Arctic shipping remains a distant dream for now, transport minister says

WASHINGTON – The centuries-old dream of shipping through the Northwest Passage will remain mostly illusory for the foreseeable future, Canada’s transport minister indicated Tuesday in a blunt assessment of the challenges ahead.

During an appearance in Washington, Lisa Raitt played down expectations that the Arctic is on the cusp of becoming an international shipping hub because of climate change.

She offered a list of concerns she’s heard from the shipping industry, including from insurance companies — the ones Raitt said are really calling the shots when it comes to what’s allowed to pass through the area.

The obstacles include shallow passes and a lack of navigational markers, she said. The prospect of having a shipment stuck up there would wipe out any potential time-savings offered by the shorter intercontinental route

And then there’s the frightening prospect of oil spills.

“I don’t see it happening right now,” Raitt said in a lengthy, freewheeling question-and-answer session at the Canadian American Business Council.

“I’m passionate about it. But I don’t think it’s a panacea, and I don’t think the Panama Canal or the Suez Canal … have any worries of competition from the Northwest Passage right now.”

The delay’s not necessarily a bad thing, she said. Policy-makers now have time to prepare all the safety protocols necessary to protect the pristine region from spills. Raitt said she’s looking forward to the release of a report this fall with recommendations on shipping north of the 60th parallel.

“I can tell you — one oil spill or accident in the Arctic is one visual you do not want to have in this world at all,” Raitt said.

“It’s not just always about the economy. I can’t believe I said that as a Conservative. But it’s not always about the economy. You’ve got to balance it out with what’s happening in terms of safety, and the environment too.”

Successive Canadian governments, especially the current one, have pointed to an impending burst of Arctic activity as a source of national pride. There have even been differences of opinion with other countries, including the U.S., about who would have sovereignty over the bustling new shipping routes.

For now, Raitt said, it’s baby steps.

She noted that a coal shipment made it through the region faster than she expected last year. She said Canadian officials watched that ship like hawks, wary of any possible accident.

Otherwise, most of the shipping in the region consists of north-south trips by supply ships, she said.

Raitt appears to understand the file well, said John Higginbotham, a former Canadian diplomat who focuses on the Arctic at Carleton University’s Centre for International Governance Innovation.

“I think she’s struck a good balance between realism and caution,” Higginbotham said. “She’s very well-qualified to speak on this topic, given her ports background (as head of the Toronto port authority).”

But the challenges facing Arctic shipping don’t make it impossible, he added, citing last year’s coal shipment as evidence that insurers can come onside, and that safe shipments can indeed be achieved.

The potential payoff is huge, Higginbotham said, starting with far shorter routes from Asia to North America’s east coast that could eventually mean cheaper goods, quicker shipments, and lower greenhouse-gas emissions.

Whether it happens will depend on two things: the extent of climate change, and government policy, said Higginbotham. The feds would need to invest in search-and-rescue, harbours of refuge, oil-spill mitigation, communications and navigational aids, he added.

For now, Russia appears to have jumped out ahead in developing its Arctic shipping capacity, Higginbotham said, although it’s commonly believed shipping there would be much easier than through Canada’s northern archipelago.

During her question-and-answer session, Raitt also hinted that Russia’s status within the Arctic Council might be under review.

She said she couldn’t speak to the file, which belongs to Environment Minister Leona Aglukkaq, but said her own department has cut off its points of contact with Russia as a result of the crisis in Ukraine.

Later Tuesday, Raitt delivered a speech warning U.S. lawmakers not to impose a tax on Canadian ports. Without specifically threatening retaliation, she said Canada would respond by protecting its industry.

There are bills before the Senate and House of Representatives that would slap a 0.125 per cent tax on goods from Canadian ports. The measure, which is meant to replace a harbour-maintenance tax on U.S. ports, was introduced by Democrats from Washington state.

Similar bills have been defeated several times before.

“I think this is the fourth time that we’ve seen something like this happen,” Raitt said after her speech at the American Association of Port Authorities.

“Our position the last three times hasn’t changed. It’s always been the same. We believe that adding tariffs at the border doesn’t make sense for a strong, bilateral friendship and relationship.”