Focus shifting to rebuilding ties, efficiency

The Toronto Port Authority controls hundreds of acres of Canada's most valuable waterfront. It also loses more than $5 million a year - something it is hoping to fix.

"We're turning our minds to address the infrastructure - the slips - the old ferry. We want to build out the infrastructure so that it is the best we can do for the City of Toronto," says Michele McCarthy, the authority's new chair.

The Toronto lawyer, who was appointed to the board last year and elected chair in June, says one of her roles will be to put a new face on the relationship with city hall, which was affected by the often-heated discussions about a proposed, and now-dead, fixed link to the City Centre Airport on Toronto Islands.

"I want to open up the lines of communication with the mayor," she says.

Photos courtesy of Toronto Port Authority
While the City Centre Airport on the Toronto Islands has long been the subject of controversy, the Toronto Port Authority says there are no plans to close it.

In 2004, the authority lost $2.4 million operating the island airport, $1.7 million on its two marine terminal operations and $644,000 on the Outer Harbour Marina.

In 2003, it lost $1.9 million running the airport, $1.5 million on the port operations and $700,000 on the marina, according to its financial statements.

The federal public authority, which was established in 1999, controls 280 waterfront acres. Under the Canada Marine Act, Canada's 19 port authorities are supposed to be fully commercial and self-sufficient.

The federally appointed authority thought it had a way to stop the financial bleeding in 2002 - a bridge to move more passengers to the airport and eliminate the connecting ferry. The plan also included a new airline carrier to increase daily flights, as well as a new passenger terminal.

Several studies have shown the airport can become profitable provided air passenger traffic is increased. Although passenger traffic is down from its record highs of the mid-1980s, the island airport is one of Canada's busiest with about 120,000 landings and takeoffs annually, according to the authority.

The fixed link, however, was widely opposed.

Among the opponents were local community groups such as Community AIR (Airport Impact Review); the Toronto Environmental Alliance, which opposed the airport expansion on grounds of increased air and noise pollution; and author and urban activist Jane Jacobs.

Mayor David Miller also pledged to stop the bridge during the October 2003 municipal elections and in December of that year the new council reversed its previous support. In May of this year, the federal government paid $35 million in compensation to the port authority for not proceeding with the fixed link.

"It was very evident to us in December (2003) ... that we were not going to be building a bridge. We spent the last 18 months preparing for the scenario of no bridge," says Lisa Raitt, the port authority's president and CEO.

The airport is governed by a tripartite agreement between the federal government, the port authority and the city that expires in 2033. The authority's board has seven members. Five are appointed by the federal government, and the province and the city appoint one each. It is the only port authority in Canada operating a land-based airport.

Lisa Raitt

The island bridge issue is finished, McCarthy says. "That's all resolved now."

Raitt agrees. "That's behind us now. It really is a fresh start for the port authority. The pieces have stopped moving. The challenge is to improve efficiencies, attract more passengers, more cargo and diversify our lines."

With the fixed-link plan abandoned, the port authority is now repairing the dock and slips used by the airport ferry.

"With the bridge plan, we hadn't been carrying out the repairs and maintenance to the slips and docks," Raitt says.

The authority expects to have a new passenger ferry operating in 2006. But the number of passengers will be less than the 900,000 proposed under the fixed-link plan. The physical limitation of the ferry puts a natural cap on growth, Raitt says.

"If it (ferry) attracts more passengers, that's great. If it attracts a carrier, that's great. We certainly hope a new ferry will make a carrier want to come in. We see the island airport as an ideal alternative to Pearson. It brings people right into the heart of downtown Toronto," she says.

Community AIR, however, also opposes the new ferry.

"The new ferry is just another scheme to keep the airport alive. It has been in freefall since the 1980s. It has never made a profit since the 1930s," says Marc Brien, the association's research co-ordinator.

Michele McCarthy

Brien also says the airport land should be returned to the city. He adds that the authority should be dissolved because it is "holding back the rejuvenation of the central waterfront."

"It doesn't make sense to keep the airport open. The airport lands could be developed into a spectacular park that serves as a magnet for tourism investments and recreational activities. And the marine port business should be transferred to the Port of Hamilton, which is financially successful, Brien says.

"We are functioning under the assumption that the port authority will remain," says Kristin Jenkins, vice-president of public affairs for the Toronto Waterfront Revitalization Corp. The corporation, which represents the city and the federal and provincial governments, is the lead agency redeveloping Toronto's waterfront.

"The island airport lands are not a part of the mandate of the Toronto Waterfront Revitalization Corporation," Jenkins says.

The port authority expects additional revenue will come through the re-establishment in June of the Toronto-Rochester ferry service. The ferry service, first launched in 2004, can carry 750 passengers and more than 220 vehicles. It stopped running last year after 80 days when the former owner faced bankruptcy.

The ferry is now owned by the City of Rochester and uses a $10.5-million international marine passenger terminal built by the Toronto Port Authority. The ferry is operating at 50-per-cent capacity, but usage is expected to increase.

The authority also hopes to increase revenue from its port operations by bringing more cargo containers into the Port of Toronto.

"We're following a world trend - 10-per-cent growth in shipping around the world," Raitt says. "We're at capacity for bulk shipments. Containers is a high-growth area for us to get into. We're at the infancy stage. There are no targets set for this year or next.

"We're trying to open new trade routes for vessels to come into Toronto with containers. We have to sell the concept of coming through the St. Lawrence Seaway as opposed to stopping in Montreal and putting the containers on rail," Raitt adds.

"My goal is to see some kind of container-shipping line set up in three to five years," Raitt says. "More and more stuff is coming to North America and is getting clogged on the West Coast. We need to find an alternative route into the heartland of America and Canada."

In 2004, the Port of Toronto handled 21.3 per cent more cargo, 2.5 million tonnes, than in the previous year. This was the highest volume of tonnage handled by the port since 1978, the authority says. It was also the third year in a row the port had handled increased shipping.

In 2004, the Port of Vancouver, Canada's largest port, handled more than 73 million tonnes of cargo. The Port of Montréal handled 10.8 million tonnes, of which more than 90 per cent was containers.

Bulk shipping makes up more than 75 per cent of the Toronto port shipping capacity. In 2003, the total tonnage handled by all Canadian ports and marine terminals increased 8.5 per cent from 2002 to a record 443 million tonnes, according to Statistics Canada.

The Toronto Port Authority was to present its plans for the new ferry to connect to the airport and review its current operations this week at its annual meeting.

"Our mandate is to run the airport," Raitt says. "And we have not been told anything different by Transport Canada regarding whether that airport is going to be closed. One thing I have taken out from these past 18 months of negotiation around the fixed link: I got a clear message there is going to be an airport."

(Charles Wyatt can be reached at wyatt@businessedge.ca)