen over recent years, coming out of COVID, we are already possibly too late.

    As a port authority, our role is to facilitate trade, build robust supply chains, and create the space for Canadian industries to thrive, but we don't do it alone. We are at the centre of a network of stakeholders and partners, including industry, shippers, transportation service providers and others in the sector. We also rely on the support of such organizations as the Canada Border Services Agency. CBSA has a critical job to do in regulating the movement of goods in and out of Canada to protect Canadians. We do believe, however, that the agency could strike a better balance to facilitate trade and commerce.

    Here is an example. HOPA and its partner, Hamilton Container Terminal, have proposed a rail transload facility for pre-cleared containers in Hamilton. This facility would help to expand and diversify the supply chain, aligned with population growth in this busy economic region. It will offer a competitive cost option for Hamilton-area importers and exporters. Reduced trucking distances will have positive impacts on congestion and emissions by keeping containers on rail closer to their final destinations.

    HOPA and HCT have committed to investing in the required infrastructure, which today is close to $30 million or $40 million. We have a list of commercial partners and shippers who are eager for this service. We have the support and partnership of CN Rail. We are ready to go. We have made a request to CBSA to provide staffing for this facility, estimated to be between two and four staff. The request has now been outstanding for two years, and we are still waiting.

    The time to build supply chain capacity is before the next crisis, or before the growing population overtakes our current systems. We would invite CBSA to be more forward-looking to enable this and other projects to move forward.

    The other thing we can do as a country, for future-ready supply chains, is to invest in the critical trade-enabling infrastructure, especially in the Great Lakes region, sometimes overlooked as a critical trade gateway. The national trade corridors fund facilitated such investments. I know that there have been some questions about the programs's impact, so let me share a bit of our experience.

    Hamilton's Westport is one of the city's oldest harbourfront industrial areas, constructed mostly on industrial fill over the course of a century. In 2018 we were awarded $17 million through the NTCF to modernize infrastructure and improve connections in this zone. HOPA matched that federal investment with a further $20 million. The Westport modernization project was born. By creating new development parcels and modernizing facilities and infrastructure, HOPA turned the initial investment into long-term value.

    A couple of years later, we worked with the NTCF again on a $5-million project at Pier 10 in Hamilton, focused on Ontario's grain and food processing supply chains. These projects have more than delivered on their supply chain objectives, fostering increases in cargo volumes, rail volumes, employment and more.

    As a result of these investments, we recently announced the construction of Canada's largest sugar refinery in the Westport zone, leveraging the NTCF's initial investment. This announcement was followed closely by the announcement of an expanded flour mill and additional terminal capacity. Both these developments are helping to fuel the food processing sector in southern Ontario.

    These outcomes total almost a quarter of a billion dollars in new investment and over a billion dollars in economic impact. They are terrific examples of the value of investing in trade-enabling infrastructure that ports do facilitate and of how these minimal investments can be seriously leveraged.

     The most recent budget made no provision for recapitalizing the NTCF or other flagship infrastructure programs. We think this is a missed opportunity to deliver more projects like HOPA's Westport project.

    Port authorities are entrepreneurial government business enterprises that are created to be self-sufficient and nimble responders to commercial opportunities that bolster Canadian trade. We think we're delivering on that mandate strategically and successfully.

    We would encourage government to empower ports to do what we do best. We can continue to deliver good projects and good outcomes for the Canadian economy.

    Thank you for allowing me to address the committee today.

    Thank you very much, Mr. Hamilton.

    We'll go on to Mr. Weller, please, for up to five minutes.

     Thank you, Madam Chair and members of the committee, for the privilege to speak to you today.

    My name is Matt Weller. I am the founder of Naviga Supply Chain, which was created to respond to the supply chain challenges of small and medium manufacturers, which make up 99.4% of all of Canada's manufacturing. Many of these produce low-volume, high-value or high-complexity products that present a unique set of supply chain challenges that are seldom discussed and even less addressed.

    I'm speaking to you today as a practitioner with 24 years of experience working hands-on in every supply chain discipline in a variety of industries who has seen first-hand the productivity and supply chain challenges these Canadian manufacturers face at their roots.

    Our supply chain challenges cannot be addressed solely by export programs, process improvements, technology, AI or investment. None are the panaceas many wish they were. To be certain, these are all essential and beneficial elements once a firm has become reliably effective in its productivity and profitability, but disastrous if applied without first achieving effective operations.

    Where SME manufacturers are concerned, the core challenge is in getting to this point. There are more challenges stacked against them in this regard than I can list in this short address, but executional knowledge, development and retention are paramount among them.

    These pre-existing challenges are now being exacerbated by the perfect storm. Declining birth rates and a large retiring demographic mean that capital is already becoming scarce. Arbitrary taxation and regulatory policies are antithetical to competition and productivity, and serve to stifle SMEs, which further compounds the problem.

    Globalization is breaking down, with new geopolitical impacts on supply every day. As we lose existing manufacturing resources, future entrepreneurs are being discouraged from manufacturing, believing that physical production is not a viable business model in Canada. Many VC firms will not invest in manufacturing because of the front-loaded capital aspects and the lack of confidence in their ability to produce value.

    It's time to do something different. Here are three suggestions.

    First, while industry must inform and lead the solutions to these challenges, a national reindustrialization strategy is needed to coordinate and prioritize those efforts and design a supply chain and business environment that is favourable to productivity. We need to ensure we can understand, identify and retain critical manufacturing resources, skills, capacity and capabilities, and their complex interactions at the detailed levels, which will be needed for both industry and consumers in the much longer term.

    Taking a “whole system thinking” approach, we can balance the needs of our economic system and avoid short-term benefits to any particular sector or industry at the long-term expense of overall productivity and economic stability. This is critical for us to survive the societal, economic and geopolitical challenges that lie ahead. The recent pandemic has already demonstrated our vulnerability.

    Second is education and funding. Young entrepreneurs are taught how to fundraise, market and sell, but not how to produce. For manufacturing start-ups the default practice is to worry about that later. When later comes, many fail, along with the funds invested in them.

     We need to change this trend in our institutions and incubators. We need to incentivize educational institutions to develop supply chain-system thinking for reindustrialization and actively fill the executional knowledge gap. Funding—government or private equity—could be awarded based on executional knowledge retention in meeting productivity targets and—proving the viability of the business with results. This would also serve to de-risk for investors, who otherwise would not invest in any kind of manufacturing.

    Third, build a small and medium manufacturing ecosystem.

    There is a lot that our small and medium manufacturers can learn from our intangibles tech sector in terms of building ecosystems. Our SME manufacturers tend to be unbelievably stretched on resources, poorly networked online and they struggle in isolation. An ecosystem could help tremendously with this, regionally and nationally. It must be industry-led, but encouraged by government. An active ecosystem can leverage broad, experienced-based knowledge to solve common problems, improve the visibility of Canadian manufacturing and build an inventory of resources and capabilities with collaborative trade networks and relationships across Canada in addition to existing north-south trade patterns.

    We need to act post haste. The world is changing quickly and it will not wait for Canada. This study brings me the optimism we could have the dialogues and vision to act.

    Thank you for your time.

     Thank you, Mr. Weller.

    We will move on to Mr. Aubry-Morin.

     Good afternoon, Madam Chair. My name is Jean Aubry-Morin. I'm the vice-president of external relations at the St. Lawrence Seaway Management Corporation. I would like to thank the committee for the privilege of discussing with you the value of the St. Lawrence Seaway, a key link in the North American supply chain and an important gateway for international trade.

    We are a non‑profit corporation that was established in 1998 to operate the Canadian assets of the St. Lawrence Seaway. We work closely with the Great Lakes St. Lawrence Seaway Development Corporation, which is the U.S. partner in our binational network.

    The Great Lakes St. Lawrence Seaway system is a 3,700-kilometre marine highway that includes 15 locks and extends from the Atlantic Ocean to the head of the Great Lakes. We provide an essential link to a network of inland ports and international connections on both sides of the Canada-U.S. border. Our system supports 355,000 jobs and $30 billion in wages.

    In 2022, 252 million tonnes of cargo was moved through the St. Lawrence Seaway waterway, generating $66 billion of economic activity. Marine shipping on the St. Lawrence Seaway is environmentally friendly and cost-effective. One Seawaymax vessel carries the equivalent of a thousand transport trucks or 300 railcars.

    The Canadian government recently announced a plan for a green shipping corridor on the St. Lawrence and Great Lakes system. More shipping moving essential cargo through the system will reduce congestion on our highways and the busy rail corridor and will increase transportation sector efficiency and productivity.

    Dry bulk and liquid bulk are the major cargo streams on the system—essential goods such as grain, iron ore, salt, petroleum and specialized chemicals. Project cargo, from wind turbines to manufacturing equipment, also moves on the seaway. We are well positioned to support the diversification of Canadian goods shipped by water. Since the conflict in Ukraine began, we have supported increased exports of potash and grain to meet international needs.

    Thanks to strategic infrastructure investments, our legendary 99% availability rate means shippers don't have to worry about delays in getting their products to market. We have available capacity that can double the throughput of our existing system in response to future economic opportunities, including the emerging potential of Canada's critical minerals strategy and the ongoing decarbonization of the cargo supply chain.

    In addition to the trade growth potential, we offer our system's low GHG emissions. The net-zero focus offers benefits to the entire transportation sector. Through innovation, the SLSMC has reduced its GHG emissions by 58% compared with the 2005 level, ahead of the mandated 2030 reduction target of the federal government.

    The recent renewal of our long-term agreement with the Canadian government brings stability and predictability for the corporation and stakeholders. This 20-year agreement allows the SLSMC to continue its mission of maintaining a safe, secure, reliable, environmentally friendly and cost-effective system.

    Ongoing investments in marine infrastructure through renewed federal infrastructure funds will strengthen the key supply chain and encourage international trade opportunities. It is critical that the Canadian government continues to recognize the essential value of the St. Lawrence Seaway corridor.

    I look forward to answering any questions the committee may have. Thank you very much for the opportunity, Madam Chair.

     Thank you very much, sir.

    Now we will go on to rounds of questions.

    Mr. Baldinelli, please go ahead for six minutes.

     Thank you, Madam Chair.

    I would like to thank the witnesses for being with us today.

    As a member of Parliament from Niagara, it's wonderful to see so many witnesses whom we have invited today who have either come from Niagara or their businesses and relationships that deal with trade and supply chains in the Niagara area.

    Earlier in the comments by Mayor Steele, he talked about the notion of collaboration, the private sector working together with government and its agencies to facilitate economic growth.

    Just yesterday, there was a release that was issued. It came from the Chamber of Marine Commerce. The title of the news release says, “Chamber of Marine Commerce Supports Call for Government to Get Out of the Way of Supply Chains”. In its release it says:

    Mr. Hamilton, you talked about some of the examples with regards to HOPA in Hamilton and your issues with CBSA. In fact, you talked about a two-year wait to get approval for CBSA staffing for a very important project.

    Can you elaborate on that?

    As a result of the highlighted vulnerabilities of our supply chains coming out of COVID, we realized that we needed to build additional capacity to service the GTHA. We embarked on a project to create a transloading facility for containers that would be brought by vessel into Montreal. Then we would connect it by rail from Montreal to Hamilton and deliver those containers into Hamilton.

    The containers would come off the vessel and be pre-cleared there for security reasons. Then they would be brought to Hamilton before they would be allowed to enter into the economy through CBSA clearance. What that requires is the creation of what's called a "sufferance warehouse". That sufferance warehouse would be where containers would be held in bond until they were cleared to enter into the economy.

    What we applied for was the ability to create that sufferance warehouse in Hamilton. Between the Hamilton-Oshawa Port Authority and Hamilton Container Terminals, we put up all of the capital and the land resources to facilitate that. Really, all we needed was CBSA to come in to do the inspections. We were little bit dismayed that CBSA had come back on a number of occasions and said there was no business case to support that. Yet, when you look at the container growth in and out of GTHA over the last decade, it has more than doubled.

    Then you look at other factors like the increasing population size and the population that we're going to see throughout the GTHA, and you realize that this container volume is going to continue to grow. We need the capacity to be able to meet that demand.

    Again, we could be waiting until it's too late.

    Yes, thank you for that.

    I just want to pivot from that and go Mr. Reinas with the Peace Bridge authority and some of the issues that he is also finding in dealing with CBSA.

    We have the ports security act, and you have section 6 of the Customs Act. Now, on the notion of contract negotiations, regardless of where we stand on the contract, it's always that we seem to be negotiating the last contract with our union, as opposed to having forward moves to negotiate a contract in the future.

    Could you explain some of those issues?

    I'll start with the last one.

    You mentioned the contract. The last contract with CBSA ended in 2022. My understanding is that they are negotiating a four-year contract that will end in 2025. If they settle this summer sometime, it will basically be good for one year, and they'll start all over again. Ideally, the two sides would agree on a longer term contract to remove some of the uncertainty that's associated with the contract.

    With respect to Securing America's Ports of Entry Act, the U.S. is moving to their standard operating procedure of 100% scanning of all trucks. Currently, they do about 5% to 10%. Unless we understand what that means in terms of slowing down commerce moving across the border, it needs to be addressed. A one-hour delay means that it's one hour less service that the trucker has, which means that he might not be able to get his product to where it needs to go.

    We at the Peace Bridge had to deal with this because we have limited space on the U.S. side. Realistically, it should be addressed at every port of entry because, if you address there, you can examine the shipment while it's crossing. All of the major crossings for commerce in Canada are bridges: Blue Water Bridge, Ambassador Bridge, Peace Bridge and the Queenston-Lewiston Bridge.

     And if I'm not mistaken, we have two of the four busiest commercial bridges in my riding alone.

    If I'm not mistaken as well, we're the only bridge that has responded to the new legislation through the PARE program. What is of grave concern is that none of the other bridges is ready for this. I don't think the government is ready for this act.

    Part of the problem is that the bridges are all run differently. The Ambassador Bridge is private; the Lewiston-Queenston Bridge runs on a similar model to us. Other bridge authorities take the perspective that it's for governments to figure out.

    We can't wait for the government, because if it gets imposed, it's just one incident away from becoming mandatory. Right now the year is 2026. It needs to be addressed. I thought the Gordie Howe bridge would have incorporated that into their modelling and design, because it only makes sense to do it in Canada and take that time and space to actually adjudicate these shipments.

    You have only 15 seconds left, Mr. Baldinelli.

    We'll go to Mr. Arya for six minutes, please.

    Thank you, Madam Chair.

    Mr. Reinas, you did mention the decrease in trade between Canada and the U.S. You seemed to expressly state or at least imply that it is because the border crossing is not seamless. We too can use the statistics. We are politicians. We know how to go in for the rhetoric. I will give you another number. You said it is declining. In 2022, Canadian exports to the U.S. were $436 billion, which was 22% more than 2021.

    So, let's stick to the facts. I know that seamless crossing at the border is important. Improvements in any way are always good. We should aim for that. I think steps are being taken. If you want steps to be quicker, it's always good. We'll come to that.

    Mr. Weller, you mentioned quite a few problems that you say SMEs have faced. I think those are the same words I heard almost nine years back, when I first got elected. Every year I hear the same words.

    However, the exports of manufactured goods are just increasing every single year. In 2018 it was $318 billion, and in 2022 it was $436 billion. I am not saying things are perfect for SMEs; there are challenges. You mentioned the demographics and the birth rate. Compared with G7 countries, I think the only other country that can compete with Canada in terms of the demographics and the birth rate is the U.S. Look at all the other G7 countries. We are in much better shape in any of the statistics we can discuss on that.

    You talked about arbitrary tax policies. Why didn't you mention that the small business tax has actually been reduced by our government? Of course, nobody wants to acknowledge the good things, but that's okay.

    Mr. Masson, you said that FedDev is helping SMEs to integrate into global supply chains and...productivity. Can you speak about the programs that cater to that?

    I would be happy to.

    Thank you very much for the question, Madam Chair.

     Let me begin by talking a bit about FedDev Ontario's programming in general. We provide two main programming offerings. One is investments directly in business through payable contributions at 0% interest to help companies grow and develop go-to-market plans. Our second key intervention is with not-for-profit partners that are well poised to help these companies integrate into global supply chains.

     I can give you one specific example of that, which is the project that we funded with the Toronto Region Board of Trade for their trade accelerator program. This was specifically geared toward smaller SMEs that had about a year or two of market traction already. They came in through a six-week curated program that the board of trade put on to help them develop sector-specific strategies for the markets they were targeting. At the end of that program they would come out with an export strategy that would help them as a springboard.

    I'll come back to you, because my time is limited.

    I have a quick question for Mr. Hamilton.

    HOPA Ports and the McMaster Institute for Transportation and Logistics came out with a study for increased use of short-sea shipping in the Great Lakes.

     I was not aware of the viability of short shipping. Are there any specific examples in other parts of North America or the world where short-sea shipping is quite viable?

    Thanks for the question.

    In all likelihood, we're probably the only jurisdiction where it's not working well right now. It certainly works very well in Europe. It works along the Mississippi River in the United States, and it works quite well throughout Southeast Asia and Asia, among the various different countries there.

     There are lots of examples of how it starts to help alleviate the pressure on our ground transportation network and has the capability to reduce greenhouse gas emissions.

     Thank you, Mr. Hamilton.

    I have limited time. I'm sorry to cut you off.

    I have a question for Mr. Jean Aubry-Morin of the St. Lawrence Seaway Management Corporation.

    You mentioned the marine corridor in the St. Lawrence system. Can you slightly expand on that?

    I'm referring to the green shipping corridor, which is a collaborative effort between the U.S. and Canada. It's for the St. Lawrence Seaway and the Great Lakes to allow collaborative effort to remove what I would call gaps and delays in the system to increase fluidity. It also allows the environmental benefit to be delivered more proficiently inside the corridor.

    Pause just one second.

    Can you expand on what that green shipping corridor actually means?

    Through the COP27, the U.S. and Canada expressed interest for the marine industry to be able to work collaboratively to be able to establish the driver to put in place all of the elements of having transportation on water be able to support the growth of the economy as we go forward.

    You're talking about reducing delay, using biofuel to reduce 80% of emissions from the vessels themselves, or using electrification at the port and on the shore to be able to reduce the emissions when the vessels are idle. These are typical examples that we use in the seaway system.

    Thank you very much.

    We'll now move on to Mr. Savard-Tremblay for six minutes.

    Thank you, Madam Chair.

    I would like to thank all the witnesses for their presentations.

    My question is for Mr. Aubry‑Morin, from the St. Lawrence Seaway Management Corporation.

    As we know, in March 2023, the government announced an agreement under which your corporation will continue to manage, maintain and operate the seaway. The agreement also provides for improvements to governance mechanisms.

    What needed to be improved?

    More specifically, we need to be able to mobilize the 47 adjacent communities that are part of the seaway and use the information that they are providing.

    In addition, since the corporation was set up two decades ago, we have been in contact with the first nations that are affected by various parts of the system, including the Kahnawake, Akwesasne and Mississaugas, as well as the first nations in the Welland Canal region. It's a matter of formalizing those relationships.

    The agreement was announced 13 months ago. Can you tell us what has been done since then?

    I can give you a specific example. Consultations were held with first nations and the communities that our colleagues referred to a few moments ago on all the projects on the Welland Canal, including the electrification and implementation of a new supply chain for battery systems. We want to ensure cohesiveness, harmony and support for development in both Canada and the U.S., whether it be in terms of the environment, society or the economy.

    What has been the impact of those changes so far? The changes are quite recent, but have you noticed anything?

    I alluded to it earlier when I said that the corporation had already met its greenhouse gas emissions reduction target set for 2030. We have reduced our GHG emissions by 58%. In fact, we're probably going to get to net zero in 2038 or 2040. This work was made possible through collaboration and information sharing with various first nations and adjacent communities. They have helped us to guide our action plans and strategies in this regard.

    A review of the seaway was undertaken prior to the agreement's renewal by Transport Canada. At that time, most stakeholders stated that the seaway would be able to accommodate higher levels of traffic.

    Has there been an increase in traffic over the last few years?

    The success of the seaway lies in its reliability, resilience and responsiveness. I was talking earlier about the geopolitical problems or challenges we face when it comes to exporting potash and grain, for example.

    Yes, we are currently at 42% of capacity. Projects are under way to increase that capacity. One example I can give you is Pier 18 in Port Colborne. The investments in new infrastructure development made through the national trade corridors fund will increase transit capacity by one million tonnes. Hopefully, each of these projects in the near future will make it possible for that to happen as well.

    You talk about increasing capacity, but what impact will that have?

    We anticipate a reduction in our environmental footprint. If these commodities and cargo were shipped by other modes of transportation, the environmental impact would be greater. Earlier, I alluded to the fact that each ship represents the equivalent of more than 1,000 trucks or 300 railway cars. So you have to imagine that, for 2,800 trips made via the seaway annually, there would be about 2.8 million trucks on a highway like the 401. Marine shipping helps reduce road congestion, which is great for the environment.

    You're mainly talking about the carbon footprint. What about the environmental impact on shorelines?

    Shoreline erosion management is done in such a way that the entire program we are focusing on, together with the communities, the first nations and, more specifically, stakeholders within the system, will allow us to mitigate or minimize the effects of erosion. The increase in marine traffic does not create a significantly heavier environmental burden.

     You have 26 seconds remaining.

    In that case, Madam Chair, I think I'll wait for the next round of questions.

    Thank you, Mr. Aubry‑Morin.

    All right.

    Mr. Cannings, you have six minutes.

    Thank you.

    Thank you, all, for being here.

    I think I'll start with Mr. Reinas from the Peace Bridge. This whole idea of the Americans wanting to scan 100% of the trucks I find very interesting, in many ways. Is this a policy that they want to institute at every border crossing, or is it just starting with major ones? You mentioned a 2026 timeline, I think.

    The legislation is very clear. It indicates that by 2026, CBP, Customs and Border Protection, must have a plan for every truck entering the U.S., both southern border and northern border. They're phasing it in. The largest acquisition that U.S. customs has undertaken is the acquisition of non-intrusive inspection equipment. Over the last three or four years, I think it's been in excess of $1 billion. A number of southern ports have already gone 100% inspection for obvious reasons, but it is coming to the northern border. At Peace Bridge we will be the first border crossing, but it's coming to all of them.

    You mentioned that the biggest-volume truck border crossings in Canada are those bridges west of the Great Lakes. Of course, the border is just a line in the dirt, so the trucks are crossing on roads. I'm just fascinated to hear about this technology. You said this is done as the trucks are moving across the bridges. Is that correct?

    That's correct. The new technology is called a multi-energy portal. The cab gets scanned at a low dosage, if you want to call it that, and then the trailer is at a much higher energy.

    Yes, every truck can be done. It's done now at some ports. Every port has some form of X-ray equipment. What happens now is that the driver has to get out of the truck. Even at the land border crossings, for every truck going into the U.S. there's X-ray equipment. The new technology is much more efficient in terms of allowing trucks to do it at motion, at five miles per hour. When you have a port like ours, with 5,000 trucks crossing per day, it's important that we keep these trucks moving. If you go 100% with a driver having to get out, the borders come to gridlock.

    Right. This phase-in will happen over the next year and a half, I assume.

    It's happening now. Sometimes these schedules slip, as oftentimes happens, but the schedule in the legislation is 2026.

    Are you suggesting that in many cases this will happen in Canada? Does the scanning have to happen before the trucks enter the United States?

    It doesn't have to happen in Canada. What I'm saying is that if it happens in Canada, it means the truck doesn't have to stop on the U.S. side to get adjudicated.

    The way it works is that the truck gets scanned. Then there's a command centre where there are people who are watching the scan. That will be replaced by artificial intelligence in a few years, but the truck still has to sit there and wait. The beauty of putting it in Canada is that it allows that adjudication to take place while the truck is crossing the bridge, the two to three minutes there. Otherwise, it has to sit there and wait for two to three minutes. That backs up very quickly if you can't do it while it's in motion.

     Okay. I'm sorry if I was caught up in all this while you were giving your statement. What are the real challenges for us right now where the federal government could help?

    Well, I think there are two things. One is being aware that it's happening, as it could have a big impact if we're not ready for it by 2026.

    The second thing is that we want to include facial verification. Customs already has photographs of the drivers in their system. What we're saying is to include that in the information packet of the cargo being scanned, the drivers and licence plates being scanned, the RFID technology and all that. Include the facial identity because those trucks that are scanned must go to the United States. The opt-out, if a truck doesn't want to do that, is before the scanning. Once it's scanned, it has to go to the United States. Include the facial piece in there because then everything can be adjudicated, and there will be no need to stop at the U.S. primary inspection booth, which facilitates the movement of Canadian exports into the United States.

    Do you see this happening at the land border crossings, like the Pacific border crossing in British Columbia and places like that?

    Yes, it will be happening at every port of entry coming into the United States; the non-intrusive inspection will be there.

    What we're saying is that at the big crossings, when you have a bridge where there's going to be time to adjudicate, why not put the technology on the Canadian side because it facilitates the movement of goods and traffic.

    It's very similar in many ways to what happens at airports in the pre-clearance mode, where people are actually cleared in Canada. Then, when they get to the U.S. side, they're free to go.

    Right, and in airports that includes the facial recognition?

    Mr. Ron Reinas: Yes.

    Mr. Richard Cannings: When I have to stand there and get.... It never works for me.

    We're not part of the pre-clearance model because this is in the cargo environment, which is different, but the principle is very much the same.

    The Canadian government is concerned about the facial recognition piece?

    They were when we made our original national trade corridor fund application. We got approved with an IBTTA permit from the International Bridge, Tunnel and Turnpike Association to do the technology, but specifically did not include facial verification.

    Therefore, we have applied again. At the beginning of March, we applied to Transport Canada to add the facial verification piece. We haven't heard anything yet as to whether that will be approved or not.

    What I'm saying is that we're building it this summer. It would be nice to incorporate it now and allow us to have the full package done by the end of the year.

    You have zero seconds left.

    Mr. Seeback, you have five minutes.

    Thank you very much, Madam Chair.

    I just want to jump back to something that Mr. Arya was trying to say about trade. Actual trade volume in Canada went down from the latest trade report. The actual dollar value went up, but the actual volume of trade went down. It went up because of inflation and things like the carbon tax.

    It's the same thing with our percentage of the U.S. market. While our trade value may have gone up because of inflation and the carbon tax, we've lost market share. When you're losing market share, you're losing. That's why we're now their third-largest trading partner. You can try to put lipstick on a pig, but it's still a pig. That's the Liberal record on trade.

    Part of the problem is infrastructure, our trade infrastructure. We know that the Canada West Foundation put out a report that our trade infrastructure has precipitously declined in the last 12 years.

    I want to ask Mr. Weller a question. To add to the problems with this, the radical Liberal environment minister said that we shouldn't invest in roads anymore—as if roads are these terrible things. I think roads are critical for trade. I suspect everyone here might agree with that, and we probably need to expand our roads to be able to expand trade.

    Mr. Weller, would you like to comment on that?

    Sure, Madam Chair, through you, regardless of whether our future is a green economy or not, infrastructure is going to be a critical piece of it. Meeting the needs we're going to have for green energy, for solar panels and for EV production, requires not just having the resources of minerals but also the extraction and processing of the minerals on a scale that we haven't seen before. We're talking about an industrial build-out that we haven't seen before, which is why I mentioned that we need to reindustrialize.

    Frankly, from a practitioner's perspective, the goals that have been set are not attainable in the current environment. You probably should have started years ago to get there. It's not the popular answer, but that is the reality of it. Yes, you're going to need roads for sure. You're going to need infrastructure. You're going to need power grid updates. You're going to need municipal infrastructures to support communities that are involved where this is going on, and on and on. You are going to need some sort of overarching coordination of all of it, not the individual pieces of it. In order to actually get an overall benefit to the entire system, you have to coordinate all of it together. That's what I refer to when I say “a whole system thinking approach”.

     To continue with infrastructure, a part of supply chains is going to be infrastructure. The government actually commissioned a report called the “Final Report of The National Supply Chain Task Force 2022” that said we need major investments in “highway and road structures and [other] networks” worth $3.3 trillion, which includes railways and ports and everything else. However, I was shocked to see that in the federal budget there is virtually no actual investment in this critical infrastructure.

    Canada is a trading nation: 60% to 70% of our GDP comes from trade, so these investments are critical. What do you think about where we are on the investments we're getting to support supply chains and train infrastructure with what the government seems to be offering?

    Again, I'm going to speak purely from the manufacturing perspective because that's the background I'm involved in.

    I think we simply need more investment in productivity. When we talk about the supply chain, export and export development, and increasing trade—any of these things—what we're ultimately talking about is productivity. That is the measure as far as the national economy is concerned.

    I don't need to go into detail about the Bank of Canada's recent statement about productivity. Everybody in this room knows the numbers. I don't need to quote them. I would say the record has been poor. That is not to denigrate any political party, but I say that with the optimism we can do better. Once we start to see how these pieces actually fit together, we can coordinate a response to that and improve it, and I think we can improve it. Canada is rich with resources. We need to focus on being able to process those resources and not just sell them so that we can buy them back down the road, further down the value chain, at a higher value.

    You have 16 seconds.

    There's not much I can do in 16 seconds.

    Thanks, Madam Chair.

    Thank you very much.

    We will now go to Mr. Badawey for five minutes, please.

    Thank you, Madam Chair.

    Thank you for having me on the committee today. I do appreciate the presence of all of the witnesses here this afternoon.

    Throughout both the United States and Canada, leaders are prioritizing regionally based hubs where the production happens. They're concentrating on those areas where the sales happen within some regions to streamline logistics, improve inventory management and accelerate the response to market demand. With that, this committee has taken on a supply chain study. There are outcomes that are expected of this study. You folks are tasked, in your daily business and everything that you're doing on a daily basis, with helping move goods and people and creating that fluidity. You are also tasked with looking at different mechanisms, whether they be policy or financial investments, that we as government can actually partner with you on to help you meet your goals.

    With that said, I do want to first concentrate on Mr. Hamilton with respect to some of the projects that the Hamilton-Oshawa Port Authority is working on right now. Being a Niagara-area member of Parliament, I know we in Niagara have been very successful at integrating our multimodal network, looking at land acquisition and really creating a new economy. I know we can't talk about much of that new economy yet. There will be a day for that.

    With that said, Mr. Hamilton, what are some of the wins that are happening not only in Niagara but also in Hamilton and Oshawa?

    Afterwards, I'm going to go to Mayor Steele.

    Mr. Hamilton, please go ahead.

    On that, Parliamentary Secretary, our vision is to create and lead an integrated port network in southern Ontario. What we've really wanted to try to do is combine assets so we can ensure that cargoes are moving through the most efficient supply chain and the most efficient port of entry, as well as concentrate the infrastructure investments so we can get the biggest bang for our buck.

    In Hamilton now, one of our challenges is that we've run out of space, and the space we do have is becoming increasingly expensive. Looking towards the Niagara region, we saw a real opportunity to take advantage of the industrial space that was available, along with access to the marine supply chain through the Welland Canal, a good road network and proximity to the U.S. border.

    Over the last couple of years, as we've entered Niagara, we've been able to, with our partners, invest about $100 million. We now have about 800 acres we've been developing, and we are home to 12 tenants, all of whom are really there because of their access to great supply chains.

    Where we see future investments is in better utilizing the St. Lawrence Seaway in particular to get better access to the water and, again, give these companies more sustainable and robust supply chains by combining the multimodal nature of road, rail and marine.

     Thank you, Mr. Hamilton.

    Obviously that is creating some productivity within the region as well as within the province of Ontario.

    Yes, certainly.

    As we look at that, for every dollar we spend, we're probably able to attract an additional eight dollars.

    Thank you, Mr. Hamilton.

    Mayor Steele, can you elaborate?

    With Port Colborne being the gateway to navigation for the Welland Canal on Lake Erie, the open land that's been left from former industrial sites.... Right from the water of Lake Erie to our north-end border with Welland, we have vast tracts of land. Some of that's under the control of private enterprise and some is with the St. Lawrence Seaway authority. Now HOPA is coming in for a number of acres within the city.

    We're looking to enhance that marine industry. I'm glad Jean Aubry-Morin spoke about the big project in Port Colborne. It's approximately $45 million to rehabilitate wharfs 18-1, 18-2 and 18-3, which have been out of service for approximately 10 to 15 years. Private enterprise has partnered with them on that project.

    There's Ian's project on the old Algoma Steel plant and getting that back into service with multimodal, as Ian talked about.

    Port Colborne is lucky. You know, Vance, as you served as mayor of Port Colborne for quite a long time. I served with you as a councillor. We own our own rail and we own our own port here alongside the St. Lawrence Seaway. We ran the former government elevator for grain that passes from the upper lakes down in through Niagara and then out to the seas to foreign markets.

    There's so much land here that could be redeveloped along the canal, but it is infrastructure money, as has been talked about by many witnesses here today. It really needs to be coordinated between all of us—both the private and the public sector—so that we get these lands developed as fast as possible and get them out to market.

    We're developing a brand new commercial-industrial subdivision that's right alongside the St. Lawrence Seaway canal. With us are private enterprise, with about 600 acres; the St. Lawrence Seaway, with approximately 100 acres there; and then the City of Port Colborne, with about 80 acres that we're developing.

    We all need to work together. We need to get the companies that are coming to Canada. Quite frankly, I think you're going to see more and more. I think the Honda announcement last Thursday in Alliston was really the tip of the iceberg.

    It really bodes well for the political climate of North America, both in Canada and the U.S. When you have the issues in Asia, in the Middle East and, quite frankly, some of the issues in Europe right now, you're looking at having companies move here.

     Port Colborne is seeing a company called Jungbunzlauer, or JBL, as we call them. They are one of the largest citric acid plants in the world. They're moving a new xanthan gum plant to Port Colborne. It's going to double the size of their plant.

    These are just things that are coming along, but we need to be ready. Quite frankly, we needed to be ready yesterday, not tomorrow.

    Thank you very much.

    We'll go on to Mr. Savard-Tremblay for two and a half minutes.

    Thank you, Madam Chair.

    Mr. Aubry‑Morin, let's pick up where we left off and go back to the St. Lawrence Seaway review that was done.

    Some stakeholders have stated that a review of the pilotage and coasting trade systems could make the seaway more competitive. Do you share that opinion?

    Thank you for the question.

    When we talk about supply chains, we're talking about fluidity and movement. The speed of movement of all commodities and goods is part of the solution, and it can be achieved by using technological or human resources or by coordinating movement, or by combining all of these methods. As mentioned by my colleagues Mr. Weller and Mr. Reinas, whatever the method used, the solution is to ensure that commodities never get stuck somewhere and that they move continuously in real time. What makes the seaway successful is that we invest in technology to ensure that coordination.

    At this point in time, what should be reviewed and what has already been done?

    We are currently in the process of implementing what we would call third-generation vessel passage management and multimodal site and movement technology, so that we can communicate information in real time efficiently and quickly. This will allow for proactive decision-making to avoid the delays and stoppages we've referred to, and will include pilotage service providers on the St. Lawrence and the Great Lakes, as well as other stakeholders involved in port or logistics services.

    Thank you.

     You have 17 seconds remaining.

    Mr. Aubry‑Morin, we have only 17 seconds left. We'll continue in the next round.

    Thank you.

    Mr. Cannings, you have two and a half minutes.

    Thank you.

    I turn to Mr. Weller. I have only two and a half minutes. You talked about a reindustrialization strategy. I don't know if you can talk about that in two and a half minutes, but I would just like to know what caused our deindustrialization. What have we learned in recent years, especially during the pandemic, about our supply chains, so that we can reindustrialize and make those supply chains more resilient?

     Through you, Madam Chair, there's a lot in that question to unpack. I will try, as quickly as I can, to reiterate....

    What caused the failures? There were several things. Beginning in the late nineties we had a lot going on. It got worse with.... I'd say we were at our peak in the late nineties. Basically, the financial crisis happened in 2008, which pushed us over a cliff. Canada's dollar went to par with the U.S. dollar, which hurt a lot of manufacturers, and between 2001 and 2010 Canada's medium-sized manufacturers shrank by 51%. At the same point in time, imports from China grew by 456%. So, competition on a global scale is what led to the demise. We never recovered, and from an employment perspective the data shows that we haven't recovered yet and we're not picking up.

    Basically, that globalization has caused that deindustrialization. What can we do to...?

    This is why I say, “reindustrialize.” When we talk about supply chain, we talk about trade, exporting, purchasing and manufacturing. These things on their own are no more a supply chain than a set of tires is a car. Isn't that right? They're components of the supply chain, but when we're talking about the supply chain we need to talk about the whole system. There has to be an overarching balance struck in terms of coordinating all those efforts and resources, which are necessary. Don't get me wrong: Everything we have going on in Canada is necessary, and I don't wish to take away from any of that, but we need to coordinate it at a level that looks to the future and to the scale that we're going to need it.

    The world is breaking down on a globalized scale. Right now we depend on a lot of imports. We have retired and outsourced a lot of our capabilities. We need to get them back, not only for our own sake but also to now export to others for whom it's less advantageous for them to have the same skills. This can be coordinated.

    When I say “reindustrialization”, it's an opportunity to set a strategy that will cover investments, infrastructure and everything else, to bring it all together in a coordinated way so that we're not satisfying ourselves in the present and hurting ourselves in the future.

    Thank you very much for that information.

    I go to Mr. Jeneroux for five minutes.

     Thank you, Madam Chair.

    I'm going to ask a quick question, and then after this, share my time with one of the hardest-working members of Parliament, Mr. Baldinelli from Niagara Falls.

    First of all, though, Mr. Reinas, you talked about flagpoling, and you glossed over it at the beginning of your testimony. Maybe flesh out in a bit more detail certain things that the federal government can do, because I think that's certainly something that should be part of our report going forward.

    My whole point is that you can invest tons of money in infrastructure, but if you don't have policies to support that or you have policies that actually hurt that investment, you really are defeating yourself.

    What happens with flagpoling is that, during the pandemic when you couldn't go to the border, IRCC had an online system, and if you applied before your work permit or residency permit expired, you were given what was called “implied status”. Once the border reopened it went back to the old way: People apply, but they don't get their approvals for nine or 12 months. In between, their work permit is expiring, so to assure themselves that they can stay in Canada, they go to the border because there they have to be processed immediately.

    The problem is that it ties up U.S. customs officers, which means that they're not out there working to clear trucks going into the U.S., so you understand how it all fits together. Then, when they get their paperwork refusal in the U.S., they come over to Canada, they have to go into secondary, tying up CBSA officers, who aren't out working primary, allowing imports or tourists to come into Canada.

    To me, it's quite simple: Go back to what you did during the pandemic. Give people implied status and say, “Don't go to the border.” Do it the way it should be done in 2024. Do it online. More importantly, have a service standard that says that you're going to get your work permit within 21 or 30 days of applying for it, so there's no need to wait for nine months and fear losing your work permit. To me, it's low-hanging fruit that should be addressed.

     Mr. Baldinelli.

    Thank you.

    Thank you to my colleague for ceding some time.

    Recently, the St. Lawrence Seaway announced that nearly 38 million tonnes of cargo transited the binational seaway in 2023. That's up 3.4%. That growth leads to jobs and job creation.

    If you think about Niagara, we're within an eight-hour drive and we have the seaway and hundreds of millions of people within that area.

    Mayor Steele, you talk of the need for collaboration. You referenced both HOPA and the St. Lawrence Seaway authority and how we can unleash the potential of Niagara. The national supply chain task force indicated that over a 50-year period, from 2020 to 2070, an investment of about $4.4 trillion is going to be needed. The majority of that, about $3.3 trillion, is going to be in the road structures.

    There had been talk in Niagara for a long time of the need for a mid-peninsula corridor. It would tie nicely into the whole multimodal aspect of what's going on in terms of the investments and trade that happen in Niagara. I was wondering if you had any thoughts on that.

    Thanks for the question.

    Yes, that goes back to quite a long time ago, and it keeps popping its head up from time to time. It's probably a project that still should be looked at, especially to move trucks between the Peace Bridge, where Mr. Reinas is, all the way up to the Hamilton airport, which is one of the largest cargo airports in Canada, and then across the 403-401 corridor. It would alleviate a lot of the QEW coming from the GTA down into Niagara over the Burlington Skyway, and at least it would get people moving faster.

    It's more than just highways; it's actually our rail system. Our rail system, quite frankly, in Niagara isn't the greatest system. There are some inefficiencies. We ripped out lots of tracks over the years, and now we look back and wish we had those again, specifically the Buffalo to Detroit line that followed Highway 3 all the way from Buffalo-Fort Erie to Windsor-Detroit. Having that line today would alleviate a lot of things.

    I think one thing I've said, and a lot of the other people have said today is the fact that we're not here to take away rail or trucking and make everything go through the St. Lawrence Seaway authority with shipping. We're trying to meld everybody together so that we can all work together, but instead of trucks travelling for hours and hours on end, we could actually ship more. A number of people, both Ian and Jean Aubry spoke about this, with regard to the cargo on the ships and how many trucks it takes off the road, how many railcars it takes off the rails. Short-line rail is something we can look at for southern Ontario, also short-line trucking with a lot of firms. In our neighbourhood, we have one short-line trucking firm that travels in southern Ontario for all the goods for the markets that he deals with.

    Those things need to be looked at. That's how you look at the environmental aspect of this and getting rid of CO2. Also look at electrification of shipping. Hydrogen fuel for shipping is another thing. A possibility is looking at biofuel from grain for airlines. We need to look at how we can start processing those types of commodities here in southern Ontario within Niagara.

    We are way over. Thank you very much.

    Next is Mr. Sheehan for five minutes, please.

    Thank you very much, Chair, and I'll be sharing some time with Vance, a very hard-working former mayor in the Niagara region as well.

    My first question is, of course, for FedDev.

     I would be remiss if I didn't acknowledge your work in steel. I'm co-chair of the all-party steel caucus. Recently we had the ambassador to Japan in Sault Ste. Marie. He certainly pointed out something you alluded to, the EV supply chains, which we haven't talked a lot about.

    Perhaps you could expand a little more on the opportunities for, say, the steel industry and other industries as it relates to the EV battery announcement that Honda recently made. A lot has been talked about mining, and a lot has been talked about car production, but there are the investments both in Hamilton and Sault Ste. Marie.

     Sault Ste. Marie is a $420-million announcement, which is generational, in funding. We were saying that in 2021, and I was glad to hear it again and again and again. It's going to anchor Sault Ste. Marie for a long time. If you recall, FedDev did make an announcement with the previous federal Conservative government. I remember it was on July 24, 2015. I won't forget the date, because a week later, there was an election. However, after I won and even before I was sworn in, I was called to a meeting and heard that Algoma Steel was going into restructuring. That's the kind of due diligence that the previous government had done on that.

    On this particular investment, it's going to take a million gas-powered cars off the road, or close to it. Where else do you see these supply chains? Expand on the Algoma Steel example. The ambassador was very impressed. He and a lot of people made the point that it's not just governments; it's the market and it's the people. If someone wants to drive an electric vehicle.... If there was somebody who was competing against that steel industry, he would point out, “Well, that's being made with coal.”

    Perhaps you'd like to expand on that, and then after you're done, I'll pass my time to Vance.

     Thank you very much for the question.

    As I noted in my opening remarks, the transition to electric vehicle production in southern Ontario has been quite rapid and transformational in creating a number of supply chain opportunities across the region. Certainly with large steel producers, both with Algoma and with what's happening at Dofasco down in Hamilton in terms of greening their operations, there is tremendous opportunity to connect green steel products into the production processes for automotive parts, supplying EV production going forward.

    There is also a tremendous amount of opportunity to build that corridor to connect to some of the resource extraction around critical minerals in northern Ontario and get them down to market through the south. We're already seeing some talk of that around a north-to-Niagara type of corridor emerging.

    What's truly unique about our region when it comes to the EV supply chain is that it is one of the only jurisdictions in North America where you have the overlap of a very dense technology cluster with a very dense manufacturing cluster. That opens up a whole new range of opportunities for suppliers, not just when it comes to traditional manufacturing, but also on the automotive technology side and being able to leverage new technologies, including artificial intelligence such as cybersecurity-based solutions, to drive the component parts of the future.

    I believe that Vance has a question.

    You have one minute and 30 seconds.

    Thank you, Madam Chair.

    Thank you, Terry.

    I'll say this: We're not here to speak. We're here to allow you to speak and to therefore get on the record for the analysts your desires and expectations on fluidity, capital investments, data, digital and the list goes on.

    We heard from Mr. Hamilton with respect to the establishment of the Niagara trade corridor. We worked very hard on that with Hamilton and Oshawa. We know the economic investments that are under way. We know the economic investments that are going to happen. The supply chain and logistics strategy is something that I hope comes as an outcome of this committee. As the parliamentary secretary for transport, it's something that I'm very eager to start on with our partners within the supply chain office.

    We heard from HOPA about what their successes were within the investments that they're making, especially along the Welland Canal corridor.

    My question is for Mr. Jean Aubry-Morin with respect to their intentions on behalf of the Seaway to economically develop the Welland Canal corridor in partnership with a lot of the stakeholders that exist there today.

    Mr. Aubry-Morin.

    Mr. Badawey, thanks for your question.

    I'm going to start with one word—collaboration.

    Right now there are six major projects along the Welland Canal corridor that we've put our support and expertise behind to make sure that the promoters themselves, the community and also the elected officials have all of the technical support necessary—from the concept level to the pre-project situation—so that all of the gaps and hurdles are removed as much as possible and every dollar that is invested in the corridor can get its full potential.

    To go back to a comment that was made before—I think you mentioned it, Mr. Badawey—fluidity equals productivity. When it's not obtained.... Full fluidity will give us what we need.

    What we're doing right now is supporting all these projects. For the one that we were talking about a minute ago, which was EV, critical minerals, water and power are three ingredients that will permit the supply chain to be successful in that case. That's the full support and collaborative contribution that we're doing.

    Thank you very much.

    We'll go to Mr. Martel for five minutes, please.

    Thank you, Madam Chair.

    Witnesses, thank you for being with us this afternoon.

    Mr. Aubry‑Morin, you said earlier that there was potential for export growth and that we had the capacity to do more. What are the barriers that are currently preventing us from doing more?

    Mr. Martel, the simple answer to your question is that all the delays and inconveniences that negatively impact the movement of goods and commodities, whether by ship, rail or truck, are contributing to the lack of productivity that my colleagues alluded to a few moments ago. Having access to a certain capacity on the network, but not using it as effectively as possible, is the biggest barrier we are currently facing.

    Accordingly, we need a system that allows for the optimization of all resources. The seaway is currently working on this by implementing a system that provides real-time management of information used for decision-making for pilotage, arrival at port, navigation and the use of seaway infrastructure.

    We know that business confidence in transportation infrastructure in this country has plummeted. In addition, Canada is now ranked 32nd in the world for its transportation infrastructure.

    Mr. Aubry‑Morin, the corporation entered into a new agreement with Transport Canada in March. Does the agreement offer a new solution to the problem?

    I could use the seaway productivity model. If we look at the investment in innovation and technology that has been made since the commercialization of the seaway in 1998, we can see that our productivity has more than doubled.

    We also talked earlier about scanning equipment for the Canada Border Services Agency, as well as the use of pilotage services.

    If the same approach to technology, innovation and infrastructure integration was used throughout the system, along with information-based decision-making, we would quickly see how the renewed long-term agreement with the federal government could allow us to become an influential player as well as a partner to the other agencies. We could then apply this type of business model elsewhere.

    In your opinion, what would be the biggest challenges in terms of our transportation infrastructure? What solutions do you propose?

    Madam Chair, what has made the seaway an unqualified success is that it is a strong link at the heart of the supply chain.

    There's also the issue of reliability and the ability to get a better return for every dollar invested in infrastructure. Let's take the example of a multi-million dollar investment in a lock made 25 years ago, which lasted 80 years. Today, that same amount allows us to extend the life of a lock to over 120 years. Being able to provide better reliability or better fluidity within the system will allow us to offer more predictability. As a result, it will enable us to make investments throughout the supply chain.

    So the answer to your question would be better reliability, which would lead to greater productivity.

    Thank you.

    Mr. Hamilton, can you tell me more about how short sea shipping could improve the efficiency of our supply chain? I don't know if you can answer in 15 seconds.

     I'm going to suggest that perhaps, if he wants, he can submit the answer to that question in writing.

    We'll now move to Mr. Badawey for five minutes.

    Thank you, Mr. Chair.

    We've heard a lot about the investments that are being made. I know that Mayor Steele, as well as Mr. Hamilton and Mr. Jean Aubry-Morin, spoke about some of the activities happening in the Niagara region and southwestern Ontario.

    I'm wondering if Mr. Hamilton can hear me.

    Ian, can you hear us?

    He's trying to respond. I'm not sure he can.

    He might try unplugging his headset and then plugging it back in again.

    I'll hold your time while he does that, Mr. Badawey.

    No problem.

    Mr. Ian Hamilton: Is that better now?

    Mr. Vance Badawey: That's better. Perfect.

    We spoke about the establishment of the Niagara ports trade corridor. Mr. Baldinelli brought up the investment in the mid-peninsula corridor, and I thank him for that. We spoke about the productivity that's happening—it may possibly be an anomaly in Canada, but that's what's happening in Niagara—based on a lot of the work that all of the partners are doing together in terms of collaboration, etc.

    Mr. Hamilton, I'll ask you the same question I asked Mr. Aubry-Morin with respect to that corridor. What are your thoughts on how we expand the economic activity along that corridor?

    Second, do you think a port authority being established along the Welland Canal corridor would be beneficial?

    Lastly, on the development of properties that are currently managed by the St. Lawrence Seaway, some of which now are managed by the Hamilton-Oshawa Port Authority, owned by Transport Canada, how would that play into the productivity as well as the land or economic development within the Niagara region?

     I'll build on Mr. Aubry-Morin's statement around collaboration. Certainly we see that as the foundation for developing Niagara.

     There has been a very positive reception from the region and all of the municipalities along the Welland Canal to HOPA's coming in and doing what we can to develop the area.

    In addition to collaboration, I think there needs to be actual dollars and cents—infrastructure money—spent to develop the facilities along the Welland Canal so we can really tap into their potential.

    One of the key areas is marrying together the different modes of transportation and ensuring that customers today have that modal choice. It was brought up earlier that we're not necessarily trying to move everything to marine. However, we are making sure that we can create the most sustainable supply chains by marrying together rail, marine and road and creating the ability to structure the supply chains in a way that has the most beneficial attributes in terms of cost, environmental impact and social benefits by reducing congestion.

    I certainly believe that the track record of HOPA in Oshawa and in Hamilton in particular, along with the start we're off to in Niagara, would suggest that we could take on lands along the Welland Canal, and, in partnership with the St. Lawrence Seaway, find a very happy marriage where we can make the investments and work on that creation of those multimodal hubs and drive more cargo to the Seaway. We would applaud the expansion of authority into the Niagara region. In a lot of ways, this may have already happened by lands being transferred to HOPA's letters patent in the last few months.

    Thank you, Mr. Hamilton.

    I have a final question for Mr. Reinas.

    With the Niagara multimodal trade corridor being established, of course, one would think it would only be between lake to lake along the Welland Canal corridor. In the future, how do you see the town of Fort Erie and, in particular, the Peace Bridge being part of that multimodal trade corridor, especially as it relates to fluidity?

    As has been discussed before, there's a lot of interconnectivity among all of the modes of transportation. Material that comes into Hamilton gets loaded on a truck from short-sea shipping at some point. A lot of times it has to cross the border, so it's all related. The more we can do to make sure that the border functions.... At the border, there has been a lot of investment in infrastructure. It's the non-infrastructure stuff that really needs work in terms of processing time.

    There's no point putting a lot of money into building a new port of entry or expanding a port of entry and having 15 primary inspection booths if you're only going to staff half of them.

    It's not just infrastructure; it's the human capital and the human resources, it's the processes and it's the procedures. All of it has to be interconnected amongst all of the modes.

    Thank you.

    Thanks, Kyle.

    Mr. Savard‑Tremblay, you have the floor for two and a half minutes.

    Thank you, Mr. Chair.

    Mr. Aubry‑Morin, let's pick up where we left off.

    Several briefs submitted during the review indicated that the corporation's mandate could be updated to include an economic development component as well. So that would be a new mandate. It was also suggested, among other things, that the corporation could recover other operating costs from users, seek out commercial opportunities and provide instruments to increase non-toll system revenues.

    In your opinion, what would be the benefits of granting the corporation new powers such as those?

    Thank you for your question.

    In my opinion, the idea of competition in the search for revenue should be approached with a great deal of caution.

    I would like to go back to a concept that was explained at the outset. The St. Lawrence Seaway corridor supplies a market that, if it were a country, would be the third-largest economy in the world. The seaway supports the flow of goods and commodities from both the Canadian and U.S. economies. It's a binational route through the Welland Canal and other places. If we encouraged investments in this network or its development, it would mainly have the advantage of creating value within the Canadian and American economies.

    The seaway is operated by a not-for-profit corporation that has successfully recovered its costs since its inception in 1998 and maintained its financial standing.

    I hope that answers your question.

    Thank you.

    Currently, your board of directors is made up of provincial, federal and industry representatives, including shippers and members from the grain and steel sectors. Do you think it would be appropriate to add some spots on the board of directors so as to include other groups, such as aboriginal communities, which we were talking about earlier, as well as unions and municipalities? Would your organization be open to giving these groups a statutory place?

     Answer very quickly, please, because we're already 15 seconds over time.

    Mr. Chair, this is more of a political question. I would leave it to the member to ask the federal government.

    We'll now turn to Mr. Cannings for two and a half minutes.

    Thank you.

    I'm going to go back to Mr. Weller to pick up where I left off with some complicated questions.

    In the middle of the pandemic or after the pandemic, we learned that maybe these long supply chains weren't such a good idea. I know that Canada and the U.S. have been talking about nearshoring and friendshoring.

    What has Canada done—I know various reports have come out on this—and what should Canada be doing to help build that ecosystem, if that's what you call it, that would help us keep things under control and not be so out there when it comes to natural disasters, pandemics or whatever could hit us?

    Colleagues, I'm going to interrupt. The bells are ringing, so we need unanimous consent to continue. I would suggest that we continue with this final round of questions for about a minute and a half, and then we adjourn so that people can go to vote.

    Is that the agreement of the committee?

    That's great.

    Through you, Mr. Chair, I'll speak to what needs to happen, if that makes sense, and what isn't really happening yet, and I will keep this, again, in the context of small and medium manufacturers.

    A lot of the problems we've gotten into in the first place come from—and this is not to denigrate our manufacturing community at all—a lack of executional knowledge. What I mean by that is that, as the old saying goes, you have to be effective before you can be efficient. We have to relearn how to be effective, and the challenges against that—and the pandemic is what exposed this—are that we have a brain drain going on. We have several companies that have retiring owners and executives who have knowledge. That knowledge is not necessarily coming in behind them; it's leaving with them. We have to start educating a new generation of manufacturing on how to be effective and how to be productive.

    I'll give you a short analogy. I've heard many people, many learned people, say that the biggest problems from the pandemic were just-in-time manufacturing. I couldn't disagree more. That is an example of the lack of knowledge that I am speaking to, because, with just-in-time, people associate that with saying you need no inventory.

    What it means is that it's a waste to have inventory that you don't need. It's not a waste to have what you need to produce. When we use terms and when we highlight programs and everything else, and if it's a checklist on some consultant's checklist—I'm a consultant, and shouldn't say that—without understanding the balance behind it, that gets you in trouble every time. You have to be effective before you can be efficient.

    Many people around this table have talked about collaboration. That is key as well. In the sector that I'm particularly concerned about, they are very isolated. They're not well connected. They're not online in terms of a conversation, not at all like our tech community, and building an ecosystem there where they can start to leverage common knowledge. An ecosystem that is similar to those that have been built by the tech community and sponsored by government would be next level for bringing us to where we need to be in order to be really competitive, in my opinion.

    Thank you very much.

    I want to thank all of the witnesses for appearing today.

    I have a couple of notes for everyone. The next three meetings are on the supply chain study, and the committee will begin the study on seafood import policies on May 21. If you have a witness list to submit, please get it in by May 6 at 4 p.m.

    The meeting is adjourned.