Canada’s ports need billions in upgrades to support Ottawa’s trade ambitions

Originally published in the Hamilton Spectator.

Ottawa wants to mobilize $1 trillion in strategic investment and double exports outside the U.S. There’s just one $21.5-billion problem: Canada’s ports physically cannot afford the infrastructure required to ship that ambition to the world.

Every strategy to diversify trade ultimately depends on the ability to move goods efficiently to global markets. Port infrastructure is no longer a niche transportation issue; it is the ultimate gatekeeper of national economic competitiveness.

The baseline numbers demand attention. Canadian ports handle more than 340 million tonnes of cargo annually, generate approximately $53 billion in economic activity, contribute $25 billion to GDP, support nearly 71,000 direct jobs and channel more than $2 billion in tax revenues to governments each year. Yet despite anchoring the national economy, ports remain one of the few major transportation assets expected to finance much of their own growth.

Canada’s port authorities are financially starved, almost by design. Unlike the rest of our transportation ecosystem, they receive zero ongoing federal operating support. Instead, they must scrape together retained earnings, secure private financing and wait and compete on highly targeted federal infrastructure programs just to maintain facilities.

This obsolete structure belongs to a different era. A model built for quiet, localized operations cannot anchor an aggressive national trade strategy.

The cracks are showing. According to the Association of Canadian Port Authorities, Canada's ports face an infrastructure gap now projected to reach $21.5 billion by 2040. Existing facilities require massive modernization to accommodate growing trade volumes, develop inland terminals and strengthen intermodal connections. More troubling still, 61 per cent of identified port capital projects currently have no secured funding. These are not speculative, blue-sky ideas; they are costed, vetted projects stuck in dry dock, stalled by a financial framework designed for the last century.

The federal government recognizes the strain on our supply chains, but its interventions are entirely reactive. The recent $5-billion Trade Diversification Corridors Fund, paired with July’s massive $10-billion emergency infrastructure injection for the Vancouver Fraser Port Authority, are welcome drops in a much larger bucket.

Writing massive, one-off federal checks to clear single bottlenecks proves the systemic rulebook is broken. Government bailouts cannot close a long-term national infrastructure gap measured in the tens of billions, nor can they substitute for the permanent financial flexibility ports need to independently chase global capital.

Ottawa trade and transportation consultation that occurred over the summer cannot be a passive listening tour. It must be the launchpad to completely dismantle and rebuild the financial rules governing our ports. Reforming borrowing limits, expanding opportunities for commercial development and giving ports greater flexibility to generate revenue would allow them to self-fund the infrastructure required to support Canada's long-term economic ambitions.

We do not have time for a decade-long ideological debate on outright terminal privatization. While partnerships between ports and private operators have real merit, full privatization raises hard, slow-moving questions around public accountability, strategic control and labour relations. Modernizing existing financial tools is the immediate, unassailable win.

Look south for proof. Many American port authorities benefit from capital-raising tools completely denied to their Canadian counterparts, including issuing bonds and independent taxing authority through special port districts. In some cases, these tools exist because some U.S. port authorities operate as municipal or state entities empowered to raise capital like public utility providers.

Canada made a different choice: under the Canada Marine Act, Canadian port authorities operate as arm's-length, financially self-sufficient entities deliberately structured to stay off the government's books.

That logic is broken. Borrowing limits for Canadian port authorities are micromanaged by the federal government on a slow, bureaucratic, case-by-case basis. Moreover, these limits are often tied to current revenue levels, which prevents ports from funding their own revenue-generating projects. It is a system fundamentally poorly suited to ports competing for time-sensitive capital against global rivals with unrestricted access to it.

Canadian ports are being expected to compete for global trade while restricted by rigid, 20th-century financial handcuffs. If Canada is serious about becoming a genuinely diversified trading nation, giving ports faster access to capital — whether through higher statutory borrowing limits, bond-like financing instruments or expanded room for private partnerships — must be treated as a dominant national economic priority.

Trade diversification does not end at the factory gate or the mine site. It ends at the port. Ensuring Canada's ports have the financial capacity to expand, innovate and compete is one of the most important investments the country can make in its economic future.

(Vincent Desmarais-Adam is a Principal Associate at government affairs and communications consulting firm Porter O’Brien.)