Much like the ding, ding, ding of Pavlov’s bell, the rumour of government money is a sound that generates a lot of unnecessary excitement; even when the dish is empty (or should be). So it’s not really much of a surprise that, as the federal budget unveiling draws near, people are keeping their ears peeled and speculating what items will be featured at the bountiful subsidy buffet. “Will there be $400 million for an Atlantic Gateway? Who will get it? Who is more entitled to their subsidy entitlement this year?”
Quite frankly, it’s as productive as trying to figure out who has been naughty and who has been nice before the man in red comes to visit on a cold December evening. There will generally be something for everyone regardless, but should there be?
As concerns the Atlantic Gateway, the answer is an emphatic no. Before we decide how money that hasn’t been budgeted and isn’t needed should be spent, let’s take a closer look at the Atlantic Gateway and what is required for it to be successful.
First, the gateway is not some well-intentioned political project ready to be awarded to the squeakiest wheel. It is an economic reality driven by business interests and the desire for companies to cut transit times. Trends in global trade like the rise of India as a major export economy, increased traffic through the Suez Canal, congestion in the Panama Canal, and congestion at west coast ports have fuelled increases in shipments to the east coast. Ultimately companies will decide at which ports they call. Some of them have already chosen Halifax but much remains to be done to encourage others.
We need better business rules, not more infrastructure. The fact is that the Port of Halifax is running at about 50% capacity and CN’s local rail service at 30%, so there is lots of room to expand using current infrastructure. It’s embarrassing enough that we need to explain why we still have extra capacity in the port – the last thing we need right now is to sink hundreds of millions of precious taxpayer dollars into more space. We know from the recent Macquarie purchase of Halterm and the investment by CERES in expanding and updating their terminal and equipment, that the private sector has not only the expertise but the resources to make large infrastructure investments where they make sense.
Here’s what is needed most on the public side: policy changes – the stuff that costs nothing. The Atlantic Gateway needs a) removal of inter-provincial barriers to trade including harmonized trucking regulations and full labour mobility, b) elimination of federal tariffs to make shipping more affordable, c) more focus within provincial education on promotion of the trades in an effort to reduce the labour crunch, d) amendments to the Maritime Act to make port management more flexible, and e) amendments to the Transportation Act to make the logistics industry more competitive and efficient. (These last two items had bi-partisan support under the last federal government but have seen limited attention under the new one.)
Yes, some limited, targeted spending would be useful for highway twinning (near Rivière-du-Loup and St. Stephen) and upgrades at the New Brunswick/Maine border. These too, have had bi-partisan, multi-jurisdictional support for many years. Also important is continued support of the Halifax Smartport strategy (like the $12.5 million recently allocated for a security upgrade at the port). But there is no immediate requirement for an additional $10 million, let alone $400 million.
In short, the Atlantic Gateway is about policy, provincial and federal, and some targeted regional spending most of which occurs outside Nova Scotia or falls within the domain of the usual port funding process.
We need to send a signal that the Maritimes is a rational place to do business.
Ploughing $400 million into the community most entitled to its subsidy entitlement is not the way to go nor is debate on the topic very useful. Ships will come to Halifax if the business case makes sense. Right now, the only thing upsetting the business case is bad public policy – not a shortage of cash.
Charles Cirtwill is the acting President of the Atlantic Institute for Market Studies, a non-partisan public policy think tank based in Halifax, NS.