Even before the railroad arrived in the late 19th century, Vancouver was conceived as a vital West Coast port for North American trade.
Almost a century and a half later, while a major seaport, some feel it has yet to realize its full potential as a link between east/west trade and more.
Championing an evolution for the Port of Vancouver is Kaity Arsoniadis-Stein, of the Vancouver International Maritime Centre (VIMC) formerly president and secretary general of the International Ship Owners Alliance (ISAC), among her long experience in international shipping.
Her organization wants to develop Vancouver as a major maritime hub, not just a through port for freight. This means attracting satellite offices of major shipping companies, and being a centre for managing trade into North America and across the Paci c to the major Asian ports.
“We’ve made the rounds, and come out of meetings where people said Canada didn’t register in their thinking, but we have changed their opinions on that. They see that Canada is a stable, safe environment, and blue chip companies are moving out of the EU and looking at other options, and with Brexit that’s only going to accelerate. Where are these companies going to go? Well, we’re looking better every minute.” says Stein.
And while some of the major European based shipping companies may not be as familiar with Vancouver as L.A/Long Beach the maritime press are very aware of the importance of the Port of Vancouver.
“We had a press tour here last week (mid- October) we hosted 10 journalists from 16 publications, and we asked the three American journalists which port on the West Coast would they consider a maritime hub, and they all agreed, not L.A/Long Beach or Seattle/Tacoma but Vancouver, they don’t have the professional services we already have established.”
Vancouver, combined with the smaller northern Port of Prince Rupert handled 170 million tonnes of freight last year (140/30 respectively) and that is only going to increase, as both ports have ambitious expansion plans. But that is not enough, as Stein explains, Vancouver needs to build on what it has and become a true maritime hub, and build the knowledge infrastructure that requires.
“Maritime trade is going to escalate, probably quadruple by 2024, and according to an OECD report, 30 billion tonnes (up from 9 billion today) will be shipped globally by 2030. So yes it will mean more ships, but Vancouver has to attract more high value knowledge based people and companies, to add much greater value and economic.
“Singapore’s maritime trade adds 21 billion (USD) to their GDP, it’s $26 billion for Norway, so the potential of what we can do here is huge.”
She says one stumbling block to that end, is immigration. “Immigration needs to be revamped, the current immigration pathways are not sophisticated enough to bring in the high quality professionals we need. But that’s going to have to come from the federal government.”
Changing immigration policies won’t happen overnight, but it’s certainly doable, as Canada has had policies in the past to encourage high value immigration.
In the meantime, Stein says her organization is pursuing the other facets of building a maritime hub. One very achievable goal is education, to make it possible for people contemplating a career in the maritime industry to get the certification and credentials they need.
“We were at a shipping event in Greece, and out of that came a bilateral agreement between the University of the Aegean and UBC (University of British Columbia) as well as BCIT (British Columbia Institute of Technology) to create programs and build from there.”
Haijun Yu, managing director and founder of the Canadian registered Sealink Holdings Ltd. Consults with VIMC on their common goals, for Yu and Sealink it is the creation of a Vancouver Shipping Fund and Shipping Investment Company. That goal too requires, ideally, enhanced immigration procedures or visas to attract capital to the region.
“Wealthy Chinese families like to emigrate, and Canada is among their first choices, Vancouver especially, which offers a very good quality of life. They also want to diversify their investments, and that is [potentially] a big resource for us for capital.”
Yu’s company and VIMC have been successful in gaining great support from the provincial government of British Columbia, however, now they would like to see the federal government step in and allow ship owners to convert their working visas to permanent residency. Yu’s side of the equation involves creating a Canadian based shipping company to facilitate that.
“We’re basically focusing on building the ship owning company. We want to set up our own shipping company, which will attract more capital investment, and create high value jobs. We don’t talk to the government directly we go through VIMC.” He adds that this proposal would be a much more attractive avenue for emigration than the U.S’s EB-5 visa, that requires an investment of $500,000-$1 million (USD) and it would be a great bene t to Canada, as it would bring in capital focused on developing a major industry, crucial to the Canadian economy.
Stein as noted above, travels the world and brings professionals and journalists to Vancouver, promoting its advantages, but as also noted above, the city and port do not yet have the critical mass of companies and professionals to mirror the Asia/Paci c ports of Singapore and Hong Kong.
“Immigration in Canada is not costed to suit the shipping industry, and we need to bring in specialists with know how so we can grow the industry here. We wouldn’t be taking jobs away from Canadians; we’d be building a new opportunity. A fifth of all jobs in Canada are dependant on trade, so we have to make sure we continue to raise the profile of Vancouver globally.”
Stein notes that Vancouver’s attractive lifestyle means the city does a very good job of retaining professionals, and companies. “Once they’re here they won’t leave.”
Yu echoes that sentiment, and says both the shipping company proposal he is heading up and the VIMC represent a good opportunity to attract the right people, create jobs and bring in capital. But he cautions Canada needs to learn from its early mistakes with the handling of wealthy immigrants coming into Vancouver pre 1997 Hong Kong.
Canada offered a fast track to permanent residency to those investing $500 k or more in Canadian based companies.
But he says local support was wanting, and after anxieties over the 1997 hand-over of Hong Kong passed, most of that capital returned to China.
For his part, Yu’s company plans to raise $50 million (CAN) in equity capital, much of that from local investors, to take the initiative and demonstrate the attractiveness of their proposal.
“To start everything is difficult for sure, but we have already talked with many interested local investors, and we’ve been able to educate them on the shipping industry. Sure there are still challenges. Though, through our discussions with the many [potential] investors they see the value in our proposal. And the initial investment of $500 k is not a lot.”
Although some foreign investors may question Canada’s tax burden, but Stein says Canada is not at a disadvantage tax wise, even though centres like Singapore can be quite aggressive in their efforts to attract shipping companies.
“Singapore is a tax free zone, but it isn’t enshrined at the federal government level as it is in Canada’s income tax act. There are no mysteries where we’ll be tax wise 10 years from now, we o er the same advantages and stability.”
In 2014 the Canadian government overhauled the existing tax structure to streamline it and maintain that foreign-earned income on international shipping is not subject to Canadian taxation.
Yu also says that a Vancouver based shipping company would not suffer from any undue regulatory burdens.
“I don’t see any conflicts; ships can still be flagged BVIs or Panamanian.”
Yu says success will come for a shipping company proposal when cargo companies see the advantages of ship owning, which they are, and says his company will help them in developing their own fleets.
“Traditionally Canada is not a maritime nation, it’s similar to Australia in that regard. They have a great deal of resources and cargo owners only saw their job as getting cargo to port. But as shipping costs escalated, they lost a lot of control over the end price of their commodities.
Now they’ve realized they need to control logistics, and with the ability to ship to a foreign port they have much more power over price.”
He adds that while the VIMC proposal is clearly the correct strategy for the future of the Port of Vancouver, it will take years. The shipping company proposal will be realized much quicker and says Vancouver can be very competitive in cost comparisons to Norway and even Shanghai for staff and human resources.
Stein says she doesn’t expect Vancouver to be the top maritime centre in the world, “but top six would be nice.”