No. H025/03For release - March 31, 2003
OTTAWA — Transport Minister David Collenette today announced that Transport Canada's Port Divestiture Program will now be extended until March 31, 2006. The extension is the result of a progress review which was promised when the program was last extended in March 2002.
"This divestiture program allows communities to benefit from the advantages of local operation, including the flexibility to respond to changing needs and new business development opportunities," said Mr. Collenette. "Extending the life of the Port Divestiture Program by three years will enable the Government of Canada to pursue further possibilities for divestiture."
The 1995 National Marine Policy, which aimed to reduce overcapacity and improve efficiency of the port system in Canada, established three categories of ports: Canada Port Authorities, regional/local ports and remote ports. The Port Divestiture Program was originally established in 1996 as a means to transfer regional/local ports to local ownership and control. Transport Canada will continue to own and operate certain designated remote ports unless local groups express an interest in discussing divestiture. As of February 28, 2003, Transport Canada had divested 439 of its original inventory of 549 ports and, in the process, saved Canadian taxpayers more than $122 million.
Funding for this initiative is built into the current fiscal framework.
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Contact:
Anthony PolciDirector of CommunicationsOffice of the Minister, Ottawa(613) 991-0700
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BACKGROUNDERPORT DIVESTITURE PROGRAM
The National Marine Policy, announced in December 1995, outlines the Government of Canada's intent to modernize Canada's marine transportation system. One initiative within this policy framework is the Port Divestiture Program, under which Transport Canada is transferring the ownership and operation of regional/local ports and harbour beds to provincial or local interests. As of February 28, 2003, Transport Canada had divested 439 of its original inventory of 549 ports and, in the process, saved Canadian taxpayers more than $122 million.
The government's commitment to completing the divestiture process was recently reiterated in the new policy framework Straight Ahead: A Vision for Transportation in Canada. On March 31, 2003, in support of this commitment, the Government of Canada announced the extension of the Port Divestiture Program for three more years.
The public port system supports the safe and efficient movement of vessels and cargo and is integral to regional economic prosperity. Transferring regional/local ports to local interests places decision-making responsibilities in the hands of those best able to gauge local requirements. This allows for a more effective and efficient port system with local accountability. The new owners have the same rights and obligations of any property owner and are subject to all applicable legislation.
Under the Port Divestiture Program, regional/local ports, including harbour beds, owned by Transport Canada are first offered to other departments within the Government of Canada and then to the provinces. If the province is not interested in acquiring these facilities, Transport Canada then seeks expressions of interest from local stakeholders, including municipalities. A public tender may be used as a final option in the event that no expressions of interest are received.
The Port Divestiture Fund was created to ease the transfer process. The fund provides an incentive to local interests to assume ownership of the facilities and to give operators flexibility to operate within the local business environment. Contributions from the fund must be applied to eligible expenditures directly related to the operation of the port or to eligible capital projects designed to bring existing port property up to minimum safety or operating standards.
Audits of contribution agreements help safeguard the efficiency and effectiveness of the Port Divestiture Program. For each year of a contribution agreement, the port operator must provide the Minister with evidence certifying that the contribution funds have been applied to eligible expenditures directly related to port operations. In addition, a port operator's books and records must be open for audit and inspection at the discretion of the Minister of Transport, a requirement that continues for six years after the end of the contribution agreement. The transfer documents also provide for the full repayment of the contribution in certain instances, such as if the port operator ceases to operate the port.
Under the National Marine Policy, the vast majority of ports in Canada were classified as regional/local. However, the policy also includes two other categories not covered by the port divestiture program:
Canada Port Authorities (CPAs): These 19 ports that are vital to domestic and international trade and are financially self-sufficient continue to be owned by Transport Canada but independently managed by boards of directors nominated by user groups and various levels of government. CPAs are governed by the Canada Marine Act (CMA), which enables them to operate in a more commercial, efficient and timely manner.
Remote Ports: The 34 ports that serve basic transportation needs of isolated communities and which rely on the presence of an existing Transport Canada wharf structure. Remote ports will continue to be operated by Transport Canada unless local groups express an interest in acquiring them.
While Transport Canada is transferring its property interests in the case of regional/local ports, the Government of Canada retains jurisdiction over lawful navigation on the water. As a result, the need for ships to obey all applicable federal statutes such as the Canada Shipping Act remains unaffected.
March 2003
