Well, get out your chequebook, Nova Scotians, you are about to invest in three – count ’em, three – competing container terminal projects. (Well, four, actually, if you count Halifax as having two terminals.)
We have already invested huge amounts of tax dollars into Halifax over the years, having spent a few million more this year alone.
Whether you think that is sound infrastructure investment that has leveraged hundreds of millions in private investment, or the next Sydney Steel, the fact is the taxpayer has a lot of sunk capital sitting in the facilities on the Halifax waterfront.
As of a few weeks ago, Nova Scotia taxpayers are also now committed to supporting Sydney Harbour dredging and using the material we dig up to build the foundation for a container terminal there – at, as far as I can tell, no cost to the eventual terminal operator.
So, we spend millions in Halifax and millions more in Sydney. And what of this fourth terminal in Melford?
We’re told not to worry about it. Melford is, after all, a supposedly fully private-sector-driven alternative – fully private-sector-driven if you ignore sweetheart land deals, cosy tax concessions, a current rail subsidy and continued calls for highway twinning, plus the likely calls for investment in the upgrade of the feeder road or other local infrastructure to “support” this investment.
The recent announcement of interest on the part of Maher Terminals LLC in the Melford terminal was huge news in the Strait and is a desperately needed shot in the arm for what has so far been a speculative effort in an area desperate for any economic hope. But many will recall that this isn’t the first time a major international player has come calling in Nova Scotia with the miracle cure. In true Jerry Maguire fashion, I think I will hold off judgment until they “show me the money,” or at least the cargo, and we know for sure we are not just moving boxes from one Nova Scotia landing point to another.
Halifax itself flirted with fame and glory just a little over a decade ago when another significant player in New York, Maersk, started trailing its name and its client base up and down the east coast in an effort to milk a little more out of U.S. taxpayers. It worked for Maersk then; let’s hope that isn’t what Maher is up to now.
Don’t get me wrong: I think the potential for a deep-water, rail-based transshipment port serving large swaths of North America has significant potential for Nova Scotia. (Hey, it’s why we are here in the first place, after all.) And, horror of horrors, I see merit and challenges in each of the current proposals for pursuing that opportunity.
What I am certain of is that we would be hard-pressed indeed to find a responsible expert in global transportation who would say there is room for four deep-water terminals in Nova Scotia. And what I object to is all four of them chasing after the opportunity on our dime.
So, what to do. Well, we could cut ’em all off the dole. Stick with the plan laid down more than a decade ago and leave Halifax (and other ports) alone to sink or swim entirely on the merits of their business case and their ability to attract new capital. That means no photo-ops with stimulus money, but it also means that not one dime more in taxpayers’ money goes to Halifax facilities or anywhere else.
We could then defend charging the terminal advocates in Sydney fair value for whatever progress is made building their terminal with our money and we could also plug our ears to cries for fair treatment and new investment from the Strait area.
If a terminal in Melford or south-end Halifax needs a new road to be profitable, let the terminals pay for it. If the rail serving both Sydney and the Strait needs to be upgraded to avoid further derailments, then borrow the money on the open market and pay it back via freight rates that reflect the true cost of service.
Of course, in a global environment where every major port seemingly receives some form of direct or indirect government subsidy, perhaps asking Canada and Nova Scotia to join the short list of truly private operations is a little too much to ask (I don’t believe that, but many will).
Well, then, in an age of belt-tightening and fiscal prudence perhaps we could just pick one. Send the money to Halifax or the Strait or Sydney and be done with it. How likely do you think that will be?
Just look at the wrangling over where our next provincial jail will be going.
So, welcome back to the container terminal business, my taxpaying friends. Here’s hoping this time we aren’t just being sold a bill of goods.
president and chief executive officer,
Atlantic Institute for Market Studies, Halifax