New report says privatizing Canada's ports could generate significant revenue
C.D. Howe Institute report looked at 4 major ports including Vancouver, Prince Rupert, Montreal and Halifax
A new report from the C.D. Howe Institute says changing the financial structure of Canada's major ports could raise much needed infrastructure money and benefit taxpayers.
Canada's 18 ports are overseen by Canada Port Authorities, an arms-length organization overseen by the federal government. The port authorities manage safety and navigation services, permits, and leases for different terminal operators.
In November, the federal government hired investment bank Morgan Stanley to review Canada's port system as part of a larger drive to increase private investment to raise money for infrastructure.
The C.D. Howe Institute also worked on a study focused on Canada's four largest and most lucrative port authorities: Vancouver, Montreal, Halifax and Prince Rupert.
Study author Steven Robins said the federal government could restructure the system to generate cash for other infrastructure projects.
"We can take our money [from the ports] and invest it in assets that we also need that the private sector isn't willing to finance — things like public transit, new highways, those kinds of things," he said.
Use port revenue to invest in other projects
Currently, the federal government re-invests port profits back in the ports.
Robins says the government could use the profits for other priorities. In this case, the government wouldn't secede control of the ports.
He says this could generate $260 to $300 million per year from the four ports.
Alternatively, if the government needed a larger sum of money up front, Robins said the government could privatize the four ports, which he estimates could raise a one-time sum of $2.6 to $3.4 billion.
Robins says switching to private funding wouldn't largely change the pricing, customer experience or employment at the port.
Because the ports generate so much revenue, Robins says private investors would not be inclined to change the operations of the port significantly.
But he said while private investment could generate much needed funding, the government shouldn't step away from the port authority completely.
Robins said safety, permitting, and deciding how much traffic should go through the port should be left within the federal government.
"Let the private sector invest in the actual assets and [the government] should take the role of the regulator."
With files from The Early Edition