Advocate for improvements to border crossings
Transcription
Advocate for improvements to border crossings
Advocate for Improvements to Southern Ontario Border Crossings Discussion Paper Partnership, Communication and Advocacy Part of the Goods Movement Strategic Plan Action Number 6 May 2014 1 Table of Contents 1 Introduction ....................................................................................................................................... 8 1.1 Study Scope ................................................................................................................................................. 8 1.2 The Importance of Peel Region in Canada’s International Trade......................................................... 10 1.3 Competitiveness Framework for Cross-Border Goods Movement Analysis ........................................ 13 2 2.1 2.2 2.3 2.4 2.5 3 3.1 3.2 4 Key Issues in Cross-Border Goods Movement ............................................................................ 15 Policy Issues and Challenges: Road Border Crossings .......................................................................... 15 2.1.1 2.1.2 2.1.3 2.1.4 Infrastructure and Background ............................................................................................................................... 15 Policy Issues and Challenges: Border Crossing ..................................................................................................... 18 Policy Issues and Challenges: Border Access ....................................................................................................... 19 Policy Issues and Challenges: Trade ...................................................................................................................... 20 Policy Issues and Challenges: Rail Border Crossings ............................................................................. 20 2.2.1 2.2.2 2.2.3 Infrastructure and Background ............................................................................................................................... 20 Policy Issues and Challenges: Border Crossing ..................................................................................................... 21 Policy Issues and Challenges: Border Access ....................................................................................................... 22 Policy Issues and Challenges: International Airports ............................................................................. 22 2.3.1 2.3.2 2.3.3 Infrastructure and Background ............................................................................................................................... 22 Policy Issues and Challenges: Border Crossing ..................................................................................................... 22 Policy Issues and Challenges: Border Access ....................................................................................................... 23 Policy Issues and Challenges: International Seaports ........................................................................... 23 2.4.1 2.4.2 2.4.3 Infrastructure and Background ............................................................................................................................... 24 Policy Issues and Challenges: Border Crossing ..................................................................................................... 25 Policy Issues and Challenges: Border Access ....................................................................................................... 25 Summary: Border Crossing Policy Issues and Challenges..................................................................... 26 Recommendations ......................................................................................................................... 28 Improve Data Availability and Planning for Cross-Border Goods Movement..................................... 28 3.1.1 3.1.2 3.1.3 3.1.4 3.1.5 Gather Data on Border Crossing Performance .................................................................................................... 28 Develop a Commodity Flow Survey and Freight Analysis Framework ............................................................. 28 Expand MTO Commercial Vehicle Survey to Cover Peel Region Roads ......................................................... 29 Develop a Commercial Multimodal Forecasting Model .................................................................................... 29 Take a Multimodal Corridor Perspective on Transportation Planning .............................................................. 29 Improve Border Infrastructure and Highways Connecting the GTHA to Border Crossings ................. 31 3.2.1 3.2.2 3.2.3 Improve Key Truck Routes to Border Crossings ..................................................................................................... 31 Complete the New International Trade Crossing ................................................................................................ 32 Invest in Border Technology..................................................................................................................................... 32 References ...................................................................................................................................... 33 Appendix A: Overview of Key Southern Ontario Border Crossings ..................................................... 1 Truck Border Crossings .............................................................................................................................................. 1 Ambassador Bridge ..................................................................................................................................................................... 2 Blue Water Bridge ........................................................................................................................................................................ 3 Peace Bridge ................................................................................................................................................................................ 4 Lewiston-Queenston Bridge ....................................................................................................................................................... 5 Thousand Islands International Bridge ...................................................................................................................................... 6 Rail Border Crossings ................................................................................................................................................. 7 Detroit River Rail Tunnel (CP) ...................................................................................................................................................... 8 Paul M. Tellier Tunnel (CN) .......................................................................................................................................................... 9 2 International Railway Bridge ...................................................................................................................................................... 9 Rail Intermodal Terminals ............................................................................................................................................................ 9 Air Border Crossings ................................................................................................................................................. 10 Toronto Pearson International Airport ..................................................................................................................................... 11 Hamilton John C. Munro International Airport ...................................................................................................................... 12 Marine Border Crossings.......................................................................................................................................... 13 Southern Ontario Marine Ports ................................................................................................................................................. 13 Summary of Current Infrastructure Issues and Planned Future Improvements by Crossing ............................. 16 Appendix B: Data Sources ....................................................................................................................... 1 MTO Commercial Vehicle Survey (CVS) ................................................................................................................. 1 US Bureau of Transportation Statistics: North American Transborder Freight Data .............................................. 1 Transport in Canada (herein referred to as Transport Canada (2012)) ................................................................ 1 Peel Forecast Model .................................................................................................................................................. 1 3 Abbreviations APGCI BIT CBP CBSA CN CP CRG CVS DRIC FAF FBCL GGH GTA GTAA GTHA JIT MTO NGTA NITC PGMTF RFID TC TCOD TMG VIT Asia-Pacific Gateway and Corridor Initiative Brampton Intermodal Terminal (US) Customs and Border Protection Canada Border Service Agency Canadian National Railway Canadian Pacific Railway Continental Rail Gateway (MTO) Commercial Vehicle Survey Detroit River International Crossing Freight Analysis Framework Federal Bridge Corporation Limited Greater Golden Horseshoe Greater Toronto Area Greater Toronto Airports Authority Greater Toronto and Hamilton Area Just in time (delivery) Ontario Ministry of Transportation Niagara-to-GTA New International Trade Crossing Peel Goods Movement Task Force Radio-frequency identification Transport Canada Trucking Commodity Origin Destination (Survey) of Statistics Canada Travel Modelling Group Vaughan Intermodal Terminal 4 Executive Summary Ontario is the hub of Canada’s international trade, and Peel, at the centre of the Greater Toronto and Hamilton Area (GTHA), is the hub of Ontario’s international trade. In 2013, Ontario accounted for more imports of goods than the rest of Canada combined, totalling almost $270 billion by value. Exports from Ontario are also significant, and totaled $165 billion in 2013. While Peel Region is home to only 10% of Ontario’s labour force, it is home to 20% of the province’s transportation and logistics labour force, some 60,000 people. Peel also has a significant manufacturing base with 93,000 workers representing 13% of the province’s manufacturing labour force. 1 The Region produces approximately 15% of Ontario's exports. 2 While compelling, these figures probably understate the importance of Peel to Canada’s international trade. Peel serves as a transportation hub for southern Ontario. Its transportation network includes Pearson International Airport (Canada's largest cargo airport), seven 400-Series highways, and the two largest intermodal rail terminals in Ontario. This strategically important transportation network facilitates the entry of goods into the Ontario and Canadian markets and the export of goods to the United States and overseas. Overall, trucking is the dominant mode for Ontario’s international trade in terms of value, accounting for $262 billion or 59%, compared to air ($72 billon, 16%), rail ($65 billion, 15%), and water ($44 billion,10%). Unsurprisingly, Canada’s trade with the United States is dominated by trucks with imports of $117 billion and exports of $98 billion, respectively 79% of imports from the US and 66% of exports. This paper approaches cross-border goods movement in terms of the issues associated with crossing the border, the issues associated with travelling between the GTHA and the border, and some broader issues about cross-border trade, as relevant. 3 Every mode faces different challenges and opportunities in terms of travelling to and crossing the border. Given the importance of trucking, this paper gives special attention to the issues facing cross-border trucking. The key border crossing issue facing trucking is the unreliability of travel times owing to delays associated with border crossing processes. The most important border access issue for the trucking industry is congestion and the lack of resilience in the highway network linking Peel Region with Michigan and Niagara border crossings. Other transportation modes also face cross-border and other challenges that negatively impact trade. Notably the air freight industry faces high costs in the form of taxes on fuel for international flights, whereas most other provinces provide an exemption. Air cargo customs and security processing are also driving up costs and increasing travel times. In the marine Statistics Canada (2012) Peel Region Public Works (2012) 3 In April 2012, Peel Regional Council endorsed the Region’s Goods Movement Strategic Plan 2012-2016. The Plan incorporates 23 action items, which have the objective of improving the efficiency of goods movement, managing congestion, and mitigating its effects on health and the environment. One of these actions requires the Region to take an active role in advocating in border crossings bottlenecks from the cross-border movement of goods on the GTHA road network. 1 2 5 industry, the 24-hour advance notice of arrival requirements creates a deterrent to making greater use of the marine mode for cross-Lakes trade. All of these issues negatively impact trade, to the detriment of the economies of Peel, Ontario, and Canada. This paper recommends a number of actions that could be taken to better inform cross-border transportation policies and action, and ultimately help improve cross-border goods movement in Southern Ontario. Improve Data Availability and Planning for Cross-Border Goods Movement The data available in Ontario on cross-border goods movement could be improved significantly, and the actions below would go a long way to remedying this deficiency. • Gather Data on Border Crossing Performance. An area of clear weakness in the data currently available is border crossing performance, including in particular data on border crossing times. Only with good data can the Government of Canada and other partners undertake cost-benefit analysis to prioritize investment in border crossings. Efforts are underway at Transport Canada to collect data on road border crossing performance. • Develop a Commodity Flow Survey and Freight Analysis Framework. One of the key challenges faced by policy makers in regard to cross-border goods movement is obtaining data on the initial origin and final destination of cross-border goods flows. What is needed in Canada is an extension of the Freight Analysis Framework (FAF) already in use in the United States. The FAF integrates data from a variety of sources to create a comprehensive picture of freight movement among states and major metropolitan areas by all modes of transportation. Using data from a national Commodity Flow Survey and additional sources, FAF provides estimates for tonnage, value, and domestic ton-miles by region of origin and destination, commodity type, and mode, and forecasts through 2040. These data can in turn be used to inform priorities and plans with respect to border crossing-related infrastructure. • Expand MTO Commercial Vehicle Survey (CVS) to Cover Peel Region Roads. The MTO CVS only captures trips on provincial highways. For this reason, it does not capture trips between locations in Peel and rail intermodal terminals or the Toronto Pearson International Airport. Expanding the coverage of the CVS to include Peel’s road network would greatly improve the data available to policy makers and planners. • Develop a Commercial Multimodal Forecasting Model. The lack of a multimodal forecasting model, which also incorporates cross-border goods movement, is a major gap in our ability to plan multimodal infrastructure. We suggest that a multimodal forecasting model be developed and that it cover all of Southern Ontario. The implementation of a multimodal forecasting model would be complementary to the development of a Canadian or at least an Ontario FAF, as it has been in the United States. • Take a Multimodal Corridor Perspective on Transportation Planning. Shippers and their logistics partners determine how, and over what mode(s) their goods are moved to market. These decisions are made in light of the relative travel time, cost, reliability, information and risk (collectively the transportation value proposition) that come with each mode or combination of modes. There is no direct role for public policy in this choice. Public policy can however influence modal choice. It is important that 6 transportation policy consciously take into account multimodal impacts and interlinkages. As such, Ontario’s multimodal transportation strategy is certainly a step in the right direction. To take multimodal corridor planning a step further, an institutional structure could be created to analyze the performance of Southern Ontario’s multimodal transportation system and to make evidence-based recommendations for how investments in infrastructure and ancillary systems (such as supporting technology) should be prioritized. The model of the Asia-Pacific Gateway and Corridor Initiative (APGCI), described herein, would be interesting to examine and, given the success of the APGCI, such an initiative would be very likely to resonate with the Governments of Canada and Ontario. Improve Border Infrastructure and Highways Connecting the GTHA to Border Crossings This set of three recommendations pertains to physical infrastructure investments that would improve the speed and reliability of cross-border goods movement, while reducing costs. • Improve Key Truck Routes to Border Crossings. Trucks not only handle more cross-border trade than any other mode in Ontario ($262 billion in 2012 relative to $187 billion for all other modes combined), they also provide essential connectivity to other modes of transport and shipper facilities. As such, in our view, improving the speed and reliability, and reducing the cost of trucking between the GTHA and border crossings, is of paramount importance. The Ontario Ministry of Transportation (MTO) has in place multimodal transportation development strategies for the two key corridors of relevance to cross-border goods movement to and from Peel Region (the GTA West Corridor and the Niagara-to-GTA Corridor). It is critical that improvements in these corridors be realized to improve goods movement between the GTHA and key border crossings. There is also an opportunity to do better. The construction of a new high capacity, high speed highway between the Niagara frontier and Highway 401 would provide not only additional capacity, but crucially, resilience of key trade infrastructure. • Complete the New International Trade Crossing (NITC). The NITC project (formerly the Detroit River International Crossing or DRIC) project remains important as it will provide needed capacity and increased resilience of border crossing infrastructure over the Detroit River. The age and load restrictions of the Ambassador Bridge as well as the fact it is the single most important border crossing in Canada (in 2013 handling 37% of all trucks crossing Ontario’s borders), argue strongly in favour of completing the NITC as soon as possible. • Invest in Border Technology. New technology in terms of biometrics for people and better scanning for goods have the potential to materially improve the speed and reliability of border crossing, while reducing the cost. Radio-frequency identification (RFID) technology is an example of a technology that could be explored further. US CBP already has RFID readers in all lanes, and this technology can significantly improve processing times. The Governments of Canada and the United States should work together to develop RFID or other appropriate technology to improve the flow of goods vehicles. As new technology can raise concerns over privacy and dignity, implementation would likely be more successful if such new technologies were accompanied by an improved approach to privacy and respect for the human rights of travelers. 7 1 Introduction The Region of Peel is located in the Greater Toronto and Hamilton Area (GTHA) in Southern Ontario. With a population of 1.3 million, the Region comprises three municipalities: the Town of Caledon and the Cities of Brampton and Mississauga. Peel is Ontario’s hub for goods movement, and indeed one of Canada’s most important hubs for goods movement, because of three essential characteristics: 1) the importance of manufacturing and transportation to the Region, 2) the central location of Peel in North America, close to large Canadian and American markets and Canada’s most important border crossings, and 3) the integration of Peel Region with the rest of the GTHA. Figure 1: The Peel Goods Movement Strategic Plan 2012 to 2016 In 2012 the Peel Goods Movement Task Force (PGMTF) released a Goods Movement Strategic Plan. The PGMTF includes private stakeholders and regional, municipal, provincial, and federal government departments. The PGMTF oversees a Goods Movement Program, which is aimed at 1) supporting and influencing a transportation system that makes sure goods are transported in “an efficient and timely manner”, and 2) optimizing the use of existing infrastructure and capacity, while minimizing social, environmental, and economic impacts of goods transportation. The Strategic Plan calls for actions that involve advocacy, systems optimization of existing infrastructure, and effective planning and forecasting. The Strategic Plan makes several recommendations, including improvements to goods transport access to air and rail termini, improvements at rail crossings and to accident and road construction oversight, establishing a Strategic Goods Movement Network, a Regional Information Technology Services Strategic Plan and Network, and to “advocate for the improvement of Ontario border crossings.” 4 1.1 Study Scope This paper reviews the goods movement between Ontario – Peel Region in particular –and other countries, and related border-crossing issues and opportunities. It is multimodal in nature, covering goods movement across borders by air, marine, rail, and road. 5 Exhibit 1 shows the study areas as well as key border crossings and associated infrastructure connecting border crossings with Peel Region. This infrastructure will be described in greater detail in the following chapters. 4 5 Peel Region Public Works (2012) Pipeline movements are excluded. 8 Exhibit 1: Study Area and Key Border Crossing Infrastructure Source: CPCS 9 1.2 The Importance of Peel Region in Canada’s International Trade The importance of Peel Region to Ontario's and to Canada's trade is centred on two elements in the region's economy: 1) its importance as a transportation hub and 2) its importance in export manufacturing. Peel serves as a transportation hub for southern Ontario. Its transportation network includes Pearson International Airport (Canada's largest cargo airport), seven 400-Series highways, and the two largest intermodal rail terminals in Ontario. This network facilitates the entry of goods into the Ontario and Canadian markets and the export of goods to the United States and overseas. Every day 3,300 trucks carry commodities valued at over $160 million between Peel and United States, 14% of the $600 million worth of goods carried on 23,000 daily truck trips to and from Peel Region. 6 Foreign countries including the United States buy more than one-quarter of the goods Canada produces and supply more than one-quarter of the goods Canada consumes (in 2013 exports of goods totalled $479 billion and imports of goods totalled $486 billion). This immense flow of goods improves the quality of life of Canadians in many ways. By selling our oil, gas, forest products, machinery, and consumer goods (to name just a few) abroad, we are able to buy the very best products from around the world, from cars to oranges to clothing to medicines. All of these products flow between Canada and our trading partners (Exhibit 2) by the various modes of transportation: air, marine, pipeline, rail, and road. 7 Ontario is responsible for the largest share of Canada’s international trade. In 2013 Ontario accounted for more imports of goods than the rest of the country combined, totalling almost $268 billion. Lacking energy exports, Ontario had smaller exports, $165 billion. Ontario’s exports of goods overwhelmingly went to the United States with 79% finding markets in there. The United Kingdom was by far the second most important buyer of Ontario products, purchasing 8% of Ontario’s goods exports in 2012. Ontario’s sources of goods imports were more diverse, with only 56% coming from the United States, 11% from China, 7% from Mexico, 4% from Japan, and 3% from Germany (Exhibit 3). 6 7 MTO (2006) Pipelines are not examined in this paper. 10 Exhibit 2: Canada and Ontario’s International Trade in Goods, 2013 $350 $279 $268 $300 $207 $200 Trade in Billions of Dollars Trade in Billions of Dollars $250 $164 $150 $100 $50 $150 $100 $50 $0 Export Ontario Rest of Canada Source: Statistics Canada Source: Transport Canada (2012) Exhibit 4: Ontario’s Trade by Mode, by Value 2012* Exhibit 5: Ontario’s Trade by Mode, by Value 2012* $160 $300 United States Imports $140 $250 $120 United States Exports Billions of Dollars Billions of Dollars Imports $200 $0 Import Exports $250 United States China, P. Rep. Mexico United Kingdom Japan Germany Korea, South Switzerland Italy Peru Other $300 Exhibit 3: Ontario’s International Trade in Goods, Ten Largest Trading Partners, 2012 $200 $100 Other country Imports $150 Other country Exports $100 $80 $60 Water Road Rail Other Air $40 $20 $50 $0 Exports $0 Air Other Rail Road Source: Transport Canada (2012) 8 Water Imports Other country Exports Imports United States Source: Transport Canada (2012) *Note that for exports, the mode of transport represents the mode by which the international boundary is crossed. This may be different from the mode of transport within Canada. For imports, the mode of transport represents the last mode by which the cargo was transported to the port of clearance in Canada and is derived from the cargo control documents of customs. This may not be the mode of transport by which the cargo arrived at the Canadian port of entry in the case of inland clearance. This may, therefore, lead to some underestimation of Canadian imports by the marine and air transport modes. 8 11 Overall, trucking (road transport) is the dominant mode for Ontario’s international trade in terms of value, accounting for $262 billion or 59% (Exhibit 4). Air ($72 billon, 16%), rail ($65 billion, 15%), and water ($44 billion, 10%) accounted for much lower values. Unsurprisingly, Canada’s trade with the United States is dominated by trucks with imports of $117 billion and exports of $98 billion, respectively 79% of imports from the US and 66% of exports (Exhibit 5). Also unsurprisingly, trucking is much less important in trade with other countries. By value, Ontario’s $39-billion worth of exports to countries other than the United States are carried primarily by air (58%) and marine (33%). Ontario’s $114 billion in imports from other countries are roughly evenly split between air (30%), road (39%), and marine (24%). Ontario’s trade, in value terms, is dominated by manufactured products and manufacturing inputs (Exhibit 6). However, consumer goods, which also include manufactured consumer goods, and metallic mineral products are also very important. Exhibit 6: Ontario’s International Trade by Commodity, 2013 Motor vehicles & parts Consumer goods Metal & non-met mineral products Electronic and electrical equipment & parts Basic & industrial chem., plas. & rubber products Industrial machinery, equipment & parts Forest products, building & packaging materials Farm, fishing & intermediate food products Domestic export Aircraft and & trans. equipment & parts Import Other Metal ores & non-met minerals Energy products $0 $20 $40 $60 Billions of Dollars $80 Source: Statistics Canada Note: Merchandise imports based on the province of clearance, and domestic exports based on the province of origin. 12 Peel Region lies at the heart of Ontario’s, and to a great extent Canada’s, international trade. While the region is home to only 10% of Ontario’s labour force, it is home to 20% of the province’s transportation and logistics labour force. In total in 2011, Peel had 60,000 people working in transportation and logistics. Moreover Peel has a significant manufacturing base with 93,000 workers representing 13% of the province’s manufacturing labour force. 9 The Region produces approximately 15% of Ontario's exports. 10 While compelling, these figures probably understate the importance of Peel to Canada’s international trade. Exhibit 7: Population and Employment Growth Projection for the GTHA, 2011-2031 600 Population Millions of People or Jobs 500 Peel is likely to experience continued population and economic growth. Peel’s population growth rate is expected to exceed that of every other region in the GTHA except adjacent York (Exhibit 7). Population and economic growth in both Peel Region and the GTHA are likely to contribute to increasing traffic at Ontario-US border crossings. 1.3 Employment 400 300 200 100 - Competitiveness Framework for CrossBorder Goods Movement Analysis Source: Hemson Consulting Ltd. (2013), When transportation options are efficient and Reference Scenario competitive, shippers benefit from lower transportation costs, faster and better service, and increased reliability, which in turn contribute to their competitiveness, growth and that of the region. There are added costs associated with moving goods across borders. These include border crossing and customs-related charges, as well as costs associated with border delays or the variability in travel times associated with moving goods across borders. These costs have the potential to make Canadian exports less competitive in foreign markets and imports more expensive for Canadian consumers and businesses. For example extra costs associated with crossing the border mean that Canadian auto parts are that much more expensive for a US auto maker. Poor reliability can also frustrate just-in-time delivery of automotive parts, leading to missed delivery times, the need for more inventory, or potentially lost contracts. This can result in higher cost for end consumers, and lost Canadian trade-related jobs. Overall, Anderson (2012) estimates that in 2009 crossing the border adds 40% to the cost of export shipments and 75% to the cost of import shipments. He estimates that these costs equate to a premium of 0.5-1.0% on the value of goods being shipped. An older estimate of the cost of delays at the border pegged the cost to the Ontario economy alone at $5.25 billion annually. 12 Statistics Canada (2012) Peel Region Public Works (2012) 12 Ontario Chamber of Commerce (2004), p. 4. 9 10 13 Ontario’s economy depends on trade. When the costs of trading increase, cross-border shippers become less competitive; this in turn hurts Peel’s economy and the economies of Ontario and Canada. This discussion paper is fundamentally concerned with identifying these costs and proposing ways to reduce them, specifically as they pertain to those businesses in Peel Region that move goods across borders, and their ability to reach cross-border markets competitively. The costs to be explored in this discussion paper are two-fold: Border Crossing Costs. These are costs associated with border functions and are generally incurred directly at the border; or put another way, costs that would not exist if the border did not exist. 13 For example, delays waiting in lineups at the border, tolls and fees to cross the border, customs duties, and the cost of compliance with trusted trader and traveller programs. They can be understood in terms of their impact on travel time, cost, level of service (including reliability), and the information available to those moving goods. These Travel costs are largely driven by the policies of the Time Governments of Canada and the United States. The focus in this report will be on the policies of the Government of Canada, since the ability of Peel to influence US Government policy is very limited. Informa -tion /Risk Border Access Costs. These are costs of travelling Level of between Peel Region and Southern Ontario’s border Cost Service crossings. They can also be understood in terms of travel time, cost, level of service (including reliability), and the information available to those moving goods. These costs are largely driven by the Government of Ontario and the municipalities that maintain access roads to land, sea, and air ports. 13 Anderson (2012), p. 18. 14 2 Key Issues in Cross-Border Goods Movement This chapter discusses the key issues in cross-border movement that are relevant to Peel Region. It is structured by mode: road, rail, air, and marine. The final section provides a summary. 2.1 Policy Issues and Challenges: Road Border Crossings Trucks tend to provide relatively short distance transportation for all types of goods. They also often provide first- and last-mile connections between others modes and the ultimate origin and destination of goods. 2.1.1 Infrastructure and Background Owing to Ontario’s location on the northern fringe of the Great Lakes and St. Lawrence River, the vast majority of cross-border truck movements occur at a small number of bridges and one tunnel (Exhibit 1). Of these the Ambassador Bridge (Windsor-Detroit), the Blue Water Bridge (Sarnia-Port Huron), the Peace Bridge (Fort Erie-Buffalo), the Lewiston-Queenston Bridge, and the Thousand Islands Bridge saw 97% of truck crossings in Southern Ontario in 2013 (Exhibit 8). Appendix A provides additional background information on Southern Ontario road border crossings. There has been a considerable decline in cross-border truck traffic in recent years (Exhibit 9), in large part a reflection of the recession of 2008-2009. From 2006 to 2013 all of the major truck crossings have seen declines ranging from 33% at the Ambassador Bridge and 28% at LewistonQueenston to 15% at the Thousand Islands Bridge to roughly 5% at the Blue Water and Peace Bridges. While dated, the 2006 Commercial Vehicle Survey (CVS) allows us to see which border crossings are being used by trucks originating in or destined to Peel (Exhibit 10). Cross-border truck traffic from Peel seems to follow the same pattern as overall traffic, with the Ambassador Bridge being the most important crossing (Exhibit 11). It is notable that Niagara frontier crossings see a higher share of their traffic to/from Peel than those on the Michigan border, which is likely a reflection of greater proximity. Exhibit 12 shows the locations within Peel at which cross-border trips originate or to which they are destined, by border crossing used. It is important to note that trucks play a very important connecting role in international trade. Even when goods ultimately originate or are destined overseas, they are often trucked via the United States. For example, when originating in Canada and destined to locations in the United States, goods could first be trucked across the border then put on to rail for a move within the United States. 14 14 We are unaware of data on the magnitude of such movements. 15 Exhibit 8: Road Border Crossing Traffic, 2013 4 Trucks 5 Other vehicles 4 Millions of Truck Crossings Millions of Crossings 6 Exhibit 9: Truck Border Crossing Traffic Trends, 2006-2013 3 2 1 0 3 2 1 0 2006 2007 2008 2009 2010 2011 2012 2013 Ambassador Lewiston-Queenston Thousand Islands Source: Public Border Operators Association (2014) Source: Public Border Operators Association (2014) Exhibit 10: Peel Share of Total Crossings, 2006 Exhibit 11: Peel Originating/Destined Truck Crossings, 2006 35% 30% 1,400 25% 1,200 Daily Crossings, Trucks Share of Total Blue Water Peace 20% 15% 10% 5% 0% 1,000 800 600 400 200 - Share of Daily Trips Share of Value Source: MTO CVS Source: MTO CVS 16 Exhibit 12: Daily Truck Trips between Peel Region and Border Crossings Source: Region of Peel based on MTO (2006) 17 2.1.2 Policy Issues and Challenges: Border Crossing Delays Delays result when vehicles arrive more quickly at a border crossing than capacity exists to process them. Generally, border delays became very severe in the immediate aftermath of September 11, 2001, and then lessened as more resources were devoted to border security. The summer of 2007 saw delays return to 2002 levels, but subsequently the recession caused delays to decline, 15 and delays have been relatively consistent since 2007. In the context of falling truck traffic, the most significant impediment to movement through road border crossings is the burden of border functions that occur within inspection plazas 16 and not the bridge infrastructure itself. The bridges are seeing less traffic, but inspection processes seem to have become more onerous. Exhibit 13: Average Weekly Cross-Border Truck Trips on the Ontario Highway Network Source: MTO (2006) Predictable delays are far less costly than unpredictable delays. If a delay is predictable, the overall travel time for a cross-border shipment rises, but this can be built into production schedules. The cost of such delays is roughly $75/hour accounting for wasted labour, fuel, and the opportunity cost of having a truck sit idle rather than moving goods. 17 Unpredictable delays can have far more costly effects, largely because trucks crossing the border are often carrying manufacturing inputs that are part of just-in-time supply chains. Estimates of the cost to delaying a just-in-time shipment range as high as $13,000/minute as production lines have to be idled for lack of materials. 18 In order to avoid such catastrophic delays to their just-in-time production processes, business tend to build buffer time into their planned travel times. As an example, Anderson (2012) uses 2007 data from the Ambassador Bridge to show that to arrive with 90% Anderson (2012), p. 20. Anderson (2012), p. 11. 17 Anderson (2012), p. 21. 18 Intervistas Consulting (2009) 15 16 18 certainty a buffer of 30 minutes is required, and to arrive with 99% certainty a buffer of one hour is required. Building in buffer time has a significant cost, but far less cost than incurring production delays. Resilience The fact that there are so few bridges between Southern Ontario and the United States means that the closure of any one bridge can lead to significant economic disruption. Given the importance of the Ambassador Bridge in terms of value of goods transported, the fact that no alternative crossing is available in the immediate area, and the fact that the bridge is old and not entirely under public control, the resilience of the Windsor-Detroit crossing seems particularly at risk. This reason is no doubt behind the urgency the Governments of Ontario and Canada have attached to the New International Trade Crossing (NITC), a new bridge between Detroit and Windsor that has been under development for many years. 2.1.3 Policy Issues and Challenges: Border Access Congestion Without doubt the most important issue related to accessing border crossings from Peel is congestion. This is a major concern for shippers and truck carriers alike. Congestion currently occurs on the QEW/Highway 403/Highway 407 interchange in Burlington through St. Catharines. The recent MTO Niagara-to-GTA (NGTA) Corridor Planning and Environmental Assessment Study found that there are “capacity constraints on the QEW through St. Catharines, on the Burlington Skyway and through Halton Region. Even with widening to six lanes through St. Catharines, capacity problems on the QEW are experienced at various times through the year.” 19 MTO also noted that these constraints could increase with the growth in the economy, population and employment in the Niagara-to-GTA Corridor. 20 In the absence of significant improvements, MTO projects that by 2031 most of the highways in the NGTA area would be congested during peak periods and increasingly throughout the day. 21 Highway 401, west of Peel, is also expected to face significant congestion in spite of a number of improvements to the regional and provincial transportation system. For this reason, MTO is recommending expansions of Highway 401 from six to 10 or 12 lanes through Peel and Halton Regions and the protection of a new corridor to the north of Highway 401. 22 Many of the proposed improvements are many years away. Resilience As with border crossings themselves, the resilience of the highway network is also a concern. Between Peel and the Michigan frontier, Highway 401 is the only high capacity, high speed road between Woodstock and London. West of London Highway 401 and 402 provide a degree of resilience. East of Woodstock Highway 401 and 403 provide alternative routes to Peel. Between Peel and the Niagara frontier, between the QEW-Highway 405 interchange and Burlington the only high capacity high speed road is the QEW. Between Burlington and Peel Highways 403/QEW and 407 provide resilience. From this perspective the lack of alternative high capacity, high speed roads between Woodstock and London and between Burlington and MTO (2013), p. 18. MTO (2013), p. 17. 21 MTO (2013), p. 22. 22 MTO (2012), pp. v-vi. 19 20 19 Highway 405 represent a risk to the resilience of the highway network between Peel and the important border crossings for trucks. 2.1.4 Policy Issues and Challenges: Trade Cabotage At present US truckers are generally not permitted to transport loads between two points in Canada and Canadian truckers are not permitted to do so in the United States. 23 This activity is called cabotage, and it is prohibited. For example, if a trucker takes a load from Brampton to Chicago, he or she may pick up a load in Chicago and return to Canada. However, if that trucker does not have a load in Chicago, but rather in Columbus, the trucker is not permitted to carry a load between Chicago and Columbus to cover the cost of the trip. The ChicagoColumbus leg must be run empty, eating into profits and forcing truckers to charge higher rates on their paid runs. American truckers face parallel restrictions on domestic moves in Canada, with some exceptions that are not reciprocated in the US. Cabotage is an issue that goes far beyond Peel Region, but it is nonetheless an important reason for higher cross-border trucking costs. While not cabotage, there are also restrictions on the repositioning of foreign empty trailers by foreign drivers in Canada and the United States. Such restrictions increase costs. The Governments of Canada and the United States are committed to reviewing this policy. 24 2.2 Policy Issues and Challenges: Rail Border Crossings Rail tends to provide long haul transportation of bulk (e.g. coal, grain, ore, chemicals) or containerized products. 2.2.1 Infrastructure and Background Southern Ontario is served by two Class I freight railways that operate cross-border services: CN and CP. The railways are fundamentally different from trucking companies in that the infrastructure over which they travel is privately owned by the railways. 25 CN operates a more extensive network than CP serving Canada from Halifax to Vancouver, and the Mississippi Valley of the United States including key points of Chicago, Memphis, and Gulf Coast ports. CP operates a network that stretches from Montreal to Vancouver and into the United States. Because the infrastructure of the railways is privately owned, there is little to no role for government in planning, funding, or operating the infrastructure, beyond certain areas where rail infrastructure crosses public infrastructure (e.g. road/rail crossings). The Government of Canada does regulate CN and CP, but regulation is generally limited to safety and the enforcement of competition policy. Both CN and CP own border crossings in Southern Ontario. CN owns the International Railway Bridge in Fort Erie and the Paul M. Tellier Tunnel in Sarnia. CP owns the Detroit River Rail Tunnel in Windsor. Beyond these physical border crossings, CN and CP also operate intermodal terminals in the GTHA, which are very important transfer points between truck and rail (and vice versa) for 23 There are exceptions when a US carrier can pick up a load in Canada and drop it off in Canada, if on route to next pick-up. This is not reciprocated in the United States. 24 Today’s Trucking (2013) 25 There is a significant exception in the Greater Toronto Area, where many rail corridors are owned by the Government of Ontario through Metrolinx. 20 containerized shipments, including cross-border containerized shipments. Appendix A provides additional background information on Southern Ontario rail border crossings. Rail trade between Ontario and the United States was hit hard in the recession but has recovered on the Niagara frontier and at Windsor-Detroit, but not yet at Sarnia-Port Huron (Exhibit 14). In weight terms, data on imports to Canada are not available, but data on imports to the United States (Canadian exports) show that traffic has not recovered fully from the recession (Exhibit 15). Exhibit 15: Rail Shipments from Ontario to the United States, by Weight, 1995-2013 Exhibit 14: Total Rail Trade between Ontario and the United States, by Value, 1995-2013 8 7 $20 6 Millions of Tonnes Billions of US Dollars $25 $15 $10 $5 4 3 2 1 0 $0 Windsor-Detroit Sarnia-Port Huron Windsor-Detroit Niagara Frontier Sarnia-Port Huron Niagara Frontier Source: US Bureau of Transportation Statistics 2.2.2 5 Source: US Bureau of Transportation Statistics Policy Issues and Challenges: Border Crossing There is a general view that rail faces lower border costs than trucking because a single set of entry documents are required for a very large shipment. Rail crossings also involve fewer workers (usually two per train), and therefore present fewer immigration issues. 26 Both railways face some infrastructure constraints. CP faces a constraint at its Detroit River Rail Tunnel owing to the tunnel’s inability to handle double-stacked, high cube containers, which are now industry standard. This situation means that CP faces much higher costs per railcar to ship from Southern Ontario into the US than does CN. This capacity constraint extends far beyond the border. For example, it also reduces the capacity of the Port of Montreal to build CP container trains that are destined to markets via the Detroit Tunnel. CN also faces tunnel constraints, in that its Sarnia-Port Huron tunnel is limited in the length of trains it can accommodate. 26 Anderson (2012), p. 24. 21 2.2.3 Policy Issues and Challenges: Border Access The Peel Region Goods Movement Strategic Plan specifically addresses issues of access to the CN Brampton and CP Vaughan intermodal terminals through Action 3. Therefore these issues are not considered further here. Research for this paper has not uncovered any specific issues associated with rail access between Peel Region and border crossings. 2.3 Policy Issues and Challenges: International Airports Air cargo tends to be long distance movements of very high value and time sensitive products such as electronics and pharmaceuticals. The Peel Region is primarily served by two international airports handling significant volumes of cargo: Toronto Pearson International Airport in Mississauga and Hamilton John C. Munro International Airport in Hamilton. Toronto Pearson handled the most cargo traffic in Canada in 2012 (344,000 tonnes), and Hamilton handled the third most (87,000 tonnes). 27 US airports in Detroit, Buffalo, Niagara Falls, and even Chicago, New York City, and New Jersey compete for cargo in some cases. Thousands of Tonnes of Revenue Cargo Exhibit 16: Air Cargo Handled at GTHA International Cargo Airports Appendix A provides additional background information on Southern Ontario international cargo airports. 2.3.1 Infrastructure and Background 2.3.2 Policy Issues and Challenges: Border Crossing 450 400 350 Pearson Hamilton 300 250 200 150 100 50 0 In its 2008-2030 Master Plan, the Greater Toronto Airport Authority (GTAA), the organization that runs Pearson Airport, forecast that air cargo volumes would rise Source: Transport Canada (2012) quickly. In 2006 the airport handled 383,000 tonnes of cargo, while by 2012 this volume had fallen to 344,000 tonnes. The Master Plan concluded that the existing cargo throughput capacity of the airport was sufficient to handle projected demand to 2023 (somewhere between 888,000 and 1,063,000 tonnes of cargo). 28 Since volumes have fallen, it seems unlikely that capacity will be a constraint until at least the mid 2020s. That said, as commercial arrangements and technology change, investments will likely be required to maintain the current level of service of Pearson Airport for air cargo traffic. International airports are critical gateways for high value and time-sensitive products. Policies that slow the flow of goods, introduce uncertainty into supply chains, or increase costs adversely affect the competitiveness of Canadian businesses, especially businesses reliant on air cargo, many of which are located adjacent to the airport in Peel Region. More competitive airports will also attract more carriers and lead to more direct or same-plane services, reducing 27 Transport 28 Canada (2012) Greater Toronto Airports Authority (2007) 22 travel times for air cargo and reducing the need to transfer cargo from plane to plane, which can increase the potential for damage and theft. Since much cargo, particularly at Pearson, is carried as belly cargo (in the hold of passenger aircraft as opposed to on dedicated cargo aircraft), many of the policy issues that affect international passenger air service also affect cargo. 29 Regulatory Compliance According to carriers, regulatory compliance is becoming increasingly cumbersome. One major airline noted that a key advantage of air freight is speed, but processes are increasingly eating into this advantage. Broadly speaking, industry is seeking to address regulatory challenges through improvements in technology: for instance, unlike cargo trucked across the border, air cargo cannot currently clear customs electronically. In the meantime, regulatory processes will continue to increase the travel time for air freight and to impact on-time delivery. As an example of the cost imposed on business by changing security requirements, bonded warehouses now require advance notification for contractor access to be provided to Canada Border Services Agency (CBSA). Such requirements often result in contractors having to incur extra costs by sending additional staff to complete work more quickly or by being denied entry to facilities. The industry is keen to work with the Government of Canada to ensure that new regulations do not adversely impact business. Fuel Taxes Aviation fuel is taxed in Canada by both the federal government and some provinces. Ontario, along with Nova Scotia, Prince Edward Island and Newfoundland (for flights to the US only), are the only provinces to levy a tax on aviation fuel for international flights. 30 This tax has been set at $0.027/litre since 1992. The proceeds from these taxes are not generally reinvested in the aviation sector, and the costs are likely passed along to shippers and passengers. 31 2.3.3 Policy Issues and Challenges: Border Access The Peel Region Goods Movement Strategic Plan specifically addresses issues of access to Toronto Pearson International Airport in Action 2. Therefore these issues are not considered further here. 2.4 Policy Issues and Challenges: International Seaports The marine mode tends to handle heavy and bulky products that are not overly time sensitive, such as grain, iron ore, coal, or project cargo (e.g. wind turbine components). Southern Ontario’s marine ports handle a wide variety of commodities, largely bulk or breakbulk cargo, destined to and originating in other countries. At present there is no containerized cargo being handled at Ontario ports, or in the entirety of the Great Lakes. 29 While not strictly related to border crossing, ground rent and the non-deductibility of interest at the GTAA drive up the cost of air freight. 30 Lazar (2013) 31 Dachis (2014) 23 2.4.1 Infrastructure and Background Exhibit 17 provides an overview of international tonnages loaded and unloaded at southern Ontario ports in 2011 (the most recent year for which data were available) by origin and destination. Exhibit 18 provides data on US imports by water from Ontario by weight from 2007 to 2013. The Port of Hamilton handles the most international cargo of any port in Southern Ontario. Hamilton handles an increasingly diverse range of cargos, while activities associated with steel making remain important. Coal was by far the most important cargo handled. Coal is sourced from the ports of Ashtabula, Sandusky, and Toledo in the United States. Iron ore (taconite) comes from the twin ports of Duluth, Minnesota, and Superior, Wisconsin. These ports loaded ore mined in the Iron Ore Range of Northern Minnesota. Slag, ash, and coke are all produced in Hamilton, loaded at the port, and sent to a variety of US ports, primarily on the Great Lakes. Fertilizers are imported from Russia, Eastern Europe, and South America. Corn and soya beans are exported all over the world from Hamilton, primarily to Europe and the Americas, although re-export from these locations is also possible. Exhibit 17: International Tonnages Handled at Southern Ontario Ports, 2011 Exhibit 18: US Imports from Ontario by Marine, by Weight, 2007-2013 14 Hamilton Nanticoke Goderich Windsor Sarnia Bowmanville Toronto Clarkson Picton Bath Sombra Courtright Kingsville Oshawa Thorold Prescott Port Colborne Oakville St.Catharines Morrisburg Millions of Tonnes 12 Loaded 10 8 6 Unloaded 4 2 - 2 4 6 2007 2008 2009 2010 2011 2012 2013 Millions of Tonnes Handled Source: Transport Canada (2012b) Source: Bureau of Transportation Statistics (2014) Other ports play a mix of niche and regionally important roles. Nanticoke is a significant international port largely because of the presence of US Steel’s Lake Erie Works, a steel mill, and Ontario Power Generation’s Nanticoke Generating Station, which closed at the end of 2013. The vast majority of international tonnage is coal from Ohio and Superior, Wisconsin, and iron 24 ore and concentrates from Duluth-Superior. In terms of international cargo, the Port of Goderich, located on Lake Huron, is primarily devoted to the export of salt from the local Sifto Salt Mine, wheat, and soya beans. Windsor is a diversified port with salt and agricultural products as the primary international export commodities. Appendix A provides additional background information on the international traffic of Southern Ontario ports. The Port of Hamilton has for a number of years been pursuing a strategy of diversification. Most notably, from an international goods movement perspective, Hamilton is growing its inbound fertilizer traffic and its outbound traffic of agricultural commodities, particularly corn and soya beans. As part of its strategy, the Port has been developing significant rail infrastructure to handle more diverse cargos, but also to offer increased modal choice to shippers. 2.4.2 Policy Issues and Challenges: Border Crossing Advanced Notice of Arrival Requirements Marine carriers transporting cargo from the United States to Canada by water are required to notify the CBSA 24 hours in advance of arrival at the first port called in Canada. Given the short distances often travelled between the United States and Southern Ontario ports, this requirement can increase the travel time, and therefore the cost of cross-border shipments by water. 2.4.3 Policy Issues and Challenges: Border Access We were not able to identify any significant border access cost issues as they relate crossborder marine transportation. 25 2.5 Summary: Border Crossing Policy Issues and Challenges This table summarizes the border crossing issues identified in this section. Red indicates the nature of the negative impact of the issue on cross-border supply chains. Mode Issue Road Delays at border crossings Primary Nature of Negative Impact on Supply Chains Travel Time Inform ation /Risk Level of Service Cost Resilience of border crossings Travel Time Inform ation /Risk Level of Service Cost Congestion on highways between Peel and border crossings Travel Time Inform ation /Risk Level of Service Cost Resilience of highways between Peel and border crossings Travel Time Inform ation /Risk Level of Service 26 Cost Cabotage restrictions on truckers Travel Time Inform ation /Risk Level of Service Rail Minor infrastructure constraints including inability to accommodate double-stacked container trains at the CP Detroit River Rail Tunnel and the CN-CP International Railway Bridge (Fort Erie) Cost Travel Time Inform ation /Risk Level of Service Air Cost Regulatory compliance costs and speed to customs clearance Travel Time Inform ation /Risk Level of Service Cost Fuel taxes applied only to international flights Travel Time Inform ation /Risk Level of Service Marine Cost Airport access issues being considered in a separate study Advanced notice of arrival requirements Travel Time Inform ation /Risk Level of Service 27 Cost 3 Recommendations This final chapter proposes two sets of recommendations for improving cross-border goods movement that will benefit Peel Region, Ontario, and Canada as a whole. The first set of recommendations relates to better informing decision making relevant to cross-border goods movement. The second set of recommendations addresses border infrastructure, infrastructure connecting the GTHA to key border crossings, and the planning of infrastructure relevant to cross-border goods movement. These recommendations are provided for future directions and have not been formally endorsed by the government agencies mentioned. 3.1 Improve Data Availability and Planning for Cross-Border Goods Movement The data available in Ontario on cross-border goods movement (as detailed in Appendix B) could be improved significantly. At present the data are limited and poorly integrated across modes, values, and weights (e.g. no single source integrates these data across modes, value, and weights). Often data available for one mode are not available for another mode (e.g. US import weights by mode and port of entry are available from the US Bureau of Transportation Statistics, while export weights are not). Overall, the better the data, the better all levels of government and the private sector can plan. There are five areas where we feel action would be particularly beneficial. 3.1.1 Gather Data on Border Crossing Performance An area of clear weakness in the data currently available is border crossing performance, particularly as this relates to reliability. It is perhaps surprising that given the amount of concern expressed over border delays that the actual data available are very limited. Most data on delays are observations by CBSA, US Customs and Border Protection, and bridge and tunnel operators or others. These data are generally of limited value because they are not collected using a methodology that ensures a comprehensive appreciation of performance. The other key source is GPS data that allow for the calculation of the amount of time taken to travel from a point on one side of the border to a point on the opposite side. Such GPS data were collected by Transport Canada between 2006 and 2009. 32 Transport Canada is currently in the process of assembling detailed GPS-based data on crossing performance based on the earlier work. 33 These efforts should be supported. Only with good data can the Government of Canada and other relevant partners effectively undertake cost-benefit analysis to prioritize investment in border crossings. 3.1.2 Develop a Commodity Flow Survey and Freight Analysis Framework One of the key challenges facing policy makers in regard to cross-border goods movement is obtaining data on the initial origin and final destination of cross-border goods flows. Most of the goods traded between Canada and other countries, especially beyond the United States are multimodal. Therefore, trucks might only carry goods for a part of a trip. Therefore, the reported origin and destination might not show the origin and destination of the commodity, only the truck making the first or last mile of a long trip. Knowing the origin and destination of the commodity would help to better understand the modes of travel and also to distinguish trucks Anderson (2012), pp. 20-21. These efforts have started with the Peace Bridge in order to support evaluation of the effectiveness of the Phase II of the Truck Cargo Pre-inspection Pilot. 32 33 28 carrying international goods to and from intermodal terminals and airports from trucks making local, region, or interprovincial trips. What is needed in Canada is an extension of the US Freight Analysis Framework (FAF) to cover our country. The FAF integrates data from a variety of sources to create a comprehensive picture of freight movement among states and major metropolitan areas by all modes of transportation. Using data from a national Commodity Flow Survey and additional sources, FAF provides estimates for tonnage, value, and domestic ton-miles by region of origin and destination, commodity type, and mode for 2007, the most recent year, and forecasts through 2040. Also included are state-to-state flows for these years plus 1997 and 2002, summary statistics, and flows by truck assigned to the highway network for 2007 and 2040. As Canadian provinces are much larger geographically than US states, any FAF for Canada would need to be constructed at the sub-provincial level, incorporating regions such as county or upper-tier municipalities in Ontario, for example. Transport Canada would seem to be the organization best placed to undertake the development of such an initiative. 3.1.3 Expand MTO Commercial Vehicle Survey to Cover Peel Region Roads The MTO CVS only captures trips on provincial highways. For this reason, it does not capture all trips between locations in Peel and rail intermodal terminals or the Toronto Pearson International Airport. Expanding the coverage of the CVS to include at least Peel’s Strategic Goods Movement Network would greatly improve the data available to policy makers. 3.1.4 Develop a Commercial Multimodal Forecasting Model The lack of a multimodal forecasting model, which also incorporates cross-border goods movement, is a major gap in our ability to plan multimodal infrastructure. The development of such a model would require both cooperation between municipalities and adequate data, such as that which would be included in a Canadian FAF (see Section 3.1.2, above). Peel Region already works with other GTHA municipalities through the Travel Modelling Group (TMG) at the University of Toronto in order to integrate the forecasting models for the transit and auto modes. A few municipalities are developing commercial vehicle forecasting models. We recommend that municipalities develop a centre similar to TMG to integrate a commercial vehicle forecasting model into existing models to create a multimodal forecasting model. We suggest that air, rail, and marine also be integrated into the model. We suggest that the model cover all of Southern Ontario. Development of the forecasting model would assist decision makers in improving not only goods movement, but also the movement of people. The implementation of a multimodal forecasting model would be complementary to the development of a Canadian or at least an Ontario FAF, as it has been in the United States. 3.1.5 Take a Multimodal Corridor Perspective on Transportation Planning Shippers, their logistics providers, and consultants determine over which mode, or combination of modes, goods are moved. These decisions are made in light of the relative travel time, cost, reliability, information, and risk (collectively the transportation value proposition) that come with each mode or combination of modes. There is no direct role for public policy in this choice. Public policy does however greatly influence modal choice to the extent policy is not mode neutral, i.e. changes the transportation value proposition of a mode. It is important that transportation policy consciously take into account multimodal impacts and interlinkages. As such, Ontario’s multimodal transportation strategy is certainly a step in the right direction. To take multimodal corridor planning a step further, an institutional structure could be created to analyze the performance of Southern Ontario’s multimodal transportation system and to 29 make evidence-based recommendations for how investments in infrastructure and ancillary systems (such as supporting technology) should be prioritized. Such an institutional structure would aid in discussions with the Government of Canada over the provision of infrastructure funding, as was the case with the Asia-Pacific Gateway and Corridor in Western Canada. While a Greater Golden Horseshoe (GGH) Goods Movement Corridor initiative is only beginning to take shape, we believe that its scope should not be limited to one highway (the NGTA Corridor). Currently, Peel Region is working with Hamilton, Halton, Niagara, and Waterloo as a member of a group called the Western Golden Horseshoe Municipal Network. The Western Golden Horseshoe Municipal Network is a regional alliance that is working together towards an integrated multi-modal goods movement network. The Government of Ontario is aware of the work that this group is doing to promote economic growth and infrastructure improvements. The Western Golden Horseshoe Municipal Network is a step in the right direction and an excellent starting point for future action. The model of the Asia-Pacific Gateway and Corridor Initiative (APGCI) would be interesting to examine and, given the success of the APGCI, such an initiative would be very likely to resonate with the governments of Canada and Ontario. The Asia Pacific Gateway and Corridor Initiative The Asia-Pacific Gateway and Corridor Initiative (APGCI) is an integrated set of investment and policy measures focused on trade with the Asia-Pacific Region. Its mission is to establish Canada’s Asia-Pacific Gateway and Corridor as the best transportation network facilitating global supply chains between North America and Asia. The Initiative is led by the Minister for the Asia-Pacific Gateway. With an investment of more than $1 billion from the Government of Canada, and significant investments from other partners, the APGCI has targeted the following benefits: • • • • Generating new business opportunities and creating new jobs for Canadians; Reducing congestion and improving the flow of traffic; Enhancing the efficiency and safety of the transportation system; and, Contributing to Canada's competitiveness. Partners include: • • • • • • • • • • • • • • Asia Pacific Gateway Skills Table Department of Foreign Affairs, Trade, and Development Western Economic Diversification Canada Province of British Columbia Province of Saskatchewan Province of Manitoba Province of Alberta Vancouver-Fraser Port Authority Prince Rupert Port Authority Canadian National Canadian Pacific Railway Vancouver International Airport Edmonton Airport Calgary International Airport 30 • • Winnipeg Airports Authority Regina International Airport The APGCI consists of strategic transportation infrastructure projects including British Columbia’s Lower Mainland, their principal road and rail connections stretching across Western Canada and south to the United States, key border crossings, and major Canadian ports. Source: http://www.asiapacificgateway.gc.ca/apgci.html Part of the success of the APGCI is attributable to the inclusion of all major land-holding and infrastructure-operating players such as the airports, railways, and ports. This partnership allowed a prioritization of spending across all of western Canada with a focus on a specific set of goals. This partnership and goal-focus has yet to take shape in Southern Ontario. The Southern Ontario Gateway Council, in which Peel Region participates, is also a step in the right direction, but seems to lack strong political backing at the federal and provincial levels. Strong federal and provincial political leadership would be required to drive any APGCI-type initiative for Southern Ontario. Partnerships between major players are important, but it is also important to bear in mind the constraints under which the partners must operate. For example, in the case of the provincial government, it is important to understand that funding is generally available for road projects, not for operating funding, and, as such, any approach to the provincial government should focus on specific road infrastructure projects in the context of broader investments in any APGCI-type initiative. The failure to identify specific road infrastructure priorities, with a strong rationale, would be a roadblock to obtaining funding. It is also worth noting that better multimodal data and a multimodal forecasting model would facilitate taking a multimodal corridor perspective on transportation planning. 3.2 Improve Border Infrastructure and Highways Connecting the GTHA to Border Crossings This set of three recommendations pertains to physical infrastructure improvements that would improve the speed and reliability of cross-border goods movement, while reducing costs. 3.2.1 Improve Key Truck Routes to Border Crossings Trucks not only handle more cross-border trade than any other mode in Ontario ($262 billion in 2012 relative to $187 billion for all other modes combined), 34 they also provide essential connectivity to other modes of transport and shipper facilities. As such, in our view, improving the speed and reliability, and reducing the cost of trucking between the GTHA and border crossings is of paramount importance. MTO has in place multimodal transportation development strategies for the two key corridors of relevance to cross-border goods movement to and from Peel Region. The GTA West and NGTA studies set out road and non-road (including transit) improvements to the surface transportation systems in these corridors. It is critical that improvements in these corridors be realized to improve goods movement between the GTHA and key border crossings. There is also an opportunity to do better. The construction of a new 34 Transport Canada (2012) 31 high capacity, high speed highway between the Niagara frontier and Highway 401/GTA West Corridor would provide not only additional capacity, but crucially, resilience. As noted in Chapter 2, Peel Region is undertaking a separate study on ways to improve road access to rail intermodal terminals and Toronto Pearson International Airport, and these issues are not addressed here. 3.2.2 Complete the New International Trade Crossing The NITC project (formerly the Detroit River International Crossing or DRIC) has already consumed significant resources and time. In spite of declining traffic volumes, this project remains important as it will provide for far more resilient border crossing infrastructure over the Detroit River. The age and load restrictions of the Ambassador Bridge as well as the fact it is the single most important border crossing (in 2013 handling 37% of all trucks crossing Ontario’s borders), 35 argue strongly in favour of completing the NITC as soon as possible. 3.2.3 Invest in Border Technology Across all modes, new technology in terms of biometrics for people and better scanning for goods have the potential to materially improve the speed and reliability of border crossing, while reducing the cost. Radio-frequency identification (RFID) technology (a system to exchange information wirelessly using a combination of readers and tags or cards) is an example of a technology that could be explored further. US CBP already has RFID readers in all lanes, and this technology can significantly improve processing times. 36 The Governments of Canada and the United States should work together to develop RFID or other appropriate technology to improve the flow of goods vehicles. As new technology can raise concerns over privacy and dignity, implementation would likely be more successful if such new technologies were accompanied by an improved approach to privacy and respect for the human rights of travelers. 37 Public Border Operators Association (2014) One industry stakeholder told us that processing times could be improved by 1.5 minutes per truck crossing through the use of RFID technology. 37 Anderson (2012), p. 42. 35 36 32 4 References Airports Council International (2013) “2012 North American Airport Traffic Summary.” http://www.aci-na.org/content/aci-world-traffic-statistics Anderson, B. (2012) The Border and the Ontario Economy. Cross-Border Transportation Centre, University of Windsor. Blue Water Bridge Canada (2011).”The blue water bridge annual report.” Blue Water Bridge <http://www.bwbc.gc.ca/reports/AnnualReport2011_e.pdf> (February, 2013). Border Infrastructure Investment Plan (2013) April. 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(2013). “North American Transborder Freight Data, including Port, Commodity, or State Origin/Destination.” RITA, http://transborder.bts.gov/programs/international/transborder/TBDR_QA.html 34 Statistics Canada (2012) “National Household Survey.” https://www12.statcan.gc.ca/nhsenm/index-eng.cfm Today’s Trucking (2013) “Outdated Foreign Empty Trailer Rules Under http://www.todaystrucking.com/outdated-foreign-empty-trailer-rules-under-review Review.” Tofflemire, John (2011) “A Governance Review of International Border Crossings in Ontario.” Cross-Border Transportation Centre, University of Windsor, Background Paper No. 2, September. Transport Canada (2010). “Assessment of Access to Intermodal Terminals and Distribution/Transload Facilities in the Province of Ontario: Identification of the Clusters and Facilities.” Ontario-Quebec Continental Gateway Initiative. Transport Canada (2012). “Transportation in Canada 2012.” Transport Canada. Transport Canada (2012a). “Transportation and the Economy.” http://www.tc.gc.ca/eng/policy/anre-menu-3028.htm (February, 2013). Transport Canada, Transport Canada (2012b). “Marine Database” Transport Canada. Transport Canada (2013). ” Canadian Vehicle Use Study (CVUS) – Heavy Trucks” United States Maritime Administration (2012) Status of the U.S.-Flag Great Lakes Water http://www.marad.dot.gov/documents/USTransportation Industry. lag_Great_Lakes_Water_Transportation_Industry_Final_Report_2013.pdf. (February). 35 Appendix A: Overview of Key Southern Ontario Border Crossings This Appendix provides additional detail on key border crossings in Southern Ontario for trucks, rail, air, and marine. Truck Border Crossings Section 2.1 provided an overview of the key border crossings used by trucks in Southern Ontario. 38 This section provides further information on these crossings and on recent and planned future improvements. Exhibit 19: Truck Trade between Ontario and US Regions, by value, 2012 Exhibit 20: US Imports from Ontario by Truck, by Weight, 1995-2013 40 9% Central 19% 49% South North-East 23% West Millions of Tonnes 35 30 25 20 15 10 5 - Source: Transport Canada (2012) Source: Bureau of Transportation Statistics (2014) 38 While not covered in this paper owing to its low volume of traffic, the Windsor-Detroit Truck Ferry handles overweight trucks and trucks carrying dangerous goods, neither of which is allowed to use the Ambassador Bridge. The ferry is privately owned and operated. 1 Ambassador Bridge Exhibit 21: The Ambassador Bridge Source: Ontario-Québec Continental Gateway and Trade Corridor- Reproduced with the permission of Transport Canada Brief description Completed in 1929 the Ambassador Bridge connects Detroit, Michigan with Windsor, Ontario, over the Detroit River. The bridge connects Interstates 96 and 75 with Huron Church Road/Highway 3 in downtown Windsor. Highway 3 connects with Highway 401. The four-lane bridge is by far the single most important road border crossing between Canada and the United States for both total vehicles and trucks. The bridge is owned by Manuel “Matty” Moroun via private operating companies. Current issues The key issue with the Ambassador Bridge is that it is not connected directly with a high capacity, high speed road on the Canadian side. Highway 3 runs through downtown Windsor and has traffic lights and significant cross traffic. There are also weight and dangerous goods restrictions on the bridge. Overweight trucks and trucks carrying dangerous goods must use the Detroit-Windsor truck ferry. As noted above, comprehensive data to make an assessment of congestion and delays are lacking. Recent improvements On the US side the Ambassador Gateway project was completed in 2009 and involved the construction of direct access to the bridge from Interstates 96 and 75. Future improvements An 11-km extension of Highway 401 (Rt. Hon Herb Gray Parkway, formerly known as the WindsorEssex Parkway) is currently under construction between the current end of Highway 401 and the planned Canadian inspection plaza for the New International Trade Crossing. This highway will also improve access to the Ambassador Bridge as it will provide a high speed, controlledaccess facility as an alternative to Huron Church Road/Highway 3 between the current end of Highway 401 and the E.C. Row Expressway. 2 The companies that own the Ambassador Bridge have proposed the construction of a second span roughly parallel to the existing bridge. The new span would offer six lanes and would connect to existing inspection plazas. This project has completed a transitional screening under the Canadian Environmental Assessment Act in February 2014. 39 Blue Water Bridge Exhibit 22: The Blue Water Bridge Source: Ontario-Québec Continental Gateway and Trade Corridor- Reproduced with the permission of Transport Canada Brief description The Blue Water Bridge provides six lanes for vehicular traffic between Sarnia, Ontario, and Port Huron, Michigan. It connects Highway 402 with Interstates 94 and 69. The Canadian portion of the bridge is owned by Blue Water Bridge Canada, a federal crown corporation, and the US portion is owned by the Michigan Department of Transportation. The bridge comprises two spans, one built in 1938 and one built in 1997. The bridge is the second busiest Ontario international crossing for total vehicles as well as for trucks. Current issues This border crossing was subjected to the worst summer on record for traffic congestion and border wait times in 2007. In fact, congestion has been one of the main issues of this bridge during summer. Therefore, commuters and trucks crossing decreased in some other seasons due to the uncertainly of the timing and delivery of goods by taking this bridge. 40 Congestion has almost certainly lessened since 2007, but, as noted above, comprehensive data to make such an assessment are lacking. Recent improvements There have been significant recent improvements on both sides of the border at the Blue Water Bridge. On the US side six additional inspection booths were added in 2012, funded by Blue Water Bridge Canada. Connecting US highway infrastructure has also been improved. On the Canadian side, seven new primary commercial inspection lanes were completed in 2011 as 39 40 Canadian Environmental Assessment Agency (2014) Blue Water Bridge Canada (2011) 3 well as a new CBSA commercial facility, inspection area, and loading docks and bays. Highway 402 and the approaches to the bridge were widened in 2009. Future improvements A number of improvements are planned for the Blue Water Bridge. On the US side, the focus is on planning for commercial and non-commercial inspection capacity expansion. The feasibility of the project is currently being assessed within the fiscal and regulatory environment. On the Canadian side the Blue Water Bridge Canada master plan calls for the addition of 14 new primary inspection lanes, construction of new CBSA traffic and secondary inspection facilities, completion of a truck exit roadway from the commercial primary inspection lanes to Highway 402, and construction of a multi-purpose service centre for travel information, currency exchange, and food service. 41 Peace Bridge Exhibit 23: The Peace Bridge Source: Ontario-Québec Continental Gateway and Trade Corridor- Reproduced with the permission of Transport Canada Brief description The Peace Bridge connects Buffalo, New York, with Fort Erie, Ontario, over the Niagara River. Opened in 1927, the Peace Bridge is now the third busiest border crossing for trucks in Ontario. The key approaches to the bridge are the QEW in Ontario and Interstate 190 in New York. The bridge provides three vehicle lanes with the centre lane being reversible to accommodate peak volumes. The bridge is tolled. The bridge is owned, operated, and maintained by the Buffalo and Fort Erie Public Bridge Authority, an entity created by an agreement between the State of New York and the Government of Canada. The Authority is governed by a 10-member board consisting of five members from New York and five members from Canada. 41 Border Infrastructure Investment Plan (2013), pp. 13-14. 4 Current issues There are reports of serious congestion on the Peace Bridge. However, as noted above, comprehensive data to make an assessment of congestion and delays are lacking. A Transport Canada study using GPS data to measure border performance is currently underway at the Peace Bridge. Recent improvements Over the past five years there have been no significant infrastructure improvements to the bridge itself, but the Canadian inspection plaza was redesigned to include security and technology improvements, additional commercial capacity, and upgrade to support trusted shipper programs. 42 In February 2014 the Governments of Canada and the United States launched Phase II of the Truck Cargo Pre-inspection Pilot in Fort Erie. Phase I of the scheme was undertaken on the border in British Columbia. The scheme allows US Customs and Border Protection to conduct primary inspection of US-bound trucks on the Canadian side of the border. The objective of this project is to reduce traffic congestion at the crossing. 43 Future improvements A number of improvements to US infrastructure are proposed, including reconfiguration of the inspection plaza, commercial warehouse expansion, improved Interstate access, and improved access from bridge to plaza. A re-decking of the bridge is currently in the design phase. Design and construction costs are being funded by the Authority. The Governments of Canada and the United States note that twinning the bridge is an option for the future should traffic demand and port of entry capacity warrant the expansion. 44 Lewiston-Queenston Bridge Exhibit 24: The Lewiston-Queenston Bridge Source: Ontario-Québec Continental Gateway and Trade Corridor- Reproduced with the permission of Transport Canada Border Infrastructure Investment Plan (2013), p. 18. Public Safety Canada (2014) 44 Border Infrastructure Investment Plan (2013), pp. 17-18. 42 43 5 Brief description The Lewiston-Queenston Bridge connects Queenston, Ontario, and Lewiston, New York, and Ontario Highway 405 with US Interstate 190. The bridge is owned, operated, and maintained by the Niagara Falls Bridge Commission. The bridge was opened in 1962 and provides five reversible lanes for vehicular traffic. Current issues As noted above, comprehensive data to make an assessment of congestion and delays are lacking. Recent improvements There have been bridge reconstructions and rehabilitation undertaken over the past five years. There have also been some improvements to inspection infrastructure. On the US side, the main building security holding area was completed in 2010. On the Canadian side the Queenston Plaza received five new commercial primary inspection lanes, a new toll house, and maintenance facility in 2009, and new Canada Food Inspection Agency, CBSA facilities, and 10 new non-commercial primary inspection lanes in 2011. Highway 405 was also expanded to provide two dedicated truck lanes leading to the bridge. 45 Future improvements Further improvements to the Canadian Plaza are planned including east-bound road realignment and improvements to retail and amenities. The project is funded, will cost $14 million, and was scheduled to be complete in 2013. On the US side more significant work is planned to the inspection plaza. There are plans to reconfigure and expand the main building to include additional space for adequate interview rooms and holding cells, to reconfigure the non-commercial inspection garage and commercial dock, to build additional commercial and non-commercial inspection booths, and to improve bus-processing capacity. 46 Thousand Islands International Bridge *Source: Ontario-Québec Continental Gateway and Trade Corridor- Reproduced with the permission of Transport Canada 45 46 Border Infrastructure Investment Plan (2013), pp. 20-21. Border Infrastructure Investment Plan (2013), pp. 20-21. 6 Brief description Originally opened in 1938, the Thousand Islands Bridge system is a series of bridges and supporting structures extending from Collins Landing near Alexandria Bay, New York, to Ivy Lea near Gananoque, Ontario, covering a distance of 13.6 km and providing a direct connection between Interstate 81 and Highway 401. The bridge is managed by the Thousand Islands Bridge Authority based in New York. Chaired by an American, the Authority includes equal numbers of Canadian and American directors on its board. The Canadians are appointed on the recommendation of the (Canadian) Federal Bridges Corporation Ltd. (FBCL). The bridge is tolled and revenues cover operating, maintenance, and minor capital costs of the bridge. Leftover revenues fund CBSA facilities, and any revenues remaining thereafter are held for future capital uses. 47 Current issues While recent inspection reports have found that the bridge is in good condition and that a bridge maintenance program is in place, 48 the CBSA port of entry facility is at the end of its economic life and needs to be replaced, and commercial secondary inspection is congested. 49 As noted above, comprehensive data to make an assessment of congestion and delays are lacking. Recent and future improvements The Beyond the Border Action Plan directly identified improvements at the Thousand Islands Bridge. FBCL has begun planning the Customs Plaza Rehabilitation Project for CBSA. FBCL has developed a conceptual plan to meet CBSA requirements and the project is in its initial planning phase. The project is expected to cost $60 million and be complete in 2017. 50 Rail Border Crossings As noted in Section 1.2, rail is second to trucking in terms of the value of trade it carries between Ontario and the United States. Most goods carried by rail between Canada and the United States are destined to or originate in the Central United States with one-fifth travelling to and from the South and over one-quarter being shipped to and from the West (Exhibit 25). While the volume of rail shipments from Ontario to the United States has recovered to some degree since the recession, it has not regained its peak of close to 20 million tonnes in 2004 (Exhibit 26). Federal Bridge Corporation Limited (2014) Federal Bridge Corporation Limited (2014), p. 10. 49 Border Infrastructure Investment Plan (2013), p. 24. 50 Federal Bridge Corporation Limited (2014), p. 14. 47 48 7 Exhibit 25: Rail Trade between Ontario and US Regions, by value, 2012 Exhibit 26: US Imports from Ontario by Rail, by Weight, 1995-2013 25 27% Central 52% South West Millions of Tonnes 20 15 10 5 21% - Source: Transport Canada (2012) Note: Data not available for US Northeast, but less than 9% of total traffic. Source: Bureau of Transportation Statistics (2014) Detroit River Rail Tunnel (CP) Brief description The Detroit River Rail Tunnel (actually two single-track rail tunnels) opened in 1909. The portals are located in downtown Windsor and downtown Detroit, just east of the Ambassador Bridge. In 2001 CP purchased CN’s interest in the tunnel. In 2010, Continental Rail Gateway (CRG), a partnership of CP, Borealis Infrastructure (a subsidiary of the Ontario Municipal Employees Retirement System), and the Windsor Port Authority, took ownership of the tunnel. The current tunnel carries over 400,000 rail cars annually representing approximately $21.8 billion in trade. This volume of traffic is equivalent to 22-25 trains per day. The tunnel is exclusively used for freight service. 51 Current issues The current tunnels are unable to handle double-stacked, high cube containers and certain other high-clearance cars, including some automobile-carrying cars, which are increasingly the rail industry’s standard. As a result, the trains that run through the tunnel have much lower productivity than would be the case with a double-stack capability. This situation has the effect of increasing the cost of cross-border shipments. Recent improvements Security procedures since 2001 have required full vehicle and cargo inspections in Windsor on behalf of US Homeland Security. This security system has enhanced the construction of two 51 Continental Rail Gateway (2013) 8 grade separations of the CP mainline at Walker Road and Howard Avenue in Windsor. These grade separations were constructed in order to secure the corridor for train traffic. Future improvement CRG has developed plans to construct new a new rail tunnel next to the existing twin tunnels. CRG is currently (March 2014) undertaking an Environmental Review of the project to identify the potential for significant adverse environmental effects and appropriate mitigation measures. The project requires federal approval in both Canada and the United States with involvement of the Canadian Transportation Agency and U.S. Army Corps of Engineers. CRG is seeking $200 million in government funding toward the $400-million cost of the tunnel. CRG proposes to maintain the existing twin tunnels, but to use them only when the new tunnel is out of service. CRG hopes to begin construction in 2014 and open in 2017, but a US Presidential Permit and Government of Canada approvals (including approval under the Bridge and Tunnels Act), and funding have yet to be obtained. Paul M. Tellier Tunnel (CN) Brief description The Paul M. Tellier Tunnel under the St. Clair River connects Sarnia, Ontario, and Port Huron, Michigan. The tunnel replaced an earlier tunnel and opened in 1994. Current issues The tunnel is a constraint on the length of trains. International Railway Bridge Brief description CN owns the single-track International Railroad Bridge in Fort Erie. Both NS and CP have trackage rights over this bridge, but it does not offer double-stacked container capacity. There are currently five trains per day operating in each direction. From the International Bridge, CN has trackage rights to the NS’s Bison Yard in Cheektowaga, NY, where it interchanges traffic with NS. CN also owns and operates the single-track Whirlpool Bridge. 52 The current level of traffic on the bridge means that there is no congestion. 53 Rail Intermodal Terminals This section provides a description of the CN and CP intermodal terminals in and adjacent to the Region of Peel. Collectively, the GTHA intermodal terminals handle two million containers per year. 54 52 The Whirlpool Bridge carries the VIA/Amtrak Toronto-New York passenger railway service, but does not at present carry freight traffic. 53 Consultation with CP. 54 Jones Lang LaSalle (2012) 9 CN Brampton Intermodal Terminal CN’s Brampton Intermodal Terminal (BIT) is Canada’s largest intermodal terminal. 55 Sixty percent of the railway’s system-wide intermodal traffic touches BIT. A 2010 Transport Canada study found that the terminal receives and ships containers from all over North America, with international traffic accounting for 69% of inbound and 43% of outbound container traffic, though many distribution centres in the terminal’s periphery more than double this volume. 56 A 2010 study by the McMaster Institute for Transportation and Logistics found that major freight generators adjacent to BIT were not well integrated into the terminal, constraining peak truck capacity. 57 In response to demand in 2011, CN announced a capacity expansion at BIT including: • • • • The installation of new track and extension of existing track to increase rail capacity by close to 15%; Creation of approximately 25% more ground space for international containers by staging CN containers offsite; Purchasing five new cranes in 2011, after the acquisition of five new ones in fall 2010, and; Increasing the labour force by about 10% in 2011. While data on volumes handled at BIT are not reported publicly by CN, in 2007 BIT was reported to have handed 660,000 intermodal units. 58 CP Vaughan Intermodal Terminal The CP Vaughan Intermodal Terminal (VIT) in York region opened in 1991 with a capacity of 110,000 units per year, and has been expanded to handle more than 700,000 containers per year. Most freight is general freight from west coast ports, all of which is containerized. International traffic accounts for 60% of inbound and 40% of outbound traffic. Sears and its subsidiary SLH Transport and Consolidated FastFrate are co-located. The Coleraine business park is nearby in Peel Region. In May 2013, the Government of Ontario announced the extension of Highway 427 from its current terminus at Zenway Boulevard to Major Mackenzie Drive, 6.6 km to the north. Construction is currently scheduled begin in 2017. Once complete this project will significantly improve truck access to the VIT. Air Border Crossings Movement of goods by air is a part of the intermodal transportation system of trade between the Ontario and other countries as cargo has to be shipped to and picked up from airports by means of other modes such as trucks and rail. Generally, air transportation is used for the movement of light, high value, and time-sensitive goods. CN (2011) Transport Canada (2010) 57 McMaster Institute for Logistics and Transport (2011) 58 Government of Canada (no date) 55 56 10 Exhibit 27: Ontario’s International Trade by Air, Top 10 Trading Partners, 2012 $14 60 Exports $12 Imports $10 50 Thousands of Tonnes Billions of Dollars Exhibit 28: US Imports from Ontario by Air, by Weight, 2007-2013 $8 $6 $4 $2 Japan France Argentina Mexico Peru Switzerland Germany China, P. Rep. United Kingdom United States $0 Source: Transport Canada (2012) 40 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 Source: Bureau of Transportation Statistics (2014) Toronto Pearson International Airport Toronto Pearson handled the most cargo traffic in Canada in 2012 (344,000 tonnes), and Hamilton handled the third most (87,000 tonnes). 59 Pearson has three different cargo areas: the West Facility (infield), Cargo North, and Vista Cargo. The West Facility handles Air Canada among other airlines. It has a 24/7 customs facility on site. Cargo North is Fedex only. Vista Cargo is smaller, but handles many airlines. In its 2008-2030 Master Plan, the Greater Toronto Airport Authority (GTAA), the organization that runs Pearson Airport, forecast that air cargo volumes would rise quickly. In 2006 the airport handled 383,000 tonnes of cargo, while by 2012 this volume had fallen to 344,000 tonnes. The Master Plan concluded that the existing cargo throughput capacity of the airport was sufficient to handle projected demand to 2023 (somewhere between 888,000 and 1,063,000 tonnes of cargo). 60 Since volumes have fallen, it seems unlikely that capacity will be a constraint until at least the mid 2020s. That said, as commercial arrangements and technology change, investments will likely be required to maintain the competitiveness of Pearson Airport for air cargo traffic. The GTAA will soon begin to update its 2008 airport master plan for 2017. 59 Transport 60 Canada (2012) Greater Toronto Airports Authority (2007) 11 Hamilton John C. Munro International Airport Hamilton John C. Munro International Airport (YHM), located in Hamilton, is fifth in Canada in terms of cargo handled (86,000 tonnes in 2011). 61 Hamilton Airport handled 351,491 passengers in 2012, an increase over 2011, but a decline from the 545,800 handled in 2008. 62 Hamilton Airport is served by three cargo airlines: CARGOJET, Purolator, and United Parcel Service (UPS). The airport is a hub for CARGOJET’s route network. International service is offered to Exhibit 29: Hamilton International Airport Bermuda, Newark (NJ), Brussels (Belgium), Cologne (Germany), and Warsaw (Poland) and international cargo is connected to 12 major cities throughout Canada. The airport is the hub of Purolator’s Canadian route network and the international hub of UPS’s Canadian operations. Unlike Toronto Pearson International Airport, Hamilton International is not a National Airports System airport. In 1996 TradePort International Corporation (Hamilton International Airport Limited) entered into a 40-year lease agreement with the City of Hamilton to be the sole operator and manager of Hamilton International Airport. Source: Hamilton International Airport TradePort is in turn owned by Vantage Airport Group, an operator of 11 airports in Europe and the Americas, and a subsidiary of the Vancouver Airport Authority. The airport’s vision is “to be the ‘Airport of Choice’ in Southern Ontario for passengers, goods movement, airlines, and service partners.” Its mission is that “Hamilton International consistently provides its passengers, airlines, and business partners with a high-value, hassle-free experience that maximizes stakeholder value”. Hamilton describes itself as having the “best domestic cargo freighter distribution network in the country.” 63 The airport has 24-hour operations, no slot restrictions or ramp congestion, quick turnarounds, dual runway system (10,000 ft. and 6,000 ft.), and onsite Canadian Border Service Agency operations. The airport claims to have lower aeronautical fees than Pearson. 64 In January 2013, the airport announced a $12-million infrastructure investment to develop onsite infrastructure to expand air cargo operations. Of this investment $8 million came from Governments of Ontario and Canada and $4 million from TradePort. The project involves the construction of 60,000 square feet of truck docks, refrigerated space for flowers, fresh produce and pharmaceutical products, a centre for live animals, and courier facilities. The goal is to allow the airport to provide an efficient cargo service on a much larger scale than before. 65 61 Transport Canada (2012). 2011 is the latest year for which Transport Canada data are available. 62 Hamilton Airport (2012) 63 Hamilton Airport (2014) 64 Hamilton Airport (2014) 65 Hamilton Airport (2010) 12 Marine Border Crossings Southern Ontario Marine Ports Southern Ontario’s marine ports (Exhibit 1, p. 9) handle a wide variety of commodities with both international and domestic origins and destinations. At present there is presently no significant amount of containerized cargo being handled at Ontario ports. Exhibit 30 shows the Ontario’s marine trade with its top 10 marine trading partners. Notably these data show the mode of import/export into Canada and not necessarily the mode by which the goods entered or exited Ontario, and so these data are not directly relevant to marine border crossings in Ontario. For instance, Ontario’s $9.3 billion in marine imports from China likely largely arrived in Ontario by truck, rail, or air, as opposed to marine directly. Marine trade value data are not available on the basis of shipments to and from Ontario ports. Exhibit 30: Ontario’s Top 10 Marine Trading Partners, 2012 $10 Billions of Dollars $9 $8 $7 $6 $5 $4 Exports $3 Import $2 $1 $0 Source: Transport Canada (2012) Unless otherwise noted, the data in this section are drawn from Transport Canada’s Marine Database. 66 The following subsections discuss in more detail the most important ports, by international tonnage handled, in Southern Ontario. Port of Hamilton The Port of Hamilton handles both the most cargo and the most international cargo of any port in Southern Ontario. Hamilton handles an increasingly diverse range of cargos. Exhibit 31 shows international cargos handled in 2011, while activities associated with steel making remain important. Coal was by far the most important cargo handled, with 2.3 million tonnes being unloaded. Coal is sourced from the ports of Ashtabula, Sandusky, and Toledo in the United States. Iron ore (taconite) comes from the twin ports of Duluth, Minnesota, and 66 Transport Canada (2012b) 13 Superior, Wisconsin. These ports loaded ore mined in the Iron Ore Range of Northern Minnesota. Slag, ash, and coke are all produced in Hamilton, loaded at the port, and sent to a variety of US ports, primarily on the Great Lakes. Fertilizers are imported from Russia, Eastern Europe, and South America. Corn (200,000 tonnes) and soya beans (180,000) are exported all over the world from Hamilton, primarily to Europe and the Americas, although re-export from these locations is also possible. With uncertainties in the global steel market and the associated uncertainties around steel production in Hamilton, the Port of Hamilton has for a number of years been pursuing a strategy of diversification. Most notably, from an international goods movement perspective, Hamilton is growing its inbound fertilizer traffic and its outbound traffic of agricultural commodities, particularly corn and soya beans. As part of its strategy, the Port has been developing significant rail infrastructure to handle more diverse cargos, but also to offer increased modal choice to shippers. Exhibit 31: International Cargo Handled at the Port of Hamilton, 2011 Non-agglomerated bituminous coal Iron ores & concentrates Slag, ash, & residues Coke of coal, lignite, peat & retort carbon Nitrogenous fertilizers Loaded Corn Unloaded Soya beans Iron or steel in primary forms Other products of coal & petroleum refining Silica & quartz sands (for construction) - 1 2 3 Millions of Tonnes Handled Source: Transport Canada (2012b) Port of Nanticoke Nanticoke is a significant international port largely because of the presence of US Steel’s Lake Erie Works, a steel mill, and Ontario Power Generation’s Nanticoke Generating Station, which closed at the end of 2013. Out of a total 4.5 million tonnes of international cargo handled in 2011, 3.8 million tonnes were coal from Ohio and Superior, Wisconsin, and iron ore and concentrates from Duluth-Superior. Port of Goderich In terms of international cargo, the Port of Goderich, located on Lake Huron, is primarily devoted to the export of salt (three million tonnes loaded in 2011), from the local Sifto Salt Mine, and wheat (110,000 tonnes loaded in 2011) and soya beans (130,000 tonnes loaded in 2011). 14 The wheat is shipped through the Great Lakes to Toledo, Ohio, a centre of food manufacturing. Soya beans were exported to destinations throughout Northern Europe. Salt was distributed to the US, primarily the Great Lakes. In 1999, the Town of Goderich purchased the Harbour from Public Works Canada (in conjunction with Transport Canada). Industrial users of the Port formed the Goderich Port Management Corporation, a not-for-profit organization, responsible for the management of port facilities. Port of Windsor Windsor is a diversified port. Primary export commodities in 2011 were 1.3 million tonnes of salt from the Windsor Salt mine. Agricultural products were the other major export cargo, totalling more than 80,000 tonnes of wheat, oil cake, and flours and meals of oil seeds. Wheat was shipped to Toledo, Ohio, while other agricultural products went to Europe. Inbound the port handled 900,000 tonnes of aggregates and smaller quantities of a range of other commodities. The port handled a total 1.1 million tonnes of inbound international cargo in 2011. Port of Sarnia The Port of Sarnia exported 195,000 tonnes of fuel oils, 225,000 tonnes of asphalt, and a variety of other refinery products to the United States as well as 100,000 tonnes of wheat to Toledo, Ohio. Imports were 290,000 tonnes of aggregate from the US, 240,000 tonnes of gasoline and fuel oil from the US, and 18,000 tonnes of fertilizer from the Ukraine. This traffic reflects the large presence of the petro-chemical industry in Sarnia, and the significance of agriculture in the surrounding area. Port of Bowmanville The Port of Bowmanville handles international cargo for the cement plant and a small amount of salt. In 2011 imports were 75,000 tonnes of coal from Ohio, 110,000 tonnes of coke from Chicago, and 23,000 tonnes of salt from Ohio. Exports were 290,000 tonnes of cement to Cleveland, 500,000 tonnes to Detroit, and 80,000 tonnes to Toledo. Port of Toronto Traffic at the Port of Toronto is dominated, in tonnage, by the import of 340,000 tonnes of raw sugar for the sugar mill from Brazil, Costa Rica, and Nicaragua, and 175,000 tonnes of salt for road de-icing from Cleveland. Some asphalt (from Detroit) and steel pipe (from South Korea) were also imported. A small amount of cement was exported to Rochester, NY. Port of Clarkson Port Clarkson, the only marine port in Peel Region, exported 95,000 tonnes of lubricating oils and greases (to the US and Europe) and 100,000 tonnes of cement (to Duluth, Minnesota). Imports were 230,000 tonnes of lubricating oils and greases (from Europe and the United States), 27,000 tonnes of coal (from Ashtabula, Ohio), 72,000 tonnes of slag ash and residues (from Chicago and Gary, Indiana). Lubricants are associated with Suncor’s Mississauga Lubricants Plant. Cement is associated with the Holcim/Dufferin cement plant. 15 Summary of Current Infrastructure Issues and Planned Future Improvements by Crossing The table below provides a summary of current infrastructure issues for all border crossings in Southern Ontario of significance to goods movement stakeholders in Peel Region. Crossing Road Ambassador Bridge Current Infrastructure Issues Planned Future Improvements The key issue with the Ambassador Bridge is that it is not connected directly with a high capacity, high speed road on the Canadian side. Highway 3 runs through downtown Windsor and has traffic lights and significant cross traffic. There are also weight and dangerous goods restrictions on the bridge. Overweight trucks and trucks carrying dangerous goods must use the Detroit-Windsor truck ferry. As noted above, comprehensive data to make an assessment of congestion and delays are lacking. An 11-km extension of Highway 401 (Rt. Hon Herb Gray Parkway, formerly known as the WindsorEssex Parkway) is currently under construction between the current end of Highway 401 and the planned Canadian inspection plaza for the New International Trade Crossing. This highway will also improve access to the Ambassador Bridge as it will provide a high speed, controlled-access facility as an alternative to Huron Church Road/Highway 3 between the current end of Highway 401 and the E.C. Row Expressway. The companies that own the Ambassador Bridge have proposed the construction of a second span roughly parallel to the existing bridge. The new span would offer six lanes and would connect to existing inspection plazas. This project has completed a transitional screening under the Canadian Environmental Assessment Act in February 2014. A number of improvements are planned for the Blue Water Bridge. On the US side, the focus is on planning for commercial and non-commercial inspection capacity expansion. The feasibility of the project is currently being assessed within the fiscal and regulatory environment. On the Canadian side the Blue Water Bridge Canada master plan calls for the addition of 14 new primary inspection lanes, construction of new CBSA traffic and secondary inspection facilities, completion of a truck exit roadway from the commercial primary inspection lanes to Highway 402, and construction of a multi-purpose service centre for travel information, currency exchange, and food service. A number of improvements to US infrastructure are proposed, including reconfiguration of the inspection plaza, commercial warehouse expansion, improved Interstate access, and improved access from bridge to plaza. A redecking of the bridge is currently in the design phase. Design and construction costs are being funded by the Authority. Further improvements to the Canadian Plaza are planned including east-bound road realignment and improvements to retail and amenities. The project is funded, will cost $14 million, and was scheduled to be complete in 2013. On the US side more significant work is planned to the inspection plaza. There are plans to reconfigure and expand the main building to include additional space for adequate interview rooms and holding cells, to reconfigure the noncommercial inspection garage and commercial dock, to build additional commercial and noncommercial inspection booths, and to improve bus-processing capacity. The Beyond the Border Action Plan directly Blue Water Bridge This border crossing was subjected to the worst summer on record for traffic congestion and border wait times in 2007. In fact, congestion has been one of the main issues of this bridge during summer. Therefore, commuters and trucks crossing decreased in some other seasons due to the uncertainly of the timing and delivery of goods by taking this bridge. Congestion has almost certainly lessened since 2007, but, as noted above, comprehensive data to make such an assessment are lacking. Peace Bridge There are reports of serious congestion on the Peace Bridge. However, as noted above, comprehensive data to make an assessment of congestion and delays are lacking. LewistonQueenston Bridge As noted above, comprehensive data to make an assessment of congestion and delays are lacking. Thousand While recent inspection reports have found that 16 Island International Bridge Rail Detroit River Rail Tunnel Paul M. Tellier Tunnel International Railway Bridge Rail Intermodal Terminals Air Toronto Pearson International Airport Hamilton John C. Munro International Airport Marine the bridge is in good condition and that a bridge maintenance program is in place, the CBSA port of entry facility is at the end of its economic life and needs to be replaced, and commercial secondary inspection is congested. As noted above, comprehensive data to make an assessment of congestion and delays are lacking. identified improvements at the Thousand Islands Bridge. FBCL has begun planning the Customs Plaza Rehabilitation Project for CBSA. FBCL has developed a conceptual plan to meet CBSA requirements and the project is in its initial planning phase. The project is expected to cost $60 million and be complete in 2017. The current tunnels are unable to handle doublestacked, high cube containers and certain other high-clearance cars, including some automobile-carrying cars, which are increasingly the rail industry’s standard. As a result, the trains that run through the tunnel have much lower productivity than would be the case with a double-stack capability. This situation has the effect of increasing the cost of cross-border shipments. A group called Continental Rail Gateway (CRG) has developed plans to construct new a new rail tunnel next to the existing twin tunnels. CRG is currently (March 2014) undertaking an Environmental Review of the project to identify the potential for significant adverse environmental effects and appropriate mitigation measures. The project requires federal approval in both Canada and the United States with involvement of the Canadian Transportation Agency and U.S. Army Corps of Engineers. CRG is seeking $200 million in government funding toward the $400-million cost of the tunnel. CRG proposes to maintain the existing twin tunnels, but to use them only when the new tunnel is out of service. CRG hopes to begin construction in 2014 and open in 2017, but a US Presidential Permit and Government of Canada approvals (including approval under the Bridge and Tunnels Act), and funding have yet to be obtained. No plans for substantial future improvements have been identified. No plans for substantial future improvements have been identified. The tunnel is a constraint on the length of trains. The bridge does not offer double-stacked container capacity. There are currently five trains per day operating in each direction. The current level of traffic on the bridge means that there is no congestion. None identified. No plans for substantial future improvements have been identified. No substantial issues have been identified. No plans for substantial future improvements have been identified. No substantial issues have been identified. In January 2013, the airport announced a $12million infrastructure investment to develop onsite infrastructure to expand air cargo operations. The project involves the construction of 60,000 square feet of truck docks, refrigerated space for flowers, fresh produce and pharmaceutical products, a centre for live animals, and courier facilities. The goal is to allow the airport to provide an efficient cargo service on a much larger scale than before. The Port of Hamilton continues to diversify cargos and develop land and infrastructure as required. No substantial issues have been identified. 17 Appendix B: Data Sources The Appendix provides additional details on the key data sources used in this project. MTO Commercial Vehicle Survey (CVS) MTO undertakes the CVS every five years. The survey intercepts trucks at more than 100 sites 24 hours a day, seven days a week, throughout the province where infrastructure investment priorities in support of freight are under consideration, such as truck inspection stations, some roadside locations on the provincial highway system and international border crossings across the province. Through roadside interviews, the survey collects information about trip characteristics, vehicle classification, weights and dimensions, commodity details, border crossing, routes, and trip origin and destination. MTO uses the data obtained from the CVS to improve its understanding of current travel patterns, characteristics, and trends in travel patterns of trucks moving not only within Ontario, but also across borders. The info collected is also used to develop forecasts of truck travel demand in support of transportation planning and policy development. Parallel to the survey, categorized traffic counts are also collected at each survey site. The traffic counts are vital to expand the sample to the population of multiple classes of trucks to represent total traffic. The CVS is a very useful survey for the analysis of cross-border goods movement. It provides origin/destination truck trip data between Canada at the regional level and the United States at the county level. As the CVS operates on a five-year cycle, the value of the data for analysis can degrade quickly. For example, the 2011-13 CVS data are not scheduled to be released until early 2015. Given the dramatic changes that have occurred in cross-border goods movement in Ontario since 2006, before the recession, relying too heavily on the CVS is likely to provide a distorted picture of goods movement in 2014. Nonetheless, the 2006 CVS data remain some of the most detailed goods movement data available. US Bureau of Transportation Statistics: North American Transborder Freight Data This website provides import values and weights by mode and commodity, together with export value (but not weights) by mode for US border crossings (for both Mexico and Canada). All data are available 2007-2013, with road and rail values and weights (not by commodity) going back to 1994. Transport in Canada (herein referred to as Transport Canada (2012)) Transport Canada produces an annual report covering all modes of transportation. This report includes a variety of useful data on cross-border goods movement. Transport Canada also provided supplemental information on the value of Ontario’s international trade by mode and country of origin/destination. Peel Forecast Model Peel Transportation Planning staff developed the Region of Peel's Travel Demand Forecasting Model in 1978. The model has been updated frequently. This model has been used in a number of the Region’s transportation planning initiatives. Travel demand forecasting predicts how various transportation policies and programs will affect travel patterns in the future. The 1 information in a travel demand forecast helps municipalities plan future transportation improvements, policies, services, and programs. The model would be used to reflect the changes in traffic volume changes in road network and also to forecast future traffic based on the land use growth. The model does not forecast truck volumes; however it is helpful in identifying congestion and in estimating travel times for truck planning. Note: the data obtained for analysis in this paper has been summarized for discussion purposes. 2