Uncertainty could be looming for the Deltaport container terminal at Roberts Bank if the U.S. acts on claims that Canadian West Coast ports are benefiting from unfair subsidization.
The Federal Maritime Commission in the U.S. recently voted to launch a study into possible unfair practices by Ottawa for its container ports, raising fears of a damaging trade war.
Richard Lidinsky, chairman of the Federal Maritime Commission, announced at this fall's Journal of Commerce conference in Montreal that he would be proposing a study following a request from two U.S. senators from Washington state. They wanted an investigation of "diversions" of U.S.-bound cargo from Asia through Canada.
Some of the issues to be investigated include the U.S. Harbor Maintenance Tax, rail service rates and infrastructure funding.
Deltaport was specifically mentioned but the port at Prince Rupert was singled out.
Mexican ports will also be investigated.
The report will be referred to the U.S. Congress, which could launch retaliatory trade actions against Canada.
In an FMC news release this fall, Lidinsky stated: "Canadian and Mexican ports are free to compete with U.S. ports for U.S. cargo. But they should do so on a playing field that is not artificially tilted by governments' policies. So the primary question is: Are we handicapping our own ports in international competition?"
In response the Canadian government said it will "vigorously defend" its trade policies and infrastructure investments.
Federal Minister of International Trade and Minister for the Asia-Pacific Gateway Ed Fast, who was at the Tsawwassen First Nation recently to attend the opening of the 41B Street overpass, told the Optimist a "response" has recently been completed to the U.S. study.
"Like we always do, we defend Canada's interests internationally. In this case, there's some in the United States who have suggested that somehow Canada is competing unfairly and is attracting more business to its ports than it should. The truth is, Canada competes aggressively but fairly," Fast said.
"We have completed a response to the study that is being undertaken and that response very clearly outlines that Canada's ports are well positioned because we have invested strategically in infrastructure to ensure that goods, commodities, can leave Canada and enter Canada on the most efficient basis.
"The Asia Pacific Gateway initiative is our government's commitment to ensuring that Canada's economy and the businesses it serves is the premier gateway into the Asian markets."
Noting his government chose not to impose harbour taxes, Fast said the response document would be submitted to his U.S. counterparts.
Meanwhile, on another front, there's been talk of a foreign trade zone being established in Delta to complement container port activities.
The B.C. Ministry of Transportation and Infrastructure and Ministry of Jobs, Tourism and Innovation recently made a report by InterVISTAS Consulting Inc. on the feasibility of establishing a special trade zone public.
The study, which didn't specifically mention South Delta or the Tsawwassen First Nation, looked at a number of issues and potential benefits of having a foreign trade zone, aimed at attracting economic activity that would otherwise take place elsewhere.
The consultant's report notes the federal government is marketing trade zone activity as part of its Gateway initiative, announcing in its 2011 budget that it will re-examine the existing policies and programs.
The consultant's report notes the next step is to develop a new federal policy that keeps the best features of the existing federal programs, while expanding the range of activities that can be done within the zones.
Fast said the federal government will now review the findings of the consultant's report.
