"Selling the Atlantic Gateway"
Frank McKenna urges cooperation around a single port authority, an initiative that will better enable the region to take advantage of emerging trends in shipping
Trade activity between North America and Asia is staggering. In less than a decade, it has grown from $646 billion to $1.1 trillion, representing about one eighth of the world's total trade. Expect global commerce to expand and accelerate as emerging Asian markets gain ground, most notably China, which is already the world's third-largest trading nation. It currently accounts for 5.5% of world trade but is growing at a blistering pace of 25% a year. A number of factors ensure we will benefit from this torrid pace, including our close proximity to China's largest trading partner, the United States.
All of this presents our political and business leaders with unprecedented economic opportunities; already those in British Columbia are taking full advantage. Recognizing that 50% of world trade now takes place on the Pacific Ocean, the province has launched a pan-Western strategy to secure a larger share of the action.
The Pacific Gateway concept has been well defined and aggressively launched. British Columbia has successfully secured close to $190 million in federal money to enhance its competitive position, along with a commitment of $400 million for future strategic initiatives.
Massive investments are now being made to improve and expand port infrastructure. First and foremost, the province is readying a second port, Prince Rupert, for global commerce. Plus, it is strengthening links to other markets, which includes the seamless and secure shipment of goods by road, rail, and air to the United States. It is also focusing its efforts. A merger of ports is taking place under a single management structure. This is a significant initiative that should be emulated in Atlantic Canada. The region must commit to a similar tack, as an increase in trade has significant spill-over benefits. For instance, each container entering our region is estimated to generate $1,000 in complementary fees and services. An inflow of one million more containers would pump an additional $1 billion into our economy.
Simply put, we can't afford to miss the boat on new and emerging trading patterns. A number of forces point shippers in our general direction. Both traffic congestion along the West Coast and the demands of post-Panamax ships have prompted companies to explore new corridors to North America via the Suez Canal.
These developments strengthen our case as a strategic entry point to a market of 300-million plus people, but they don't guarantee smooth sailing ahead. The intent of our Atlantic Gateway Strategy is to ensure we remain relevant-a destination of choice-in an increasingly competitive world. To date, it has fallen short of this goal. In part, this is due to a lack of cohesion and clarity. It is often described in different and sometimes conflicting ways, leaving varying impressions of a disparate collection of assets and activities.
On this front, our leaders must collaborate rather than compete. Consider our major ports in Nova Scotia, New Brunswick, and Newfoundland and Labrador. Each has a role to play in a comprehensive Gateway strategy. The time has come to create a single port with multiple facilities in the various provinces. Some will specialize in containers, some in bulk cargo, some in transshipment or short-sea shipping, some in a variety of these models. Instead of the debilitating competition we presently experience, we will have one marketing effort and one management structure. The result will be a more rational structure, quicker access to federal dollars, and more money and goods flowing into our region. The rising tide will lift all boats.
In short, we need to view each of our ports as a pearl-much more valuable if strung together. To that end, leaders across Atlantic Canada must better coordinate their efforts to present a single cohesive offering to international markets. A compelling case can be made for this "virtual" port approach, one that integrates natural amenities and port infrastructure with road and rail systems, short-sea shipping, and a stable and expert workforce. A centralized entity would respond more effectively to the needs of shippers as well as emerging trends. Its pooled resources would distinguish itself from rivals including New York, Norfolk, Charleston, and Miami. And its economy of scale could reduce certain costs.
There is also a more pragmatic and pressing need. The federal government recently announced a national fund for gateways and border crossings worth more than $2 billion. Securing the region's fair share of funds will largely be based on our ability to articulate a clear and concise gateway strategy. A virtual port approach would be central to this plan. Atlantic Canada has long benefited from its outward focus. Long before the term "globalization" was first uttered, this region was an international trading destination. Today 70% of our GDP stems from it, generating $19 billion in exports and $14 billion in imports. The stakes are now much greater, the competition more fierce. Only by more collaborative efforts-stringing our assets together-will we remain a compelling and competitive commercial destination.
Frank McKenna is a former premier of New Brunswick and Canadian ambassador to the United States. He is currently the deputy chair of TD Bank Financial Group.