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Canada Needs To Close Transportation Gaps To Seize Historic Opportunity

Vancouver, October 22, 2007 – Canada has a historic opportunity to become the gateway of choice for goods entering and leaving North America, but it will miss this chance unless governments and industry work to address shortcomings in the country’s transportation network, according to a Conference Board publication released today.
Vancouver, October 22, 2007 – Canada has a historic opportunity to become the gateway of choice for goods entering and leaving North America, but it will miss this chance unless governments and industry work to address shortcomings in the country’s transportation network, according to a Conference Board publication released today.

“Of the three countries signing the North American Free Trade Agreement, Canada is closest to both Asia and Europe,” said Prof. Mary Brooks of Dalhousie University, author of Addressing Gaps in the Transportation Network: Seizing Canada’s Continental Gateway Advantage.

“Yet American shippers prefer to use American ports to avoid the Canada-U.S. border and the uncertainty associated with border delay. The major investments that the Canadian government is making in port and corridor infrastructure are good first steps. However, Canada is falling short on the so-called ‘soft’ issues, such as developing a highly-skilled workforce in transportation management and reducing regulatory barriers and administrative burdens.”

Canada’s geographic advantage stems from the fact that Shanghai is closer to Prince Rupert and Vancouver than it is to Los Angeles, and Halifax is closer to Antwerp, Belgium, than ports on the U.S. eastern seaboard. Both Vancouver and Halifax are closer to Asian ports than their west and east-coast American competitors—in most cases by a full day or more. Furthermore, Prince Rupert and Halifax have spare port capacity, in contrast to the congestion at Los Angeles and Long Beach.

Canadian governments have made progress in funding infrastructure improvements in the past two years. Still, Canada needs to move away from its current policy that ports must be financially self-sustaining in order to support nationally-significant projects.

In addition to infrastructure, the “soft” issues are contributing even more to the transportation gap. First, Canada cannot serve as a North American gateway to the U.S. market if goods are not processed efficiently at the border. Two issues are particularly relevant:

the need for regulatory convergence—higher border costs mean that U.S. ports will be favoured over Canadian ports

the administrative burden imposed on traders—Canada has the lowest administrative burden among NAFTA countries, but it is still a greater burden compared to global leaders like Denmark and Hong Kong.

Canada needs a human resource strategy—both federal and provincial governments have roles to play—to deal with a looming truck driver shortage (estimated by the Ontario Trucking Association at 224,000 by the end of 2008), and to ensure that it has individuals with the skills to manage both transportation systems and supply chains.

This report, funded by the Conference Board’s International Trade and Investment Centre, is publicly available at www.e-library.ca or at www.conferenceboard.ca/ITIC. The International Trade and Investment Centre is meeting Monday and Tuesday in Vancouver to discuss enhancing Canada-Asia supply chains.


For more information contact

Corporate Communications
613-526-3280
corpcomm@conferenceboard.ca


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