Carlo Dade is the director of the Trade and Investment Centre at the Canada West Foundation.
You can’t win the competition for global trade when you come in last – or in this case, second last.
Canada, a country that relies on moving goods in and out of the country for more than two-thirds of its GDP, has just seen its largest port ranked to second-to-last in the recently released World Bank Container Port Performance Index, a comparative measure of port efficiency.
No Canadian port did well. Saint John was the top port in the country – placing 233 out of 348. Vancouver ranked 347th.
This is a real crisis that should set off alarms.
And this is not Canada’s first warning. The country dropped from a Top 10 performance a decade ago to 32nd, right above Azerbaijan, in the World Economic Forum’s 2019 ranking of industry perceptions of export transport infrastructure quality. This latest news of poor port performance, coming just as the government has tied future growth in trade to its Indo-Pacific Strategy, will not help sell Canada to already skeptical foreign customers.
So, what is to be done?
A good first step is to stop the practices that have accompanied Canada’s decline – namely short-term funding and planning windows tied to the domestic election cycle. A different approach is required to climb in world rankings.
The ports and all levels of government have invested and continue to invest in additional capacity. The Vancouver Port Authority and the federal government just announced the Roberts Bank Terminal 2 Project, a major expansion – albeit one delayed by a ridiculously long and cumbersome review processes.
But something other than just spending money and fixing the approval process is required.
The problems with Canada’s ports neither start nor stop at the ports. They extend into the interconnected assets and systems that move goods in, out and throughout the country. Trying to fix one asset in the trade and logistics system without looking at the whole system is a fool’s errand that has led to these poor showings in international measures and, more importantly, lost economic opportunity.
As the report notes, “In numerous cases, the development of high-quality container port infrastructure operating efficiently has been a prerequisite for successful export-led growth strategies.”
A decade of research, convening and examination of international best practice in building and managing trade infrastructure by the Canada West Foundation shows that countries that do well – which are most of Canada’s competitors – have long-term, comprehensive, national planning with private-sector input that extends beyond the election cycle.
Canada is one of the few major economies not to do this. This work, found in From Shovel Ready to Shovel Worthy: The Path to a National Trade Infrastructure Plan for the Next Generation of Economic Growth, was supported by national business organizations and has identified the essential steps needed to fix Canada’s trade infrastructure problem.
The only good news in all of this is that the Canadian system may be poised to change. Canada’s business community and premiers are pushing the federal government to get to the root cause of Canada’s decline in trade infrastructure.
Manitoba Premier Heather Stefanson, in her capacity as chair of the annual meeting of premiers – with the backing of a growing number of premiers – has put creating long-term, national trade infrastructure and transportation corridor planning on the agenda for this summer’s meeting of the Council of the Federation.
The premiers are stepping up; the federal government needs to join them.
If Ottawa joins the call from premiers and business and establishes a long-term national planning strategy in partnership with the provinces and private sector, they will have no ribbons to cut – the benefits will accrue to politicians not yet in office. But, from experience elsewhere, solving our trade infrastructure problem starts with this act of political courage.
We long ago ran out of excuses in Canada not to do this. With the continuing bad news – coming from the release of indicators and global reports like the World Bank study – it appears we are also running out of time.
The research and call for national planning began under the Stephen Harper government almost a decade ago. Let’s hope it ends under the Trudeau government.