Alex Binkley on trade corridors

The Binkley Report

Alex Binkley is a foremost political and economic analyst, whose website is www.alexbinkley.com. Readers will be aware that his columns in True North Perspective have foreseen political and economic developments in Canada. In this edition ...

David Emerson urges big-picture view of trade corridors

Urban development threatens to choke off free trade flow

Short-line railways deserve greater attention and support

David Emerson has issued a timely reminder about what Ottawa’s priorities should be in its soon to be announced transportation plan.

The former federal cabinet minister and head of the group that produced a sweeping review of Canadian transportation last year says the government needs to focus on the big picture instead of physical assets such as railways, bridges, pipelines and transmission lines.

“Trade and logistics corridors are complex, dynamic systems made up of many parts,” he told the Senate banking committee. “Without really efficient connections to the global marketplace for Canadian goods and services, Canada’s economy would be, quite bluntly, toast. Transportation and logistics are now a more important competitive driver than most tariff and non‑tariff barriers.”

Trade corridors must be “formally embraced and defined, and part of the government's decision-making and regulatory mechanisms and processes,” Emerson said. Without government-wide involvement, “the trade corridor concept will fall short of its potential.”

The federal government needs “a mechanism through which trade and transportation and logistics decisions could be made in a comprehensive way.” The government-wide approach must include research, manpower, the application of technology and innovation, security, border and environmental issues.

“If you don't connect all of those in a focused decision‑making exercise, driven by the need for the most efficient connection possible for Canada to the global marketplace, we’ll simply fall behind because other countries are doing it and you know we have issues with the U.S. these days.  You simply cannot go on assuming the status quo stability of NAFTA and the relationship with the U.S.

“We've got to get into Asian and European markets,” he said. “If we're going to do that, we have to have world‑leading transportation and logistics capability.”

Bottlenecks have developed in Canadian transportation “where urban encroachment is bringing the system if not to a standstill, then at least creating serious delays and problems with the import and export of products,” he said. “We’ll need and should put in place mechanisms and authorities that would enable government to take control of certain pieces of land or implement certain initiatives that would prevent the ultimate encroachment into the trade corridor that is already starting to bind.”

It’ll take decades to develop national east-west trade corridors connected to “efficient feeder systems, whether it's through short line-rail, better trucking and road connections,” he said. Without them, “we’ll disenfranchise a large number of smaller communities and prevent their growth and development over time.”

The feeders would move goods between the corridors and the northern parts of the country, he said.

Canada needs “much greater public policy focus on short‑line railways, because the short‑line railways, regulations‑wise, are treated in ways that basically inhibit their economic viability. They’re taxed in a way that is much less generous and competitive than short‑line rail in the U.S. Many of these short‑line rail systems are peeled off from the Class 1 railways, so they tend to be under‑invested in, under‑maintained.

“We have a problem with neglecting short‑line rail.  We've made it pretty easy for the Class 1s to basically terminate a spur line.  Frankly, I don't think we should be doing that,” he said. “I think we should be making it exceedingly difficult to get rid of a short‑line railway. I think we should be recognizing that at some point the economics of reinvesting in those spur lines could be very critical to the country, particularly to the development of the hinterland and rural communities.”