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It’s not just pipelines: Sea ports could see marine traffic reviews after Ottawa’s directive on $2B Vancouver terminal

It’s not just pipelines: Sea ports could see marine traffic reviews after Ottawa’s directive on $2B Vancouver terminal
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OTTAWA — In an echo of the criticisms that stalled the Trans Mountain pipeline expansion, opponents of a $2-billion container terminal near Vancouver are calling on the federal government to delay hearings on the project, arguing regulators have failed to account for the environmental effects of increased tanker traffic that would result from the development.

Several First Nation communities and one private-sector firm are calling on regulators to delay hearings scheduled to begin May 14 after Environment Minister Catherine McKenna issued a directive last month that ordered officials to include marine shipping activity in their review of Roberts Bank Terminal 2, a roughly $2-billion project planned for construction on a sprawling man-made island off the coast of Vancouver. The proposal is led by the Vancouver Fraser Port Authority, and is currently under environmental review by a federal panel.

The directive by McKenna could raise concerns that the broader environmental considerations applied to Trans Mountain may also be extended to projects such as sea ports and rail lines, in turn diminishing Canada’s ability to build major infrastructure projects.

Last August, a Federal Court of Appeal judge halted construction on the Trans Mountain expansion, partly due to a failure by the national energy regulator to include the environmental impacts of marine vessels in its study of the project. The court also ruled that Ottawa had failed in its duty to consult with local Aboriginal communities.

The ruling marked a setback for the oil and gas sector, which has failed for many years to build the major pipelines needed to get its product to market. The delays have generated fierce criticism of Ottawa in some Western provinces. Last year, regulatory and legal delays on the Trans Mountain pipeline ultimately compelled Ottawa to purchase the existing assets for around $4.4 billion, effectively nationalizing the project as a way to ensure its completion.

Meanwhile, the court ruling on Trans Mountain could set a precedent for future projects that involve ocean vessels of any kind. In her March 8 letter, McKenna directed the chair of the panel reviewing Roberts Bank to update the terms of reference around the project to include marine shipping, a decision that came “as a consequence” of the federal court ruling on Trans Mountain, she said.

But her directive came just over two months before hearings are scheduled to begin on May 14, leaving some local communities to claim that they were not sufficiently consulted on the updated terms.

Global Container Terminals (GCT), a major terminal operator on the B.C. coast, is also calling on Ottawa to push back the start date for public hearings after the terms of reference were changed.

“We think that the process is a little bit flawed,” Doron Grosman, President and CEO of GCT, said in an interview.

The company is locked in its own battle with the Vancouver Fraser Port Authority, after the regulator struck down GCT’s competing container terminal project, called Deltaport, which is planned to come online around 2028. The port authority acts as both regulator and landlord to GCT on its existing Deltaport terminal, but is also putting forward its own competing terminal project in Roberts Bank — a position that Grosman calls an “inextricable conflict of interest.” The port authority rejected the GCT bid on Feb. 28.

A gantry crane stands in the DP World Ltd. terminal at Port Metro Vancouver in Vancouver, B.C. on Wednesday, Sept. 19, 2018. Darryl Dyck/Bloomberg

GCT then launched a judicial review of the decision on March 28 in federal court, saying regulators should be compelled to consider both proposed projects. Grosman also warns the move could stifle investment from private sector players like GCT, which is backed by three institutional investors, in favour of taxpayer-funded projects.

“I think it’s very surprising, I think it’s unusual,” Grosman said. “I think it’s not in line with the current Canadian administration’s policy in desiring private capital to be invested, and to not be crowded out by the public sector.”

Officials with the Canadian Environmental Assessment Agency did not directly respond to questions about whether Ottawa would delay hearings on Roberts Bank.

Duncan Wilson, a vice-president at the Vancouver Fraser Port Authority, does not expect the directive from McKenna to hurt their chances of building the project. He said the panel has been studying the environmental impacts of marine activity since 2015, and the port authority has consulted with over 40 First Nations communities.

I think it’s not in line with the current Canadian administration’s policy in desiring private capital to be invested, and to not be crowded out by the public sector

“Frankly we think [the directive] is a sensible thing to do given the growing interest in the impacts of activities in the Salish Sea,” he said.

The port authority also says the Roberts Bank expansion would allow larger vessels to enter the Vancouver port, which would increase capacity without using a greater number of ships.

Wilson said that the Roberts Bank project, which could come online around 2025, is the only project of the two that could be built in time to meet growing demand — a claim GCT disputes.

Meanwhile, several Aboriginal communities oppose Roberts Bank.

In its own submission to the panel, the Tsawwassen First Nation, who claimed to be the community most directly impacted by the Robert Banks project, said the proponent “has not provided sufficient information for the purposes of proceeding to a public hearing.”

The Musqueam Indian Band, for its part, criticized the panel in a February submission for not properly accounting for the cumulative effects the project could have on juvenile salmon habitats.

The Roberts Bank Terminal 2 project is expected to cost “more than” $2 billion according to estimates by the port authority, but the group did not provide a more detailed cost range. However, a 2016 briefing note from Transport Canada suggests the authority has asked for a $2.8-billion borrowing limit to cover the costs of the project, which includes $700 million in the event that the scope of the terminal is broadened.

Either Roberts Bank Terminal 2 or the Deltaport project would go a long way in meeting demand to move cargo from the B.C. coast in coming years. The port currently accepts around five million shipping containers of cargo every day, which could almost double by the year 2035, according to estimates by the port authority.

In February, the National Energy Board submitted its report to Ottawa on the Trans Mountain pipeline expansion and how it would effect local marine life. Environmentalists have for years warned that increased marine traffic in the region, whether carrying oil or household goods, could further diminish local killer whale populations.

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