By Pierre Gratton
In a recent flurry of media activity, Daniel Veniez, Chair of Ridley Terminals Inc. (RTI), has rightly pointed out that the future of the port terminal should not be a political football nor ideologically driven.  Unfortunately, it is clear through his actions and through his efforts to sell RTI to a single private interest that he is engaged in both.

Ridley is a strategic asset critical to the growth of northeastern British Columbia and beyond.  It is one of the key reasons, for example, that the Northeast BC coal sector has undergone a remarkably strong reemergence in recent years, driven by the growing demand for high quality steel-making coal in emerging Asian markets. A recent PriceWaterhouseCoopers’ study of BC’s mining sector performance in 2008 reported record levels of production, new investment, job growth and the highest industrial wages of any sector, due in large part to the province’s steel-making coal industry. 

This dramatic re-emergence is not abating, despite the current economic downturn, as steel-making coal prices remain at relatively high levels from a historical standpoint.  Indeed, the future of BC’s and Alberta’s steel-making coal sector and that of communities such as Chetwynd, Tumbler Ridge, Fort St. John, Dawson Creek and Prince Rupert, has not looked so bright in many years. 

This new investment has not only meant high-paying jobs and spin-off benefits for what had been an economically depressed region of British Columbia, but also new revenues for governments and an important contribution to Canada’s trade balance. The strategic importance of BC’s and Alberta’s steel-making coal resource cannot be understated – it is one of the top three jurisdictions in the world for steel-making coal and can and will play a pivotal role enabling the rapid industrialization of emerging Asian markets – and the recovery of our own.

A key challenge for many of western Canada’s exporters is their inability to control its single largest cost element – rail costs – due to their captivity to monopoly pricing practices. Given this, it would exacerbate matters for current and future producers and exporters were RTI sold to a private company, which would lead to another monopolistic service provider or restricted access for property developers. RTI was never intended to become a profit centre for the federal government. In fact, it was created with the single purpose of enabling economic development in Northern BC.

To continue to do play this role and to drive future development, RTI’s throughput rates must be kept at competitive levels against international markets to direct volume to the terminal.  Sale to a private entity would hold all users of the port hostage to monopolistic pricing, which is not in their interests, nor the interests of the citizens of Northeastern BC and British Columbians and Albertans, generally.

Like Mr. Veniez, we were encouraged by the decision of the Conservative government to cancel the previous government’s proposed divestiture as their first order of government on February 7, 2006. His efforts to improve the viability of the port are commendable.  Nevertheless, the fundamental rationale for not privatizing the port in 2006 remains as true today as then.

We are thus heartened by comments made by the Honourable Jay Hill, who clearly understands the importance of the public sector’s involvement in RTI at this time. A sensible option would be to transfer the RTI asset to the Prince Rupert Port Authority, which would create obvious synergies and efficiencies. In addition, a new management structure should be formed comprised of port users, who would operate the terminal on a not-for-profit basis focused on delivering high quality, competitive service for Northeastern economic interests, a model seen elsewhere in Canada and around the world.