Summary of Cost-Benefit/Impact Analyses Projects and Initiatives to Be Cost Recovered Through GIF2022

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Summary of cost-benefit/impact analyses Projects and initiatives to be cost recovered through GIF2022

November 2020

Vancouver Fraser Port Authority

Vancouver Fraser Port Authority Summary of cost-benefit/impact analyses – projects and initiatives to be cost recovered through GIF2022

Contents 1. About GIF2022 and this document ...... 1 2. Pre-funding leverages government and partner funding ...... 2 3. Projects to be cost recovered through GIF2022 ...... 2 4. Cost-benefit/impact analysis summary ...... 3 4.1. Burrard Inlet Line Double Tracking Project ...... 3 4.2. Heatley Diamond Reconfiguration ...... 3 4.3. Highway 91/17 and Deltaport Way Upgrade Project ...... 4 4.4. Glen Valley Double Tracking ...... 4 4.5. GTCF Technical Analysis and Engagement ...... 5 5. Costs allocated to terminals east of the Second Narrows Rail Bridge ...... 5 6. Allocation of costs to trade areas and groups of terminals ...... 6

Appendices: • Greater Vancouver Gateway 2030 – May 2017 • Greater Vancouver Gateway 2030: Cost-Benefit Analysis Supplementary Documentation – November 6, 2017 • Gateway Rail Assessment 2030 Executive Summary – April 6, 2018 • Second Narrows Rail Bridge Capacity Analysis – Summary of Rail Capacity Analysis Methodology – November 6, 2020

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Vancouver Fraser Port Authority Summary of cost-benefit/impact analyses – projects and initiatives to be cost recovered through GIF2022

1. About GIF2022 and this document On January 1, 2022, the Vancouver Fraser Port Authority will implement a new fee called the Gateway Infrastructure Fee 2022 (GIF2022). The fee will recover 90% of contributions that the port authority is pre- funding, on behalf of industry, towards infrastructure projects and initiatives to increase the fluidity of the gateway. The port authority will be contributing the remaining 10% from its revenues.

This document, along with its appendices, provides an overview of cost-benefit/impact analyses related to the projects or initiatives that will be cost-recovered through GIF2022.

Four documents are appended:

Appendix name Author Overview

Greater Vancouver Gateway Greater Vancouver Gateway 2030 (GVG2030) is the Gateway 2030 Transportation Gateway Transportation Collaboration Forum’s (GTCF) (GVG2030) Collaboration strategy for smart infrastructure investment to remove Forum bottlenecks impeding the growth of trade, while addressing May 2017 the community impacts of goods movement and population growth.

This document outlines nearly 40 initial projects and initiatives identified by the GTCF through consultation with industry, municipalities, Indigenous groups and government agencies. Greater Vancouver HDR HDR’s report provides a cost-benefit analysis of full suite of Gateway 2030: Cost- projects outlined in GVG2030. This document was Benefit Analysis appended to the funding applications submitted by GTCF Supplementary members in 2017 and 2019 to the National Trade Corridors Documentation Fund. (HDR) Overall, this analysis determined that every $1 invested in November 6, 2017 GVG2030 projects would generate $2.32 in public benefits, for a total of $4 billion in benefits to Canadians. Gateway Rail Mott MacDonald Mott MacDonald was commissioned to interview industry Assessment 2030 stakeholders to understand forecasted growth to 2030 and (MM1) identify rail capacity. Mott MacDonald then modelled the rail network to identify and prioritize infrastructure April 6, 2018 investments on rail corridors for the year 2030 and beyond.

This document also provides a usage breakdown of infrastructure improvements by trade area. Second Narrows Rail Mott MacDonald This technical memo summarizes methodology and results Bridge Capacity of work undertaken to quantify the demand placed on the Analysis – Summary Second Narrows Rail Bridge from vessels transiting to and of Rail Capacity from terminals east of the bridge, and therefore the Analysis requirement for additional rail capacity to the North Shore Methodology Trade Area as a result of the operations of these terminals. (MM2)

November 6, 2020

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2. Pre-funding leverages government and partner funding Since 2017, the Vancouver Fraser Port Authority and its partners have been seeking federal funding for priority gateway infrastructure projects across the Vancouver gateway. Funding commitments and pre- funding contributions from the port authority, on behalf of industry, will leverage investments from others—including the federal government through the National Trade Corridors Fund, the provincial government, municipalities, railways and private sector industry—into trade-enabling projects that will benefit the greater Vancouver gateway.

The port authority has committed $380 million in pre-funding towards the capital projects and initiatives noted below, which will be cost recovered through GIF2022. By committing this pre-funding, the port authority and industry are leveraging approximately $2 million from the federal and provincial governments and other partners for every $1 million being pre-funded. 3. Projects to be cost recovered through GIF2022 This table outlines the projects and initiatives that will be cost recovered through GIF2022, and where information related to cost-benefit/impact analysis for each can be found:

Project name Pre-funding CBA/CIA ($Million) Pitt Meadows Road and Rail Improvements Project (Harris Road $61 GVG 2030, HDR, Underpass and Kennedy Road Overpass Project) MM1, MM2, Section 5 Mountain Highway Underpass Project $6 GVG 2030, HDR, MM1 Westwood Street and Kingsway Avenue Grade-Separations Project $2 GVG 2030, HDR, (planning study) MM1, MM2, Section 5 Pitt River Road and Colony Farm Road Rail Overpasses Project $2 GVG 2030, HDR, (planning study) MM1, MM2, Section 5 Burrard Inlet Road and Rail Improvements Project – Centennial $55 GVG 2030, HDR, Road Overpass, Waterfront Road Access Improvements, MM1 Commissioner Street Road and Rail Expansion, and rail improvements along CP Cascade Subdivision Burnaby Rail Corridor Improvement Project/Holdom Overpass $58 GVG 2030, HDR, (formerly North Shore Corridor Capacity Improvements Project) - MM1, MM2, Thornton Rail Tunnel Ventilation Upgrades, Rail Corridor Section 5 Improvements, Holdom Road Overpass Portside Blundell Overpass and Upgrades Project $42 GVG 2030, HDR, MM1 Fraser Surrey Port Lands Transportation Improvement Project $13 GVG 2030, HDR, MM1 BI Line Double Tracking Project $29 Section 4.1

Heatley Diamond Reconfiguration $6 Section 4.2

Highway 91/17 and Deltaport Way Upgrade Project $88 Section 4.3

Glen Valley Double Tracking $10 Section 4.4

GTCF Technical Analysis and Engagement $8 Section 4.5

Total $380

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4. Cost-benefit/impact analysis summary Please refer to the appendices for cost-benefit/impact analysis for the following projects and initiatives: • Pitt Meadows Road and Rail Improvements Project (formerly Harris Road Underpass and Kennedy Road Overpass Project) • Mountain Highway Underpass Project • Westwood Street and Kingsway Avenue Grade-Separations Project (planning study) • Pitt River Road and Colony Farm Road Rail Overpasses Project (planning study) • Burrard Inlet Road and Rail Improvements Project – Centennial Road Overpass, Waterfront Road Access Improvements, Commissioner Street Road and Rail Expansion, and rail improvements along CP Cascade Subdivision • Burnaby Rail Corridor Improvement Project/Holdom Overpass (formerly North Shore Corridor Capacity Improvements Project) - Thornton Rail Tunnel Ventilation Upgrades, Rail Corridor Improvements, Holdom Road Overpass • Portside Blundell Overpass and Upgrades Project • Fraser Surrey Port Lands Transportation Improvement Project

The remainder of this section provides analysis for projects and initiatives not covered in the appendices. 4.1. Burrard Inlet Line Double Tracking Project The Burrard Inlet Line (BI Line) is CN’s primary access to the South Shore Trade Area to service the Centerm and Vanterm container terminals. The BI Line Double Tracking Project would increase the capacity of the BI Line to support anticipated growth in trade through the Port of Vancouver. It would also make the south shore rail network more resilient to disruptions by ensuring that an alternate route for south shore access to the North American rail network is maintained.

Current rail operations along BI Line are constrained by not only the presence of five at-grade road crossings, which limit the flexibility of train positioning opportunities, but by the restriction associated with a capacity-constrained, single-track corridor. These limitations impact the ability of the rail corridor to accommodate growing container volumes through south shore terminals.

The BI Line Double Tracking Project will support efficient movement of Canadian goods and people by addressing a bottleneck in the rail corridor by adding capacity to optimize the use of switching windows on the Heatley Diamond crossing. At this location, the BI Line crosses the CP Cascade Subdivision, which is used for freight service and also accommodates the West Coast Express commuter rail service. Due to conflicts with competing rail moves on the CP corridor, this crossing limits the amount of time that BI Line can be used.

Adding a second track will allow for simultaneous rail movements to and from the south shore, enabling the movement of more volume within the same timeframe, thereby mitigating the impact of increased volumes on the CP Cascade Subdivision. The project will increase capacity and operational fluidity on rail corridors for both CN and CP, providing an increase in overall rail capacity to the South Shore Trade Area.

The port authority is pre-funding $29 million on behalf of industry. Other funding is being provided by the National Trade Corridors Fund and CN.

4.2. Heatley Diamond Reconfiguration The reconfiguration of the Heatley Diamond and associated works on the south shore of Burrard Inlet are intended to address current capacity challenges at the intersection of the north-south Burrard Inlet Rail Line and the main east-west Rail Corridor along the South Shore. The BI Line connects into one of the northernmost east-west rail lines via the Heatley Diamond today, and so north-south movements from the BI Line across the Heatley Diamond impacts east-west flows.

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While the design of the project is still under development, the objective would be to reduce the conflict at this intersection and improve fluidity, both north-south and east-west, for terminal facilities in the South Shore Trade Area.

The port authority is pre-funding $6 million on behalf of industry. Other funding is being provided by CP and CN.

4.3. Highway 91/17 and Deltaport Way Upgrade Project The Highway 91/17 and Deltaport Way Upgrade Project is a combination of improvements to existing Highway 91, Highway 17, Highway 91 Connector and Deltaport Way to improve travel safety and efficiency. These upgrades will improve local and commercial travel in the area and reduce conflicts between commercial vehicles and other traffic.

The project will result in: • Increased competitiveness for national and international commercial activity directed to and through the Pacific Gateway/Port of Vancouver • Output productivity gains for Canadian manufacturers for critical ‘just-in-time’ operations due to reduced transit times and greater reliability as a result of reduced delays • New Logistics Facility Construction: the construction of the new Highway 17 (SFPR) corridor has already attracted approximately $65 million in known investment for logistics facilities. The added access and capacity created by these improvements will create the conditions necessary to allow these initial facilities and others to expand in this area. These will further anchor the local economy with the expected creation of a myriad of supporting businesses.

This project will help meet forecasted container demand and provide additional calculated economic benefits of at least $427 million to the trucking sector. The construction of this project is also anticipated to generate an additional $156 million in gross domestic product (GDP) and almost 2,600 jobs.

The anticipated cost of the project is approximately $260 million with funding from the National Infrastructure component of the New Building Canada Fund, the Province of B.C., and the Tsawwassen First Nation. The port authority is pre-funding $88 million on behalf of industry.

4.4. Glen Valley Double Tracking Glen Valley Double Tracking would increase the capacity of the rail corridor to support anticipated growth in trade through the Port of Vancouver. Double tracking would address a significant current bottleneck created by 3.7 miles of single track within the 25-mile double-track rail corridor between the end of the Directional Running Zone (DRZ) and CN’s Thornton Yard.

Located near Abbotsford, B.C. on the CN Yale Subdivision, this 3.7-mile section of single track is operated bi-directionally and is within the corridor that CN and CP use to access the Roberts Bank Rail Corridor and terminals at Roberts Bank.

The project would add a second track in the corridor, removing the conflict between opposing train movements causing congestion and delays while one or more trains wait for the single-track section to clear. The project would increase capacity and fluidity to better accommodate the anticipated 50% growth in train volumes to and from import and export facilities at Roberts Bank and in the rest of the Lower Mainland.

The port authority is pre-funding $10 million on behalf of industry. Other funding is being provided by the National Trade Corridors Fund and CN.

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4.5. GTCF Technical Analysis and Engagement The Gateway Transportation Collaboration Forum (GTCF), established in summer 2014, is a collaborative effort to ensure the Greater Vancouver Gateway is ready to manage growing trade. It consists of Transport Canada, the B.C. Ministry of Transportation and Infrastructure, the Vancouver Fraser Port Authority, TransLink and the Greater Vancouver Gateway Council.

Technical analysis and engagement undertaken by the GTCF has been critical in understanding the interests and issues facing trade-related transportation in the Greater Vancouver area, and has resulted in the identification and planning of strategic infrastructure and supply-chain efficiency initiatives, and securing federal and partner funding to advance priority projects.

Funding for the ongoing work of the GTCF will support the identification and advancement of infrastructure and technology initiatives that maintain existing trade volumes to continue, optimize existing infrastructure, and prepare for and unlock potential terminal investments to accommodate forecasted increases in trade over the coming decades. The focus will shift to what projects will be required to manage growth in trade up to and beyond 2030, and to maintain the momentum that has been built since 2014 in leveraging federal and agency funding.

The port authority applied for funding from the National Trade Corridors Fund toward this initiative in spring 2020. If successful, the amount to be cost recovered from industry would be reduced.

5. Costs allocated to terminals east of the Second Narrows Rail Bridge

Deep-sea vessels transiting to and from terminals east of the Second Narrows Rail Bridge require the raising and lowering of the Second Narrows Rail Bridge. This in turn restricts rail capacity to/from the North Shore Trade Area, and has contributed to the need for investments to support rail to the North Shore Trade Area.

The Burnaby Rail Corridor Improvements and other GVG2030 projects will increase the capacity of the rail network serving the North Shore Trade Area. With those projects in place, and based on forecasts of rail and vessel volumes, total demand placed on the Second Narrows Rail Bridge in 2030 will be equivalent of 40.1 trains per day.

Of this, 25.2 trains per day, or 63% of total demand, would be attributed to rail movements to/from the North Shore Trade Area.

The remaining 14.9 trains per day, or 37% of total demand, would be as a result of vessel demand to and from the six bulk terminals located east of the Second Narrows Rail Bridge: IOCO, Westridge, Parkland, PCT, Shellburn and Suncor. Therefore, 37% of the cost of projects that will increase the capacity of the rail network serving the North Shore Trade Area will be allocated to the cross-berth volumes from these bulk terminals.

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6. Allocation of costs to trade areas and groups of terminals Based on the cost-benefit/impact analyses, the port authority has allocated the costs of projects and initiatives to be recovered through GIF2022 as follows:

Project name Pre- RBTA SSTA NSTA SNE FRTA funding ($Million) Pitt Meadows Road and Rail $61 59% 20% 11% 10% Improvements Project (formerly Harris Road Underpass and Kennedy Road Overpass Project) Mountain Highway Underpass Project $6 100%

Kingsway Avenue Overpass (planning $2 48% 28% 24% study)

Westwood Street Underpass (planning 100% study) Pitt River Road and Colony Farm Road $2 48% 28% 24% Rail Overpasses Project (planning study)

Burrard Inlet Road and Rail Improvements $55 100% Project – Centennial Road Overpass, Waterfront Road Access Improvements, Commissioner Street Road and Rail Expansion, and rail improvements along CP Cascade Subdivision BI Line Double Tracking Project $58 100%

Thornton Rail Tunnel Ventilation Upgrades $42 63% 37%

Rail Corridor Improvements and Holdom 27% 46% 27% Road Overpass Portside Blundell Overpass and Upgrades $13 100% to laden containers port-wide Project Fraser Surrey Port Lands Transportation $29 100% Improvement Project Heatley Diamond Reconfiguration $6 100%

Highway 91/17 and Deltaport Way $88 85% 15% Upgrade Project Glen Valley Double Tracking $10 34% 20% 17% 10% 19% GTCF Technical Analysis and $8 36% 24% 23% 13% 4% Engagement $380

Acronyms: RBTA – Roberts Bank Trade Area SSTA – South Shore Trade Area NSTA – North Shore Trade Area SNE – Terminals east of the Second Narrows Rail Bridge FRTA – Fraser River Trade Area

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GATEWAY TRANSPORTATION COLLABORATION FORUM GATEWAY TRANSPORTATION GREATER VANCOUVER COLLABORATION FORUM GATEWAY 2030

TABLE OF CONTENTS

Executive Summary ��4

Map - Key Gateway Activity Centres and Railway Routing in Greater Vancouver ��10

Map - Rail Network Bottleneck Identification & Problem Definition ��11

Map - Road Network Issue Identification & Problem Definition ��12

Map - Potential Project Bundling ��13

Bundle 1 - Improvements Along the Rail Corridor Connecting to the North Shore and the South Shore of Burrard Inlet ��14

Bundle 2 - Improvements Along the Rail Corridor Connecting to the Burrard Inlet and The Fraser River ��20

Bundle 3 - Burrard Inlet Road & Rail Improvements Program ��26

Bundle 4 - Fraser Richmond Port Lands Access Projects ��32

Bundle 5 - Fraser Surrey Port Lands and Surrey Industrial Area Access Project ��38

Bundle 6 - Roberts Bank Rail Corridor Improvements ��42

Bundle 7 - Roberts Bank Terminal Access and Goods Movement Improvements ��46

Other Projects ��50

Appendix A ��56

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EXECUTIVE SUMMARY

GREATER VANCOUVER GATEWAY 2030

Creating strategic, nationally significant trade corridors to ensure the efficient movement of Canadian products to the world

Preamble

The transportation sector plays a critical role in Canada’s economy, in particular British Columbia and western Canadian provincial economies. A 2016 study by the Conference Board of Canada identified transportation and warehousing as the most concentrated industrial cluster in the Greater Vancouver area relative to the rest of Canada. The sector is growing at rates exceeding the national average and has created more than 30,000 jobs in Greater Vancouver in the last 25 years.

A new 2017 study by the Federal Minister of Finance’s Advisory Council on Economic Growth emphasizes the importance of trade to the Canadian economy and describes how the country’s trade-related infrastructure is lagging globally. Efficient infrastructure to strengthen road, rail and port networks is required in the coming years for Canada to overcome this challenge, and the study put forward four recommendations to enable Canada to become a global trading hub. One of those recommendations is investing in trade-enhancing infrastructure that the Government of Canada is rightfully implementing.

The Greater Vancouver Gateway 2030 initiative, our strategy for smart infrastructure investment, is guided by the Government of Canada’s commitment to strengthen trade corridors in order to increase trade and access global markets. Transportation 2030, announced by Transport Canada Minister Garneau in 2016, outlined how the Government of Canada will be investing $10.1 billion over the next 11 years in transportation infrastructure projects to help eliminate bottlenecks and build more robust trade corridors that will improve the reliability of our supply chain systems and grow our economy. For this investment to be successful, a strategic approach is needed to drive funds to where they will have the greatest impact for Canada’s economy.

Additionally, government has announced the creation of an infrastructure bank, which will unlock economic potential and provide access to additional funding. The Greater Vancouver Gateway 2030 initiative is intended to provide information on trade transportation infrastructure required to strengthen the gateway and west coast goods and people movement through projects identified by the Gateway Transportation Collaboration Forum (GTCF).

Success of this new infrastructure program will be realized far more quickly and effectively if a secretariat under Transport Canada is in place to oversee joint funding opportunities for common infrastructure projects. These projects are national in significance and have business cases that will demonstrate how the projects will deliver long-term economic benefits. These new projects will build on the success of projects funded under the Asia Pacific Gateway Corridor Initiative (APGCI) and maximize the use of existing transportation infrastructure. While the foundation is in place, further investment is required to keep pace with Canada’s growing trade needs. The Greater Vancouver Gateway 2030 initiative aligns with the broader work of the Pacific Gateway Alliance (PGA) - a partnership between governments, ports, and rail –aimed at ensuring the Pacific Gateway is globally competitive.

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Purpose

This briefing package provides an overview of: • the results achieved by the GTCF since its inception in summer 2014; • the projects identified and packaged as the Greater Vancouver Gateway 2030 initiative, together with the region’s major bridge replacement and associated corridor upgrade projects; and, • the significant opportunity for the gateway and Canada associated with these projects.

As an extension of the GTCF, Greater Vancouver Gateway 2030 brings together a broad group of stakeholders that are presenting projects as bundles that have come together through rigorous studies and extensive engagement.

• Bundle 1 contains improvements along the rail corridor connecting to the North Shore and the South Shore of Burrard Inlet. • Bundle 2 contains improvements along the rail corridor connecting to the Burrard Inlet and the Fraser River. • Bundle 3 captures the Burrard Inlet Road & Rail Improvements Program. • Bundle 4 contains projects to improve access to the Fraser Richmond Port Lands. • Bundle 5 captures the Fraser Surrey Port Lands and Surrey Industrial Area Access Project. • Bundle 6 contains improvements to the Roberts Bank Rail Corridor • Bundle 7 contains improvements designed to improve access to Roberts Bank Terminal.

In addition to these project bundles, there are several major projects designed to alleviate bottlenecks on critical trade corridors in the region, including the Patullo Bridge Replacement and Corridor Upgrade Project, the George Massey Tunnel Replacement Project, and Highway 1 widening.

GTCF Overview

The Gateway Transportation Collaboration Forum (GTCF), established in summer 2014, is a collaborative effort to ensure the gateway is ready to manage growing trade. The GTCF is primarily focused on identifying gateway-related projects of national significance: highways and major roads and bridges, rail infrastructure, port infrastructure and disaster mitigation infrastructure.

The GTCF Steering Committee consists of senior executives from Transport Canada, B.C. Ministry of Transportation and Infrastructure, Vancouver Fraser Port Authority, TransLink and Greater Vancouver Gateway Council. Transport Canada is responsible only for facilitating collaboration and consensus among members in support of the committee’s mandate and does not participate in the evaluation or endorsement of recommended transportation infrastructure projects. Transport Canada also does not discuss project funding nor is it party to funding applications.

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Overview of the Greater Vancouver Rail Network

The Greater Vancouver rail network connects the Port of Vancouver’s 27 major marine cargo terminals with the North American rail network, providing Canadian producers and consumers with trade access to more than 170 international trading economies. Rail plays a significant role in supporting Canada’s largest and most diversified Port area.

Canadian National Railway (CN) and Canadian Pacific Railway (CP) are the primary rail operators within the rail network. In the Fraser Valley, CP’s mainline is located on the north bank of the Fraser River and CN’s mainline is located along the south bank of the Fraser River. To increase the efficiency of private and public infrastructure, the two railways have developed a series of innovative cooperative operating agreements. All of the rail companies across the network cooperate to make the best use of the rail infrastructure, equipment and resources to maintain system reliability and cost effectiveness resulting in competitive trade for Canada.

The existing rail network is being utilized as efficiently as possible. However, these operational efficiencies alone will not be enough to support the significant Greater Vancouver gateway opportunities on the horizon. More infrastructure is required to link to road interfaces and mitigate the regional impacts of road-rail interactions.

Overview of the Greater Vancouver Road Network

The road network and goods movement in Greater Vancouver is governed by road authorities at the provincial, regional, and municipal level. • B.C. Ministry of Transportation and Infrastructure is responsible for the provincial highway network. • TransLink, in partnership with municipalities, plans the region’s major road network, approximately 600 kilometres of road that facilitates the safe and efficient movement of people and goods across the region and connects the provincial highway system with the regional road and bridge network. TransLink also owns and operates four bridges. • Municipalities are responsible for the local road network and designating truck routes.

The overall movement of goods and trade can be improved by addressing infrastructure opportunities targeted at improved road-rail interactions.

Economic Impacts from Greater Vancouver Gateway 2030 Project Construction and Maintenance

According to a recent economic impact analysis study conducted by Deloitte, and accounting for the direct, indirect and induced economic impacts, construction of the more than 30 projects identified in Greater ancouvV er Gateway 2030 will: • stimulate approximately $4.3 billion of Canadian industry output; • contribute $2.3 billion to Canadian GDP; • create or sustain 30 thousand jobs across a broad range of industries; and, • generate $1.6 billion in labour income.

It is estimated that ongoing maintenance activities will have an additional annual impact of approximately: • $5.3 million of Canadian output; • $3 million to Canadian GDP; and, • $2 million in labour income (net of the existing maintenance activity on current infrastructure).

These impact estimates are based on preliminary costing of the more than 30 projects, which are still in planning stages. As such, the impact estimates are subject to change as projects are included or excluded and cost estimates are refined.

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Structuring (Dynamic) Economic Impacts

Beyond the construction and maintenance impacts, the proposed projects are expected to bring critical economic impacts, as well as a range of social and environmental benefits. The impacts of a similar set of infrastructure projects recently completed in the North Shore Trade Area were assessed for comparison and found to have resulted in: • Increased Import/Export Capacity: By alleviating critical transportation capacity constraints, the projects have enabled a significant increase in trade through the gateway. Terminal operators report anywhere between 30 per cent and 160 per cent increase in capacity. • Stimulated Private Sector Investment: The projects have stimulated follow-on private sector investment, which was approximately five times the size of the original project expenditure. The ultimate economic impact therefore exceeded the economic impact of the original investment multi-fold. • Improved Productivity/Efficiency: The projects have significantly improved productivity across the supply chain. For example, one of the main train operators reports that they are able to eliminate one out of seven trains to transport the same volume, while some terminal operators are reporting increases of 33 per cent in unloading productivity and as much as a two-fold increase in loading productivity. • Enhanced Competitiveness/Reputation: The projects have enhanced the international competitiveness and reputation of both the Port of Vancouver as well as the products exported via its terminals. For example, following the north shore projects, the gateway attracted an international investment commitment of over $500 million for a new grain terminal.

Social and Environmental Impacts of the Greater Vancouver Gateway 2030 Projects

The Deloitte study of similar, recently-completed projects in the North Shore Trade Area also found that they have delivered important social and environmental impacts to the local community and the province, including: • Public Safety: Elimination of interface between trains and pedestrians, bikes, and vehicles has significantly reduced the risk of traffic accidents and enabled faster and more secure access for first responders to the terminal area. Structural improvements have stabilized the road banks and hill sides, reducing the risk of landslides. • Improved Mobility: Major congestion points have been removed in a community experiencing rapid growth in traffic. Reduced congestion has improved mobility for local residents, which is likely to support more flexibility in work arrangements and higher productivity due to reduced commuting time. • Reduced Emissions: Elimination of wait times at train crossings means reduced emissions and reduced energy requirements.

Social and Environmental Impacts of the Greater Vancouver Gateway 2030 Projects cont’d

• Reduced Noise: Noise pollution has been significantly reduced by decreasing industrial noise associated with rail car handling, minimizing the stopping and starting of trains at crossings, and reducing safety-related train whistles. The projects have stimulated new investment by terminal operators in noise barriers and mufflers. • Urban Development: Terminal expansion stimulated by the projects will allow re-location of ship-handling and conversion of land into an industrial park. Some of the projects contributed to the rezoning of the adjacent residential area to higher density, which is expected to stimulate additional development activity in the area. • Improved Standard of Living: The extension of the community Spirit Trail, introduction of bike lanes, improvements in traffic flow, reduction of noise, stabilization of unsafe slopes, and stimulated urban development have positively impacted the general standard of life in the area. More broadly, given that nearly 40 per cent of the B.C. economy is driven by exports, the export capacity expansion, improved productivity, and enhanced export competitiveness are critical for the long-term standards of life in the province.

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Benefits of Project Bundling

There are multiple Canadian precedents for achieving similar benefits from bundling infrastructure projects.

Bundling projects can provide a number of strategic and technical benefits to the gateway and stakeholders, including: • Higher capacity expansion by optimizing flow over the entire corridor, as opposed to spot solutions that create constraints elsewhere; • Better funding leverage by including more partners and spreading partner funding across projects to fill funding gaps; • Greater competition for project design and construction by offering larger scale opportunities; • Optimized construction and design innovation given the similar nature of the assets and ability to spread research and development costs over a larger range of projects; • Accelerated project delivery timelines given ability of the contractor and developer to move and rotate different construction crews between the projects; and, • Lower costs to procure and administer by using a single procurement approach.

The following sections in this package provide a summary of each proposed project bundle that combined have the potential to bring significant benefit to trade and investment in Canada. The bundles are presented both as a broader narrative as well as across a Greater Vancouver map to demonstrate the current bottlenecks and how they will be alleviated with the delivery of these projects.

Next Steps

Over the coming months, GTCF members, under the Greater Vancouver Gateway 2030 umbrella, will continue working with local government, industry, First Nations and other stakeholders1 to confirm priority projects, gain support, and secure funding commitment. The Greater Vancouver Gateway 2030 program is made up of project proponents with strong track record of leading and implementing large-scale infrastructure projects of national significance through collaborative intergovernmental initiatives such as the APGCI program.

In brief, Canada’s economy depends on a robust western Canadian trade-enhancing transportation infrastructure network. The Greater Vancouver Gateway 2030 initiative and the project bundles recommended within are designed to maximize the use of existing infrastructure and to build on the previous success of the APGCI and provide a clear path to ensuring Canada continues to grow as a global trading hub.

1 Please see Appendix A for a full list of industry stakeholders, local governments, First Nations, and others who have been actively engaged over the past two years as part of the GTCF Working Groups and studies.

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GATEWAY TRANSPORTATION Page 9 | DRAFT | MAY 2017 COLLABORATION FORUM GREATER VANCOUVER GATEWAY 2030

MAP - KEY GATEWAY ACTIVITY CENTRES AND RAILWAY ROUTING IN GREATER VANCOUVER

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MAP - RAIL NETWORK BOTTLENECK IDENTIFICATION & PROBLEM DEFINITION

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MAP - ROAD NETWORK ISSUE IDENTIFICATION & PROBLEM DEFINITION

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MAP - POTENTIAL PROJECT BUNDLING

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BUNDLE 1 - IMPROVEMENTS ALONG THE RAIL CORRIDOR CONNECTING TO THE NORTH SHORE AND THE SOUTH SHORE OF BURRARD INLET

Project Description

Bundle 1 proposes to address key issues on the rail network within the Vancouver Lower Mainland area on the north side of the Fraser River spanning from the Fraser Valley to the tidewater Port of Vancouver terminals on the Inner Harbour and the Fraser River.

The projects in Bundle 1 are complementary to each other and the combined delivery of the projects will:

• Maximize the use of current infrastructure assets to accommodate current and growing trade volumes; • Facilitate increased rail corridor capacity and increased rail service efficiency and reliability to the South Shore, North Shore and Fraser River Trade Areas; • Generate significant community, commuter and goods movement, road user benefits and enhance the safety at at-grade rail crossing and on the road network; • Accommodate anticipated growth in rail and road traffic; • Provide local and Indigenous community benefits; and, • Reduce the impacts of national trade on local communities.

Project Cost

Bundle 1 Projects Estimated Capital Cost Location Pitt River Road Overpass $61 million Coquitlam Colony Farm Road Overpass $35 million Coquitlam Kingsway Avenue Overpass $75 million Coquitlam & Port Coquitlam Westwood Street Underpass $75 million Coquitlam & Port Coquitlam Kennedy Road Overpass $25 million Pitt Meadows Harris Road Underpass $46 million Pitt Meadows Highwayay 7 at Allen Way Interchange / Harris $129 million Pitt Meadows Road Interchange Bell Road Overpass $29 million Abbotsford Bundle Total: $475 million

Potential Project Partners

• Port of Vancouver • Kwikwetlem First Nation • Municipalities (City of Abbotsford, • Government of Canada • Translink City of Pitt Meadows, City of Coquitlam, City of Port Coquitlam) • Province of British Columbia • Railways (CP, CN)

Why the Bundle is Required

These strategic infrastructure improvements will provide significant benefit to the economies of Canada and provinces beyond British Columbia by ensuring new and existing container, bulk, and break-bulk shippers in Alberta, Saskatchewan, Manitoba, and across Canada continue to have access to a safe, efficient, reliable, and cost-competitive transportation network with capacity to accommodate future volume increases. In 2015 alone, bulk shippers transported over 53 million tonnes of cargo through the road and rail corridors accessing the North Shore and South Shore terminals while South Shore container terminal handled over 1.2 million TEUs1 .

1 Twenty-foot Equivalent Units.

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BUNDLE 1 - IMPROVEMENTS ALONG THE RAIL CORRIDOR CONNECTING TO By preserving the Port of Vancouver’s ability to accommodate new customers and forecasted cargo growth of 4.5% in each of the next five years2 the increased capacity of the transportation corridor facilitated by these projects will enable future THE NORTH SHORE AND THE SOUTH SHORE OF BURRARD INLET cargo expansion, enhance shippers’ confidence in their industry sector investments, and ensure Canada remains competitive with global markets.

Key Commodities

The key commodities moved on this rail corridor to and from marine terminals include:

• Western Canada agriculture • Saskatchewan potash; • Mining mineral ores and products including grain, canola, • B.C. metallurgical coal; concentrates; pulses, and others; • Vegetable seed oils; • Fertilizers and sulphur; and, • Canadian forest products including • Container cargo import and pulp, lumber, wood pellets; exports.

Map of Bundle Project Locations

Problem Definition

The GTCF Fraser River Trade Area Study and stakeholders identified these projects as key infrastructure opportunities to improve goods movement through the Greater Vancouver Gateway. Coupled together, these projects will increase the efficiency of this entire corridor rather than addressing individual issues and pushing constraints downstream.

The road network’s efficiency, reliability, and safety are impacted by the nine at-grade rail crossings identified within Bundle 1 suite of projects. The at-grade crossings along this corridor are currently subject to some of the highest frequency of daily crossing delays and they will see a greater frequency of train crossings as the Vancouver Gateway grows to accommodate the increased demand for access tidewater port terminals. With each train crossing, commuters and goods movement vehicles experience travel time delays and must find an alternative route or wait for the train to clear the crossing.

2 Vancouver Fraser Port Authority, 2016, 2015 Financial Report, p. 34 - Management Discussion and Analysis Section

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The provision of grade separations will eliminate road traffic congestion due to increased rail traffic, will provide certainty of crossing the rail corridor for emergency services and first responders, minimize train whistling and reduce greenhouse gas emissions from idling vehicles during train events. The rail network operators will see increased mainline and yard operations efficiencies by enabling the optimization of corridor flows and yard switching activities.

Specific road and rail corridor issues to be addressed are:

Issue 1: Improving Mission Rail Bridge Staging Capacity Issue Description Mitigation(s) Mission Rail Bridge Staging Area: Bell Road Overpass: • West bound trains heading into the Greater Vancouver gateway are • The Bell Road Overpass Project will facing delay as west bound trains exiting the Fraser Canyon directional result in the elimination of three running zone and seeking to cross the Mission Rail Bridge are currently adjacent rural at-grade crossings and staging or waiting on the CN Mainline, thus impeding all other replace them with a single overpass. westbound traffic accessing the gateway. The delay will be exacerbated The project will increase safety as the number of trains at this location increases (see “Key Gateway by closing each of the crossings. Activity Centres and Railway Routing in Greater Vancouver” map). Eliminating the at-grade crossing will • Three rural road at-grade crossings are currently impeding the railway’s enable the railways to create a train ability to expand storage capacity at this location. The crossings need staging area for westbound trains accessing the Mission Rail Bridge. to be eliminated to enable a new rail siding to accommodate train traffic seeking to cross the Mission Rail Bridge.

Issue 2: Improving the road and rail network in Pitt Meadows Issue Description Mitigation(s) CP Intermodal Yard (Pitt Meadows): Harris Road Underpass Project: • CP Intermodal Yard operations are constrained by the Harris • The Harris Road Underpass Project will eliminate Road at-grade crossing at the east end of the intermodal the at-grade crossing on Harris Road. The rail yard. Elimination of the at-grade crossing will enable crossing currently bisects the community of greater switching and train building efficiencies, provide the Pitt Meadows. By eliminating the crossing, the potential to add another mainline track, and increase access eastern boundary of the CP Intermodal Yard to intermodal services at Vancouver Intermodal Facility. will no longer constrain CP’s ability to assemble • The Harris Road at-grade crossing impacts the reliability of intermodal trains. emergency services for the community on both sides of the crossing. Kennedy Road Overpass Project: • Transport Canada, in its list of top high risk at-grade • The Kennedy Road project will grade separate the crossing, identified the Harris Road crossing as a hotspot for municipal trucking road at the west end of the CP potential accidents. Intermodal yard. The Project will work towards maximizing the efficiency of the Pitt River Rail • Kennedy at-grade crossing is located on the western Bridge as well as the rail yard. boundary of the intermodal yard. This municipal trucking route constrains operational efficiency of the rail yard and Highway 7 at Harris Road/Allen Way access to the Pitt River Rail Bridge. Interchange Project:

Lougheed Highway • The interchange will eliminate the Lougheed Highway intersections at Harris Road and at • The provincial Lougheed highway intersection at Harris Road Allen Way. Doing so will increase the fluidity of has been identified by the BC MOTI as a key candidate for a the road network between the Pitt River Bridge grade separated interchange that will increase the fluidity, and connection to the Golden Ears Bridge while capacity, and safety of the Lougheed corridor. improving access to industrial properties, such as CP’s Vancouver Intermodal Terminal.

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Issue 3: Improving the road and rail network in Coquitlam and Port Coquitlam Issue Description Mitigation(s) CP Coquitlam Yard & the Cascade Subdivision: Westwood Street Underpass Project: • CP Coquitlam Yard operations are constrained • The Westwood Street Underpass project will eliminate the last by the arterial road at-grade crossings of remaining major public at-grade crossing along the Cascade Westwood Street and Kingsway Avenue at Subdivision between CP’s Coquitlam Yard and the Port South the west end of the yard. Elimination of the Shore terminals. Grade separating the arterial road crossing will at-grade crossings will generate significant enable increased CP yard train building flexibility. travel time savings for the road network while enabling greater switching and train building Kingsway Overpass Project: efficiencies as well as the potential addition of • The Kingsway Overpass project will increase the operational another mainline rail track. capacity of the Westminster Subdivision by eliminating the • Transport Canada, in its list of top high risk at- arterial road at-grade crossing. Along with the Pitt River and grade crossing, identified the Westwood Street Colony Farm projects, this project enables siding expansion and crossing as a hotspot for potential accidents. double tracking along this rail corridor.

Issue 4: Increasing rail staging and meet and pass capacity along the Westminster Subdivision Issue Description Mitigation(s) CP Westminster Subdivision: Pitt River Road Overpass Project: • The CP Westminster Subdivision currently • The Pitt River Road Overpass project will provide this major cannot add staging capacity because of roadway with a grade separation of the CP Westminster insufficient staging length between at-grade Subdivision near Lougheed Highway. The new intersection crossings. and grade separation design includes access to the primary • Enabling CP to expand capacity by adding access point to the new Riverview development and mental health center. Eliminating the at-grade crossing at Pitt River a siding along this corridor will increase rail Road will also provide substantial commuter traffic time saving access to the North Shore, Fraser River, and to Coquitlam and Port Coquitlam communities. When coupled Lulu Island (Richmond) terminals. together with the Colony Farm Road overpass, the Project will enable the Westminster subdivision to have sufficient staging Access to Riverview Hospital site length between Kingsway Avenue and New Westminster to • Grade separating Pitt River Road will address facilitate capacity expansion through the addition of a new siding the need to provide a new road connection or double tracking. to the Riverview Hospital redevelopment site and alleviate queuing on Pitt River Road and Colony Farm Road Overpass Project: Lougheed Highway intersection as a result of • The Colony Farm Road Overpass Project will eliminate an the at-grade crossing closure from increasing intersection on Lougheed Highway and the Colony Farm Road rail traffic. at-grade crossing. The project will provide significant travel- time savings by eliminating movements at the intersection at Access to the Kwikwetlem First Nation Lougheed Highway and Colony Farm Road. The new overpass Reserve and Colony Farm Park will provide reliable multi-modal access from Lougheed Highway • Grade separating Colony Farm Road will to the Kwikwetlem First Nation (KFN) Reserve, the planned KFN address reliable multi-modal access to commercial development, the Colony Farm Regional Park, and the Kwikwetlem First Nation Reserve, the Forensic Psychiatric Hospital. Coupled with the Pitt River the proposed First Nation’s economic Road Overpass project, this road rail grade separation will development site, and Colony Farm facilitate future capacity expansion along the CP Westminster Regional Park while eliminating intersection Subdivision through additional siding or double tracking. movements along Lougheed Highway.

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Issue 5: West Coast Express Service Reliability Issue Description Mitigation(s) • The West Coast Express (WCE) leases access from CP’s South Shore rail corridor to • The proposed provide regional commuter passenger rail services from Mission to downtown Vancouver improvement for during the morning and evening commuter peak times. Issues 2 and 3 • Operations began in 1995 under a 20 year lease and were recently renewed until 2025. will increase the operational efficiency • Since inception, passenger and freight demand have each increased substantially, which and capacity of the CP is now creating rail congestion issues along the corridor. Cascade subdivision • Congestion has created WCE service reliability issues as trains are increasingly delayed which will reduce as freight and passenger movements compete for track availability. For example, during the frequency of a 47-day period in late October to December 2016, 69 eastbound evening trains were conflicts between the delayed for a cumulative effect of 319 station delays and 80 hours in delays. commuter passenger rail service and freight • Without greater service reliability, optimizing ridership to encourage a commuter modal traffic, thus increasing shift to WCE will be a challenge. the reliability and in • Without greater capacity along the rail corridor, there is significant uncertainty that CP turn subscription rate would be interested in extending the WCE lease for an additional term. of the WCE service.

Issue 6: New Westminster Rail Bridge Congestion and Capacity Constraints Issue Description Mitigation(s) The New Westminster Rail Bridge (NWRB) is consistently operating at • Increased capacity along the CP corridor or above its capacity. The single-track bridge provides one of two rail (CP Westminster Subdivision) could links across the Fraser River for all rail operators and is a key part of the provide an attractive alternative for rail corridor, carrying traffic serving the North Shore terminals. Where North Shore terminal traffic to utilize possible, developing operational or train routing alternatives to reduce this corridor, which could reduce demand the demand on the NWRB could extend the operational life of the federal on the NWRB and extend the life of the owned infrastructure asset. federal asset. When combined with the improvements proposed in Bundle 2, the The long-term solution to potentially expanding or replacing the rail feasibility of routing trains over the CP bridge is outside of the current federal funding program window. The Westminster Subdivision instead of over GTCF bundles focus on maximizing the operational capacity and lifespan the NWRB increases substantially. of the current bridge asset.

Economic Development

Marine terminal traffic demand is strong as inland producers and consumers seek increased access to global markets. In response to this demand, South Shore terminal operators are currently investing in increased capacity and modernization to remain competitive. For example, Port of Vancouver recently approved permits for grain terminal projects at Alliance Grain, Columbia Containers, and Viterra Pacific Grain Elevators and a potash terminal at Pacific Coast Terminal. In addition, an application is under review for container expansion at the Centerm container terminal. Similar investments to those on the South Shore are taking place at North Shore and Fraser River Terminals

Bundle 1, with an estimated capital expenditure of $475 million will generate the following direct, indirect, and induced economic benefits during construction period3.

3 Metrics are derived from Deloitte LLP’s “Vancouver Gateway Economic Impact Analysis of Infrastructure Projects”. January 2017

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Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and consumers to compete in international markets. The national transportation system supports economic growth, job creation, and Canadian communities. Maintaining and expanding the efficient network requires investment in the supply chain by public and private sectors. In doing so Canada, the rail corridors, and the host communities mutually benefit.

Social and Environmental Benefits: Economic Benefits: • Enhanced public safety; • Increased GDP, taxes, and jobs growth during and after • Improved mobility; construction; • Improved transit service; • Follow-on private sector investments; • Reduced emissions from vehicles and trains; • Increased import/export capacity; • Reduced noise pollution train whistling; • Increased competitiveness of the terminal and Canadian products; • Reliable crossings of the rail corridor; • Stronger international reputation; • Facilitation of development; • Enhanced efficiency and international competitiveness • Improved standard of living and access to parks; for Port of Vancouver, the Pacific Gateway, and Canada; • Enhanced emergency response times; • Increased Fraser River, North Shore, and South Shore • Reduced impacts of regional and national trade on local capacity handling of bulk commodity exports and communities; container trade; • Improved access to Indigenous communities; • Enablement of Port of Vancouver to serve future cargo expansion on the North Shore, South Shore and Fraser • Improved multi-modal access to regional park; River; • Improved safety by removing at-grade crossings; and, • Improved reliability and reducing rail corridor transit • Improved nuisance noise levels through the elimination times and operating costs; of at-grade crossing. • Increased employment and tax revenues at the municipal, provincial and federal levels; • Generation of productivity gains for the Canadian economy; and, • Reduced potential economic disruptions or foregone economic activity.

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BUNDLE 2 - IMPROVEMENTS ALONG THE RAIL CORRIDOR CONNECTING TO THE BURRARD INLET AND THE FRASER RIVER

Project Description

Bundle 2 is a suite of interdependent projects that will facilitate increased trade along rail corridor servicing Port of Vancouver terminals on the North and South Shores of the Burrard Inlet, while generating significant community and road user benefits as well as increased at-grade rail safety.

The bundle will address rail tunnel ventilation, rail train staging capacity, road rail grade separations, interchange replacement, and intersection improvements. Construction of the improvements is to occur on or adjacent to existing road or rail corridors in Burnaby, New Westminster, and Coquitlam.

Project Cost

Bundle 2 Projects Estimated Capital Cost Location New Westminster Road / Rail Grade Separation and crossing $130-240 million New Westminster closures Brunette Interchange Upgrades $380-400 million Coquitlam North Shore Corridor Capacity Improvement Project Burnaby • Thornton Rail Tunnel Ventilation Improvements $15 million • Douglas Grade Separation $70 million • Rail Corridor Improvements (~5 miles of track) $35 million • Retrofitting Tugs with folding masts $2 million

North Fraser Way at Marine Way Intersection Improvements $4 million Burnaby Bundle Total: $636 - 766 million

Potential Project Partners

• Port of Vancouver • Municipalities (City New • Railways (CP, CN, BNSF) • Government of Canada Westminster, City of Burnaby, City • TransLink of Coquitlam) • Province of British Columbia

Why the Bundle is Required

These strategic infrastructure improvements will provide significant benefit to the economies of Canada and provinces beyond British Columbia by ensuring new and existing container, bulk, and break-bulk shippers in Alberta, Saskatchewan, Manitoba, and across Canada continue to have access to a safe and cost-competitive transportation supply chain with the capacity to accommodate future volume increases. By preserving and enhancing the Port of Vancouver’s ability to accommodate cargoes, the increased capacity of the transportation corridor facilitated by these projects will enable future cargo expansion, enhance shippers’ confidence in their industry sector investments, and ensure Canada remains competitive with global markets.

In 2015, the North Shore Terminals alone handled an estimated 33.5 million tonnes of grain, coal, potash, and other products providing Canadian producers with access to international markets. Terminals on the North Shore are currently considering investments that could increase terminal capacity by as much as 250%. Terminals are indicating a desire to expand capacity; however, they also articulated that investment decisions cannot be finalized until upstream supply chain capacity investments along the rail corridor have been confirmed and that the investment ensures that the rail corridor continues to be efficient, competitive and reliable.

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Key Commodities

The key commodities transported on this rail corridor include:

• Western Canada agriculture • Saskatchewan potash; • Mining minerals ores and products including grain, canola, • B.C. metallurgical coal; concentrates; pulses, and others; • Vegetable seed oils; • Fertilizers and sulphur; and, • Canadian forest products including • Containerized cargo import and pulp, lumber, wood pellets; exports.

Map of Bundle Project Locations

Problem Definition

The GTCF and stakeholders identified these projects as key infrastructure opportunities to increase good movement through the Greater Vancouver Gateway.

The road network’s efficiency, reliability, and safety are impacted by each of the at-grade rail crossings identified within the Bundle 2 suite of projects. The provision of grade separations and at-grade crossing closures will:

• Eliminate road traffic congestion due to increased rail traffic; • provide travel time certainty of crossing the rail corridor for emergency services and first responders; • minimize train whistling and reduce greenhouse gas emissions from idling vehicles during a train events; and, • benefit railways and their customers as rail operations are optimized to utilize the increased capacity and network efficiency.

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Specific corridor issues to be addressed are:

Issue 1: North Shore Rail Corridor Capacity Improvement Issue Description Mitigation(s) North Shore Rail Corridor Capacity: Staging Capacity: • The rail corridor to the North Shore operates as a cohesive system from the North Shore to New In order to take advantage of the reduced vent time, trains must Westminster Rail Bridge and on to CN’s Thornton be staged closer along the rail corridor to the tunnel than is Yard. There is currently only one sidings or currently possible. staging area along the corridor so train routing must be coordinated to transit from the North Near the south end of the Thornton tunnel, eliminating the Shore, across the Second Narrows Rail Bridge, Douglas at-grade crossing will enable the construction of staging through the Thornton Tunnel, along the rail line capacity through the addition of five miles of new track along the corridor. to and across the New Westminster Rail Bridge (NWRB). Improvements to each element of the system are interdependent and compounding. To facilitate staging the crossings will be eliminated by:

Increased Rail Capacity to the South Shore: Douglas Road Grade Separation: • The rail corridor from the NWRB to the Thornton • The Douglas Road rail grade separation project eliminates a key at-grade crossing on a municipal trucking route. The Tunnel also provides access to South Shore Terminals via the Burrard Inlet Line. As outlined project is a component of the Burnaby’s most recent Official in Bundles 1 and 3, container and grain terminals Community Plan. along the South Shore are expanding and the • Project benefits include increased rail safety and regional proposed infrastructure in Bundle 2 will also goods movement. benefit those Bundles 1 and 3. Tunnel Ventilation: Thornton Tunnel Rail Capacity: • The rail tunnel’s capacity is limited by the cycle In order to increase the frequency of rail traffic transiting the time required between each train transit. After Thornton Rail Tunnel, it is necessary to increase the rate at which locomotive exhaust emissions are cleared from the tunnel. By each transit, the locomotive emissions must introducing additional mechanical ventilation in the tunnel, the be vented to ensure that there is sufficient required venting time between trains will be reduced from 20 oxygen for the next locomotive and operating crew. Currently, the minimum ventilation time is minutes to 10 minutes or less, thus dramatically increasing the approximately 20 minutes after each transit. availability of the tunnel and the ability to optimize rail operations along the corridor.

Second Narrows Rail Bridge Capacity: Retrofitting of tugs with folding masts: • The rail bridge is required to open for all vessels • The four commercial tugs identified result in an estimated in excess of 11m (35 ft) in height as marine traffic 650 bridge openings per year and could be retrofitted with at the second Narrows rail bridge has the right-of- folding masts that can be lowered as the vessels transit way. A recent assessment by the Port concluded under the bridge thus eliminating the respective rail bridge that 20 percent of vessel transits requiring bridge openings. openings are by local commercial tugs with masts extend past 11m in height. Eliminating the need Corridor Improvements: for the bridge to open for the four tallest tugs • The Thornton Tunnel ventilation and corridor staging would reduce the number of bridge openings by improvements described above will increase the capacity of an estimated 650 lifts per year. the rail corridor immediately adjoining the bridge. This will • As the rail tunnel is immediately adjoining to the enable greater optimization of the rail bridge’s operational Second Narrows Rail Bridge, tunnel capacity and capacity and availability and service to the North Shore cycle time are directly correlated to the capacity Terminals. across the rail bridge. Any increase in the tunnel capacity will directly benefit the operations of the rail bridge.

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Issue 2: New Westminster Rail Bridge (NWRB) Capacity Constraints and Congestion Issue Description Mitigation(s) The NWRB is a single-track swing bridge that provides the New Westminster at-grade Crossing closures: rail link across the Fraser River between Surrey and New • Closing the at-grade crossings at Braid Street, Spruce Westminster. The bridge is over 100 years old and will Street, and Cumberland Street will improve rail, traffic eventually require replacement or upgrading; however, the and community safety, while increasing rail operating GTCF Bundles focus on maximizing the operational capacity efficiencies and enable the corridor to accommodate and lifespan of the bridge in its current state. the anticipated growth in rail traffic. A grade separation will replace the three at-grade crossings. The bridge is currently operating near its practical operational capacity. The operational efficiency of the bridge can be • South bound trains will be able to stage closer to improved by reducing the transit window required for each the north end of the bridge head thus increasing the train crossing by increasing the proximity of the staging practical operational capacity of the bridge. locations to the bridge. • Coupled with the Brunette Interchange Project, local communities will benefit from travel time-savings, The improvements proposed in Bundles 1 and 2 will enhance increased rail crossing safety, and reduced nuisance connectivity and facilitate railways diverting a portion of noise through train whistling reductions. current traffic from NWRB to the CP Westminster Subdivision. • Coupled with the Issue 1 mitigations, the capacity The long-term solution to potentially expand or replace the and fluidity of the Burrard Inlet rail corridor line to NWRB is outside of the current federal funding program the south shore and the north shore terminals will be window. The GTCF bundles focus on maximizing the increased. operational capacity and lifespan of the current bridge asset. • Reduce vehicle and rail conflicts with the closure of the New Westminster Rail Crossings.

Issue 3: Marine Way at North Fraser Way West Bound left hand turning capacity Issue Description Mitigation(s) The intersection at Marine Way and North Fraser Marine Way at North Fraser Way Dual Westbound Left Hand way provides primary access to the Big Bend Turn Project: Industrial Park. Currently, during peak demand, • The Marine Way at North Fraser Way project will see a second traffic demand exceeds turning lane capacity to westbound turning lane added to increase the storage capacity access the industrial park. The resultant traffic of the lanes accessing the industrial park. queues exceed capacity and spill over impacting the major thoroughfare - Marine Way, which is a • The project will generate significant road user benefits with key goods movement and commuter corridor in the travel time savings alone estimated at $4.1 million. region with an Average Annual Daily Traffic (AADT) • As part of the project there is an opportunity to upgrade the of nearly 40,000. safety of the adjacent railway crossing.

Issue 4: Brunette Interchange Issue Description Mitigation(s) The Brunette Interchange was originally designed and constructed in The Brunette Interchange project will: the 1960s and currently experiences several issues: • replace the existing interchange to reduce • Traffic Safety – the location accounts for 10% of all crashes congestion on Highway 1 and on local arterial within the City of Coquitlam; roads. This will increase capacity for goods • Interchange ramps are difficult to navigate for large trucks; movement, community, and commuter traffic. • Congestion – the ramps and interchange itself operate above • increase multimodal accommodations for capacity during peak traffic demand; cyclist and pedestrians to facilitate increased access to rapid transit services at the Braid • Regional goods movement – congestion at the interchange Skytrain Station. is impacting access to Highway 1 from Coquitlam and New • Increase emergency service access to regional Westminster as well as intraregional truck movements; and, Royal Columbian Hospital and health district. • The Rail crossings (discussed in Issue 2) impact the road • Improve traffic safety and reduce the network traffic flows as well as the efficiency of the railway network. frequency of crashes at this high volume location.

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Economic Development

Bundle 2, with an estimated capital expenditure of between $636-766 million, will generate the following direct, indirect, and induced economic benefits during construction period1.

In addition to these construction project economic benefits, Bundle 2 will likely facilitate follow-on investments by the private sector in terminal capacity to expand trade. Similar trade corridor capacity projects have proven successful at generating positive economic, social and environmental impacts. Deloitte’s recent assessment of the similar North Shore Trade Area APGCI investment observed that the $200 million in infrastructure investment stimulated over $1 billion, or five times as much as the initial investment, in follow-on private sector investment in terminal productivity, capacity expansion, and an entire a new terminal. In addition to the capital investments, the APGCI project reported an increase in rail operating efficiencies whereby longer trains have now eliminated the need for an additional train each day. It is anticipated that Bundle 2 will facilitate similar investment to increase terminal competitiveness.

Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and consumers to compete in international markets. The national transportation system supports economic grown, job creation, and Canadian communities. Maintaining and expanding the efficient network requires investment in the supply chain by public and private sectors. In doing so Canada, the trade corridors, and the host communities mutually benefit.

Social and Environmental Benefits: Economic Benefits:

• Enhanced public safety by removing at-grade crossings; • Enhanced efficiency and competitiveness for Port of • Reduced impacts of national trade on local Vancouver, the Pacific Gateway, and Canada; communities; • Increased GDP, taxes, and jobs growth during and after • Enhanced emergency response times; construction; • Improved commuter and community mobility; • Potential follow-on Private Sector investments; • Improved transit service; • Increased import/export capacity; • Reduced emissions from vehicles and trains; • Enablement of Port of Vancouver to serve future cargo expansion; • Reduced noise pollution train whistling; and, • Stronger international reputation; • Provision of grade separated multi-modal access to a regional park. • Reduced potential economic disruptions or foregone economic activity; • Generating productivity gains for the Canadian economy; and, • Improved reliability and reduced rail corridor transit times and operating costs.

1 Metrics are derived from Deloitte LLP’s “Vancouver Gateway Economic Impact Analysis of Infrastructure Projects”. January 2017

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BUNDLE 3 - BURRARD INLET ROAD & RAIL IMPROVEMENTS PROGRAM

Project Description

Bundle 3 is a suite of interrelated road rail grade separations and local and port roadway improvements that will facilitate increased rail movements and better rail service to terminals on the South Shore, while generating significant community and road user benefits and enhancing the safety of at-grade rail crossing safety. Bundle 3 components are an integral component the City of Vancouver’s False Creek Flats redevelopment plan. The grade separations and road improvements are proposed for construction on and adjacent to existing road or rail corridors in the City of Vancouver and the Port of Vancouver.

Bundle 3 addresses key issues on the rail corridor servicing Port of Vancouver Terminals on the South Shore of the Burrard Inlet. In 2015, the South Shore Terminals alone handled an estimated 20 million tonnes of bulk commodities and over 1.2 million TEUs of containers providing Canadian producers and consumers with access to international markets. Terminals along the South Shore are investing in new capacity and implementing operational efficiencies to remain internationally competitive to facilitate greater maritime trade. The bundle will work to ensure that Canadian markets continue to receive consistent and competitive supply chain services that will enable Canada to expand its trade corridors to global markets.

Project Cost 12

Bundle 3 Projects Estimated Capital Cost Location Overpasses/ Upgrades along to Burrard Inlet Line (Malkin TBD Vancouver National or Williams) $150-230 million1,2 Burrard Inlet Road and Rail Improvement Project: Vancouver • Waterfront Road Access Improvement Project $59 million • Centennial Road Overpass Project $54 million • Commissioner Street Rail and Road Expansion Project $15 million Bundle Total: $278 - 358 million Potential Project Partners

• Port of Vancouver • City Vancouver • TransLink • Government of Canada • Railways (CP,CN, BNSF, SRY)

Why the Bundle is Required

These strategic infrastructure improvements will provide significant benefits to the economies of Canada and provinces beyond British Columbia by ensuring new and existing containerized cargo and bulk shippers in Alberta, Saskatchewan, Manitoba, and across Canada continue to have access to a safe and cost-competitive transportation network with capacity to accommodate future volume increases.

By preserving the Port of Vancouver’s ability to accommodate new customers and cargoes in the future, the increased capacity of the transportation corridor facilitated by these projects will enable future cargo expansion, enhance shippers’ confidence in their industry sector investments, and ensure Canada remains competitive with global markets.

1 Cost estimate subject to confirmation yb City of Vancouver: http://vancouver.ca/files/cov/false-creek-flats-prior-venables-replacement-open-house- information-displays.pdf 2 includes land acquisition costs valued at $75-$105 million

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Key Commodities

The key commodities transported along these corridors are: • Containerized cargo import and • Canadian forest products including • Sulphur. exports; pulp, lumber; • Western Canada Agriculture • Saskatchewan potash; Products including grain, canola, • Vegetable seed oils; and, pulses, and others;

Map of Bundle Project Locations

Problem Definition

GTCF, the City of Vancouver, and stakeholders identified these projects as key infrastructure opportunities to increase the sustainability of goods movement through the Vancouver Gateway by addressing key bottlenecks that limit the accessibility of Port of Vancouver Terminals and as part of the City of Vancouver’s redevelopment plan for the False Creek Flats.

Road network efficiency, reliability and safety are impacted at each of the at-grade rail crossings identified within the Bundle 3 suite of projects. These crossings are subject to some of the highest frequency and duration of daily crossing delays, and the provision of grade separations and closing of at-grade crossings will:

• Eliminate road traffic congestion due to current and increased rail traffic; • Provide certainty of crossing the rail corridor for emergency services and first responders; • Minimize train whistling and reducing greenhouse gas emissions from idling vehicles during train events; and, • Benefit railways and their customers as rail operation are optimized to utilize the increased capacity and efficiency.

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Specific corridor issues to be addressed are:

Issue 1: South Shore Road and Rail Network Congestion Issues Issue Description Mitigation(s) Waterfront Road – Centennial Road Connectivity Waterfront Road Access Improvement Project • At the east end of the Centerm Intermodal Yard (IY) • The project will connect East Waterfront Road to access is provided via at-grade crossing of Waterfront Centennial Road, thus providing continuous Port access Road. Centerm is planning to increase productivity of road along the South Shore from Highway 1 to Canada the IY from 5,000m to 8,500m of rail per day, which Place, which will increase mobility within the port will exacerbate the impacts at these crossings. property. • There is currently no continuous road access to the • Enables rail alignments to facilitate rail track expansion Port or Highway 1 from Waterfront Road. • Grade separates the road and rail access to the • Access for cruise related trucks from Highway 1 Centerm terminal. requires the use of city streets to access Canada Place. • Facilitates consistent and predictable emergency • Limited access for first responders when road is services access from Waterfront road. blocked by trains. • Benefits all South Shore road and rail traffic. Centennial Road Congestion and at-grade Crossing Centennial Road Overpass Project Impacts • Creation of a viaduct structure that will separate Port • Centennial Road is intersected by three spur lines that container trucks and other port traffic from three at- provide access to the marine terminals. Train crossing grade spur lines that provide direct access to adjacent occupancies result in significant delays to the Port Vanterm container Terminal, Alliance Grain Terminal, trucking corridor and specifically container truck traffic. and the SRY Dock. • The area is constricted in width whereby neither rail • Improves road operations, minimizes road and rail nor road can be expanded to accommodate current conflicts, and improves overall safety. and future traffic demands. • The grade separation will enable the expansion of the Port road and gateway rail networks. • Benefits all South Shore Traffic. Commissioner Street Congestion: Commissioner Street Rail and Road Expansion • The road network in this area is narrow and Project: geometrically sub-standard. • Improves overall safety through this section of the • Access to Terminals is tight and sub-standard. South Shore corridor. • The sub-standard geometry and limited width of the • Includes the widening of Commissioner Street in the road restrict efficient and secure access to the port vicinity of Columbia Continers transload centre and the site preparation works for additional rail capacity. operations and constrain the fluidity of container truck movements. • Community mitigations will include the construction of • The adjacent rail corridor width cannot be expanded to acoustic barriers to reduce existing and future noise impacts from port and railway activities. accommodate an additional track as it is constrained to the south by an embankment and to the North by Commissioner Street.

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Issue 2: Burrard Inlet Rail Line (BI Line) crossing within False Creek Flats Issue Description Mitigation(s) • The Burrard Inlet railway line (BI Line) is located just Malkin Avenue (alternative locations at National or south of the South Shore terminals near the false creek William) Overpass Project flats. In 2008. the City of Vancouver commissioned The project is an essential component of the City a study to identify opportunities to support goods redevelopment plans for the False Creek Flats. The project movement along the rail corridor and to increase the includes: safety and efficiency of the City’s road, cycling, and • A grade separation of the BI Line will for road users, pedestrian networks. The Study determined that closing pedestrians, and cyclists. The grade separation the Venables at-grade crossing and constructing a grade supports the City’s goals to increase community separation of the BI Line at Malkin (alternative locations livability and connectivity; at Williams or National) avenue would increase the capacity of the road network, thus decreasing commuter • The closure of Venables Street at-grade crossing and times. The grade separation project will tie into existing implementation community calming measures to cycling and pedestrian networks to provide a safe multi- reduce traffic on residential streets; modal crossing of the railway corridor. • Connections to the City’s multimodal path network; • The new corridor will also serve to provide emergency and, access to the new St. Paul’s Hospital and medical • The closure of a series of at-grade crossings along the center and is a key component of the city’s false creek BI Line that will enable greater staging capacity and redevelopment plans. efficiency in accessing South Shore terminals.

Economic Development

Bundle 3, requiring an estimated capital expenditure of between $278 to $358 million, will generate the following direct, indirect, and induced economic benefits during construction period3. The columns in the figures below are respective to the project capital expenditures.

In addition to these construction project economic benefits, Bundle 3 projects will enable private sector follow-on investments that result from the increased capacity generated by the corridor improvements. Investment programs have already been initiated at Centerm, Alliance Grain Terminal, and Columbia Containers.

Similar trade corridor capacity projects have proven successful at generating positive economic, social and environmental impacts. Deloitte’s recent assessment of the similar North Shore Trade Area Projects observed that the $200 million project stimulated over $1 billion, or five times as much, as the initial investment in follow-on private sector investment from terminal productivity, capacity expansion, and an entire new terminal. In addition to the capital investments, the North Shore project has reported increasing rail operating efficiencies whereby longer trains have now eliminated the need for an additional train each day. It is anticipated that Bundle 3 projects will facilitate the ongoing private investment to increase terminal competitiveness.

3 Metrics are derived from Deloitte LLP’s “Vancouver Gateway Economic Impact Analysis of Infrastructure Projects”. January 2017

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Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and consumers to compete in international markets. The national transportation system supports economic growth, job creation, and Canadian communities. Maintaining the efficiency and expanding the network requires investment in the supply chain by public and private sectors. In doing so, Canada, the trade corridors and the host communities mutually benefit.

Social and Environmental Benefits: Economic Benefits:

• Enhanced safety by removing at-grade crossings for • Enhanced efficiency and competitiveness of the supply traffic and pedestrians; chain for Port of Vancouver, the Pacific Gateway and • Creation of an East-West bike and pedestrian path and Canada; grade separating this path across the BI line; • Increased GDP, taxes and jobs growth during and after • Improved regional mobility and commuter travel times; construction; • Improved nuisance noise levels through the elimination • Increased South Shore capacity handling of bulk of at-grade crossing and the construction of sound commodity exports and container trade; barriers; • Facilitation of follow-on private sector investments - • Reduced truck and rail idling times and associated Bundle 3 provides the transportation capacity required greenhouse gas emissions; to enable the expansion of Centerm by 600,000 TEUs; • Facilitation of City-led redevelopment of the False Creek • Generation of productivity gains for the Canadian Flats industrial area; economy by improving reliability and reducing rail corridor transit times and operating costs; and, • Enhanced emergency response times and access to the • Reduced potential economic disruptions or foregone new St Paul’s Hospital Site and Health district; and, economic activity. • Minimized impacts of regional and national trade on local communities.

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BUNDLE 4 - FRASER RICHMOND PORT LANDS ACCESS PROJECTS

Project Description

GTCF Bundle 4 addresses key issues on the road network and rail corridor that services Port of Vancouver operations within the Fraser Richmond Port Lands (FRPL) in Richmond, British Columbia. Bundle 4 proposes to grade separate two at-grade crossings, to widen a local arterial road, and to widen from four lanes to six, a section of provincial Highway 91. These network improvements will facilitate increased rail movements, reduced commuter times, increased operational efficiency, and improved public safety.

The logistics centres within the FRPL provide off-dock infrastructure and key components of the backbone of supply chain that supports container trade through the Vancouver area. The area is an integral part of the supply chain whereby containers are stuffed with Canadian exports and inbound cargo is sorted at distribution centres. The Port is forecasting that container trade demand will double through B.C. ports by 2030. In response the Port and its terminal operators are expanding capacity at deep sea terminals. These terminal expansions in the Vancouver Inner Harbor and at Roberts Bank will increase demand on supply chain and specifically operators within the Fraser Richmond port lands. For the container supply chain to remain competitive through the gateway, the infrastructure accessing the off-dock facilities must be improved.

Project Cost

Bundle 4 Projects Estimated Capital Cost Location Portside Road Overpass and Upgrade $90 million Richmond Blundell Road Four-Laning $13 million Richmond Westminster Highway Overpass $31 million Richmond Highway 91 Six-Laning $50 million Richmond Bundle Total: $184 million

Potential Project Partners

• Port of Vancouver • Municipality - City Richmond • TransLink • Government of Canada • Railways (CN) • Province of British Columbia • Municipality - City of Richmond

Why the Bundle is Required

The bundle will:

• Enhance rail and port logistics operations and capacity; • Accommodate anticipated growth truck traffic from the logistics centres; • Grade separate a major truck route; • Reduce the impacts of national trade on local communities; • Enhance regional goods movement capacity; • Enhance commuter and rail safety; and, • Enhance emergency response times.

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Key Commodities

The key commodities transported on this rail corridor include:

• Western Canada Agriculture • Canadian forest products including • Containerized cargo import and Products including grain, canola, pulp, lumber, wood pellets export pulses, and others

Map of Bundle Project Locations

Problem Definition

The GTCF Bundle 4 will increase the efficiency of road and rail networks in Richmond, British Columbia. The GTCFand stakeholders identified these projects as key infrastructure opportunities to increase goods movement through the Vancouver Gateway, which provide significant benefits to community and commuter road network users.

Road network efficiency, reliability, and safety are impacted by congestion due to the lack of capacity for the volume of truck traffic generated by the industrial cluster at the Fraser Richmond Port Lands and the heavy volume of east west commuter traffic. The congestion is exacerbated at each of the at-grade rail crossings identified within the Bundle 4 suite of projects. The at-grade rail crossing to be grade separated by this bundle experience some of the highest frequency of daily crossing delays due to their proximity to rail yard switching. The provision of grade separations and increased corridor capacity will reduce road traffic congestion and will provide certainty of crossing the rail corridor for emergency services and first responders, while minimizing train whistling and reducing greenhouse gas emissions from idling vehicles during train events.

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Specific corridor issues to be addressed are:

Issue 1: Fraser Richmond Port Lands Road Network Congestion Issue Description Mitigation(s) Portside Train Blockages: Portside Road Overpass and Upgrade • Portside Road is located at the eastern terminus of the Ewen Yard. • Elevates the Portside Road and Blundell As a result, the numerous switching activities from the yard result Road intersection to provide a grade in some of the highest crossing blockage rates in the region. separation of the rail line at the head of Currently the crossing experiences 37 blockages a day impeding the Ewen Yard. The elevated intersection to traffic for over 2 hours each day. enable full movements. • The train blockage impacts access to the transloading facility and • Increases emergency access reliability to other industrial properties on the south side of the rail line. the industrial properties south of the rail • Traffic queues from train blockages impact local arterial road line. network. No. 8 Road, Blundell Road, and Portside Road traffic • Increases switching efficiency of the Ewen experience congestion, which delays traffic from the logistics Yard. centres and getting goods to market in a timely manner. These • Increases access to and efficiency of off- arterial roads provide direct connections to the provincial highway dock facilities. network connecting the logistics centres with Port terminals and the rest of Canada. • Provides access for the economic development of industrial lands located • Congestion and rail events impact the reliability of emergency to the west of the #7 Road Canal where response times. currently no road access exists. Bundell Road Congestion Blundell Road Four-Laning • Blundell road currently reduces to two lanes from four lanes • Widening of Blundell from 2 lanes to four west of No.8 Road. The Road provides the primary access to lanes with provisions for truck turning lanes. the logistics and warehousing facilities on the west side of the • Improves opportunities for enhanced transit Fraser Richmond Port Lands. The current configuration limits services to the industrial park. opportunities for transit and constrains movement of tractor trailer movements. • Enables Growth of additional Richmond Industrial land west of number 7 Road • The development of the Richmond (municipal) Industrial Lands Canal. immediately west of #7 Road Canal will contribute to congestion on Blundell. • New configuration increases the safety of truck movements.

Issue 2: Westminster Highway at-grade Crossing Issue Description Mitigation(s) Westminster Highway Congestion Westminster Highway Overpass • The corridor is anticipated to have eight train blockages • Provides a grade separation of Westminster a day with an Average Annual Daily Traffic (AADT) for a highway. 1 cross-product of nearly 200,000 by 2030. • Improves commuter and community traffic along • Current traffic delays are already significant for commuter this corridor and goods movement traffic along Westminster Highway. • Facilitates additional rail capacity in the area to service the Richmond logistic hub. 1

1 cross-product indicative metric that indicates level of interaction between train and vehicles at at-grade crossings. The cross product is calculated as the product between AADT and # of Trains.

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Issue 3: Highway 91 Capacity and Congestion Issue Description Mitigation(s) Highway 91 is the major access route to the FRPL. In addition, Highway 91 Six-Laning the route connects the areas south of the Fraser River and the • Expand Highway 91 in Richmond from four to six South Shore Port facilities. The section between Knight Street lanes between Knight Street and the Nelson Road and Nelson Road experiences significant congestion issues during Interchange. peak and off-peak travel times. Key issues on this segment of the highway include: • The increased capacity will benefit commuter and goods movements through reduced travel times • Road User safety and collision rates; through reduced congestion. • Commuter congestion and significant delay during AM and • Project will provide enhanced east west PM peak travel demands; and, connectivity within Richmond. • Congested goods movement between FRPL and Highway • Improves FRPL highway link to Highway 99 and 99. Highway 99 provides direct link to the United States connectivity to YVR, Port Terminals, and United and connections to Vancouver International Airport and to State Border crossing. Port terminals. The Province is upgrading this section of the Highway 99 corridor including the construction of a 10 lane • These improvements will complement the work bridge to replace the George Massey Tunnel and upgrading being delivered as part of the George Massey of interchanges at Highway 91 connects with Highway 99. Tunnel Replacement Project.

Economic Development

Bundle 4, with an estimated capital expenditure of between $184 million will generate the following direct, indirect, and induced economic benefits during construction period2.

The FRPL are a strong economic generator in the region and is a key component of the supply chain that enables Canadian producer and consumers to access international markets. The successful operation of the Port of Vancouver container terminals and their competitiveness relies heavily the efficient operation of the FRPL off-dock facilities. The FRPL’s daily truck trip generation profile is comparable to that of a deep sea container terminal. Consequently, the area is a logistic and warehousing hub that requires access to a reliable and efficient transportation network.

Currently the FRPL supports the Canadian economy by generating annually an estimated: • 4700 person-years of direct employment; • $260 million a year in direct wages; • $400 million a year in direct GDP; and, • $870 million a year in economic output.

2 Metrics are derived from Deloitte LLP’s “Vancouver Gateway Economic Impact Analysis of Infrastructure Projects”. January 2017

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Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and consumers to compete in international markets. The national transportation system supports economic growth, job creation, and Canadian communities. Maintaining and expanding the efficient network requires investment in the supply chain by public and private sectors. In doing so Canada, the trade corridors, and the host communities mutually benefit.

Social and Environmental Benefits: Economic Benefits:

• Reduced commuter and goods movement travel times; • Enhanced efficiency and competitiveness of the supply • Enhanced public safety on the road network and at rail chain for Port of Vancouver, the Pacific Gateway and crossings; Canada; • Improved transit service for workers; • Increased transloading capacity handling of grain and forestry containerized exports; • Reduced emissions from idling vehicles and trains; • Increased GDP, taxes, and jobs growth during and after • Reduced noise pollution train whistling; construction; • Facilitation of logistics parks and industrial • Facilitation of follow-on private sector investments in developments; logistics park developments; • Enhanced emergency response times and predictability; • Generation of productivity gains for the Canadian and, economy; • Reduced impacts of regional and national trade on local • Reduced potential economic disruptions or foregone communities. economic activity; and, • Stronger international reputation for investment and trade.

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BUNDLE 5 - FRASER SURREY PORT LANDS AND SURREY INDUSTRIAL AREA ACCESS PROJECT

Project Description

Bundle 5 addresses key goods movement transportation issues in the Brownville area of Surrey and Delta. Brownsville hosts a large concentration of industrial lands in excess of 420 ha including over 50 ha of Port property. Provincial Highway 17 connects the area to the National Highway Network and Port Terminals while rail service is provided by all major railways (BNSF, CN, CP) as well as the local switching railway SRY.

Bundle 5 will increase the road network connectivity to the port, industrial, and commercial properties from the highway network and will facilitate a comprehensive rail redevelopment of the area. The Bundle will construct an interchange on Highway 17 providing access to port lands and will construct a grade separation of Highway 17 at Old Yale Road. The interchange and associated road improvements will also grade separate the adjacent railway network and rail yard. The Old Yale project will facilitate a direct connection to the Pattullo Bridge Replacement, which provides an essential goods movement capacity across the Fraser River.

Project Cost

Bundle 5 Projects Estimated Capital Cost Location Highway 17 Interchange at Plywood Road and Grade Road $108 million Surrey & Delta Highway 17 at Old Yale Road Overpass $32 million Surrey Bundle Total: $140 million Potential Project Partners

• Port of Vancouver • Province of British Columbia • Municipalities (City of Surrey, • Government of Canada • TransLink Corporation of Delta) • Railways (CN, BNSF, SRY, CP)

Why the Bundle is Required

By preserving the Port of Vancouver and the adjacent industrial properties’ ability to accommodate new customers and cargoes in the future, the increased capacity of the transportation corridor facilitated by these projects will enable future cargo expansion, enhance shippers’ confidence in their industry sector investments, and ensure Canada remains competitive with global markets.

The recently completed Highway 17 has significantly increased mobility along this highway corridor. Improved connectivity to the corridor is required to facilitate re-investment in the area and job creation. Surrey’s official community plan for the area estimates that upon redevelopment the area will provide direct annual employment of 20,000 high-paying industrial and commercial jobs. The area is a key contributor to the regional, provincial and national economies. For example, the Port recently estimated that Port properties alone in the area contributed the following direct and indirect benefits to the economy:

• 4000 jobs; • $220 million a year in wages; and, • $440 million a year in GDP.

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Bundle 5 addresses key mobility and access constraints within the Brownsville area that will:

• Enable a direct connection from the new Pattullo Bridge to industrial and port properties; • Increase access and facilitate re-development of Fraser Surrey Port Lands and the surrounding industrial properties; • Enhance rail and port logistics, operations, and capacity; • Accommodate anticipated growth in rail and road traffic; • Provide grade separated access to enhance emergency response times; • Reduce the impacts of national trade on local communities; • Enhance regional goods movement capacity; and, • Enhance community and rail safety.

Key Commodities

The key commodities transported on this rail corridor include:

• Western Canada agriculture • Canadian forest products including • Containerized cargo import and products including grain, canola, pulp, and lumber; and, exports. pulses, and others;

Map of Bundle Project Locations

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Problem Definition

The GTCF Bundle 5 will address the efficiency of road and rail networks in Surrey and Delta, British Columbia. The GTCF and stakeholders identified these projects as key infrastructure opportunities to increase goods movement through the Vancouver Gateway while providing significant benefits community and commuter road network users.

The road network’s efficiency, reliability and safety are impacted by each of the at-grade rail crossings identified within the Bundle 5 suite of projects within the Brownsville area. The provision of grade separations will reduce road traffic congestion due to rail crossing events and will provide certainty of crossing the rail corridor for emergency services and first responders while reducing greenhouse gas emissions from idling vehicles during train events. Bundle 5 projects are complementary to the Pattulo Bridge Replacement Project, which is described in “Other Projects”.

Specific corridor issues to be addressed are:

Issue 1: Access to Fraser Surrey Port Lands Issue Description Mitigation(s) • The primary access to the Surrey Brownsville Industrial area Highway 17 at Plywood Road and Grace Road and Fraser Surrey Port Lands is currently provided via the Interchange Tannery Road interchange with Highway 17. A collection of • The interchange will add a second primary two lane roads connects the interchange with various port and access point to the port lands from Highway 17. industrial properties. • The structure will also grade separate the • The single interchange does not have the functional capacity railway tracks parallel to Highway 17 allowing required to support growth opportunities in this area. for the development of expanded rail access to • Mobility in the area is constrained by the capacity of the two terminals. lane roads, the connectivity of the network, and the high • The interchange will enable greater certainty number of at-grade crossings of active spur lines. for first responders crossing the rail corridor to • The road temporary network alignment constrains the the Fraser Surrey Port Lands and will provide a redevelopment opportunities for industrial and port properties. secondary access/egress point in the case of an emergency situation.

Issue 2: Highway 17 at Old Yale Road Intersection Issue Description Mitigation(s) Old Yale Road intersection at Highway 17 Old Yale Road Underpass at Highway 17 • The signalized intersection at Highway 17 and Old Yale Road • The proposed six-lane structure will provide reduces the free flow movement of highway traffic. grade separation of the municipal arterial road • The City of Surrey OCP anticipates an Old Yale Road and the provincial highway. underpass of Highway 17. This underpass will increase • The project will improve goods movement and connectivity to the industrial properties on the North side of commuter traffic along the Highway 17 corridor Highway 17. and on Old Yale Road. • The Pattullo Bridge Replacement Project alignment is planning • The structure will facilitate a direct connection a direct connection to Highway 17 westbound towards the from the new Pattullo Bridge to Highway 17 Fraser Surrey Port Lands from the new crossing. The present west. This connection will eliminate the need for intersection will need to be removed and replaced with an goods movement trucks to use the municipal underpass structure to accommodate the bridge connection roads when accessing Highway 17 or the Port from the new crossing. and industrial properties within the Brownsville area from the Pattullo Bridge.

Economic Development

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Based on previous corridor expansion projects, Bundle 5, with an estimated capital expenditure of $140 million will generate the following direct, indirect and induced economic benefits during the construction period1.

In addition to economic benefits during construction, Bundle 5 projects will enable private-sector follow-on investments that result from the increased capacity generated by the road network improvement and future rail realignment. Based on zoning and recent developments it is likely that future follow-on investments will be port and logistics center based.

Similar trade corridor capacity projects have proven successful at generating positive economic, social and environmental impacts. Deloitte’s recent assessment of the similar North Shore Trade Area Projects observed that the $200 million project stimulated over $1 billion, or five times as much as the initial investment, in follow-on private-sector investment in terminal productivity, capacity expansion, and an entire a new terminal. It is also anticipated that Bundle 5 projects will facilitate the ongoing private investment to increase terminal competitiveness.

Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and consumers to compete in international markets. The national transportation system supports economic growth, job creation and Canadian communities. Maintaining and expanding the efficient network requires investment in the supply chain by public and private sectors. In doing so, Canada, the trade corridors and the host communities mutually benefit. Specific benefits of Bundle 5 include:

Social and Environmental Benefits: Economic Benefits:

• Enhanced public safety; • Enhanced efficiency and competitiveness for Port of • Reduced commuter and goods movement times; Vancouver, the Pacific Gateway, and Canada; • Reduced emissions from vehicles and trains; • Increased employment and tax revenues at the municipal, provincial and federal levels; • Facilitation of logistics parks and industrial • Facilitation of follow-on private-sector investments and developments; increasing import/export capacity; • Enhanced emergency response times and predictability; • Increased competitiveness of terminals and Canadian • Minimized impacts of regional and national trade on products; local communities; • Improved reliability and reduced rail corridor transit • Improved safety by removing at-grade crossings; and, times and operating costs; and, • Reduced volume of heavy vehicle commercial traffic on • Generation of productivity gains for the Canadian municipal streets. economy.

1 Metrics are derived from Deloitte LLP’s “Vancouver Gateway Economic Impact Analysis of Infrastructure Projects”. January 2017

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BUNDLE 6 - ROBERTS BANK RAIL CORRIDOR IMPROVEMENTS

Project Description

Bundle 6 consists of projects that will reduce the impacts of international trade on Metro Vancouver local communities. The bundle focuses on community livability and maximizing the utility of past APGCI funded grade separations along the Roberts Bank Rail Corridor, which links the deep sea marine at Roberts Bank with the North American rail network.

The Whistle Cessation Projects will upgrade at-grade crossings to meet federal rail crossing standards required to enable whistle cessation agreements between the railways and the local community. The 96th Avenue Project will provide grade separated access to the community north of the CN Yale Subdivision in Langley.

The Langley Road Improvements with Rail Crossing Information System (RCIS) Project will upgrade local roads to handle diverted traffic and install real-time information signs to notify road users of pending train events at the major at-grade crossings and direct road users to grade separated crossings. The Langley Road Improvements with RCIS will be constructed within the Township of Langley and the City of Langley, and will be an extension of the current RCIS Project (RCIS - Phase 1), which will be implemented in 2017. The GTCF Roberts Bank Trade Area Study and the GTCF Fraser River Trade Area Study each identified potential candidate locations for whistle cessation throughout the Greater Vancouver Lower Mainland rail network. Specific whistle locations will be refined based on community impacts and budgetary constraints.

Project Cost

Bundle 6 Projects Estimated Capital Cost Location Langley Road Improvements with RCIS $10 million City of Langley Whistle Cessation Projects $5 million City and Township of Langley 96th Avenue Overpass Project $12 million Township of Langley Bundle Total $27 million

Potential Project Partners

• Port of Vancouver • Province of British Columbia • Railways (CP, CN) • Government of Canada • TransLink • Municipalities (City of Langley, Township of Langley)

Why the Bundle is Required

These strategic infrastructure improvements in Bundle 6 will provide significant road user and community benefits. The Langley Road Improvements and RCIS Project leverages past grade separation that were constructed under the successful Roberts Bank Rail Corridor Program, which was funded under the Asia Pacific Gateway Corridor Initiative (APGCI). The first phase of RCIS is currently being implemented. The second phase, proposed within Bundle 6, provides road improvements, new road connections, and additional signs to increase the program’s benefit and so that the use of existing infrastructure is maximized.

Trade through the Vancouver Gateway and specifically through the Port of Vancouver terminals at Roberts Bank is expected to grow substantially with current terminal investment and the proposed new terminal development. Bundle 6 continues the established practice within the Vancouver Gateway of ensuring sustainable gateway development by proactively considering the effects of goods movements on communities, engaging local communities, identifying issues, and responding to community interest. Continued sustainable development of the Vancouver Gateway will ensure a resilient, safe, and competitive Canadian supply chain.

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The bundle will:

• Reduce the impacts of international trade on local communities; • Enhance commuter and rail safety; and, • Enhance reliability and reduce emergency response times.

Key Commodities

• Containerized import and export • Western Canadian coal. cargo; and,

Map of Bundle Project Locations

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Problem Definition

The GTCF Bundle 6 addresses nuisance noise levels from train whistling and issues regarding road network efficiency in Langley, British Columbia. The GTCF Roberts Bank Trade Area Study, in consultation with stakeholders, identified these projects as opportunities to mitigate the impacts of Canadian international trade on these host communities while providing significant benefits to the community and road users.

Specific corridor issues to be addressed are:

Issue 1: Langley Road Network Congestion during train crossing events Issue Description Mitigation(s) Congestion and Queuing During Train Events Additional RCIS Signs • Traffic congestion accrues during each train crossing • New RCIS signs will be installed at key locations event within the City of Langley. Congestion develops including 200th street, the Langley bypass, and the during the crossing closure as well as during the time Fraser Highway. required to dissipate the traffic after the train has • Drivers will be encouraged to divert to grade separated cleared the crossing. Stakeholders have reported crossings. This will have the additional benefit of that time to clear congestion per train event is reducing the number of vehicles queued at each at-grade estimated in excess of ten minutes. This is in addition crossing and the time to clear the congestion. to the five minute period that the train occupies the crossing. • The RBRC program, funded under the APGCI, constructed a series of road rail grade separation projects in this area bounded by the City of Surrey, the City of Langley, and the Township of Langley. However, there remain several major arterial road crossings of the rail corridor. Notifying traffic and providing connection to the available grade separation routes will further increase the benefits to road users and maximize the use of existing infrastructure and previous investments. Local Road Network Connections Road Connecting between 53rd Avenue and 203rd • As a way to eliminate the need for costly additional Street overpasses in the area and to maximize the use • This connection could complete the 53rd/54th Avenue of previous investments in grade separations, the corridor and provide a reliable connection to 196th street existing arterial road network requires widening or corridor railway overpass additional short segment to be added in order to accommodate diverted traffic. Road Connecting between 202nd Street and 203rd Street Just North of the Langley Bypass • This connection could provide a more complete grid network to enable a greater volume of traffic to divert to the Mufford Crescent overpass from the Langley Bypass at-grade crossing.

Issue 2: 96th Avenue Issue Description Within the Fort Langley community, there are a number 96th Avenue Project of at-grade crossings that connect the community on the • the 96th Avenue overpass will provide a guaranteed north side of the CN Yale Subdivision with the community access route for emergency services and residents the on the south side. Due to the proximity of the crossing, community on the north side of tracks. at times all these at-grade crossing can be occupied by a single train, which has resulted in a level of community • The overpass will include accommodations for severance. multimodal use including pedestrians and cyclist

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Issue 3: Whistle Cessation Projects Issue Description The GTCF RBTA Study identified candidate projects locations for whistle cessation within the City and Township of Langley. Transport Canada requires that all trains whistle whenever they approach a public at-grade crossing. Communities can, subject to Transport Canada Regulations and Guidelines, eliminate the requirement for whistling at specific public crossings subject to the train engineer who ultimately determines the need for whistling, by entering into a whistle cessation agreement(s) with the operating railway. The encumbrance to establishing whistle cessation agreements is often the municipal funding required for the crossing safety upgrades. The Bundle 6 Whistle Cessation Projects will support communities to fund the safety upgrades in preparation for the whistle cessation agreements. Candidate Whistle Cessation Projects in other communities are addressed in “Other Projects”.

Economic Development

In addition to the economic benefits from construction, Bundle 6 projects will contribute to the sustainable development of the Vancouver Gateway generating positive economic, social and environmental impacts. The projects maximize past grade separation investments in the Roberts bank Rail Corridor Program. A preliminary assessment of the Langley Road Improvements with RCIS Project indicates that road user benefits, which were predominantly derived from travel time savings, will be in excess of $5.8 million.

Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and consumers to compete in international markets. The national transportation system supports economic growth, job creation, and Canadian communities. Maintaining and expanding the efficient network requires investment in the supply chain by public and private sectors. In doing so, Canada, the trade corridors, and the host communities mutually benefit.

Social and Environmental Benefits: Economic Benefits:

• Reduced impacts of national trade on local • Investment in the sustainability of the Port of communities; Vancouver, the Pacific Gateway and Canada; • Enhanced public safety of at-grade rail crossings; • Generation of productivity gains for the Canadian • Reduced emissions from idling vehicles during train economy; events; • Reduced potential economic disruptions or foregone • Reduced nuisance noise from train whistling; and, economic activity; and, • Reduced commuter and goods movement travel times. • Stronger international reputation for investment and trade.

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BUNDLE 7 - ROBERTS BANK TERMINAL ACCESS AND GOODS MOVEMENT IMPROVEMENTS

Project Description

Bundle 7 consists of three projects that will reduce the impacts of international trade on Metro Vancouver local communities and generate commuter and goods movement travel time savings. The highway improvements proposed in Bundle 7 increases the road network capacity to the port terminals at Roberts Bank, to industrial properties on the Tsawwassen First Nations (TFN) Treaty Lands, and to Delta’s Tilbury Industrial Area (a major Vancouver Gateway facilities centre). The improvements also enable the rail yard capacity expansion required to support container trade expansion at the Port’s Roberts Banks terminals.

Bundle 7 consists of upgrading the intersection on Highway 17 at 80th Street to an interchange and upgrading Deltaport Way by adding two lanes and replacing Arthur Drive overpass and intersection with an interchange.

Project Cost

Bundle 7 Projects Estimated Capital Cost Location Tilbury / 80th Street Interchange $60 million Delta Arthur Drive Bridge Replacement $80 million Delta Deltaport Way Widening to Four Lanes $25-45 million Delta Bundle Total: $165-185 million

Potential Project Partners

• Port of Vancouver • Province of British Columbia • Municipality – Corporation of Delta • Government of Canada • Railways (BCRC)

Why the Bundle is Required

The strategic infrastructure improvements in Bundle 7 will remove bottlenecks on the provincial highway network that serves Roberts Bank terminals and off-dock logistic and distribution centres within the region. On average, 30% of containers arrive or depart Roberts Bank terminals by truck while the balance 70% moves by rail. It is essential to maintain efficient road and rail service to and from container terminals to ensure that forecasted demand is captured. A reliable and cost effective supply chain ensures the continued growth of the Canadian container trade and its internationally respected reputation.

The Port of Vancouver forecasts that container volumes through port terminals will increase from the current annual volume of just over 3.0 million TEUs to 4.8 million TEUs by 2025. Bundle 7 investments support the ongoing and efficient access by road and rail to the Roberts Bank terminals as well as the off-dock facilities within the region.

Key Commodities

The key commodities transported on this rail corridor include:

• Containerized import and export • Metallurgical and thermal coal. cargo; and,

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Map of Bundle Project Locations

Problem Definition

The GTCF Bundle 7 addresses issues related to the provincial highway network in Delta, British Columbia. The GTCF Stakeholders and the Roberts Bank Trade Area Study identified these projects as opportunities to mitigate the impacts of Canadian international trade on these local communities while providing significant benefits to businesses, the community, and road users.

Specific corridor issues to be addressed are:

Issue 1: Highway 17 at 80th Street Intersection Congestion Issue Description Mitigation(s) Congestion: Tilbury Interchange: • The intersection on Highway 17 at 80th Street provides access to the Tilbury • The interchange will Industrial Area. During peak demand, the intersection is operating at or near remove 80th Street capacity. intersection from the • The Tilbury Industrial Area and the adjacent Sunbury Industrial Area are Highway 17 corridor. This will improve road safety, experiencing significant redevelopment as businesses elect to invest in these areas. reduce idling, increase • The industrial growth has resulted, and will continue to result, in increased truck the corridor capacity, traffic as transportation and logistic-oriented businesses migrate to the area due to and generate travel time the strong transportation network connections and the proximity of the Fraser River. savings for commuters and the goods movement industry.

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Issue 2: Deltaport Way Congestion Issue Description Mitigation(s) Congestion: Deltaport Way 4 Laning • Deltaport Way is the sole trucking route to access the Port • Four laning will increase the safety and terminals at Roberts Bank and the TFN Treaty Industrial capacity of the highway while reducing the Lands. Highway traffic is predominantly container truck traffic cycle times required at the intersections at throughout the day with the addition of commuter traffic during 41B and Arthur Drive. shift change at the terminals. • The growth of terminal capacity and the development of the TFN Arthur Drive Bridge Replacement and Treaty Industrial Lands will result in Deltaport Way operating Interchange: near or above capacity. • The Arthur Bridge replacement project will construct a diamond interchange to eliminate the intersection on Deltaport Way and increase connectivity to the TFN Treaty Industrial Lands and Delta’s road network. • The bridge span will be increased to accommodate four lanes on Deltaport Way and full expansion of the rail corridor.

Economic Development

Bundle 7 will contribute to the sustainable development of the Vancouver Gateway by generating positive economic, social and environmental impacts. The Vancouver Gateway previously experienced an economic disruption when container truck drivers went on strike. The strike resulted in a loss of international reputation and was estimated to cost the Canadian Economy $885 million a week. Since this incident, the Port and supply chain partners, including truck drivers, have made significant gains in resolving the issues that led to the strike and repairing the international reputation of the Vancouver Gateway. The investments in Bundle 7 will facilitate a container trucking market that remains efficient, competitive, and without labour disruptions.

Economic benefits from during construction of Bundle 7 with an assumed construction cost of $165 million are outline below:

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Economic, Social, and Environmental Benefits

Canada is a trading nation and its efficient national transportation trade network enables Canadian producers and business to compete in international markets and provide consumers with choice and goods at a fair price. The national transportation system supports economic growth, job creation, and Canadian communities. Maintaining and expanding the efficient network requires investment in the supply chain by public and private sectors. In doing so Canada, the trade corridors, and the host communities mutually benefit.

Social and Environmental Benefits: Economic Benefits:

• Reduced impacts of international trade on local • Investment in the competitiveness of the Port of communities; Vancouver, the Pacific Gateway and Canada; • Generation of travel time savings for commuters and • Increased employment and tax revenues at the goods movement road users; municipal, provincial and federal levels; • Increased public safety for road users; and, • Generation of productivity gains for the Canadian • Support of First Nations economic development economy; opportunities and investment in First Nations • Reduced potential economic disruptions or foregone communities. economic activity due to labour disputes resulting from insufficient or efficient access to container terminals and off-dock facilities; and, • Stronger international reputation for investment and trade.

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OTHER PROJECTS

Project Description

The strategic infrastructure improvements identified in this fact sheet work to increase the connectivity and mobility of the highway and road network within the Vancouver Lower Mainland. The projects will provide significant benefits to goods movement, commuter and overall mobility of road users. The Projects identified enhance a key road connection to the Vancouver International Airport (YVR), upgrade major roadway connections across the Fraser River, expand highway capacity along Highway 1, improve community livability, and provide local road connections to facilitate economic development on First Nations and port lands. • 4700 person-years of direct employment; • $260 million a year in direct wages; and, • $400 million a year in direct GDP, and $870 million a year in economic output.

Project Cost

Other Projects Estimated Capital Cost Location Mountain Highway Underpass $6 million North Vancouver • The Mountain Highway underpass will increase road clearance under the CN Rail overpass to accommodate the movement of large project cargo loads from the Port to the highway network. Whistle Cessation Projects $20 million Various Municipalities • Whistle Cessation Projects at numerous locations throughout the Lower Mainland will upgrade crossing safety infrastructure to higher standards to reduce trains whistling and the impacts on communities at the specific public at-grade crossings. Moray Channel Bridge $91 million Richmond • The Moray Channel Bridge Project will replace the current swing bridge with a fixed structure across the middle arm of the Fraser River in Richmond. Western Lower Level Route Extension (WLLRE) $160 million North and West • The WLLRE Project will extend the Low Level Route from Garden Vancouver Avenue to Marine Drive near Park Royal Shopping Centre in North and West Vancouver. Highway 1 Widening from Langley to Abbotsford including $695 million Surrey, Langley, and Surrey overnight truck parking Abbotsford • The Highway 1 widening project will continue the improvement of the highway from four lanes to six within the Lower Mainland. The project also includes the construction of an overnight long- haul truck parking area in North Surrey. Pattullo Bridge Replacement $1,506 million New Westminster and • The Pattullo Bridge Replacement project will replace the existing Surrey 80-year-old structure with a new four lane bridge that can be expanded to six lanes as demand increases. George Massey Tunnel Replacement Bridge $3,500 million Delta and Richmond • The George Massey Tunnel Replacement project will decommision the existing four-lane tunnel and construct a new ten-lane structure. Construction will be initiated in 2017.

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Potential Project Partners

• Province of British Columbia • Municipalities • Railways (BCRC, CN, CP, BNSF, • Port of Vancouver • Government of Canada SRY) • Vancouver International Airport • TransLink • Squamish First Nation (YVR)

Map of Bundle Project Locations

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Problem Definition

Specific corridor issues to be addressed are:

Issue 1: Mountain Highway Underpass Issue Description Mitigation(s) Supply chain partners including private industry, the port, and various • The Mountain Highway Underpass levels of government have been working collaboratively to increase the project will lower the north bound competitiveness of the Vancouver Gateway for project cargo. The group lane of the underpass to facilitate the identified Mountain Highway Underpass as a key bottleneck in the project movement of maximum legal size cargo corridor from the Port of Vancouver to inland industrial sites such as project cargo loads from the Lynnterm those in Northern Alberta, Saskatchewan and British Columbia. port Terminal. • The clearance will be increased to 5.43 The Mountain Highway underpass of CN Rail line has a maximum meters to facilitate overheight and clearance of 4.2 meters, which is lower than the maximum permitted overweight Project Cargo transiting the cargo clearance allowed on Highway 1 in British Columbia. This constraint gateway enroute to major industrial is resulting in project cargo shipments being diverted through other ports. development locations.

Issue 2: Whistle Cessation Projects Issue Description Mitigation(s) The GTCF RBTA Study and FRTA Study identified candidate With increasing train traffic and train lengths traversing locations for whistle cessation throughout the Vancouver communities, whistling at crossings is becoming an Lower Mainland. Transport Canada requires that all trains increasing impact. The encumbrance to establishing whistle on approaching a public road at-grade crossing. whistle cessation agreements is usually the municipal Communities can, subject to Transport Canada Regulations funding required for the crossing safety upgrades. The and Guidelines, eliminate this requirement, by entering into Whistle Cessation Projects will support communities a whistle cessation agreement(s) with the operating railway. funding the safety upgrades required in preparation for Notwithstanding this agreement, it is the decision of the train the whistle cessation agreements. Candidate Whistle engineer as to whether the whistle is sounded. Cessation Projects in Langley are specifically addressed in the “Bundle 6 Fact Sheet”.

Issue 3: Moray Channel Bridge Issue Description Mitigation(s) Improving Travel Time Reliability from YVR to Moray Channel Bridge Replacement Project Highway 99 • The Moray Channel Bridge Replacement Project will replace • The bridge was constructed in 1965 and is and upgrade the current road link to YVR from Highway nearing the end of it structural service life. 99. The new structure will support the ongoing growth and • The existing Moray Bridge provides two development of Canada’s second business airport. In 2016, eastbound traffic lanes leaving the airport and YVR handled more than 281,000 tonnes of high value cargo and a record 22.3 million passengers. operates as a system with the Airport Connector Bridge that provides three westbound lanes to • The project proposes to replace the existing swing span with the airport. a new fix span across the channel. The structure will have an • Stakeholders raised concern regarding the air draft equal to that of the Airport Connector Bridge so that capacity of the structure at two lanes, the marine traffic can still transit the channel. reliability of the swing mechanism, which can • The bridge will include three lanes for eastbound vehicle no longer be serviced by readily available traffic and accommodations for a multimodal path for cycling commercial parts, and the reliability of time and walking. sensitive commercial truck trips delayed by bridge openings.

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Issue 4: Western Lower Level Road Extension (WLLRE) Issue Description Mitigation(s) Congestion at the Head of the Lions Gate Bridge WLLRE Project • The Marine Drive bridge spanning the Capilano River is • The WLLRE Project will create a new connected to approaches at the north end of the Lions Gate connection between the District of North Bridge. Vancouver and the District of West Vancouver • Lions Gate Bridge traffic must compete with municipal east-west across the Capilano River. The new traffic that also uses the Marine Drive Capilano River Bridge. The connection will divert traffic away from the limited capacity of the road network results in major congestion Lions Gate Bridge head to increase capacity and travel delays. for inter-municipal traffic and commuters using the Lions Gate Bridge. • Recent improvements at the Lions Gate Bridge head have worked toward segregating these streams of traffic, but the area • The resulting road network re-configurations continues to experience significant congestion and traffic delays. will divert traffic from local streets within the Squamish First Nation to the new WLLRE Traffic and Congestion on Local First Nations Road Network thus increasing community livability for the people of the Squamish First Nation. • The Low Level Road currently directs traffic through Squamish • The new connection will establish an First Nations community streets via Welch Street, Capilano Road, industrial grade separated road link over and the Wardance Bridge. The Squamish First Nations have the CN rail line to the undeveloped lands indicated a desire to divert this regional traffic by extending the within the Squamish First Nations Reserve. low level route and implementing traffic calming measures within the Squamish First Nation reserve local road network. (The Lands are also know as the Pacific Environmental Centre Site) Redundancy in the in municipal road • The new link will provide redundancy to • There are currently only two municipal roadway crossings of increase the resiliency of the municipal road the Capilano River: the Marine Drive crossing and the Wardance network for regional traffic and commercial Bridge crossing. trucking.

Issue 5: Highway 1 widening from Langley to Abbotsford Issue Description Mitigation(s) Congestion on Highway 1 Highway 1 Widening Project • Highway 1 was widened from the Port Mann Bridge across the • Increases capacity of Highway 1 from Langley Fraser River to 202nd Street interchange in Langley as part of to Abbotsford eliminating the bottleneck the Port Mann Highway 1 Project. between the Fraser Valley and Metro Vancouver • MOTI, the Township of Langley and Transport Canada are enabling travel time savings for regional goods and people movement. currently implementing further upgrades to extend the widening to 216th Street and to construct a new Interchange at • The Highway 1 widening project from Langley 216th Street. This project will address the present congestion to Abbotsford (32.5km) will expand Highway 1 and delays through this section of Highway 1 for commercial from four lanes to six lanes between the 216th trucking and commuter traffic. However, the Highway 1 section Street interchange in Langley and the Whatcom between Abbotsford and Langley will remain highly congested Interchange in Abbotsford. and the bottleneck between the Fraser Valley and Metro Vancouver North Surrey Overnight Truck Parking Project • The expansion of Highway 1 from Abbotsford to Langley will • Provides overnight truck parking to remove eliminate the last remaining 4-lane section of Highway 1 truck parking from local streets and to between the Burrard Inlet and Abbotsford. concentrate parking so facilities and services can be provided. Overnight Truck Parking • This provides benefits to the local communities • Currently the long-haul trucking industry has limited options and commercial truck operators as they will for overnight parking. This has resulted ad hoc parking have a safe and convenient place to park including the use of city streets. overnight.

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Issue 6: Pattullo Bridge Replacement Issue Description Mitigation(s) The Pattullo Bridge is a critical The Pattullo Bridge Replacement Project will replace the current crossing with a safe and link for local, regional and efficient crossing with modern lane widths that will improve travel-time reliability and national transportation needs safety for all bridge users. and an important component of the Asia-Pacific Gateway The design is the outcome of multiple years and phases of engagement with the goods movement network. An municipalities of New Westminster and Surrey, as well as goods movement partners average of 80,000 vehicles such as the Port of Vancouver and the Ministry of Transportation and Infrastructure. per day, about 10 per cent of which are trucks, cross the The design has been endorsed by both the councils of New Westminster and Surrey and Fraser River on the Pattullo will provide: Bridge. • Improved and new connections to the road network on both sides of the bridge, including improved access to the recently completed Highway 17 truck corridor, and The bridge was built in 1937 more free-flow access on and off the bridge; and was designed for a 50-year life which has now • A safer crossing with wider lanes and a centre median that separates traffic been exceeded by 30 years. travelling in opposite directions; The 80-year old bridge is • A more reliable crossing as modern lane widths and curvature will provide about 10 vulnerable to high wind per cent increased capacity on the new four-lane bridge; and, conditions and may not survive a moderate seismic • Accommodation for multimodal use path and connections to regional greenway event or ship collision. paths.

Issue 7: George Massey Tunnel Replacement Issue Description Mitigation(s) The George Massey Tunnel is an important link in the regional and The George Massey Tunnel Replacement provincial transportation system. It connects to key gateways such Project as Vancouver International Airport (YVR), Canada-U.S. border crossings, BC Ferries’ Tsawwassen terminal, Deltaport container The project will: Terminal and the Boundary Bay Airport. • Construct new 10-lane bridge (eight lanes plus two dedicated transit/HOV lanes), with Congestion construction to begin in 2017; • Since the Tunnel opened in 1959, Metro Vancouver’s population • Replace the Westminster Highway, Steveston and economy have grown with an additional one million people Highway and Highway 17A interchanges, forecast over the next 30 years. providing better access to and across Highway • Without improvements to this crossing, economic growth 99, with improved on and off ramps and and regional livability will be constrained by congestion additional lanes; and increasing travel times for commuters, goods movers, • Improve transit and HOV infrastructure, commercial traffic and other traffic. providing a continuous dedicated transit/ HOV lane between Highway 91 in Delta and Safety Bridgeport Road in Richmond, which will • The tunnel was built to the engineering standards of the 1950s also support potential future rapid transit and, while operationally safe, it does not meet modern highway expansion; and seismic standards. • Provide access and connections for cyclists • With narrow lanes and multiple merge points, crashes in and and pedestrians with a multi-use pathway on around the tunnel happen with higher frequency than on other the new bridge; and, parts of the Highway 99 corridor. • Decommission existing tunnel.

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APPENDIX A

LIST OF INDUSTRY STAKEHOLDERS, LOCAL GOVERNMENTS, FIRST NATIONS & OTHERS

Steering Committee • Tsawwassen First Nation • Fraser Surrey Docks Member Agencies • Tsleil-Waututh Nation • Kinder Morgan Canada Terminals (Vancouver Wharfs) • Transport Canada • Semiahmoo First Nation • Lafarge • BC Ministry of Transportation and • Cowichan Tribes Infrastructure • Lyackson First Nation • Lantic Sugar/ Rogers • TransLink • Musqueam Indian Band • Lynnterm (Western Stevedoring) • Port of Vancouver • Penelakut Tribe • Neptune Terminals • Greater Vancouver Gateway • Lake Cowichan First Nation • Pacific Coast Terminals Council • Kwantlen First Nation • Richardson Terminals • Seaspan Municipalities • Shxw’owhamel First Nation • TSI Vanterm • Corporation of Delta • Sto:lo Tribal Council • Univar Canada Terminal • City of Richmond • Skawahlook First Nation • Vancouver Pile Driving • City of Burnaby • Sto:lo Nation • Viterra • City of New Westminster • Soowahlie First Nation • West Coast Reduction • City of Surrey • Kwikwetlem First Nation • Westshore Terminals • City of Coquitlam • Leq’á:mel First Nation • WWL • City of Port Coquitlam • Seabird Island First Nation • YVR • City of Pitt Meadows • Matsqui First Nation • Canaan Group • City of Maple Ridge • Sumas First Nation • Coast 2000 • District of Mission Industry & Organizations • BC Marine Terminal Operators • City of Abbotsford • BNSF Association • Township of Langley • CN Rail • BC Chamber of Shipping • City of Langley • CP Rail • Fraser River Industrial Association • City of White Rock (FRIA) • SRY • City of North Vancouver • Western Canadian Shippers • Alliance Grain Terminals Coalition • District of North Vancouver • Allied Shipbuilders • Council of Marine Carriers • District of West Vancouver • Canexus Chemicals • Metro Vancouver (GVRD) First Nations • Cargill • Tsawwassen First Nation • Columbia Containers • Katzie First Nation • Global Container Terminals • Halalt First Nation • DP World • Squamish Nation • Fibreco

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Appendix D: Cost-Benefit Analysis Supplementary Documentation

Greater Vancouver Gateway 2030

Cost-Benefit Analysis Supplementary Documentation

National Trade Corridors Fund

Vancouver Fraser Port Authority

November 6, 2017

Vancouver Fraser Port Authority | Greater Vancouver Gateway 2030 | National Trade Corridors Fund Cost-Benefit Analysis Supplementary Documentation

Table of Contents

1 Executive Summary ...... 4 1.1 Introduction ...... 4 1.2 Methodology ...... 4 1.3 Monetized Benefits ...... 6 1.4 Non-Monetized Benefits ...... 8 1.5 Results...... 9 1.6 Sensitivity Analysis ...... 12 2 Introduction ...... 13 3 CBA Methodology and Framework ...... 14 4 Project Overview ...... 16 4.1 Base Case and Alternative Case ...... 19 4.1.1 Base Case (Without Greater Vancouver Gateway 2030 projects) ...... 19 4.1.2 Alternative Case (Greater Vancouver Gateway 2030 projects are built) ...... 19 4.2 Project Cost and Schedule ...... 20 4.2.1 Capital Costs ...... 20 4.2.2 Operations & Maintenance Costs ...... 21 4.2.3 Residual Value of Assets ...... 21 5 Freight Diversion Analysis ...... 22 5.1 West Coast Port Overview ...... 22 5.1.1 Port of Seattle/Tacoma...... 24 5.1.2 Port of Portland ...... 24 5.1.3 Port of Vancouver USA ...... 25 5.2 Capacity Improvements at Other West Coast Ports ...... 26 5.3 Commodity Overview ...... 30 5.3.1 Intermodal ...... 32 5.3.2 Grain ...... 33 5.3.3 Potash ...... 33 5.3.4 Forest Products ...... 34 5.3.5 Petrochemicals ...... 35 5.3.6 Canola Oil ...... 35 5.3.7 Coal ...... 35 5.3.8 Sulphur ...... 36 5.3.9 Conclusion ...... 36 6 Key Assumptions ...... 37 6.1 Projection of Train Volumes ...... 37 6.2 Greater Vancouver Rail Capacity ...... 39 6.3 Rail Rate Comparison ...... 41 6.3.1 Rail Haul Distance Increases ...... 41 6.3.2 Increased Resources & Cycle Times ...... 42 6.3.3 Interline Rates vs. Single Line Rates ...... 42 6.4 Ocean Shipping Rate Comparison ...... 43 6.4.1 Comparative Bulk Shipments ...... 44 6.4.2 Comparative Container Shipments ...... 46 7 Outcome Measurement, Data and Assumptions ...... 50 7.1 Transportation Cost Savings to Canadian Producers ...... 50

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7.1.1 Methodology ...... 50 7.1.2 Assumptions ...... 50 7.1.3 Benefit Estimates ...... 52 7.2 Safety and Environmental Impacts of Shipments to Alternative Ports ...... 52 7.2.1 Methodology ...... 52 7.2.2 Assumptions ...... 53 7.2.3 Benefit Estimates ...... 54 7.3 Local Transportation and Environmental Benefits ...... 54 7.3.1 Methodology ...... 54 7.3.2 Assumptions ...... 58 7.3.3 Benefit Estimates ...... 59 8 Cost-Benefit Analysis Results ...... 60 8.1 Results Summary ...... 60 8.2 Sensitivity Analysis ...... 61 9 Supplementary Data Tables ...... 63 9.1 Total Program Benefits and Costs ...... 63 9.2 Annual Demand Projections ...... 64 9.3 Rail Network Improvement Benefits ...... 65 9.4 Transportation Cost Savings to Canadian Producers ...... 66 9.5 Environmental Impacts of Shipments to Alternative Ports (GHG) ...... 67 9.6 Environmental Impacts of Shipments to Alternative Ports (CAC) ...... 68 9.7 Local Transportation and Environmental Benefits ...... 69 9.8 Safety Impacts of Shipments to Alternative Ports ...... 70

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Tables

Table ES-1: Summary of Infrastructure Improvements and Associated Benefits ...... 9 Table ES-2: Overall Results of the Cost-Benefit Analysis ...... 11 Table 1: Cost-Benefit Analysis and Economic Impact Analysis Comparison ...... 15 Table 2: Key Project Characteristics ...... 18 Table 3: Capital Cost Estimates ...... 21 Table 4: Port of Seattle/Tacoma – Capital Improvement Projects ...... 27 Table 5: Port of Portland – Capital Improvement Projects ...... 29 Table 6: Port of Vancouver (Washington) – Capital Improvement Projects ...... 30 Table 7: Trains per Day in Greater Vancouver ...... 38 Table 8: Rail Network Line Capacity Evaluation Criteria ...... 39 Table 9: Rail Network Terminal Capacity Evaluation Criteria ...... 40 Table 10: Greater Vancouver Rail Network Capacity ...... 40 Table 11: Sample Rail Distance Differentials between Vancouver and Portland ...... 42 Table 12: Sample Rail Rate Differentials between Vancouver and Washington ...... 43 Table 13: Rail Rates Based on AAR and RAC Averages ...... 43 Table 14: Baltic Dry Index Rates October 16, 2017 ...... 45 Table 15: Average Base Bulk Vessel Charter Time-Destination Singapore ...... 46 Table 16: Eastbound Trans-Pacific Container Rates, Select Pacific Ports ...... 49 Table 17: Ocean Carrier Availability, Select Pacific Ports ...... 49 Table 18: Assumptions used in the Estimation of Transportation Cost Savings ...... 50 Table 19: Estimates of Transportation Cost Savings Benefits ...... 52 Table 20: Assumptions used in the Estimation of Safety and Environmental Benefits ...... 53 Table 21: Estimates of Safety and Environmental Benefits ...... 54 Table 22: Data sources for Local Transportation and Environmental Benefits Analysis ...... 55 Table 23: Assumptions used in the Estimation of Local Benefits ...... 58 Table 24: Estimates of Local Transportation and Environmental Benefits ...... 59 Table 25: Overall Results of the Cost-Benefit Analysis ...... 60 Table 26: Summary of Key Sensitivity Analysis Parameters ...... 62 Table 27: Summary of Other Sensitivity Analysis Parameters ...... 62

Figures

Figure ES-1: Cargo Growth Forecast at the Port of Vancouver ...... 5 Figure 1: Cargo Growth Forecast at the Port of Vancouver ...... 16 Figure 2: Regional Rail Network Map ...... 32 Figure 3: Trains per Day in Greater Vancouver ...... 38 Figure 4: Greater Vancouver Rail Capacity Constraints ...... 40 Figure 5: Three Year Baltic Dry Rate Index 2014-2017...... 45 Figure 6: World Container Index October 2015-October 2017 ...... 47 Figure 7: Index of Short Term Route Rate Fluctuations ...... 47

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1 Executive Summary

This report provides an analysis of the costs and benefits of the projects proposed by the Gateway Transportation Collaboration Forum in its Greater Vancouver Gateway 2030 (GVG2030) strategy.

Benefits of Greater Vancouver Gateway 2030

The purpose of the GVG2030 strategy is to identify and pursue federal funding for smart infrastructure investments to ensure that the Greater Vancouver Gateway is ready to serve forecasted trade growth through the Port of Vancouver to 2030. The nearly 40 transportation projects proposed as part of GVG2030 will provide national, provincial, regional, and local benefits. By removing capacity constraints and freight bottlenecks to get Canadian goods to market, these projects will help grow the economy, create well-paying jobs and support liveable, green communities with improvements to safety, mobility, and air quality.

GVG2030 projects include grade separation or closure of a series of at-grade road-rail crossings within the Greater Vancouver area. The elimination of delays at the rail crossings will improve the mobility of commuters and freight trucks, support active pedestrian and bicycle lifestyles, and improve the quality of life of residents through noise and emissions reductions.

The projects identified for submission in the first national call for projects from the National Trade Corridors Fund represent the Gateway Transportation Collaboration Forum’s highest priority projects to address existing and emerging bottlenecks in the next five years.

While this report has been prepared to support the Vancouver Fraser Port Authority’s submission of 9 Comprehensive Project Proposals to the National Trade Corridors Fund in November 2017, it provides an analysis for the nearly 40 projects that make up the GVG2030 strategy. It is anticipated that funding applications will be submitted for all GVG2030 projects over the subsequent national calls for projects.

Overall, the analysis determined that every $1 invested in the GVG2030 projects would generate $2.32 in public benefits, for a total of $4 billion in benefits to Canadians. It should be noted that as most cargo handled through the Port of Vancouver is transported by rail, this analysis focuses on the benefits associated with investments that would remove rail bottlenecks and increase rail capacity. Given the nature of the proposed roadway improvements, freight shipments by truck also benefit through reduced delay and improved reliability. However, the quantification of the full range of these benefits falls outside of the scope of this analysis.

1.1 Introduction

The Greater Vancouver rail network connects the 27 major marine cargo terminals within the Port of Vancouver with the North American rail network. This network provides Canadian producers and consumers with access to more than 170 international trading economies worldwide. Rail plays a significant role in supporting Canada’s largest and most diversified port.

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The Port of Vancouver is served by three Class 1 railways – the Canadian National Railway (CN), the Canadian Pacific Railway (CP), and the BNSF Railway (BNSF) – as well as the Southern Railway of British Columbia (SRY). These railways have recognized the need for rail capacity expansion to meet the forecasted increases in demand in the Greater Vancouver area. This need has historically been addressed through infrastructure expansion, operational improvements, as well as co-production agreements between railways which expand the capacity of existing rail infrastructure. All of the rail companies across the network cooperate to make the best use of the rail infrastructure, equipment and resources to maintain system reliability and cost effectiveness resulting in competitive trade for Canadian businesses and consumers.

While these cooperative agreements have provided operating efficiencies across Greater Vancouver (effectively increasing rail capacity), additional infrastructure investments must be made in order to ensure that future rail capacity is sufficient to meet the growing demand for goods movement through the Port of Vancouver.

Trade through the Port of Vancouver is increasing

In 2016, 136 million tonnes of cargo across various commodity sectors passed through the Port of Vancouver. Based on a conservative assumption of cargo growth, total annual tonnage through the port is anticipated to increase by 69 million tonnes by 2030, as compared to 2016 volumes. Port of Vancouver Freight Volumes 250 Others

Other Fertilizers 200 Autos

Sulphur 150 Bulk Liquids

Potash

100 Metals & Minerals

Agricultural Products Millions Tonnes of Metric Millions 50 Forest Products

Containers

0 Coal

Figure ES-1: Trade Growth Forecast at the Port of Vancouver

To manage this projected growth, which translates to approximately 26 additional trains per day travelling to / from the Port of Vancouver, investment in the GVG2030 projects is needed to increase the efficiency and capacity of the rail network.

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Cost-Benefit Analysis

The overall improvements and public benefits generated by these projects were monetized through a Cost-Benefit Analysis (CBA) – a conceptual framework that quantifies in monetary terms as many of the costs and benefits of a project as possible. Where it is not possible to reasonably quantify benefits, qualitative assessments are provided. The CBA in support of GVG2030 demonstrates a sound analysis of anticipated outcomes of the program including safety, efficiency, environmental, social and international trade and commerce benefits in compliance with federal, provincial and industry-specific CBA guidance.

1.2 Methodology In order to fully assess the impacts, a Base and Alternative Case is used to compare the socioeconomic costs of rail network capacity constraints in the Base Case to the anticipated benefits from infrastructure improvements in the Alternative Case.

Base Case (Without Greater Vancouver Gateway 2030 projects)

In the Base Case, it is assumed that the infrastructure improvement projects identified in GVG2030 are not constructed. As a result, railroad capacity serving both passenger and freight rail services remains at current levels resulting in constraints to future growth in passenger and freight rail service once capacity is reached. The Base Case assumes planned / funded improvements at other West Coast ports proceed as planned, and that rail capacity constraints within the Greater Vancouver rail network result in either the diversion of Canadian cargo to other ports, most likely in the Pacific Northwest of the U.S., at an increased cost to Canadian businesses and consumers.

In addition, with long term growth in freight and passenger rail traffic, commuters are increasingly being delayed at level crossings within Greater Vancouver. Vehicle idling while crossings are occupied by trains results in increased emissions. While vehicle delay is prominent, the presence of at-grade crossings also may result in impacts to emergency response, safety and noise.

Alternative Case (Greater Vancouver Gateway 2030 projects are built)

The Alternative Case presumes that the nearly 40 projects identified in GVG2030 proceed as planned, alleviating rail network bottlenecks and facilitating growth in international trade. Construction of the projects is expected to provide rail capacity and fluidity improvements directly contributing to the overall scale and productivity of port operations. These improvements allow terminals to expand operations, reduce unit costs and, more generally, allows the Port of Vancouver to meet forecasted demand for Canadian trade.

The GVG2030 program will grade separate a series of at-grade intersections within Greater Vancouver. The elimination of delays at the rail crossings will improve the mobility of commuters and freight trucks, support active pedestrian and bicycle lifestyles, and improve the quality of life of Greater Vancouver residents through noise and emissions reductions.

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1.3 Monetized Benefits

The following benefits arising from the implementation of the full suite of GVG2030 projects are monetized as part of this CBA.

Economic Benefits

 Shipper Cost Savings As rail capacity in the Greater Vancouver area is increasingly restricted due to future train volumes, additional train delay places upward pressure on rail rates. Further, as practical capacity of the rail network is reached, shippers are forced to find alternate ports to reach export markets. These locations, being further from Canadian production sources, result in higher transportation costs for producers. Infrastructure improvements designed to increase rail capacity within the Port of Vancouver provides a more efficient supply chain providing Canadian producers with a more cost-effective way of moving goods to international markets.

 Motor Vehicle Operating Cost Savings As train volumes grow, motorists will be increasingly delayed at level crossings. Grade separation eliminates fuel consumption and other vehicle operating costs typically incurred by vehicles idling at occupied crossings.

 Travel Time Delay Reduction of delays and improved fluidity in passenger or freight transportation is a key goal of transportation investments. Time saved from faster travel could be dedicated to activities with higher value to the public including recreation, work, and other more productive uses of the time.

Quality of Life Benefits

 Safety Minimizing the rail distance from Canadian production centres to port facilities reduces the probability of accidents in the form of derailments or rail/road interaction. Further, reducing the number of at-grade crossings within the Greater Vancouver area effectively eliminates the possibility of collisions between trains and vehicles at those crossing that are grade separated.

 Emissions Minimizing the rail distance from Canadian production centres to port facilities reduces locomotive emissions relative to more distant ports. Further, reducing the number of at- grade crossings within the Greater Vancouver area reduces vehicle emission for those idling when the crossing is occupied.

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1.4 Non-Monetized Benefits

In addition to the monetized benefits described above, the GVG2030 projects would generate benefits that are difficult to monetize. A brief description of those benefits is provided below.

Economic Benefits

 Improved Travel Time Reliability Motorists have a chance to experience delays at any given at-grade railway crossing, which causes variability in travel time. In addition, queued vehicles may block adjacent intersections causing delays on nearby roads. Creating grade separated rail crossings will improve travel time reliability, as motorists will avoid any risk of delays due to passing trains. However, valuation of reliability can be drastically different among the users of facilities, and as such is difficult to monetize.

 Improved Access to Future Development Potential Grade separated crossing sites are being designed to improve travel time reliability and accessibility which could result in increased development in the surrounding area. In addition, grade separated crossings are being planned to accommodate future growth of the rail network, which would otherwise increase future delays at the crossings.

Quality of Life Benefits

 Improved Connectivity Grade separation will replace at-grade crossings with new pedestrian and cycling facilities along an overpass allowing for greater connectivity and promotion of an active lifestyle. As well, access to opportunities including nearby businesses and other public facilities will be improved.

 Improved Emergency Vehicle Access Key emergency services (fire, police, and ambulance) are impacted by delays at rail crossings, resulting in delays for emergency services. Without these delays, emergency services can arrive faster and prevent damage that would have otherwise occurred in their absence. For example, survival rates for serious medical emergencies are dependent on the arrival time of an ambulance. Removing blockages through the various GVG2030 projects would improve the travel time and reliability for emergency responders that may otherwise not be able to pass or be forced to take a longer route.

 Reduced Noise Pollution Federal law requires trains to sound their horns or whistle as they approach a public grade crossing. As part of GVG2030, various at-grade crossings will be either separated or eliminated, which will result in less noise from train whistles.

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1.5 Results

Taking the present value of GVG2030 project costs and benefits over a 30-year study period and using a 10% real discount rate results in an overall Net Present Value of $2.2 billion, and a Benefit-Cost Ratio of 2.32. The $3 billion investment ($1.7 billion in present value terms) would result in a total of $4 billion in discounted benefits – 2.3 times more than the cost of the improvements with a payback of 7.8 years, and an internal rate of return of 23.5%.

Table ES-1 summarizes the impacts and associated monetary benefits expected from the project in constant 2017$ discounted at 10%.

Table ES-1: Summary of Infrastructure Improvements and Associated Benefits

Current Status or Baseline Changes to Baseline / Socio-Economic Impact Population Affected by Impacts Summary & Problems to be Alternative of Results Addressed 2017$ Discounted at 10% The presence of numerous GVG2030 projects will grade Avoidance of increased supply at-grade rail/road crossings separate a series of at-grade chain costs for Canadian in Greater Vancouver limits intersections within Greater producers of export Canadian producers of export the ability to expand railroad Vancouver allowing additional commodities due to increased commodities infrastructure. With long rail infrastructure to be train delay as train capacity is term growth in rail traffic, constructed increasing rail approached railroad delay will cause capacity and reducing train Avoidance of increased supply $3,471 M inefficiencies in the supply delay. chain cost for Canadian chain, raising transportation producers of export Canadian producers of export costs that are ultimately commodities once the practical commodities passed on to consumers of capacity of Greater Vancouver rail transportation services. freight rail network is reached. Practical capacity of the rail Improved safety - avoided network In the port influence vehicle / train collisions due to Residents near alternative West area is reached sooner in longer train route to alternative Coast ports $169 M the absence of these rail port destinations infrastructure improvements. Avoidance of increased Residents near alternative West Canadian producers of locomotive emission due to Coast ports $78.3 M commodities destined for alternative port destinations export must seek alternate port facilities, move goods a Avoidance of increased longer distance, and face emissions due to locomotive Local businesses and residents Not monetized higher transportation costs idling as a result.

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Current Status or Baseline Changes to Baseline / Socio-Economic Impact Population Affected by Impacts Summary & Problems to be Alternative of Results Addressed 2017$ Discounted at 10% With long term growth in GVG2030 projects will grade Reduced delay (travel time) Motorists, shippers, local freight and passenger rail separate a series of at-grade costs businesses and residents $177 M traffic, commuters are intersections within Greater Improved safety - avoided Motorists, shippers, and residents increasingly being delayed Vancouver. The elimination of vehicle / train collisions $7.4 M at level crossings within delays at the rail crossings will Greater Vancouver. improve the mobility of Avoided emissions due to Motorists, shippers, local Vehicles idling while commuters and freight trucks, vehicle idling businesses and residents $1.6 M crossings are occupied support active pedestrian and Reduced vehicle operating Motorists, shippers, local generates greenhouse gas bicycle lifestyles, and improve costs due to vehicle idling and businesses $7.8 M emissions and criteria air the quality of life of Greater delay contaminant pollution. While Vancouver residents through Residual value of infrastructure Local governments vehicle delay is prominent, noise and emissions reductions. assets $25.3 M the presence of at-grade crossings also may result in Reduced travel time variability. Fewer rail crossing blockages Motorists, shippers, local impacts to emergency Not monetized service response times, will improve travel time businesses and residents safety, and noise. reliability Grade separation will provide pedestrian and cycling facilities allowing for greater connectivity and promotion of Pedestrians, cyclists, local Not monetized active lifestyles, in addition to businesses and residents. improved access to nearby businesses and other public facilities. Grade separation and whistle Pedestrians, cyclists, local cessation will reduce noise Not monetized businesses and residents. pollution from train whistles. Fewer rail crossing blockages will improve reliability for emergency responders that Motorists, shippers, local Not monetized may otherwise not be able to businesses and residents pass or be forced to take a longer route.

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Table ES-2: Overall Results of the Cost-Benefit Analysis

Cost-Benefit Analysis Results Discounted at 10% Undiscounted Program Benefits Transportation Cost Savings to Canadian $3,471,426,000 $16,900,839,000 Producers Safety and Environmental Benefits from Rail $247,347,000 $1,184,706,000 Network Improvements Improved Safety $169,009,000 $823,501,000 Avoided GHG Emissions $56,598,000 $281,842,000 Avoided CAC Emissions $21,740,000 $79,363,000 Local Transportation and Environmental $194,064,000 $974,646,000 Benefits Travel Time Savings $177,403,000 $895,800,000 Vehicle Operating Cost Savings $7,753,000 $39,157,000 Improved Safety $7,354,000 $31,811,000 Avoided GHG Emissions $1,385,000 $7,087,000 Avoided CAC Emissions $169,000 $791,000 Residual Value of Assets $25,303,000 $441,530,000 Total Benefits $3,938,141,000 $19,501,721,000

Program Costs Capital Costs $1,688,917,000 $2,957,094,000 Operations & Maintenance Costs $16,632,000 $91,371,000 Total Costs $1,705,549,000 $3,048,465,000

CBA Summary Results Discounted at 10% Net Present Value (NPV) $2,232,593,000 Benefit-Cost Ratio (BCR) 2.32 Internal Rate of Return (IRR) 23.5% Discounted Payback Period (DPP) 7.81 years

For the purposes of the BCR, O&M is considered a negative benefit and only up-front project capital costs are used in the denominator.

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1.6 Sensitivity Analysis

Overall, results are driven primarily by increased capacity and improved rail network efficiency that translate to transportation cost savings to Canadian shippers. Increased demand is a natural requirement for capacity improvement projects and 1.48% per year was determined to be the break-even growth rate for the analysis holding everything else constant. As a comparison, freight volumes at the Port of Vancouver have increased by an average of 2.6% per year since 2008, representative of a full business cycle.

The sensitivity analysis of incremental distance and cost to shippers for moving goods to alternate gateways - which account for 88% of total public benefits - determined that a $693 increase in cost per railcar is the breakeven point for the CBA, while an increase as high as $2,825 in costs from a 644 kilometers increase in haul distance would increase the NPV to $4.7 billion and generate a BCR of 3.77.

A 25% change in capital cost estimates resulted in a 19% change in NPV while a ten-fold increase in operations and maintenance costs had a 6.7% impact to NPV, indicating that uncertainty in the cost estimates does not put net public benefits at risk.

Overall, in all reasonable instances of the sensitivity analysis, the benefit-cost ratio remained well above 1.0 and demonstrated that even with overly conservative assumptions the GVG2030 improvements are expected to generate a substantial amount of public benefits with relatively low risk.

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2 Introduction

This document provides detailed technical information on the cost-benefit economic analysis conducted in support of the nearly 40 projects proposed by the Gateway Transportation Collaboration Forum in its Greater Vancouver Gateway 2030 (GVG2030) strategy. It has been developed to serve as an appendix for federal funding applications being submitted to the National Trade Corridors Fund (NTCF).

 Section 2 - Introduction: Outlines the CBA document layout and structure to assist NCTF reviewers.

 Section 3 - CBA Methodology and Framework: Introduces the conceptual framework used in the Benefit-Cost Analysis.

 Section 4 - GVG2030 Overview: Provides an overview of the nearly 40 GVG2030 projects, including a brief description of existing conditions and proposed alternatives; a summary of cost estimates and schedule; and a description of the types of effects that GVG2030 is expected to generate.

 Section 5 - Freight Diversion Analysis: Estimates of travel demand and traffic volumes.

 Section 6 - Key Assumptions: Discusses the general assumptions used in the estimation of project costs and benefits. Specific attention is made to critical assumptions such as rail rates, train volumes and current rail capacity limitations.

 Section 7 - Outcome Measurement, Data and Assumptions: Details the specific data elements and assumptions used to address the goals of the project and to comply with program requirements.

 Section 8 - Cost-Benefit Analysis Results: Estimates the Net Present Value (NPV), its Benefit/Cost Ratio (BCR) and other project evaluation metrics for the GVG2030 projects. This section also provides the outcomes of the sensitivity analysis that evaluates the different assumptions and the impact that the variability of those assumptions may have on the overall project.

 Section 9 - Supplementary Data Tables: Includes a detailed breakdown of all benefits associated with the GVG2030 projects, including annual estimates of benefits and costs, as well as intermediate values to assist NTCF in its review of the applications.

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3 CBA Methodology and Framework

Cost-Benefit Analysis (CBA) is a conceptual framework that quantifies in monetary terms as many of the costs and benefits of a project as possible. CBA adopts the view that a project or proposal would be rated positively if the overall benefits to society outweigh the costs and any losses. Typically, CBA is a forward-looking exercise, seeking to anticipate the welfare impacts of a project or proposal over its entire lifecycle. Future welfare changes are weighted against today’s changes through discounting, which is meant to reflect society’s general preference for the present, as well as broader inter-generational impacts.

For most traditional project evaluations, it is reasonable and desirable to evaluate individual project investments at a very discrete and localized level because the cost and benefit of the project are tied to that project alone. For example, for an individual (non-rail capacity related) roadway/railway grade-separation project that is solely intended to improve local traffic flow, one can quantify these benefits and costs to that roadway alone and complete the CBA. The CBA at this level can appropriately be used to establish the project worthiness.

However, the benefits derived from groups of projects designed to expand overall railway system capacity, and therefore allowing greater throughput, cannot be accurately established by examining each individual project in isolation. To do so would understate the benefits if not fail to capture benefits at all. This is because railways are a cohesive network with very few moving vehicles (trains) and with the movement of each vehicle dependent entirely on the movement of others; whereas roadways are a transportation system where each vehicle can choose from an almost unlimited set of independent paths. For railways, the overall effect of the group or portfolio of projects must be considered in unison as all are required to improve system capacity. Proceeding with one of the projects may alleviate one specific bottleneck while shifting it to somewhere else in the system (without the other project improvements), and subsequently having no incremental change to system capacity. Typically, railways examine a suite of projects using an operations simulation model to have assurance that the overall system capacity and fluidity has been achieved. All of the discrete improvements are considered as a single overall project whose implementation is required to achieve the results. For example, the Chicago, Illinois, CREATE program established a Base Case and Build Case network simulation model when the program was conceived in the early 2000s, and then identified more than 100 grade-separation, railway connection, railway double-tracking, and railway signalling projects that were tested in the Build Case network model to assure that the overall throughput, fluidity, and reliability goals of the program would be achieved. In contrast, the benefits and costs of the numerous roadway grade-separation projects within the CREATE program could be analyzed on a single-project basis for the roadway effects only because each one had independent utility for motorists.

Accordingly, an isolated project-by-project CBA would greatly understate these system level effects in Greater Vancouver rail network. A holistic portfolio level CBA is required. While project- specific localized effects on vehicle traffic and fluidity can be estimated by project, the overall network capacity expansion effect cannot (as it also requires the other project improvements).

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Therefore, a comprehensive CBA for capacity improvement projects at the Port of Vancouver requires a program-level approach.

The specific methodology developed for this application was developed using the above CBA principles and is consistent with published Government of Canada guidelines. In particular, the methodology involves:

 Establishing existing and future conditions under the Base (No-Build) and Alternative (Build) scenarios;  Assessing benefits with respect to each of the NTCF program objectives;  Measuring benefits in dollar terms, whenever possible, and expressing benefits and costs in a common unit of measurement;  Discounting future benefits and costs with the real discount rates recommended by Transport Canada (real rate of 10 percent); and,  Conducting a sensitivity analysis to assess the impacts of changes in key assumptions.

The GVG2030 projects would generate substantial economic activity and contribute to additional private investment in the region, however, such economic benefits are not traditionally considered in a CBA framework as they do not directly reflect to public welfare effects.

While crucial for highlighting the macroeconomic benefits of the GVG2030 projects, these effects are instead typically quantified as part of an Economic Impact Assessment (EIA). The difference between the two types of economic analyses is outlined in below.

Table 1: Cost-Benefit Analysis and Economic Impact Analysis Comparison

Cost Benefit Analysis Economic Impact Analysis Compares the advantages (user benefits, Assesses how the investment affects societal benefits) and disadvantages (costs) economic activity in the region of an investments Estimates whether society is better off from Estimates effects of the investment on the investment. Concerned with people’s macroeconomic indicators (e.g., jobs) Project “well-being” expenditures (costs) are seen as benefits as they generate economic activity. Primarily concerned with economic efficiency Primarily concerned with changes in and welfare gains economic activity Benefits expressed as resource cost savings Impacts expressed as changes in business or changes in “well-being” sales, employment, income, or tax revenue Used by public decision makers to determine Used by proponents & sponsors to whether to proceed or approve the project communicate the merits / economic benefits of a project to the public

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4 GVG2030 Overview

Trade through the Port of Vancouver is increasing

In 2016, 136 million tonnes of cargo across various commodity sectors passed through the Port of Vancouver. Based on a conservative assumption of cargo growth, total annual tonnage through the port is anticipated to increase by 69 million tonnes by 2030, compared to 2016. Port of Vancouver Freight Volumes 250 Others

Other Fertilizers 200 Autos

Sulphur 150 Bulk Liquids

Potash

100 Metals & Minerals

Agricultural Products Millions Tonnes of Metric Millions 50 Forest Products

Containers

0 Coal

Figure 1: Cargo Growth Forecast at the Port of Vancouver

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To manage this projected growth, which translates to approximately 26 additional trains per day travelling to / from the Port of Vancouver, investment is needed to increase the efficiency and capacity of the rail network.

Greater Vancouver Gateway 2030

Projects to be submitted during first NTCF intake

A total of nine Comprehensive Project Proposals are being submitted by the Vancouver Fraser Port Authority as part of the GTCF in 2017. As a result of bundling, these nine proposals include 16 of the nearly 40 projects within the GVG2030 strategy. These nine proposals are:

1. North Shore Corridor Capacity Improvement Project, 2. Harris Road Underpass and Kennedy Road Overpass Project, 3. Bell Road Overpass Project, 4. Burrard Inlet Road and Rail Improvement Projects, 5. Mountain Highway Underpass, 6. Whistle Cessation and Rail Crossing Information System, 7. Portside Blundell Overpass and Upgrade Project, 8. Pitt River Road and Colony Farm Road Rail Overpasses Project, and 9. Westwood Street and Kingsway Avenue Grade-Separations Project.

With the exception of the Mountain Highway Underpass project, each of these projects directly improve shipment of goods to and from the Port of Vancouver by rail, through removal of existing at-grade crossings that limit operational flexibility, and / or addition of mainline or siding tracks to increase capacity of the rail network. The Mountain Highway Underpass, is purely a road-based project to enable the movement of oversize project cargo, and is assessed separately.

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Table 2: Key Project Characteristics

Project Name Project Characteristic 1 North Shore Corridor Capacity New 18,000 feet of siding track; removal of one at- Improvement Project grade crossing. 2 Harris Road Underpass and New 17,000 feet of siding track, removal of two at- Kennedy Road Overpass grade crossings. Project 3 Bell Road Overpass Project 11,000-foot extension to existing 6,000-foot siding track, removal of three at-grade crossings. 4 Burrard Inlet Road and Rail Approximately 31,000 feet of new sidings and Improvement Projects realigned tracks, as well as reworking of switching operations. 5 Mountain Highway Underpass Enables the movement of oversize project cargo. 6 Portside Blundell Overpass and Improves road and safeguards rail access to Upgrade Project logistics centres that support the growth of container terminals, and will also safeguard for rail access to support the future development of bulk terminals in the area. Provides ability for train switching movements to be conducted without affecting vehicle traffic. 7 Whistle Cessation and Rail Mitigates many of the impacts to surrounding Crossing Information System communities that would otherwise be incurred as a result of these additional train volumes, and would also provide the Vancouver Fraser Port Authority with the ability to monitor day to day rail operations. 8 Pitt River Road and Colony 17,000 feet of double-tracking, removal of two at- Farm Road Rail Overpasses grade crossings. Project 9 Westwood Street and Kingsway Safeguarding for future track, removal of two at- Avenue Grade-Separations grade crossings. Project

While the first phase of nine project identified above are being submitted by the port authority as part of the 2017 intake for the NTCF funding program, the CBA incorporates the anticipated costs of the full suite of nearly 40 projects identified in GVG2030. The remainder of these projects would be submitted by the port authority as part of future NTCF intakes, or would be submitted by other GTCF members. Inclusion of costs for all future submissions in the CBA is necessary because additional projects that will be submitted in subsequent phases of funding applications are required to be implemented in order to achieve the rail network benefits outlined in the benefits analysis.

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4.1 Base Case and Alternative Case

One of the most essential but often overlooked components of Cost-Benefit Analysis is defining the Base Case (No-Build) and the Alternative Case (Build). Improper definition of either of these cases can lead to significant under or over-estimation of benefits.

4.1.1 Base Case (Without Greater Vancouver Gateway 2030 projects)

Key assumptions in the Base Case include:

 Rail network capacity is 80 trains per day and remains constant over the study period.  Unconstrained, train volumes grow at an average of 2.3% per year between 2017 and 2030; volumes are assumed constant after 2030.  Rail rates are an additional $1,709 to/from a Pacific Northwest port compared to the Port of Vancouver.  Rail distance to/from Pacific Northwest port is an additional 369km (229mi) compared to the Port of Vancouver.  Train traffic is expected to persist for 365 days each year as ports operate throughout the year.

4.1.2 Alternative Case (Greater Vancouver Gateway 2030 projects are built)

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Moreover, many projects are explicitly designed to include grade separation of road and rail traffic which will benefit residents of Greater Vancouver through reduced travel time delays, reduced vehicle operating costs, enhanced safety, and avoided air emissions.

Key assumptions in the Alternative Case include:

 Upon completion of all capacity-related GVG2030 projects, rail network capacity increases to 114 trains per day by 2030. o Capacity of the network increases each year between 2019 and 2029, as projects are completed.  Unconstrained, train volumes grow at an average of 2.3% per year between 2017 and 2030; volumes are assumed constant after 2030.  Rail rates are an additional $1,709 to/from a Pacific Northwest port compared to the Port of Vancouver.  Rail distance to/from Pacific Northwest port is an additional 369km (229mi) compared to the Port of Vancouver.  Train traffic is expected to persist for 365 days each year as ports operate throughout the year.

4.2 Project Cost and Schedule

4.2.1 Capital Costs

As noted previously, in addition to the costs associated with the nine CPPs being submitted by the port authority ($1.16 billion), costs are included for the remainder of the projects within GVG2030. In total, GVG2030 identifies approximately $1.7 billion of additional projects1, and an allowance is made for an additional $100 million in rail construction for an overall estimated cost of $1.8 billion. It was assumed that half of these would be NTCF intakes in fall 2020 and 2022, and high-level cash flows of Phase 2 and Phase 3 projects have been generated in the years subsequent to those intakes. It was assumed that half of these projects (by capital value) would be submitted in Phase 2, and the remainder in Phase 3. Note that for simplicity, for the Overpasses / Upgrades along the Burrard Inlet Line for which the port authority submitted an Expression of Interest and the City of Vancouver is submitting a CPP is considered a Phase 2 project. This assumption was made because although this project is being submitted as part of the fall 2017 intake, the actual timing of major design and construction work, per the project schedule included in the EOI, is anticipated to occur in the early- to mid-2020s.

1 Three projects in GVG2030 are not included in this figure; the George Massey Tunnel Replacement Project, the Pattullo Bridge Replacement Project, and the Highway 1 Six-laning, as the benefits related to these projects are primarily road-related.

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Table 3: Capital Cost Estimates

Millions 2017$ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total GVG2030 Phase 1 Projects (2017 submission) $110 $111 $254 $266 $412 $9 $1,163 North Shore Corridor Capacity Improvement Projects $16 $16 $34 $59 $59 $9 $193 Harris Road Underpass and Kennedy Road Underpass $9 $9 $37 $35 $35 $126 Project Bell Road Overpass Project $4.8 $4.8 $20 $19 $19 $68 Burrard Inlet Road and Rail Improvement Projects $44 $37 $19 $19 $19 $138 Mountain Highway Underpass Project $1.3 $3.8 $3.4 $8.6 Whistle Cessation and Rail Crossing Information System $1.0 $6.0 $6.0 $7.0 $20.0 Portside Blundell Overpass and Upgrade Project $6.1 $6.1 $34 $32 $32 $111 Pitt River Road and Colony Farm Road Rail Overpass $22 $22 $95 $91 $91 $322 Project Westwood Street and Kingsway Avenue Grade- $7 $7 $5 $3 $156 $177 Separations Project GVG2030 Phase 2 Projects (2020 submission) $90 $90 $269 $314 $135 $897 GVG2030 Phase 3 Projects (2022 submission) $90 $90 $269 $314 $135 $897 Total Capital Costs $110 $111 $254 $356 $502 $278 $404 $224 $269 $314 $135 $2,957

4.2.2 Operations & Maintenance Costs

Incremental maintenance and future infrastructure renewal and replacement costs were estimated to be approximately $3.5 million per year over the study period. Phase 1 ongoing cost estimates were carried out on a project basis, while costs for Phases 2 and 3 were higher level estimates using general cost factors and as a ratio of the capital costs. While these estimates will need more detailed analysis in the future, they are believed to be in the right order of magnitude and are not significant enough to impact the overall results of the analysis. The Sensitivity Analysis presents results under a scenario where these ongoing costs are 10 times larger than current estimates.

4.2.3 Residual Value of Assets

The residual value of capital assets at the end of the study period is estimated using straight-line depreciation and represents the remaining useful life of structures and other long-lived assets.

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5 Freight Diversion Analysis

This section provides detailed information critical to the development of underlying assumptions required in the estimation of GVG2030 benefits. As mentioned above, in the absence of projects that improve Greater Vancouver rail capacity as outlined in GVG2030 and, as Canadian export volumes grow over time, rail capacity constraints within Greater Vancouver will require the movement of goods through alternative ports. This has two consequences: i) freight rail trains are increasingly delayed within Greater Vancouver thereby increasing supply chain costs and ii) at some point, rail capacity is reached forcing Canadian producers to seek alternative port locations for access to exports markets which in turn also raises supply chain costs as additional land side distances must be travelled.

Key to this assertion are a number of assumptions including:

1. Alternate West Coast ports have (or will have) the necessary terminal infrastructure in place to receive additional volumes of divertible commodities. For example, it is doubtful that coal shipments could be diverted to alternate ports given there is no terminal facilities in place to actually process those shipments. On the other hand, potash shipments would appear to be divertible to the Port of Portland given its current terminal infrastructure dedicated to this commodity. 2. Alternate West Coast ports have (or will have) the necessary rail infrastructure in place in order to receive additional rail volumes. 3. Rail connections between Canadian and U.S. Class 1 railways are in place in order to interchange Canadian originated volumes of commodities now destined for alternative West Coast ports.

Section 5.1 provides an overview of West Coast ports that could serve as alternative gateways for Canadian shippers in terms of terminal operations, the range of commodities handled, serving railroads and programmed rail improvements. Particular focus is given to the Port of Seattle/Tacoma, Port of Portland and the Port of Vancouver USA as these ports are most likely to receive additional Canadian originated shipments given their geographical proximity to the Port of Vancouver. Following this, Section 5.2 provides a brief description of rail improvement projects currently funded or contemplated by the various port authorities in the U.S. Pacific Northwest. Finally, Section 5.3 provides an analysis of those commodities that are likely to be diverted in the absence of rail capacity improvements at the Port of Vancouver given the nuances of railroad operations and the capabilities of alternate ports to receive and process various Canadian originated commodities.

5.1 West Coast Port Overview

This section describes (1) the basic features of West Coast U.S. ports that can serve as alternatives to the Port of Vancouver, (2) the rail network serving these ports, and (3) how freight produced in or consumed in Canada would likely shift from the Port of Vancouver to other ports, as the rail network serving port reaches capacity. This section consists of an overview describing

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why and how freight shifts, and describes the diversion pattern that is likely to occur for each major rail commodity currently transported by rail to or from the Port of Vancouver.

The Port of Vancouver, in common with all major ports in Canada and the U.S., is a market-facing port, that is, the traffic that is selected to move through the port, as opposed to other ports, is determined by shippers instead of through a central planning authority. Shippers choose which port to use for their goods based on total shipping cost from origin to destination, time to market, reliability, and ease of use. Total shipping cost is typically the most important factor in goods that are shipped by ocean vessel. The ability of any given port to compete with another is most dependent upon total shipper cost2. As a railway network serving a port reaches capacity, rail carriers in North America have substantial regulatory freedom to price to optimize the value of their capacity. The practical effect is that railways auction their available capacity to the highest bidder. Shippers with the highest-value goods typically will pay the highest shipping price, thus win the auction. Once the highest-value goods are fully allocated capacity, the remaining railway capacity moves downward toward the lowest-value goods. The lowest-value goods must seek a port with a lower total shipping cost, or often are unable to tolerate any increase in shipping cost and leave the market altogether. For example, a coal producer in Country A, faced with higher shipping costs, can no longer price on a delivered basis into an export market, and the coal demand in that market is taken up by a different producer in Country B.

A major factor in total shipping cost is also the cost of the export facilities that load or unload ships and trains, and store and stage the commodity until shipload or trainload volumes are achieved. These facilities are extraordinarily expensive and have substantial requirement for waterside land, which is itself an extraordinarily valuable commodity. Facilities designed to load and unload commodities are typically highly commodity-specific, and do not exist at every port. Thus, commodities that have one or few export facilities to choose from will tolerate higher total shipping costs through a port where these facilities exist, as the threshold cost to recreate these facilities at another port which could offer lower total shipping costs is very high.

Ports are often regarded as entities unto themselves. From an ocean-basin perspective, two ports are often differentiated only by their relative difference from another port on the other side of the ocean basin, by their draft, and by their fees. However, from the overland-freight perspective, particularly in a very large land mass such as North America with great distances between inland producing and consuming points and tidewater, ports are highly differentiated by the capacity and competitive ownership of the rail network that serves them, and the facilities at the port.

Ports can to some degree influence total shipper costs through improving efficiency, reducing cargo dwell times, increasing throughput volumes and attracting customers by offering a wide range of services that cargo depends on. Often ocean shipping lines, railways, and other common-carriers of freight will ask ports to reduce the costs to the carrier or the total shipping costs, through the port changing the way it handles cargo, reduction of labour costs or resolution

2 NASSTRAC 2016 Survey of Shippers

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of labour contract issues that affect port reliability or throughput, by instituting operational changes that reduce a vessel’s port time, or a roll back of fees.

Ports often also do not control many of the cost of services they provide. Many port authorities, such as the Vancouver Fraser Port Authority, operate as landlord ports, leasing out facilities to carriers or terminal operators. However, the facilities in every port, whether under the control of the public port agency or not, all share common infrastructure including waterways, rail and roads. The public port agency is looked upon as providing for the common benefit of the port district on properties they control and areas where they can only influence.

5.1.1 Port of Seattle/Tacoma

The Port of Seattle/Tacoma, operated by the Northwest Seaport Alliance, is located in the Puget Sound region in Washington State. The two seaports were independently-run competitors until 2015 when they combined services to form the third largest cargo port in the United States by container volume. The port spans over 1,758 acres in King and Pierce counties, and features a depth of 51 feet and above allowing access by Post Panamax III (16,000 TEU) vessels.

In 2016, container traffic totaled 3.6 million TEUs. Top international trading partners include China/Hong Kong, Japan, Republic of Korea, Taiwan and Vietnam. In addition, more than 80 percent of the total trade volume between Alaska and the lower 48 states passes through its terminals. The port’s top imports include industrial machinery, electronics, vehicles, toys and furniture. Top exports include oil seeds and grains, industrial machines, prepared vegetables and fruits, fish and seafood, edible fruits, and metals.3

The ports house 10 container terminals and 5 non-container terminals. Spanning over 1,012 acres, the container terminals consist of 23 berths and 47 cranes, 43 of which are post-Panamax. However, this summer, the Alliance approved the purchase of 8 more Neopanamax gantry cranes, which will be installed over the next two summers beginning in 2018. Efforts are also underway for terminal expansion to create a terminal that can handle two 18,000 TEU ships at once. Facilities include five on-dock intermodal yards and three near-dock intermodal yards.

The ports are serviced by two Class I railroads – BNSF and UP. The railroads offer early fifth- morning service to U.S. Midwest and Ohio Valley markets and over 40 regular departures from the gateway every week.

5.1.2 Port of Portland

The Port of Portland is located about 161 kilometers from the mouth of the Columbia River. The channel is 43 feet deep and 600 feet wide and ship transits normally take approximately eight

3 "Frequently Asked Questions". The Northwest Seaport Alliance. Retrieved February 6, 2017.

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hours to reach a berth in Portland. Over 1,600 ships per year enter and depart the Columbia River for six deep-draft ports.

Over 13 million tons of cargo move through the Port’s facilities each year. Major exports include grain, soda ash, potash, automobiles and hay. Major imports include automobiles, steel, machinery and mineral bulks. Imports and exports at the Port total about $15.4 billion annually.4 The Port is the 5th largest auto import gateway in the United States and the largest mineral bulk port on the U.S. West Coast. In 2013, Port of Portland was listed as the largest wheat exporter in the United States.5

The Port contains four major terminals. Terminal 2 features two multipurpose cranes and can handle virtually any cargo from lumber and forest products to steel, machinery and packaged cargoes.6 Terminal 4 is also multipurpose and features seven ship berths capable of handling cargoes including autos, forest products, steel, and dry and liquid bulks. Terminal 5 features the Port’s rapid-handling grain elevator and, completed in 1997, a $48 million mineral bulk exporting facility. Terminal 6 handles the Port’s container service; however, after a termination of its ICTSI Oregon lease agreement earlier this year, the Port is currently developing new ideas to fill that role. The terminal is serviced by 7 container cranes (4 Post Panamax).

Serviced by two Class I railroads, BNSF and Union Pacific, the Port has invested heavily in a number of rail yards, overpasses, new trackage and related projects to improve capacity, velocity and safety throughout the region.

5.1.3 Port of Vancouver USA

The Port of Vancouver USA is a multi-purpose port authority on the Columbia River in Vancouver, Washington. The port handles more than 7 million tons of cargo each year including products such as wheat, grains, mineral and liquid bulks, automobiles and project cargo.

The Port of Vancouver USA primarily serves bulk import and export markets with dedicated facilities for agricultural commodities, mineral ores, concentrates, and fertilizers. Port of Vancouver USA is directly served by both BNSF and UP and has recently completed its West Vancouver Freight Access project, a $270 million USD project creating a new rail entrance to the port.

4 https://en.wikipedia.org/wiki/Port_of_Portland_(Oregon) 5 https://www.ams.usda.gov/sites/default/files/media/Port%20Profiles%20Entire%20Pub.pdf 6 https://www2.portofportland.com/#Marine-Terminal

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5.2 Capacity Improvements at Other West Coast Ports

According to Federal Maritime Commission, “a leading cause for cargo diversions is port congestion. […] While severe congestion manifested in Los Angeles, Long Beach, and Oakland in 2014-2015, it is a condition that can develop at any port, in any place in the world and lead to domestic or foreign port cargo diversions. […] West Coast ports and the U.S. government have vowed that port congestion on the scale experienced in 2015 will not happen again, with West Coast ports taking steps to insure against a repeat. For example, massive infrastructure improvement and expansion projects are underway to ensure ports can handle the increase in cargo volume due to mega ships, and Super-Post-Panamax cranes are being installed along the West Coast to move more TEUs than ever before. Further, evidence shows that shippers still prefer the efficiency and reliability that comes from using the United States as a gateway into North America.”7

The Ports of Seattle/Tacoma, Portland and Vancouver USA are all committed to improving infrastructure to improve their competitive position and have begun planning and constructing projects that add rail capacity, remove rail congestion and bottlenecks, or improve railroad operations and efficiency.

Typical projects include:

 Providing rail access to dock infrastructure,  Grade separations to expedite freight movement, improve public safety, and reduce modal delay,  Construction of new tracks for added freight capacities,  Construction of new tracks on rail bridges to relieve bottlenecks and increase capacity,  Construction of new arrival and departure tracks to stage trains,  Construction of new yard tracks for added railcar storage,  Installation of powered rail switches to increase rail throughput/capacity,  Installation of universal crossovers to improve rail traffic fluidity and increase capacity,  Rehabilitation of track to allow for track speed increases, and  Construction of track connections to improve access and throughput.

A summary of future railroad-related capital projects being proposed by select U.S. Pacific Northwest (PNW) ports is presented in Table 4 through Table 6 below. (Information regarding port infrastructure improvements was obtained through public sources.)

7 Federal Maritime Commission, Fourth Annual Update of the Study of U.S. Inland Containerized Cargo Moving through Canadian and Mexican Seaports, July 2016.

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Table 4: Port of Seattle/Tacoma – Capital Improvement Projects

Project Name Description Purpose Timeline Cost Funded (Years) (US $M) East Marginal Way Construct grade Improves safety 1 $56.3 Yes separation and capacity Argo Yard Truck UP grade crossing Adds capacity and 1 $7.75 Yes Roadway improvements on access; improves East Marginal Way operational and Colorado efficiency Avenue; includes adding UP Argo Yard automated gate system Lander Street Bridge Construct grade Improves safety N/A $123 Yes Project separation; joint with and capacity Port of Tacoma EB-1 Connection to Construct Improves access N/A N/A Yes General RR System connection to the and capacity (Port of Tacoma and general railroad Tacoma Rail project) system; provides dock freight rail access to support existing break-bulk operations and attract future customers North Leads (Port of Construct industrial Improves access N/A N/A Yes Tacoma and Tacoma lead tracks to the and capacity Rail project) Blair Peninsula Transfer Yard Construct Improves access N/A N/A Yes Connection to Lincoln connection from the and capacity (Port of Tacoma and Port Transfer Yard Tacoma Rail project) to existing tracks along Lincoln Avenue Culvert Erdahl Ditch Repair retaining Adds capacity and N/A N/A No (Port of Tacoma and walls supporting the access; improves Tacoma Rail project) Erdahl Ditch in the operational main rail yard; efficiency; and reconfigure tracks removes rail bottleneck Arrival & Departure Construct additional Adds capacity; N/A N/A No (A&D) Track railroad tracks; make improves Extension & East End adjustments operational Yard Reconfiguration designed to improve efficiency; removes (Port of Tacoma and operational flexibility rail bottleneck Tacoma Rail project) and efficiency West End Yard Construct additional Adds capacity; N/A N/A No Reconfiguration (Port railroad tracks; make improves of Tacoma and adjustments operational Tacoma Rail project) designed to improve efficiency; removes operational flexibility rail bottleneck and efficiency

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Project Name Description Purpose Timeline Cost Funded (Years) (US $M) Washington United The project would Adds access, N/A N/A No Terminal – Double mirror the capacity, and Ending (Port of configuration of the operational Tacoma and Tacoma current access into flexibility Rail project) the terminal tracks on the North end to allow trains to make a “through movement” Pierce County Construct terminal Adds capacity and N/A N/A No Terminal – Double tracks on the West access; improves Ending (Port of end to allow trains to operational Tacoma and Tacoma make a “through efficiency Rail project) movement;” construct new connection to the general railroad system on the East end of the terminal Yard Tracks 5 and 6 N/A Adds rail capacity N/A N/A Yes Rail Relay Project (Tacoma Rail project) Port Pass Track N/A Improves rail N/A N/A Yes Upgrade (Tacoma bottleneck Rail project) Yard Tracks 8 and 9 N/A Improves rail N/A N/A Yes Rail Relay (Tacoma bottleneck Rail project) Lincoln Ave "Wye" N/A Improves rail N/A N/A Yes Installation (Tacoma bottleneck Rail project) East Loop N/A Improves rail N/A N/A Yes Rehabilitation and bottleneck 17th Street Expansion (Tacoma Rail project) NIM Yard Lead Track N/A Improves rail N/A N/A Yes Upgrade (Tacoma bottleneck Rail project) Taylor Way Track N/A Adds rail capacity N/A N/A Yes Rehabilitation and Expansion (McPip area track upgrade) - Tacoma Rail project SR 509 Track Rebuild N/A Improves rail N/A N/A No Project (South Lead) - bottleneck Tacoma Rail project West Loop Track N/A Improves rail N/A N/A Yes Rehabilitation bottleneck (Concrete Tech Area) Sources: (1) https://www.portseattle.org/Business/Construction-Projects/Documents/CIP_Q1_2017_rpt.pdf (2) https://www.portseattle.org/Supporting-Our-Community/Regional-Transportation/Pages/Lander-St-Overpass.aspx (3) https://www.portoftacoma.com/sites/default/files/LandUseTransportationPlan.pdf

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Table 5: Port of Portland – Capital Improvement Projects

Project Name Description Purpose Timeline Cost Funded (Years) (US $M) Portland Terminal Install dispatcher- Adds capacity and 5 $10.81 No Railroad Power controlled powered improves Switches switches between operational Lake Yard and efficiency Terminal 2 Ramsey Yard Connect existing Improves 10 $1.7 No Utilization track with industrial operational lead efficiency and access Bonneville Rail Yard Construct two Adds rail-staging 10 $3.6 No Build Out interior yard tracks; capacity for South completes the Rivergate double-track lead from the wye at the east end of the yard to Barnes Yard BNSF Fallbridge Double-track the Increases capacity 10 $72 No Double Tracking Fallbridge rail line to of the BNSF east- Washougal west main line serving Port of Portland T6 Development This program Adds rail-staging 10 $80 No Project includes additional capacity to the scour protection, T6 container terminal entrance overcrossing, two cranes, terminal electrical upgrades, yard gantry cranes, and 6,800 feet arrival and 8,500 feet departure tracks Marine Drive Construct rail Avoid road/road 20 $13.6 No Improvement Phase 2 overpass on Marine conflict; improves Drive operational efficiency West Hayden Island Construct interior Avoid road/road 20 $13.6 No Interior Access Road roadway including conflict; improves rail overpass and operational berth access efficiency West Hayden Island Construct rail yard Adds capacity and 20 $9.5 No Rail Yard connected to facility improves trackage operational efficiency West Hayden Rail Rail access from the Adds capacity and 20 $3 No Access railroad main line to rail access support West Hayden Island development North Portland Upgrade railroad Adds capacity and 10 $9.16 No Junction with universal improves crossovers, tie into operational centralized traffic efficiency control (CTC), and improve geometrics

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Project Name Description Purpose Timeline Cost Funded (Years) (US $M) Kenton Rail Line Double track from Adds capacity and 10 $25.38 No Upgrade Peninsula Junction improves to Interstate 205; operational increase track efficiency speeds between North Portland, Peninsula Junction, and Reynolds on the Union Pacific Railroad (UP) Kenton Line Terminal 2 Yard and Rehabilitate rail and Improves 5 $16.5 No Rail Improvement pavement at operational Terminal 2 efficiency T4 Berth 410, 411 Rail Construct additional Adds capacity and 10 $7.8 No Yard Improvements rail track in Berth improves 410 and the 411 Rail operational Yard efficiency T4 Pier 1 Tracks 704- Rehabilitate Tracks Adds capacity and 5 $0.45 No 709 704-709 storage; also improves operational efficiency Barnes to Terminal 4 Construct a new Adds capacity and 5 $10.54 No Rail track from Barnes rail access Yard to Terminal 4; includes the replacement of Lombard Bridge Source: https://popcdn.azureedge.net/pdfs/Trade_Trans_Studies_PTIP_2017_Final.pdf

Table 6: Port of Vancouver USA – Capital Improvement Projects

Project Name Description Purpose Timeline Cost Funded (Years) (US $M) West Vancouver N/A Improving capacity N/A N/A Yes Freight Access - Grain and rail access Track Unit Train Improvements Phase B West Vancouver N/A Improving capacity N/A N/A Yes Freight Access - Grain and rail access Track Unit Train Improvements Phase C Bulk Unloading Facility N/A Improving capacity N/A N/A Yes and rail access Source: https://www.portvanusa.com/resources/waterfront-spring-brochure/

5.3 Commodity Overview

The Greater Vancouver rail network serving the Port of Vancouver is approaching capacity. As the rail network becomes congested, the overall capacity of the port will be effectively capped for all commodities that require rail transportation, limiting the amount of traffic growth that can be accommodated at the port. Without additional investment, rail congestion will result in increased

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cycle times for shipments, more demand for rail equipment and resources, and ultimately higher shipping rates to/from the port. Commodity value and existing port capacity will have a large influence on which commodities will shift, and in what order they will shift as the port becomes more congested.

Due to the high capital threshold to construct new port facilities required to load and unload containers and bulk commodities at ports where these facilities do not presently exist, it is likely that as the rail network serving the Port of Vancouver reaches capacity, the goods and commodities that will be diverted first will be those for which suitable port facilities already exist at other ports. For example, potash facilities already exist at the Port of Portland and grain facilities exist at numerous West Coast ports. Due to distances from most Canadian origins, capacity of the rail network and existing facilities at the Port of Vancouver and Prince Rupert will likely be exhausted before other West Coast ports are utilized. The Pacific Northwest ports in the U.S. are the next most likely to see volumes shift towards them, followed possibly by other ports on the U.S. West Coast, U.S. Gulf Coast, and Canada and U.S. East Coast. However, as overland distances between inland points of production and consumption and ports of export/import increase, low value goods may simply cease to move altogether due to uncompetitive transportation costs to final destination compared to other producers and consumers in the world market.

The respective rail networks of CN and CP are most efficient when providing single-line hauls along their main lines towards Canadian West Coast ports. As traffic shifts from the Port of Vancouver or the Port of Prince Rupert (CN only) to other ports, interline connections will need to be made between CN, CP, and the respective U.S. railways serving those ports. In many cases this will add route distance, and in all cases it will add additional handlings to rail shipments, increasing cycle times and shipping rates. Traffic origins play a large role in how rail traffic patterns may shift over time as it will dictate the most likely rail routing from origin to destination. The path of least resistance (factoring in overall distance, cycle times, and shipping rates) will usually dictate the most likely rail route and port selected by a shipper.

When specifically looking at Western Canadian resources, the Port of Vancouver has the strategic advantage of being the only West Coast port served by both Canadian Class 1 railways (CN and CP). Efficient access by both rail carriers results in competitive options for shippers including optionality from many dual-serviced or interchange locations in Western Canada.

It’s important to note that the overall route structure of CN and CP plays a significant role in determining how rail traffic will move to other ports, specifically PNW ports. CN has limited connections to BNSF in Western Canada (Manitoba and Vancouver only). CN has no direct connection with UP in Western Canada. CP has more options to route traffic to UP and BNSF at several interchanges through the Upper Midwest and across Western Canada. This is illustrated on the map below:

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Figure 2: Regional Rail Network Map

The following analysis gives a perspective of potential traffic diversions for each commodity group, focusing on the most likely scenarios first.

5.3.1 Intermodal Containers

As the port approaches capacity, intermodal container volumes may be affected in a variety of ways depending on the origin/destination of the traffic within North America. Domestic container volumes moving to/from Greater Vancouver will have to remain on rail, or else move to truck further increasing costs.

International container volumes could shift to other ports if shipping rates increase or transit times increase. Containers originating/terminating in U.S. markets (Minneapolis, Chicago, Detroit, Memphis, etc.) would potentially move over to U.S. rail carriers for movement to/from West Coast ports at Seattle/Tacoma, Oakland, and LA/Long Beach. There is potential for containers to be diverted to East Coast or Gulf Coast ports for furtherance via the Panama Canal, especially for low-value goods with little time sensitivity.

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CN and CP will likely concentrate on the longest hauls of domestic and international intermodal volumes first. In some extreme cases, the Canadian rail carriers may exit markets that have low volume and low yields – leaving that traffic to be trucked to larger terminals or other rail carriers for furtherance to/from port.

5.3.2 Grain

Grain represents the most likely candidate of the bulk commodities for diversion. The overall global grain market is diverse, opening up a variety of options for grain shippers to get their product to market. CN’s current pricing structure for export grain allows prairie shippers to choose between both the Port of Vancouver and the Port of Prince Rupert equally, providing some relief for CN shippers, but limited by the total grain export capability at Prince Rupert. CP grain shippers in Western Canada and the U.S. would have access to PNW grain ports through a CP-UP agreement to move traffic through the Eastport ID interchange. A similar option exists between CP and BNSF with slightly longer route distances. With excess grain capacity in the PNW, export facilities provide attractive grain prices if the higher rail rates to the PNW can be overcome. Other grain export facilities on the Great Lakes and Gulf Coast could be utilized depending on overall net back to grain shippers. Again, a significant amount of capacity exists at these ports to handle any shifts in traffic that may occur.

As discussed previously, the CN route structure in Western Canada does not easily present options to interchange Western Canadian grain products to either UP or BNSF for furtherance to the PNW. As such, CP would need to be utilized as an intermediate carrier in many cases, increasing rail rates further. Although both CN and CP interchange with BNSF in the Vancouver area, it is assumed that any grain diverted to the PNW would have to avoid this gateway due to overall rail congestion in Greater Vancouver and limited BNSF capacity between Vancouver BC and PNW grain ports.

Other export options for grain include Thunder Bay, which has significant export capability and is serviced by both CN and CP. The Twin Ports of Duluth/Superior also present an export option for Canadian grain with direct access by CN. CP has access to the Twin Ports, but the out of route rail distance for shipments from Western Canada would drive costs up for shippers considerably. The Port of Churchill presents an opportunity to export grain to global markets if/when the rail line is reopened. The grain terminal has been closed since 2016, but could be reactivated to export grain if market economics presented itself.

Grain will ultimately be shipped to where the best economics present themselves. Shippers may start selling into less lucrative markets like Europe, North Africa, and South America if insufficient capacity exists to export through Vancouver or other West Coast ports. This results in overall cost increases and lower profitability for Canadian grain shippers if they cannot export to Asia.

5.3.3 Potash

Currently, potash exports through the port are handled through Neptune Terminals (Canpotex Potash) and Pacific Coast Terminals (K+S Potash). As a bulk, granular commodity, potash

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volumes could shift to other bulk terminals in North America as long as suitable storage capacity existed at port due to Potash’s corrosive nature. Potash export facilities with excess capacity would be utilized first, with the opportunity for volumes to shift to other facilities with investment in appropriate storage capacity.

In addition to Neptune Terminals, Canpotex utilizes a secondary export facility in Portland. Railcars are shipped from Saskatchewan origins through a CP-UP routing via the Eastport, Idaho interchange. It is likely that Canpotex would divert volumes to Portland, maximizing the export capability of its Portland facility before looking for alternatives. Shifting volumes to Portland would result in higher rail rates due to longer route distance, two Class I rail carriers being involved in the haul, and reduced train size capability on that corridor (130 car maximum train lengths to Portland versus 170 cars to Vancouver). Once Portland was fully utilized, Canpotex could likely divert additional volumes to Thunder Bay, Ontario, and Saint John, NB. Shipping to Thunder Bay or Saint John would increase overall shipping costs to get product to desirable markets (primarily Asia), but they would allow capacity to get product to market. Like grain, Canpotex may have to shift product to other markets, resulting in increased costs and lower yields.

With K+S Potash being a relatively new entrant in the Canadian potash markets, it’s unknown if K+S could secure alternative export capacity for some of its volumes in the near term. It’s assumed that K+S volumes would likely continue to Pacific Coast Terminals in Vancouver unless an agreement could be reached with another export terminal. Longer term, an export facility could be developed in the PNW for K+S, ensuring export capability to Asian markets.

Greater Vancouver rail congestion could potentially deter new potash entrants from developing export facilities at the Port of Vancouver. BHP Billiton Canada recently proposed development of a new potash export facility at Fraser Surrey Docks (Surrey BC) to handle approximately 8 million tonnes per year of potash from its proposed Jansen mine in Saskatchewan. BHP had previously reached an agreement in 2010 with the Port of Vancouver (Washington State) to develop a potash export facility in the PNW, but that project was cancelled. Capability to ship potash with either CN or CP to Fraser Surrey Docks along with reduced shipping costs from origin were likely contributing factors in BHP’s decision to select Surrey as a location for their export facility versus the original site selected in the PNW. Investment in Greater Vancouver’s rail capacity should ensure that companies continue to invest in projects like the BHP export facility versus looking elsewhere for port capacity on the West Coast.

5.3.4 Forest Products

Forest products currently exported from Vancouver could be diverted to other ports, primarily those located in the PNW that handle similar products. Several options exist to get these products to port, including utilizing an interline railway gateway and trucking to a U.S. rail transload facility.

Forest products originating on CP in Southern BC or Alberta may be diverted to UP at Eastport or BNSF at Sweet Grass, Montana, for furtherance to the PNW. Other forest product traffic originating in Western Canada may be trucked to transload facilities on UP or BNSF in the U.S., near to the border. Several existing transload facilities already penetrate Canadian lumber

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markets for single-line haulage to U.S. destinations on BNSF and UP. In some cases, the only alternative may be to truck the product direct to port. This would not only increase shipper costs, but would also increase congestion on Greater Vancouver highways with increased freight truck traffic.

The market economics to move forest products to Vancouver from eastern origins in Canada (Quebec, Ontario, Manitoba, and some cases Saskatchewan) would be reduced, likely leading to them being diverted to North American domestic markets, or potential ports on the East Coast. Similar to other commodities, this would lower the overall profitability for forest products without access to the West Coast export markets.

5.3.5 Petrochemicals

Petrochemicals may be diverted away from Vancouver is several ways. Some volume may initially shift to other West Coast facilities with excess capacity. Longer term, larger volumes may incent capital investments into proposed terminal expansion and greenfield projects. Several proposed projects that were originally designed to handle crude oil may be resurrected to handle other petrochemical products such as low-sulphur diesel, glycol, and LPG export.

Port facilities on the U.S. East and Gulf coasts could be utilized but with declining netbacks to producers due to increased shipping costs from origin. There is potential to ship product directly to Mexico by rail now that the market has been opened up to foreign energy volumes. Shipping to Mexico opens up a new market for petrochemicals, but the increased transportation costs would result in lower returns for producers. In almost all cases, petrochemical diversion increases shipping distances and overall transportation costs for shippers.

5.3.6 Canola Oil

Canola oil is exported through two major facilities in Vancouver: West Coast Reduction and Pacific Coast Terminals. Some of this volume could shift to domestic markets, potentially replacing other vegetable oils. There is potential for some canola oil volumes to be diverted to export facilities that handle U.S. production of canola oil or soybean oil depending on excess capacity, but again rail shipping rates would be higher. It is assumed most production would continue to be exported through existing facilities in Vancouver unless significant capacity is developed elsewhere on the West Coast for export.

5.3.7 Coal

West Coast export coal facilities in Canada are currently limited to Ridley (Prince Rupert), Neptune (Vancouver), and Westshore (Vancouver). Pacific Coast Terminals (Vancouver) previously handled small volume coal in the past, but that capacity has been used up by the new K+S Potash volumes now being handled at the facility. Much smaller volumes of coal are exported in the U.S. at Long Beach, Stockton, and Levin-Richmond Terminal, all in California. Export coal volumes at the ports are limited by factors including low draft for vessels, coal-handling machinery, storage space, rail network congestion, and inability to expand under current environmental and air quality permitting restrictions. With no other West Coast coal terminals

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capable of handling large volumes of coal, and other proposed U.S. West Coast coal facilities having difficulty in progressing through permitting approvals, coal will likely need to be diverted to the East or Gulf Coasts. Transportation costs will be increased by longer rail hauls from Southern BC (or Powder River Basin of Wyoming and Montana for BNSF). Shipping costs to Asia will increase as well if shipments need to go through the Panama Canal. With such large increases in shipping costs to access other North American ports, it is assumed that the majority of Canadian coal production currently exported at Canadian West Coast ports will continue to be exported out of Canada’s West Coast ports, but PRB coal may be diverted to Gulf Coast ports, or cease to be exported in quantity.

5.3.8 Sulphur

Sulphur is a relatively low value commodity that is highly susceptible to shipping rates and logistics costs. A small percentage of export volumes may shift into the domestic market (molten sulphur) but otherwise it is likely that little volume will divert. Both West Coast sulphur export facilities are located in Vancouver (Vancouver Wharves and Pacific Coast Terminals), so there is little flexibility to divert elsewhere on the West Coast currently. If shipping costs were to increase significantly, it is likely that most export sulphur would just be “poured to block” and stockpiled in the prairies. Shippers may stock pile product until market prices increase high enough to justify the additional costs of transportation to alternate ports, as well as any capital investment required at new ports to handle sulphur export.

5.3.9 Conclusion

Ultimately traffic will shift to port facilities that maximize both service and price for shippers and supply chains. There are certain efficiencies of utilizing the Port of Vancouver today, but those will slowly erode as it becomes more congested. Commodities that have the opportunity to shift to different ports/markets will shift over time to whatever results in the best net back to shippers.

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6 Key Assumptions

The CBA measures benefits against costs over a 30-year study period, from the start of project development and construction in 2018 through 2047.

The monetized benefits and costs are estimated in 2017 dollars with future dollars discounted in compliance with NTCF requirements using a 10 percent real discount rate, and sensitivity testing using 7 and 3 percent.

The methodology makes several important assumptions and seeks to avoid overestimation of benefits and underestimation of costs. The following provides details with respect to the estimation of train volumes entering Greater Vancouver, the capacity of the rail network, rail rates to various alternate ports locations, and maritime shipping rates from alternate port locations.

6.1 Projection of Train Volumes

Train volume forecasts from 2017 to 2026 were derived from the forecasts developed for the British Columbia Ministry of Transportation and Infrastructure (BC MoTI) in support of the Transportation Trade Network (TTN) study. The TTN freight forecasts were developed in 2017 to help the Ministry assess and develop a series of infrastructure improvement options designed to ensure British Columbia’s multi-modal trade transportation network remains competitive as a Gateway for Asian trade with North America and the world.

The TTN study employed a forecast methodology that was endorsed by stakeholders and included risk analysis to assess the full range of potential outcomes. The initial step used to estimate freight rail volumes was to assign a proportion of throughput at the Port of Vancouver to mode of delivery (rail, road, pipeline or coastal shipping). Drawing upon various sources including data from the port authority, CP, CN, and recent Ministry truck traffic counts, HDR assigned estimates of the proportion of port throughput traveling to/from interior British Columbia (or beyond) to each mode by each commodity. This provided an estimate of commodity volumes that typically travel to/from interior British Columbia (or beyond) by mode. For those volumes moving by rail, HDR, working with the Class 1 railways, developed a set of parameters to convert freight tonnage to train counts (including average carload capacity, adjustments for empty movements, etc.). The effective train counts represented train-equivalents accounting for industry practices of fully loading unit trains, and partially loaded manifest trains which are often consolidated to carry many different commodities on route to their destination. Specific assumptions regarding carload types currently in service and their respective carrying capacity were vetted by both CP and CN.

Over the course of the study, HDR, Parsons and BC MoTI regularly engaged the Class 1 railways, the Vancouver Fraser Port Authority, the Prince Rupert Port Authority, and Transport Canada to obtain opinion on various assumptions, calculations and resulting freight and traffic estimates. Individual review meetings were held with CP and CN whereby HDR presented its most recent estimates of train movements in and out of Greater Vancouver and associated assumptions. During these meetings, the project team received feedback and adjusted rail specific assumptions

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accordingly. Further, the project team provided Transport Canada with its findings and worked to identify and reconcile any differences between TTN forecasts and those produced internally by Transport Canada. Finally, HDR provided aggregate corridor specific train count and long haul truck trip forecasts to both port authorities for review and comment. While opinions varied with respect to growth in specific commodities, consensus was obtained that the aggregate (across all commodities) forecast of freight rail traffic movements was reasonable.

The table and figure below present the train count forecasts used in the CBA, including the latest actual counts (2016), the counts for the first study period year (2018), the first year of completed phase one project improvements (2023), and the final year of analysis (2047). Forecasts beyond year 2030, in other words those beyond the scope of the TTN study forecasts and the Rail Traffic Controller modeling (described in the next section) were conservatively assumed to remain constant. In reality, freight traffic would likely continue to grow, generating additional trade benefits from the expanded network capacity.

Table 7: Trains per Day in Greater Vancouver

Trains per Day 2016 2018 2023 2030 2047 Freight Trains 55.3 62.0 73.3 85.7 85.7 Passenger Trains 15.4 15.4 15.4 15.4 15.4 Total Trains 70.7 77.4 88.7 101.1 101.1 Trains per Day in Greater Vancouver

120

100

Passenger Trains Freight Trains

Figure 3: Trains per Day in Greater Vancouver

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6.2 Greater Vancouver Rail Capacity

Rail Traffic Controller (RTC) is a train-dispatch simulation modelling software which is used as an important tool in providing data for analytical studies in complex rail environments. Used by all Class 1 railways in North America, the RTC model uses a series of algorithms to determine how a train moves in a defined network. Aspects considered for the model include track speed, track length, motive power, signals, bridges, and train priorities.

Creating the model requires data on the network of main lines, passing tracks, yards, and junctions is needed, as well as track charts and timetables. The RTC model will produce a vast amount of data from which various analyses can be performed. The RTC model will identify all possible paths for a train on a route and select the solution that has the lowest cost for the network. The cost component considers factors such as distance, adherence to schedule, and train priority. Conflicts between two trains are again solved by selecting the solution with the lowest cost.

Using the outputs, performed analyses included delay analysis, train volumes and grade crossing analysis. Delay is the time a train waits due to its designated route being unavailable. For the analysis, two measurements were used. The first is D/10, which is delay minutes for each ten train miles operated. D/10 can compare scenarios with different numbers of trains and track configurations as well as determine effects on delay due to modifications. The second measurement, D>30, determines where delays in the simulation are greater than 30 minutes. At each node, data such as the number of trains passing through, time of arrival, time of departure, and train speed can be collected. This data can then be used to develop train volumes in the network. Where grade crossings were to be analyzed, a node was included to record when the head and tail of the train passes the node.

Railroad capacity can be divided into line capacity and terminal capacity. Line capacity is the amount of trains a line can support over a time period. Theoretical line capacity is the maximum capacity that a line can sustain and continue to operate, however, it is typically unrealistic. Sustainable capacity is estimated but is generally a better measurement to be used and looks at the capacity that a line can sustain daily without creating excessive delays to other trains. The following evaluation criteria was developed by Mainline Management (MLM) for line segments:

Table 8: Rail Network Line Capacity Evaluation Criteria

D/10 Line Operation Less than 5 minutes Well below estimated sustainable capacity Between 5 to 10 minutes Within estimated sustainable capacity Between 10 to 15 minutes Approaching or at estimated sustainable capacity Greater than 15 minutes Above estimated sustainable capacity

Terminal capacity is the ability to process trains for either origination, termination, changing crews or servicing. Sustainable capacity for terminals is the operational level before multiple operations are affected, thereby decreasing efficiency for the entire terminal.

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The following evaluation criteria was developed by MLM for terminals:

Table 9: Rail Network Terminal Capacity Evaluation Criteria

D/10 Terminal Operation Less than 10 minutes Well below estimated sustainable capacity Between 10 to 20 minutes Within estimated sustainable capacity Between 20 to 30 minutes Approaching or at estimated sustainable capacity Greater than 30 minutes Above estimated sustainable capacity

A network is able to operate above estimated sustainable capacity for a short period of time before there will widespread major congestion. The chart below presents rail network capacity assumptions used for conducting the Cost-Benefit Analysis.

Table 10: Greater Vancouver Rail Network Capacity

Trains per Day 2016 2018 2023 2030 2047 No-Build Case Network Capacity 80.0 80.0 80.0 80.0 80.0 Build Case Network Capacity 80.0 80.0 98.5 114.0 114.0 Unconstrained Train Forecast 70.7 77.4 88.7 101.1 101.1 Trains Diverted to Alternative Ports - - 8.7 21.1 21.1

Capacity-Constrained Trains per Day in Greater Vancouver

120 114 TPD

100

80 TPD 21 TPD Diverted 80

Passenger Train Forecast Freight Train Forecast Diverted Freight Trains No-Build Capacity Build Capacity

Figure 4: Greater Vancouver Rail Capacity Constraints

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6.3 Rail Rate Comparison

Transportation shipping costs to the Port of Vancouver are currently a lower cost and more efficient option for Canadian shippers relative to other West Coast ports in North America. With expected volume growth, it’s important that the rail network in Greater Vancouver remains fluid with sufficient rail capacity to handle growth, traffic fluctuations, as well as make up capability during unplanned events (weather, rail outages, labour issues, etc.). The relative capacity of the rail network in Greater Vancouver has a direct influence on overall rail costs.

As the rail network in Vancouver approaches practical capacity, there becomes very little capability to handle unplanned events in the supply chain. The port regularly deals with both rain and high winds that can limit the ability to load outgoing ships. Other issues dealt with on a regular basis include labour outages, maintenance activities, and rail line outages (due to snow, slides, derailments, etc.). It’s important to have a reasonable amount of buffer capacity in the supply chain to make up for all these unplanned events, otherwise the port’s capability to grow and adapt to changing markets is jeopardized.

Some buffer currently exists in port facility storage (bulk storage for commodities, ground storage for containers, etc.). However, actual railcar storage in Greater Vancouver is very limited. For the most part, rail traffic needs to be metered into Greater Vancouver in a timely fashion that allows for “Just in Time” delivery to port facilities. The railways have a limited amount of storage capacity in their Vancouver rail yards to handle any major variance, so a fluid pipeline from origin to destination is important to the rail carriers. Projects that increase rail capacity or allow more flexibility in rail operations will help the port handle growth and variability in traffic volumes. Without additions to the infrastructure, continued growth in traffic would create congestion issues that could re-direct freight to other West Coast Ports. In the event that shipments are delayed or directed elsewhere, the relative impacts to shipper costs (specifically for rail) are reviewed below:

6.3.1 Rail Haul Distance Increases

In many cases, especially for bulk commodities originating in Western Canada, the overall rail distance for shipments would increase if Vancouver was congested and could not be utilized as the destination for rail shipments originating on CN or CP. Shipping commodities to other locations, primarily in the Pacific Northwest would increase the overall rail distance. The increase in rail distance would have a direct impact on rail costs (including fuel surcharges), which are typically passed on to the customer in the form of higher tariffs.

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An example of various rail distance scenarios for potash shipments is shown below:

Table 11: Sample Rail Distance Differentials between Vancouver and Portland

Origin Destination Rail Distance Rail Routing Saskatoon SK North Vancouver BC 1,746km / 1,085mi CN Direct Saskatoon SK North Vancouver BC 1,804km / 1,121mi CP Direct Saskatoon SK Prince Rupert BC 2,045km / 1,271mi CN Direct Saskatoon SK Portland OR 2,173km / 1,350mi CP – UP via Eastport ID Saskatoon SK Portland OR 2,351km / 1,461mi CP – BNSF via Sweet Grass MT

6.3.2 Increased Resources & Cycle Times

As congestion in Greater Vancouver increases, shipment cycles will lengthen, thus increasing the requirement for additional resources. On the rail side this includes additional railcars, locomotives, and train crews (labour). In the near term this could result in a lack of railcars for shipments, delays waiting for resources at origin, and variability in shipping times as resources are prioritized for old date shipments. Over time, railways will adjust pricing to reflect the increased use of resources for traffic coming to the Port of Vancouver as they will have to purchase or lease more railcars, purchase more locomotives, and hire more train crews and increase tariffs to recover the expenditures.

6.3.3 Interline Rates vs. Single Line Rates

The vast majority of the rail traffic shipped to Vancouver is completed on a single line rate with either CN or CP as the line haul carrier. This means that either CN or CP both originated and terminated the traffic. In some cases, they may have employed a switch carrier at either origin or destination, but those switch rates are typically fixed and absorbed by CN or CP. A single line haul typically results in the most competitive rates as overheads and fixed costs are only allocated for a single rail carrier. In the case where multiple rail carriers are required, an interline rate would be required with each line haul carrier requiring their division of the rate. Typically, this results in higher rates per kilometer/mile as each carrier wants to maximize their profitability and provide contribution towards their fixed costs and overheads. In some cases, it can also add complexity and increased transit time to shipments. Additional handlings are usually required to interchange traffic between carriers, slowing shipments down when they could be continuing their way towards destination. Even when unit trains are interchanged, there can be additional time lost for changing locomotives, changing crews, and/or doing inspections (when required). The increased costs and handling times generally incent customers to utilize single line hauls whenever possible. As the port becomes more congested, lack of investment in capacity will result in more and more shipments having to seek alternative gateways (likely U.S. PNW ports), incurring interline rates and increasing the overall cost to Canadian producers and shippers.

To emphasize the difference between a single line rate and an interline rate, Table 12 compares freight rates for export grain shipped from Unity SK to either Vancouver, BC (single line rates) or

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Longview WA (interline rates)8. Although CN and CP rates to Vancouver differ by less than $400 per car, rates to a typical PNW export elevator at Longview WA are almost $1,900 per car more based on current US-Canadian exchange rates.

Table 12: Sample Rail Rate Differentials between Vancouver and Washington

Origin Destination Single Car Unit Train Rail Routing Rate Carload Rate Vancouver BC $4,393 $3,640 CN Direct Vancouver BC $3,985 $3,257 CP Direct Unity SK Longview WA $7,100 $5,127 CP – UP via Eastport ID Vancouver BC vs. $3,115 $1,870 CP – UP via Eastport ID Longview WA

As most tariffs are confidential between shippers and railways, a broader estimate for generic freight rate differences was developed utilizing Association of American Railroads (AAR) and Railway Association of Canada (RAC) average revenue/ton-miles in 2017$ (see Table 13 below). The shipping cost differential of $1,709 per carload of mixed freight is representative of the average impacts that could be expected in the event of freight diverting to U.S. PNW ports based on AAR & RAC averages. In some cases, the diversion route distance may be less than the example, somewhat narrowing the cost difference. In other cases, the route distance diversion may be more, potentially increasing the cost of diversion. Some traffic will require three Class 1 rail carriers to be involved to get the traffic to port, such as Northern Alberta to PNW traffic routed CN-CP-UP, further increasing the rate differential. Based on all these variables, the total distance and average rail shipping costs from Saskatoon to Portland are used as a proxy to calculate rail shipping rate differentials for various commodities moving to and from the Asia-Pacific region.

Table 13: Rail Rates Based on AAR and RAC Averages

Origin Destination Average Rate Rail Routing Saskatoon SK North Vancouver BC $7,099 CP Direct Saskatoon SK Portland OR $8,808 CP – UP via Eastport ID Rate Differential North Vancouver BC CP – UP via Eastport ID $1,709 vs Portland OR 6.4 Ocean Shipping Rate Comparison

To develop an understanding of comparative cost structures that impact shippers and port competitiveness, an analysis of various ocean shipment costs was undertaken. All ocean carriage costs are not considered in the same manner. For commodity shipments and some agricultural products, containers are often the manner of choice for shippers. This is generally the case if

8 Export grain rates are based on the most current CN and CP grain tariffs available to HDR clients as of October 2017

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cargo is moved from inland locations to the coast for ocean transit. Container capacity is generally limited to approximately 30 short tons to comply with roadway restrictions in the United States and Canada except for designated heavy weight routes. Containers provide for rapid intermodal interchange and the same equipment for handling containers is used by all modes: truck, rail and port. The efficiencies achieved in the intermodal interchange of containers is paramount in keeping shipment costs lower, even with limited capacity. Container shipments generally involve higher value commodities. A loaded container shipment is generally priced by trucking and rail companies on per tonne and per mile basis and by water on an ocean rate between ports (empty containers often have reduced rates). Contract rates may be based on a door to door shipment, point to point shipment or a port to port shipment. Turnaround in port is generally quick, normally within a 24-hour period and vessel calls are scheduled as part of a regular liner service.

Bulk shipments of liquid and dry bulk commodities, including neo-bulk cargoes, are often based on a ship load charter rate. Most cargoes handled on chartered ships are generally higher quantity but have a lower value. These cargoes include agricultural products such as grain and corn, metals and minerals including road salt and scrap steel, coal, fertilizers such as potash, biomass such as wood chips, forest products including processed lumber which is generally carried as neo-bulk, and bulk liquids including petroleum, kaolin, water and liquefied gases. Ships may be chartered on a bare boat basis, time charter or voyage charter. The charter party, or contract, dictates the final cost to the shipper. Most charter arrangements use the BIMCO Gencon 94 standard format9.

6.4.1 Comparative Bulk Shipments

A bareboat (or demise) charter is when the vessel is provided to the shipper and the shipper is responsible for crewing, maintenance, operations and all regulatory requirements. Time charters are generally for specific long periods and the owner may bareboat the vessel or manage all of the operations including crewing. Voyage charters are generally short-term arrangements and the owner provides all crew and manages all operations for a single or small number of specific voyages. How the vessel is chartered has a direct impact on the final cost to the shipper and in most cases only impacts port competiveness based on the location of load and discharge ports, distance between them and the average daily charter rate. The demand for the commodity, its market rate, source for loading and destination for unloading drives port selection assuming the port can handle the commodity.

Take for example various North American ports on the West Coast with a port pairing connecting to Singapore. The distance traveled impacts the number of days the vessel is employed in transit and the charter party generally includes inland travel time, time alongside a dock for loading and discharge called lay time, and delay periods due to weather or other issues. A vessel arriving at a West Coast port may use up a week or more of operational time which could include four to six days to load or discharge the vessel at each port. These costs including any days the vessel is

9 Baltic and International Maritime Council, Uniform General Charter, 1994.

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inactive or any delays the vessel may face are priced and the cost passed onto the shipper. Even delays for labour actions causing port interruptions are generally passed along to shippers.

Daily charter rates have in the last several years been very low because of the large number of available vessels and the lack of long term charter agreement opportunities. In 2016, daily average charter rates for vessels dropped as low as $12,000 USD per day not including surcharges. The average rates in the third quarter of 2017 have rebounded to around $20,000 USD per day excluding surcharges. Some vessel rates for particular vessel types dropped as low as $3,000 USD per day.10

Figure 5: Three Year Baltic Dry Rate Index 2014-2017.11

Table 14: Baltic Dry Index Rates October 16, 201712

USD Cape Panamax Supramax Index (BCI) Index (BPI) Index (BSI) Index 2980 1637 1082 Spot TC Avg. $20,971 $13,150 $11,305 October 2017 $20,047 $12,905 $11,137 One Year Ago $12,644 $6,714 $7,064

The table below presents vessel charter rates by origin to Singapore assuming a voyage speed of 15 knots and a day rate with fuel of $25,000 USD.

10 Baltic Dry Index (BDI) October 2017 11 Baltic Dry Index, October 2017 12 Ibid

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Table 15: Average Base Bulk Vessel Charter Time-Destination Singapore

Port Nautical Transit Port Total Vessel Miles Days Time Days Cost Vancouver, BC 7,078 20 20 40 $1,000,000 Prince Rupert 5,683 16 20 36 $900,000 Seattle/Tacoma 7,062 20 20 40 $1,000,000 Portland 7,142 20 20 40 $1,000,000 Oakland 7,735 22 20 42 $1,050,000 LA/Long Beach 7,867 22 20 42 $1,050,000

On top of the base vessel rate, additional fees such as pilotage, tugs, wharfage, dockage, equipment hire, assessments, vessel services and other costs based on the terms of the contract apply. With charter rates within a similar range for the West Coast, the shippers’ competitive cost is more directly related to the source market price than the comparative vessel charter or port costs. Overall, an average dry or liquid bulk shipment of approximately 25,000 deadweight metric tons, with all costs including operator profit, would average between $1.2 million and $2.5 million USD from a Pacific Northwest port to Singapore excluding the cost of the commodity.13 That would average approximately between $50 and $100 per short ton all inclusive depending on the commodity. For low value material such as scrap metal or aggregates, $50 per short ton. For higher value cargo such as processed lumber, $100 per short ton. Ocean freight rates for grain shipments from the PNW to Asia have been as low as $20 per short ton in 2017.14 Overall, shippers have been trying to move bulk cargo in the largest vessels available to offset the vessel costs which do not dramatically increase with vessel size.

6.4.2 Comparative Container Shipments

World container rates have been highly volatile over the last several years since the industry began rebounding from the 2008 recession. Larger ships, overcapacity of available slots, the slow economic rebound in Europe and other factors have kept container rates overall lower than the period prior to 2008.15 Recently, one of the world’s largest container carriers, Hanjin, went out of business taking some 600,000 slots out of the market which had only a marginal impact on short term rates. Worldwide slot capacity is about 2% higher than demand.16

Container rates are the highest on heavy demand routes. These include Asia to North America and Asia to Europe. From North America and Europe to Asia the rates are considerably less since a large number of containers being repositioned are empty. In some cases, the overall cost of Trans-Pacific westbound to Asia from any port on the West Coast is as little as one third of the eastbound rates. After several years of depressed rates on all worldwide routes, container rates

13 Apex Worldwide Rate Estimator 14 Grain Transportation Report, Agricultural Marketing Service, US Department of Agricultural June 2017. 15 Drewry World Container Index 2017. 16 Ibid

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are slowly rebounding on some key routes. Container carriers have announced rate hikes of approximately $80 for a twenty-foot equivalent unit (TEU) and $100 for a FEU which are already impacting shippers.17 Overall container rates are measured on a composite scale known as the World Container Index which presents aggregate rates and trends. While overall there has been a recent decline in worldwide rates, the eastbound Trans-Pacific rates have been improving due to consumer demand. Seasonal fluctuations impact short term rates such as the winter pre- holiday rush which occurs in late summer.

Figure 6: World Container Index October 2015-October 2017

Figure 7: Index of Short Term Route Rate Fluctuations

Unlike vessel charters, liner services are more price sensitive and port competition more critical. Liner services will select ports for regular scheduled service based on a wider range of considerations. The ocean carrier provides the shipper with an eastbound or westbound per container rate, normally based on the box size, either 40 feet by 8 feet by 8 feet called a forty-foot

17 Loadstar, October 2017.

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equivalent unit (FEU) or 20 feet by 8 feet by 8 feet called a twenty-foot equivalent unit (TEU). There are also rates for variations on the container size. Once the rate is given to the shipper, normally on a one-year contract except for spot market shipments, the carrier absorbs the costs associated with port activities at the terminals. The rate may also include additional services depending on how the Bill of Lading (B/L) is established. The Bill of Lading is the contract of carriage between the ocean carrier and the shipper. The cost per unit is based on the extent of transportation services offered, as mentioned door to door, point to point or port to port. Pricing for ports is not the only competitive issue. Other factors include:

 Port and terminal efficiency,  Geography,  Terminal size and equipment,  Competitive rail access,  Highway connections,  Congestion,  Terminal dwell time, and  Management.

Ocean carriers focus on improving terminal efficiencies and increasing crane pick rates to minimize a vessel’s port call time. Public port agencies generally focus on improving infrastructure such as harbour deepening and removal of air draft restrictions. This is particularly critical since the ocean carriers are building and deploying bigger ships to increase volumes per voyage and reduce per container handling costs. This has a direct impact on port costs to carriers. A sample breakdown of container rate structure component from Maersk include:

 Bunker Adjustment Factor - 6%, Fuel surcharges and flux in world bunker rates  Currency Adjustment Factor - 5%, Surcharge for currency rate flux  Basic Freight Rate (BAS) - 57%, Basic ocean shipping freight rate  Terminal Handling Charge - 26%, Value added services (terminal or carrier provided)  Documentation - 11%, Administration costs for documentation-i.e. Bill of Lading  Customs Clearance - 5%, Creation and distribution of Customs Clearance Document

Competition between ports is not only dependent upon what the port charges and associated costs but also the ocean freight rate. Ocean rates are contingent upon origin and destination locations and incorporated services and may involve a number of additional services depending upon the nature of the containerized commodity. Rates incorporate a range of components that eventually establish the cost to the shipper.

Container rates have been at historic lows over the last several years but have begun to rebound in specific markets, particularly between Asia and the West Coast including the Pacific Northwest which has a geographic advantage in the Asia trade.

To get a perspective on the competitive rates in the PNW market, HDR did a spot market comparison based on 3rd quarter 2017 aggregate rates which are similar between ocean carriers. The focus was eastbound from Asia since westbound to Asia rates are artificially low.

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Table 16: Eastbound Trans-Pacific Container Rates, Select Pacific Ports18

Origin Port Low Range High Range Vancouver, BC $897 $991 Prince Rupert $1,032 $1,141 Seattle-Tacoma $885 $979 Portland $876 $968 Oakland $941 $1,040 LA/Long Beach $931 $1,029

Port utilization is a function of available carrier services at each port. Most Pacific ports have multiple connections either directly to ports throughout the world or by transload connections at major hub ports. A comparison of the number of container services for each selected Pacific port provides an indication of the port’s competiveness and its ability to attract new services. All of the ports have several services that call on several of the other listed ports as part of their North American port call cycle. They also connect to multiple ports in Asia.

Table 17: Ocean Carrier Availability, Select Pacific Ports19

Port Number of Container Worldwide Multiple Port Ocean Carriers Connections Cycle - Pacific Vancouver, BC 19 Yes Yes Prince Rupert 6 Yes Yes Seattle/Tacoma 7 Yes Yes Oakland 21 Yes Yes LA/Long Beach 23 Yes Yes

18 Apex Worldwide Rate Estimator 19 Port and Terminal Web Sites for Selected Ports

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7 Outcome Measurement, Data and Assumptions

This section describes the measurement approach used for each benefit or impact category identified in Table ES-1 and provides an overview of the associated methodology, assumptions, and estimates.

7.1 Transportation Cost Savings to Canadian Producers

7.1.1 Methodology

Transportation costs are calculated in two parts - the rail costs and ocean carrier costs - based on freight forecasts and transportation rates described in Section 6.

Capacity-constrained forecasts are used to estimate the number of trains routing to the Port of Vancouver, and the difference between the constrained and unconstrained forecast is used to determine the number of trains that would be reasonably expected to divert to other U.S. ports under the No-Build scenario. For each commodity, daily train count forecasts are annualized and converted to rail cars. Rail cars are converted to carloads by factoring in an adjustment for empty movements, described in further detail in the assumptions section below. Average rail haul rates are applied to the carloads to determine total rail costs to shippers and producers.

Ocean carrier costs are calculated on a per-tonne or container basis from the Port of Vancouver and comparable PNW U.S. ports to Singapore. While shorter distance and transit times from Vancouver is expected to generate transportation cost savings for Canadian producers, spot rates at the time of analysis did not demonstrate a substantial difference and were conservatively assumed to be the same on an incremental basis.

7.1.2 Assumptions The assumptions used in the estimation of transportation cost savings are summarized in the table below.

Table 18: Assumptions used in the Estimation of Transportation Cost Savings

Transportation Cost Inputs Value Source Representative Rail Carload Shipping Rate Mixed Freight from Saskatoon SK to North $7,099 CAD Railway Association of Canada, Vancouver BC "Rail Trends 2016", ISBN: 978-1- 927520-05-5, Value inflated to 2017$. Mixed Freight from Saskatoon SK to Portland $8,808 CAD Association of American OR Railroads, "Railroad Facts, 2017 Edition" Mixed Freight Rail Cost Differential between $1,709 CAD RAC and AAR, 2017. Vancouver and Portland Representative Rail Shipping Distance Mixed Freight from Saskatoon SK to North 1,746km / HDR Analysis, 2017. Vancouver BC, CN Direct 1,085mi

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Transportation Cost Inputs Value Source Mixed Freight from Saskatoon SK to North 1,804km / Vancouver BC, CP Direct 1,121mi Mixed Freight from Saskatoon SK to Prince 2,045km / Rupert BC, CN Direct 1,271mi Mixed Freight from Saskatoon SK to Portland 2,173km / OR, CP – UP via Eastport ID 1,350mi Mixed Freight from Saskatoon SK to Portland 2,351km / OR, CP – BNSF via Sweet Grass MT 1,461mi Mixed Freight Rail Distance Differential 369km / Selected the shortest distance between Vancouver and Portland, CP Direct to 229mi differential as a conservative Vancouver vs. CP – UP via Eastport ID to assumption. Portland

Drawing on the input of the Class 1 railways on average carload and train characteristics by commodity as described in the BC Ministry of Transportation and Infrastructure TTN study, HDR estimated transportation costs for all freight that may divert in case of severe port congestion. Key assumptions used are outlined below:

 Rail cars moving commodities other than containerized freight return empty to their origin. That is, loaded cars inbound to the ports are emptied for export at the port and return empty to point of origin (or a similar location) to be reloaded. This assumption was made because rail cars are both specialized for a given commodity, and once loaded with a commodity, typically require cleaning before use by a different commodity to avoid contamination.  Freight cars used to carry manufactured or processed goods such as steel, motor vehicles, machinery, scrap, and foodstuffs often have some empty movements in both directions due to many factors associated with the flow of goods. Accordingly, based upon industry opinion including that of the Class 1 railways, an additional factor of 10% was added to account for empty carloads of non-bulk commodities.  For containerized freight, there is typically some inefficiency with laden containers in North American rail practice. Due to fluctuations in volumes of containers offloaded from ships, and the need to maintain adequate well car supply at ports, some well cars will move empty even in the dominant container flow direction. In order to account for this, a “slot utilization” factor of 5% is added.  The number of carloads per train is governed by many factors including length of sidings on specific corridors in the rail network, grades between origin and destination, train weights, efficient locomotive usage, train handling, terminal capabilities, and others.  Intermodal trains are typically composed of double stacked containerized freight. We assume the use of 5-well articulated cars with each well containing 4 TEU (20 TEU per car).

Class 1 railways also provided input on rail rates and distances for commodities to the Port of Vancouver and alternative ports for commodities required to divert.

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7.1.3 Benefit Estimates

The table below shows the estimated public benefits value of transportation cost savings to Canadian producers and shippers that GVG2030 would enable.

Table 19: Estimates of Transportation Cost Savings Benefits

Discounted at 10% Undiscounted Rail Cost Savings $3,471,426,000 $16,900,839,000 Ocean Carrier Cost Savings - - Transportation Cost Savings to $3,471,426,000 $16,900,839,000 Canadian Producers

7.2 Safety and Environmental Impacts of Shipments to Alternative Ports

7.2.1 Methodology

The proposed projects at the Port of Vancouver will reduce the likelihood of port congestion and freight diversion to alternative PNW ports. Longer hauls by rail to further ports would have adverse safety and environmental impacts that can be avoided with continued efficient service to Greater Vancouver. The following safety and environmental impacts were quantified and monetized:

 Avoided accident costs,  Avoided greenhouse gas emissions, and  Avoided criteria air contaminant pollution.

While freight rail operations in Canada and the U.S. are considered to be one of the safest modes of transportation, accidents due to vehicle collisions, trespassing, and others still occur; and while the probability of occurrence is exceptionally low, longer travel distances increase the risk of an event.

Monetizing accident costs requires data on the frequency and severity of accidents in addition to the value of fatalities and injuries. Estimates for fatalities and injuries by rail were gathered from publically available data and converted to a rate per tonne-kilometer for fatalities and injuries. Accident rates were applied to the tonne-kilometers travelled for diverted shipments to determine the expected number of fatalities and injuries in both the Build and No-Build case. The injuries and fatalities were then monetized to determine the safety and accident costs. With improved rail network capacity, the shorter haul to the Port of Vancouver will reduce the distance travelled and reduce the expected safety and accident costs to the general public.

The negative effects of pollution depend on both the quantity of pollution produced and the type of pollutants emitted. Greenhouse gas (GHG) emissions and criteria air contaminant (CAC) pollution were quantified and monetized, accounting for different pollutants and their respective

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cost to the environment and human health. Emission rates per train tonne-kilometer for carbon dioxide (CO2), nitrous oxides (NOX), volatile organic compounds (VOC), fine particulate matter

(PM2.5), and sulfur dioxide (SO2) were multiplied by their monetary value to determine the total environmental value.

7.2.2 Assumptions

The assumptions used in the estimation of safety and environmental benefits are summarized in the table below. Given that the incremental freight rail shipments to PNW ports would move through the U.S., U.S. statistics were used to quantify safety and environmental impacts, but social values recommended in Canadian CBA guidance were used to monetize those impacts. Given that social values recommended by the U.S. Department of Transportation are significantly higher (especially when converted to Canadian dollars), the results of this analysis are considered to be conservative.

Table 20: Assumptions used in the Estimation of Safety and Environmental Benefits

Variable Name Unit Value Source Fatalities per Billion fatalities/Btkm 0.27 US Government Accountability Tonne-kilometres by Office, Surface Freight Train Transportation; A Comparison of the Costs of Road, Truck, and Injuries per Billion injuries/Btkm 2.27 Waterways Freight Shipments That Tonne-kilometres by Are Not Passed on to Consumers, Train January 2011, Table 4; converted from events per billion ton-miles to events per billion tonne-km. Value of a Statistical $/fatality $7,725,410 Conclusions and Life, National Impacts Recommendations for Canadian Policy Analysis: Policy Horizons Canada, Value of Statistical Life 2007$, inflated to 2017$ Average Cost per $/injury $82,105 Calculated from weighted average Accident Injury, National of major & minor accidents and Impacts their corresponding costs found in Collision Costs Study prepared for the Capital Region Intersection Safety Partnership by Paul de Leur, February 2010, inflated to 2017$. NOx per Gallon of Fuel grams/tonne- variable by United States Environmental Burned - Line Haul km year Protection Agency, Office of Locomotives Transportation and Air Quality, VOC per Gallon of Fuel grams/tonne- variable by "Emission Factors for Burned - Line Haul km year Locomotives", EPA-420-F-09-025, Locomotives April 2009. Converted to tonne- PM per Gallon of Fuel grams/tonne- variable by kilometres from ton-miles. Burned - Line Haul km year Locomotives

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Variable Name Unit Value Source SO₂ per Gallon of Fuel grams/tonne- variable by Burned - Line Haul km year Locomotives CO₂ per Gallon of Fuel grams/tonne- variable by Burned - Line Haul km year Locomotives Value of CO₂ damages $/tonne variable by Environment and Climate Change year Canada, Technical update to Environment and Climate Change Canada's social cost of greenhouse gas estimates, March 2016. Values inflated to 2017$. Value of NOX damages $/tonne $4,003 Transport Canada Estimating the Value of VOC damages $/tonne $488 Full Costs of Transport in Canada, Value of PM2.5 damages $/tonne $14,090 2000$. Values inflated to 2017$. Value of SO2 damages $/tonne $4,428

7.2.3 Benefit Estimates

The table below shows the estimated public value of avoided safety and environmental costs.

Table 21: Estimates of Safety and Environmental Benefits

Discounted at 10% Undiscounted Improved Safety $169,009,000 $823,501,000 Avoided GHG Emissions $56,598,000 $281,842,000 Avoided CAC Emissions $21,740,000 $79,363,000 Safety and Environmental Benefits from $247,347,000 $1,184,706,000 Rail Network Improvements

7.3 Local Transportation and Environmental Benefits

7.3.1 Methodology

Five categories of transportation and environmental benefits to local residents were quantified and monetized:

 Travel time savings,  Vehicle operating cost savings,  Improved safety,  Avoided greenhouse gas emissions, and  Avoided criteria air contaminant pollution.

These benefits are derived primarily from the elimination of existing rail at-grade crossings. The projects do not generally increase road capacity (i.e. in terms of number of lanes), and are not

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expected to induce additional travel demand that would reduce the transportation or environmental benefits. Table 22 lists the source of traffic data that was used in the analysis.

Table 22: Data sources for Local Transportation and Environmental Benefits Analysis

Project Crossing Traffic Volume Data Sources Bell Road Overpass Bell Road 2016 Railway Crossing Assessment (2016), City of Project Abbotsford. No further growth in traffic volumes Hargitt Street assumed, as the area is primarily rural in nature.

Swanson Street

Whistle Cessation Various (RCIS BC Ministry of Transportation and Infrastructure and Rail Crossing system) study for RCIS system. Information System Harris Road Harris Road 2011 City of Pitt Meadows turning movement Underpass and count at intersections of Harris Road / 122 Avenue Kennedy Road and Harris Road / 124 Avenue, and 2013 BC MoTI Overpass Project link volume count on Lougheed Highway near Harris Road. Growth rate of 3.8% assumed to 2030 based on output of the regional travel demand model, driven by land use intensification in Pitt Meadows. Kennedy Road 2015 City of Pitt Meadows link volume count. Growth rate of 3.8% assumed to 2030 based on output of the regional travel demand model. Growth is driven by the development of an industrial area that Kennedy Road would provide access to. Westwood Street Westwood Street 2013 City of Coquitlam turning movement count at and Kingsway Westwood Street / Dewdney Trunk Road Avenue Grade- Intersection. Growth rate of 3.0% assumed to Separations Project 2030 based on output of the regional travel demand model, driven by land use intensification in Coquitlam City Centre. Kingsway Street 2013 City of Coquitlam turning movement count at Westwood Street / Kingsway Avenue Intersection. Growth rate of 2.3% assumed to 2030 based on output of the regional travel demand model, driven by land use intensification in Coquitlam City Centre. Pitt River Road and Pitt River Road 2013 City of Coquitlam turning movement count at Colony Farm Road Lougheed Highway / Pitt River Road Intersection. Rail Overpasses Growth rate of 0.9% assumed to 2030 based on Project output of the regional travel demand model, driven by land use intensification in Coquitlam City Centre. Colony Farm 2013 City of Coquitlam turning movement count at Road Lougheed Highway / Colony Farm Road Intersection. No further traffic growth assumed; as

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Project Crossing Traffic Volume Data Sources Colony Farm Road is a dead end that does not provide through-connectivity, and has a limited number of destinations. North Shore Douglas Road Regional Transportation Model (EMME4), Corridor Capacity developed by TransLink. Improvement Projects Burrard Inlet Road Vanterm West Centerm Expansion Project Traffic Impact Study and Rail Alliance Grain (2016), Vancouver Fraser Port Authority. Some Improvement Terminal updates undertaken to confirm latest assumptions Projects for development of tenant properties on the south shore, and truck / train mode splits to container terminals. Portside Blundell Portside Road Fraser Richmond Port Lands Area-Wide Overpass and Transportation Plan (2015), Vancouver Fraser Port Upgrade Project Authority. Some updates undertaken to confirm latest assumptions for development of currently vacant sites owned by the port authority. Daily expansion factor based on BC MoTI data for daily truck volume profile on nearby Highway 91.

Outputs from the Rail Traffic Controller model were also used to represent the impacts of train movements through at-grade crossings. The following information is available from the RTC:

 2015 average daily train volumes and average total daily crossing occupancy, and  2030 with GVG2030 in place average daily train volumes, average total daily crossing occupancy, and start times and crossing occupancy durations of individual train movements at each crossing.

The assessment approach made use of the detailed 2030 train operating output (with implemented GVG2030 projects) to simulate crossing blockages. An assumption was made that the total daily crossing occupancy for the “with GVG2030 in place” and “no build” occupancies would be similar. Although volumes in the “with GVG2030 in place” would be higher, in the “no build” condition there is more congestion on the rail network which could decrease train speeds or inadvertently cause trains to block crossings for longer than they are permitted to. Travel time savings, vehicle operating cost savings, avoided greenhouse gas emissions and avoided criteria air contaminant pollution were all calculated primarily using a traffic operations micro-simulation model. Hourly traffic volumes and individual train crossing events, both for a 24-hour period, were programmed into the traffic operations model such that traffic flow would be blocked during these rail events. The model was then run with these rail events occurring, as well as without the rail events occurring. Vehicle hours travelled, fuel consumption, GHG and CAC emissions were extracted from both models, and a difference in values was calculated. These differences represent the benefits of the project.

For most crossings, a simple two-zone traffic operations model was used, because most crossings have no feasible alternative routes crossings for traffic to use instead, or these

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alternative routes are also blocked by the same train. The following projects used a slightly different approach to benefits analysis:

 The Whistle Cessation and Rail Crossing Information System,  The North Shore Corridor Capacity Improvement Projects,  The Burrard Inlet Road and Rail Improvement Projects, and  The Portside Blundell Overpass and Upgrade Project.

The Rail Crossing Information System of the Whistle Cessation and Rail Crossing Importation System project was quantified through a meso-scopic traffic operations model that allowed drivers to “read” the dynamic message signs and make choices about trip routing based on the nearest available grade-separated crossing.

For the North Shore Corridor Capacity Improvement Projects, the availability of two grade- separated crossings on parallel corridors to Douglas Road (Willingdon Avenue to the west and Kensington Avenue to the east) combined with the anticipated extended daily blockages at Douglas Road means that vehicles would likely avoid using Douglas Road and instead use alternative routes. Due to the regional-scale travel patterns impacts anticipated at this crossing, travel time savings benefits from this proposed grade-separation were analysed using the Regional Transportation Model, the travel demand model developed by TransLink for planning analysis. This model was run for both a “with Douglas Road” and “without Doulas Road” condition”, reflecting the assumption of motorists avoiding the Douglas Road corridor altogether due to the lack of travel time reliability, and instead diverting to parallel routes. The Douglas Road Grade-Separation would restore connectivity on the Douglas Road corridor. Vehicle hours travelled and vehicle kilometres traveled were extracted from the Regional Transportation Model and used to assess project benefits.

For the Burrard Inlet Road and Rail Improvement Projects, a 24-hour traffic operations micro- simulation model was used, but this model covers a much larger area of the port’s restricted- access road network on the south shore as well as the adjacent City of Vancouver public road network. This allows the spillover effects of traffic operations constraints on the port’s road network that impact the Vancouver’s public road network to be captured.

The Portside Blundell Overpass and Upgrade Project analysis is based on a previously-developed large-area peak-hour only micro-simulation model. Therefore, benefits were expanded to a daily benefit based on daily truck volume profiles on Highway 91, which is the primary access to the Fraser Richmond Industrial Lands that this Project will serve.

Once 2030 benefits were modelled, all other years’ benefits were scaled based on a delay growth rate. The delay growth rate is calculated using the product of the average annual daily traffic and daily train occupancies (since total delays at a crossing are sensitive to both of these parameters) for both 2017 and 2030, which was then used to develop an annual growth rate. It was assumed that beyond 2030, there would be no further growth in train volumes, but that traffic volumes would continue to grow at the same rates.

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Collision reduction savings were calculated using the US Department of Transportation’s Accident Prediction Model, which is detailed in the agency’s Railroad-Highway Grade Crossing Handbook (2007). This predictive model provides an estimate of total annual collisions at a crossing, as well as the proportion that will result in injuries or fatalities. Most input assumptions relate to the physical infrastructure of the crossing (e.g. existing crossing control infrastructure), which is confirmed by reviewing images of the crossings. An assumption was made that on average 50% of trains would pass through the crossing during daylight hours and the remainder would pass outside of daylight hours. This assumption is consistent with the RTC output, which shows train movements occurring at all times of the day and night. Collision benefits were calculated year-by- year throughout the 30-year evaluation horizon, using the same growth in train and vehicle volumes assumptions described above.

7.3.2 Assumptions

Once year-by-year outputs were developed for each of the five transportation and environmental benefit categories, the outputs were quantified and monetized according to the values and assumptions in Table 23 below.

Table 23: Assumptions used in the Estimation of Local Benefits

Variable Name Value Source Comments Person Value of Time $17.09 /hour Default Values for Cost Benefit Inflated to 2017$ Analysis, BC Ministry of using Statistics Transportation and Infrastructure, Canada December 2012 Consumer Price Index Average Passenger 1.24 people 2011 Metro Vancouver Regional Vehicle Occupancy /vehicle Screenline Survey, TransLink, August 2013 Truck Value of Time $49.36 /hour Default Values for Cost Benefit Inflated to 2017$ Gas Cost $1.38 /litre Analysis, BC Ministry of using Statistics Diesel Cost $1.42 /litre Transportation and Infrastructure, Canada December 2012 Consumer Price Index Mileage $0.25 /km Regional Transportation Model (EMME4), TransLink, 2016 Collision Cost (Property $12,189 Default Values for Cost Benefit Inflated to 2017$ Damage Only) Analysis, BC Ministry of using Statistics Collision Cost (Injury), $145,380 Transportation and Infrastructure, Canada Local Impacts December 2012 Consumer Price Collision Cost (Fatality), $6,847,764 Index Local Impacts Value of CO2 damages Variable by Technical Update to Environment Inflated to 2017$ year and Climate Change Canada's using Statistics Social Cost of Greenhouse Gas Canada Estimates, Environment and Consumer Price Climate Change Canada, March Index 2016

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Variable Name Value Source Comments Value of CO damages $250 /tonne South Fraser Perimeter Road Inflated to 2017$ Value of NOX damages $4,003 /tonne Regional Air Quality Impact using Statistics Value of PM10 damages $3,872 /tonne Assessment, BC Ministry of Canada Transportation and Infrastructure, Consumer Price September 2006, and Transport Index Canada Estimating the Full Costs of Transport in Canada, 2000$. Values inflated to 2017$. Benefit Annualization 330 days Estimate, based on traffic Factor /year volumes being lower on weekends.

All benefits were estimated over a 30-year period, and converted to a present value using a 10% discount rate. Although the evaluation period is 2018-2047, because the projects will take several years to be implemented, benefits typically only begin accruing in 2022.

7.3.3 Benefit Estimates

The resulting monetized benefits for all nine project are summarized in Table 24 below.

Table 24: Estimates of Local Transportation and Environmental Benefits

Discounted at 10% Undiscounted Travel Time Savings $177,403,000 $895,800,000 Vehicle Operating Cost Savings $7,753,000 $39,157,000 Improved Safety $7,354,000 $31,811,000 Avoided GHG Emissions $1,385,000 $7,087,000 Avoided CAC Emissions $169,000 $791,000 Local Transportation and $194,064,000 $974,646,000 Environmental Benefits

In addition to the quantified benefits to residents of Greater Vancouver, the following impacts are also important but not quantified:

 Reduced noise pollution from the elimination of train whistling,  Improved emergency vehicle access and response times,  Improved walking and cycling connectivity, both through the proposed projects providing high-quality infrastructure for these modes, as well as people walking and cycling no longer being impacted by train-related delays, and  Public transit benefits, both in the form of travel time savings for transit passengers, and improved operations and scheduling reliability for TransLink. Additionally, there are some crossings where transit does not exist or run frequently in part because the at-grade crossing impacts the feasibility of the service; grade-separation will enable these crossings to provide additional service, in addition to improving existing transit operations.

Each of these benefits are described qualitatively in Section H.2 of each Comprehensive Project Proposal.

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8 Cost-Benefit Analysis Results

8.1 Results Summary

The tables below summarize the CBA findings in 2017$. Taking the present value of project costs and benefits over a 30-year study period and using a 10% real discount rate results in an overall Net Present Value of $2.2 billion, and a Benefit-Cost Ratio of 2.32.

Table 25: Overall Results of the Cost-Benefit Analysis

Program Costs Capital Costs $1,688,917,000 $2,957,094,000 Operations & Maintenance Costs $16,632,000 $91,371,000 Total Costs $1,705,549,000 $3,048,465,000

CBA Summary Results Discounted at 10% Net Present Value (NPV) $2,232,593,000 Benefit-Cost Ratio (BCR) 2.32 Internal Rate of Return (IRR) 23.5% Discounted Payback Period (DPP) 7.81 years

For the purposes of the BCR, O&M is considered a negative benefit and only up-front project capital costs are used in the denominator.

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The $3 billion investment20 ($1.7 billion in present value terms) would result in a total of $4 billion in discounted benefits with a payback of 7.8 years, and an internal rate of return of 23.5% – well above the 10% hurdle rate.

8.2 Sensitivity Analysis

The CBA outcomes presented in the previous sections rely on a large number of assumptions and long-term projections; both of which are subject to considerable uncertainty. The primary purpose of the sensitivity analysis is to help identify the variables and model parameters whose variations have the greatest impact on the CBA outcomes - the “critical variables.”

The sensitivity analysis can also be used to:

 Evaluate the impact of changes in individual critical variables – how much the final results would vary with reasonable departures from the “preferred” or most likely value for the variable; and  Assess the robustness of the CBA and evaluate, in particular, whether the conclusions reached under the “preferred” set of input values are significantly altered by reasonable departures from those values.

The outcomes of the sensitivity analysis for GVG2030 projects are summarized in the table below. The table provides the percentage changes in project NPV associated with variations in variables or parameters. Based on rigorous analysis and a conservative assumption of cargo growth, between 2017 and 2030, total annual tonnage through the port is anticipated to increase by 60 million tonnes, or by an average of 2.3% per year. Increased demand is a natural requirement for capacity improvement projects and 1.48% per year was determined to be the break-even growth rate for the analysis holding everything else constant. As a comparison, freight volumes at the Port of Vancouver have increased by an average of 2.6% per year since 2008, representative of a full business cycle.

Overall, results are driven primarily by increased capacity and improved rail network efficiency that translate to transportation cost savings that accrue to Canadian shippers. Table 26 below focuses on the key drivers of transportation cost savings – incremental distance and cost to shippers for moving goods to alternate gateways - which account for 88% of total public benefits. The table presents a range of potential impacts to shippers, and determines that a $693 increase in cost per railcar is the breakeven point, while an increase as high as 644 kilometers would increase the NPV to $4.7 billion and a BCR of 3.77. In reality, incremental shipper distances to alternative ports could be over 800 kilometers. A worst case scenario in the analysis determined

20 As noted in Section 3.2, this number reflects the cost of the overall GVG2030, not just the Phase 1 submissions.

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that the difference in distance from Saskatoon to Vancouver via CN direct and Saskatoon to Seattle via CP and BNSF interchange could be as far as 877km / 545mi.

Table 26: Summary of Key Sensitivity Analysis Parameters

Incremental Shipment Incremental Cost to Net Present Value Change BCR Distance Shippers ($/railcar) in NPV 118km / 73mi $693 $0 M -100.0% 1.00 161km / 100mi $867 $384 M -82.8% 1.23 241km / 150mi $1,194 $1,100 M -50.7% 1.65 322km / 200mi $1,520 $1,817 M -18.6% 2.08 369km / 229mi $1,709 $2,233 M n/a 2.32 402km / 250mi $1,846 $2,534 M +13.5% 2.50 483km / 300mi $2,172 $3,250 M +45.6% 2.92 563km / 350mi $2,499 $3,967 M +77.7% 3.35 644km / 400mi $2,825 $4,683 M +109.8% 3.77

Table 27: Summary of Other Sensitivity Analysis Parameters

Original NPV Parameters Change in Parameter Net Present Change BCR (Discounted at Value Value in NPV 10%) Capital Cost -25% decrease in $2,655 M +18.9% 3.10 Estimates capital costs +25% increase in $1,810 M -18.9% 1.86 capital costs O&M 10 times increase in $2,083 M -6.7% 2.23 $2,233 M Estimates annual O&M costs 7% Discount All future values $3,991 M +78.8% 3.02 Rate discounted at 7% 3% Discount All future values $8,806 M +294.4% 4.57 Rate discounted at 3%

Changes in upfront capital cost estimates are always a significant driver of CBA results, especially when it comes to the BCR. A 25% change in cost estimates results in an inverse 19% change to the NPV, which means that uncertainty in the cost estimates does not put net public benefits at risk. Similarly, a 6.7% decrease in NPV and a BCR of 2.23 under an excessive increase in operations and maintenance costs demonstrates that despite preliminary estimates, they do not present a risk to the overall business case.

Finally, using lower discount rates in line with other common guidelines across North America (e.g. 7% requirement for the U.S. Department of Transportation, and approximately 3% for low risk debt) significantly improves CBA results. As future benefits are discounted at a lower required rate of return, the GVG2030 net benefits increase to $4 billion and $8.8 billion with rates of 7% and 3% respectively.

Overall, in all reasonable instances of the sensitivity analysis, the benefit-cost ratio remains well above 1.0 and demonstrates that even with overly conservative assumptions the GVG2030 improvements are expected to generate a substantial amount of public benefits with relatively low risk.

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9 Supplementary Data Tables

This section breaks down all benefits associated with the GVG2030 projects by year.

9.1 Total Program Benefits and Costs

Calendar Year Project Year Benefits Costs Net Benefits Net Benefits Undiscounted Undiscounted Undiscounted (Discounted at 10%) 2018 1 - $110,415,000 -$110,415,000 -$100,378,000 2019 2 - $111,314,000 -$111,314,000 -$91,995,000 2020 3 $193,000 $253,978,000 -$253,785,000 -$190,672,000 2021 4 $193,000 $355,789,000 -$355,595,000 -$242,876,000 2022 5 $270,913,000 $502,577,000 -$231,664,000 -$143,845,000 2023 6 $344,291,000 $279,735,000 $64,556,000 $36,440,000 2024 7 $411,234,000 $405,584,000 $5,650,000 $2,899,000 2025 8 $478,545,000 $226,434,000 $252,111,000 $117,612,000 2026 9 $544,568,000 $271,584,000 $272,984,000 $115,772,000 2027 10 $612,277,000 $316,784,000 $295,493,000 $113,926,000 2028 11 $681,677,000 $137,534,000 $544,143,000 $190,719,000 2029 12 $752,800,000 $2,984,000 $749,816,000 $238,914,000 2030 13 $829,053,000 $2,984,000 $826,069,000 $239,283,000 2031 14 $829,059,000 $2,984,000 $826,075,000 $217,531,000 2032 15 $829,137,000 $2,984,000 $826,153,000 $197,774,000 2033 16 $829,233,000 $2,984,000 $826,249,000 $179,816,000 2034 17 $829,349,000 $2,984,000 $826,365,000 $163,492,000 2035 18 $829,510,000 $3,145,000 $826,366,000 $148,629,000 2036 19 $829,722,000 $2,984,000 $826,738,000 $135,178,000 2037 20 $829,979,000 $5,075,000 $824,904,000 $122,617,000 2038 21 $830,231,000 $2,984,000 $827,247,000 $111,786,000 2039 22 $830,529,000 $2,984,000 $827,545,000 $101,661,000 2040 23 $830,895,000 $2,984,000 $827,911,000 $92,460,000 2041 24 $831,570,000 $2,984,000 $828,586,000 $84,123,000 2042 25 $832,270,000 $2,984,000 $829,286,000 $76,540,000 2043 26 $832,995,000 $2,984,000 $830,011,000 $69,642,000 2044 27 $833,749,000 $2,984,000 $830,766,000 $63,369,000 2045 28 $834,535,000 $2,984,000 $831,551,000 $57,663,000 2046 29 $835,343,000 $2,984,000 $832,359,000 $52,471,000 2047 30 $1,277,871,000 $20,777,000 $1,257,094,000 $72,042,000 Total $19,501,721,000 $3,048,465,000 $16,453,256,000 $2,232,593,000

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9.2 Annual Demand Projections

Calendar Project Trains in Greater Vancouver Trains Diverted to Trains in Greater Vancouver Trains Diverted to Year Year (No-Build) Alternative Ports (Build) Alternative Ports (No-Build) (Build) 2018 1 28,252 - 28,252 - 2019 2 29,200 221 29,200 221 2020 3 29,200 1,173 29,200 1,173 2021 4 29,200 1,936 29,200 1,936 2022 5 29,200 2,562 31,762 - 2023 6 29,200 3,179 32,379 - 2024 7 29,200 3,812 33,012 - 2025 8 29,200 4,447 33,647 - 2026 9 29,200 5,069 34,269 - 2027 10 29,200 5,705 34,905 - 2028 11 29,200 6,355 35,555 - 2029 12 29,200 7,021 36,221 - 2030 13 29,200 7,703 36,903 - 2031 14 29,200 7,703 36,903 - 2032 15 29,200 7,703 36,903 - 2033 16 29,200 7,703 36,903 - 2034 17 29,200 7,703 36,903 - 2035 18 29,200 7,703 36,903 - 2036 19 29,200 7,703 36,903 - 2037 20 29,200 7,703 36,903 - 2038 21 29,200 7,703 36,903 - 2039 22 29,200 7,703 36,903 - 2040 23 29,200 7,703 36,903 - 2041 24 29,200 7,703 36,903 - 2042 25 29,200 7,703 36,903 - 2043 26 29,200 7,703 36,903 - 2044 27 29,200 7,703 36,903 - 2045 28 29,200 7,703 36,903 - 2046 29 29,200 7,703 36,903 - 2047 30 29,200 7,703 36,903 -

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9.3 Rail Network Improvement Benefits

Calendar Project Transportation Cost Avoided GHG Avoided CAC Accident Cost Savings Residual Value of Year Year Savings Emissions Emissions (Discounted at 10%) Assets (Discounted at 10%) (Discounted at 10%) (Discounted at 10%) (Discounted at 10%) 2018 1 - - - - - 2019 2 - - - - - 2020 3 - - - - - 2021 4 - - - - - 2022 5 $150,854,000 $2,357,000 $1,766,000 $7,311,000 - 2023 6 $170,369,000 $2,677,000 $1,857,000 $8,263,000 - 2024 7 $185,921,000 $2,938,000 $1,872,000 $9,024,000 - 2025 8 $197,398,000 $3,137,000 $1,837,000 $9,588,000 - 2026 9 $204,750,000 $3,266,000 $1,752,000 $9,953,000 - 2027 10 $209,718,000 $3,359,000 $1,666,000 $10,202,000 - 2028 11 $212,639,000 $3,419,000 $1,561,000 $10,352,000 - 2029 12 $213,807,000 $3,451,000 $1,437,000 $10,416,000 - 2030 13 $213,485,000 $3,459,000 $1,314,000 $10,409,000 - 2031 14 $194,078,000 $3,154,000 $1,093,000 $9,462,000 - 2032 15 $176,434,000 $2,876,000 $917,000 $8,602,000 - 2033 16 $160,395,000 $2,623,000 $765,000 $7,820,000 - 2034 17 $145,813,000 $2,391,000 $635,000 $7,109,000 - 2035 18 $132,558,000 $2,180,000 $529,000 $6,463,000 - 2036 19 $120,507,000 $1,985,000 $445,000 $5,875,000 - 2037 20 $109,552,000 $1,808,000 $378,000 $5,341,000 - 2038 21 $99,593,000 $1,646,000 $316,000 $4,856,000 - 2039 22 $90,539,000 $1,498,000 $265,000 $4,414,000 - 2040 23 $82,308,000 $1,364,000 $227,000 $4,013,000 - 2041 24 $74,825,000 $1,259,000 $207,000 $3,648,000 - 2042 25 $68,023,000 $1,162,000 $188,000 $3,316,000 - 2043 26 $61,839,000 $1,072,000 $171,000 $3,015,000 - 2044 27 $56,217,000 $989,000 $155,000 $2,741,000 - 2045 28 $51,107,000 $913,000 $141,000 $2,492,000 - 2046 29 $46,461,000 $841,000 $128,000 $2,265,000 - 2047 30 $42,237,000 $776,000 $117,000 $2,059,000 $25,303,000 Total $3,471,426,000 $56,598,000 $21,740,000 $169,009,000 $25,303,000

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Vancouver Fraser Port Authority | Greater Vancouver Gateway 2030 | National Trade Corridors Fund Cost-Benefit Analysis Supplementary Documentation

9.4 Transportation Cost Savings to Canadian Producers

Calendar Project Rail Cost Savings Ocean Carrier Cost Savings Transportation Cost Transportation Cost Year Year (Undiscounted) (Undiscounted) Savings Savings (Undiscounted) (Discounted at 10%) 2018 1 - - - - 2019 2 - - - - 2020 3 - - - - 2021 4 - - - - 2022 5 $242,953,000 - $242,953,000 $150,854,000 2023 6 $301,819,000 - $301,819,000 $170,369,000 2024 7 $362,307,000 - $362,307,000 $185,921,000 2025 8 $423,139,000 - $423,139,000 $197,398,000 2026 9 $482,789,000 - $482,789,000 $204,750,000 2027 10 $543,955,000 - $543,955,000 $209,718,000 2028 11 $606,683,000 - $606,683,000 $212,639,000 2029 12 $671,018,000 - $671,018,000 $213,807,000 2030 13 $737,010,000 - $737,010,000 $213,485,000 2031 14 $737,010,000 - $737,010,000 $194,078,000 2032 15 $737,010,000 - $737,010,000 $176,434,000 2033 16 $737,010,000 - $737,010,000 $160,395,000 2034 17 $737,010,000 - $737,010,000 $145,813,000 2035 18 $737,010,000 - $737,010,000 $132,558,000 2036 19 $737,010,000 - $737,010,000 $120,507,000 2037 20 $737,010,000 - $737,010,000 $109,552,000 2038 21 $737,010,000 - $737,010,000 $99,593,000 2039 22 $737,010,000 - $737,010,000 $90,539,000 2040 23 $737,010,000 - $737,010,000 $82,308,000 2041 24 $737,010,000 - $737,010,000 $74,825,000 2042 25 $737,010,000 - $737,010,000 $68,023,000 2043 26 $737,010,000 - $737,010,000 $61,839,000 2044 27 $737,010,000 - $737,010,000 $56,217,000 2045 28 $737,010,000 - $737,010,000 $51,107,000 2046 29 $737,010,000 - $737,010,000 $46,461,000 2047 30 $737,010,000 - $737,010,000 $42,237,000 Total $16,900,839,000 - $16,900,839,000 $3,471,426,000

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Vancouver Fraser Port Authority | Greater Vancouver Gateway 2030 | National Trade Corridors Fund Cost-Benefit Analysis Supplementary Documentation

9.5 Environmental Impacts of Shipments to Alternative Ports (GHG) Calendar Project Freight Tonne-kilometres Avoided GHG Emissions Avoided GHG Emissions Avoided GHG Emissions Year Year Avoided (tonnes of CO2e) (Undiscounted) (Discounted at 10%) 2018 1 - - - - 2019 2 - - - - 2020 3 - - - - 2021 4 - - - - 2022 5 5,231,847,000 - $3,795,000 $2,357,000 2023 6 6,504,541,000 - $4,742,000 $2,677,000 2024 7 7,814,132,000 - $5,725,000 $2,938,000 2025 8 9,133,006,000 36 $6,724,000 $3,137,000 2026 9 10,428,301,000 58 $7,702,000 $3,266,000 2027 10 11,758,321,000 89 $8,711,000 $3,359,000 2028 11 13,124,133,000 120 $9,754,000 $3,419,000 2029 12 14,526,839,000 151 $10,831,000 $3,451,000 2030 13 15,967,576,000 182 $11,942,000 $3,459,000 2031 14 15,967,576,000 214 $11,978,000 $3,154,000 2032 15 15,967,576,000 246 $12,014,000 $2,876,000 2033 16 15,967,576,000 278 $12,050,000 $2,623,000 2034 17 15,967,576,000 311 $12,087,000 $2,391,000 2035 18 15,967,576,000 344 $12,123,000 $2,180,000 2036 19 15,967,576,000 377 $12,142,000 $1,985,000 2037 20 15,967,576,000 410 $12,160,000 $1,808,000 2038 21 15,967,576,000 444 $12,179,000 $1,646,000 2039 22 15,967,576,000 460 $12,197,000 $1,498,000 2040 23 15,967,576,000 454 $12,216,000 $1,364,000 2041 24 15,967,576,000 454 $12,399,000 $1,259,000 2042 25 15,967,576,000 441 $12,585,000 $1,162,000 2043 26 15,967,576,000 408 $12,774,000 $1,072,000 2044 27 15,967,576,000 373 $12,966,000 $989,000 2045 28 15,967,576,000 336 $13,160,000 $913,000 2046 29 15,967,576,000 298 $13,347,000 $841,000 2047 30 15,967,576,000 258 $13,537,000 $776,000 Total 365,937,482,000 6,743 $281,842,000 $56,598,000

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Vancouver Fraser Port Authority | Greater Vancouver Gateway 2030 | National Trade Corridors Fund Cost-Benefit Analysis Supplementary Documentation

9.6 Environmental Impacts of Shipments to Alternative Ports (CAC)

Calendar Project NOX Emissions VOC Emissions PM2.5 Emissions SO2 Emissions Avoided CAC Avoided CAC Year Year Avoided Avoided Avoided Avoided Emissions Emissions (tonnes) (tonnes) (tonnes) (tonnes) (Undiscounted) (Discounted at 10%) 2018 1 ------2019 2 ------2020 3 ------2021 4 ------2022 5 657 24.9 14.3 - $2,844,000 $1,766,000 2023 6 760 28.6 16.7 - $3,290,000 $1,857,000 2024 7 845 31.6 17.6 - $3,649,000 $1,872,000 2025 8 912 33.7 19.1 0.01 $3,937,000 $1,837,000 2026 9 957 36.5 20.2 0.01 $4,132,000 $1,752,000 2027 10 1,001 37.3 20.9 0.02 $4,321,000 $1,666,000 2028 11 1,033 37.5 21.4 0.02 $4,455,000 $1,561,000 2029 12 1,053 38.9 19.7 0.03 $4,511,000 $1,437,000 2030 13 1,060 40.0 19.4 0.03 $4,537,000 $1,314,000 2031 14 966 35.3 19.1 0.04 $4,152,000 $1,093,000 2032 15 893 32.7 16.9 0.05 $3,830,000 $917,000 2033 16 822 30.2 14.8 0.05 $3,516,000 $765,000 2034 17 754 27.8 12.8 0.06 $3,211,000 $635,000 2035 18 687 25.4 12.6 0.06 $2,940,000 $529,000 2036 19 640 23.1 10.6 0.07 $2,724,000 $445,000 2037 20 595 22.8 10.5 0.08 $2,540,000 $378,000 2038 21 550 20.6 8.6 0.08 $2,335,000 $316,000 2039 22 507 20.3 8.5 0.08 $2,160,000 $265,000 2040 23 483 18.1 6.7 0.08 $2,035,000 $227,000 2041 24 483 18.1 6.7 0.08 $2,035,000 $207,000 2042 25 483 18.1 6.7 0.08 $2,035,000 $188,000 2043 26 483 18.1 6.7 0.08 $2,035,000 $171,000 2044 27 483 18.1 6.7 0.07 $2,035,000 $155,000 2045 28 483 18.1 6.7 0.06 $2,035,000 $141,000 2046 29 483 18.1 6.7 0.05 $2,035,000 $128,000 2047 30 483 18.1 6.7 0.05 $2,035,000 $117,000 Total 19,000 692 337 1.24 $79,363,000 $21,740,000

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Vancouver Fraser Port Authority | Greater Vancouver Gateway 2030 | National Trade Corridors Fund Cost-Benefit Analysis Supplementary Documentation

9.7 Local Transportation and Environmental Benefits

Calendar Project Travel Time Savings Vehicle Operating Improved Safety Avoided GHG Avoided CAC Year Year (Discounted at 10%) Cost Savings (Discounted at 10%) Emissions Emissions (Discounted at 10%) (Discounted at 10%) (Discounted at 10%) 2018 1 - - - - - 2019 2 - - - - - 2020 3 $138,000 $2,186 - $642 $4,606 2021 4 $125,000 $2,023 - $596 $4,187 2022 5 $4,949,000 $339,000 $572,000 $59,000 $8,213 2023 6 $10,011,000 $445,000 $635,000 $77,000 $9,705 2024 7 $10,152,000 $449,000 $585,000 $78,000 $9,638 2025 8 $10,210,000 $449,000 $538,000 $78,000 $9,523 2026 9 $10,198,000 $448,000 $495,000 $78,000 $9,370 2027 10 $10,126,000 $446,000 $456,000 $78,000 $9,185 2028 11 $10,006,000 $442,000 $419,000 $78,000 $8,976 2029 12 $9,845,000 $437,000 $385,000 $77,000 $8,748 2030 13 $10,624,000 $418,000 $354,000 $74,000 $9,293 2031 14 $9,741,000 $388,000 $323,000 $69,000 $8,501 2032 15 $8,932,000 $360,000 $295,000 $64,000 $7,777 2033 16 $8,192,000 $334,000 $269,000 $60,000 $7,114 2034 17 $7,515,000 $310,000 $246,000 $56,000 $6,508 2035 18 $6,895,000 $288,000 $224,000 $52,000 $5,954 2036 19 $6,328,000 $267,000 $205,000 $49,000 $5,447 2037 20 $5,808,000 $248,000 $187,000 $45,000 $4,984 2038 21 $5,333,000 $230,000 $170,000 $42,000 $4,560 2039 22 $4,898,000 $213,000 $155,000 $39,000 $4,172 2040 23 $4,500,000 $198,000 $142,000 $36,000 $3,817 2041 24 $4,136,000 $184,000 $129,000 $34,000 $3,492 2042 25 $3,803,000 $171,000 $118,000 $31,000 $3,195 2043 26 $3,498,000 $158,000 $108,000 $29,000 $2,924 2044 27 $3,219,000 $147,000 $98,000 $27,000 $2,675 2045 28 $2,964,000 $136,000 $89,000 $25,000 $2,448 2046 29 $2,730,000 $127,000 $82,000 $23,000 $2,240 2047 30 $2,525,000 $118,000 $74,000 $22,000 $2,054 Total $177,403,000 $7,753,000 $7,354,000 $1,385,000 $169,000

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Vancouver Fraser Port Authority | Greater Vancouver Gateway 2030 | National Trade Corridors Fund Cost-Benefit Analysis Supplementary Documentation

9.8 Safety Impacts of Shipments to Alternative Ports

Calendar Project Fatalities Avoided Injuries Avoided Avoided Accident Costs Avoided Accident Costs Year Year (Undiscounted) (Discounted at 10%) 2018 1 - - - - 2019 2 - - - - 2020 3 - - - - 2021 4 - - - - 2022 5 1.4 11.9 $11,774,000 $7,311,000 2023 6 1.7 14.8 $14,638,000 $8,263,000 2024 7 2.1 17.8 $17,585,000 $9,024,000 2025 8 2.4 20.8 $20,553,000 $9,588,000 2026 9 2.8 23.7 $23,468,000 $9,953,000 2027 10 3.1 26.7 $26,461,000 $10,202,000 2028 11 3.5 29.8 $29,534,000 $10,352,000 2029 12 3.9 33.0 $32,691,000 $10,416,000 2030 13 4.3 36.3 $35,933,000 $10,409,000 2031 14 4.3 36.3 $35,933,000 $9,462,000 2032 15 4.3 36.3 $35,933,000 $8,602,000 2033 16 4.3 36.3 $35,933,000 $7,820,000 2034 17 4.3 36.3 $35,933,000 $7,109,000 2035 18 4.3 36.3 $35,933,000 $6,463,000 2036 19 4.3 36.3 $35,933,000 $5,875,000 2037 20 4.3 36.3 $35,933,000 $5,341,000 2038 21 4.3 36.3 $35,933,000 $4,856,000 2039 22 4.3 36.3 $35,933,000 $4,414,000 2040 23 4.3 36.3 $35,933,000 $4,013,000 2041 24 4.3 36.3 $35,933,000 $3,648,000 2042 25 4.3 36.3 $35,933,000 $3,316,000 2043 26 4.3 36.3 $35,933,000 $3,015,000 2044 27 4.3 36.3 $35,933,000 $2,741,000 2045 28 4.3 36.3 $35,933,000 $2,492,000 2046 29 4.3 36.3 $35,933,000 $2,265,000 2047 30 4.3 36.3 $35,933,000 $2,059,000 Total 98 832 $823,501,000 $169,009,000

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Gateway Rail Assessment 2030 Executive Summary

April 6, 2018

Vancouver Fraser Port Authority

Mott MacDonald Suite 1888 Bentall 5 550 Burrard Street Vancouver BC V6C 2B5 Canada

T +1 604 681 4400 mottmac.com

Vancouver Fraser Port Authority 100 The Pointe, 999 Gateway Rail Assessment 2030 382729-MMD-00-P0-RP-RW-0004 Canada Place https://mottmac.sharepoint.com/teams/pj-b2952/DOPE/382729-MMD-00-P0-RP-RW- Vancouver, British Executive 0004Summary - GRA2030 Executive Summary.docx Columbia Mott MacDonald V6C 3T4

April 6, 2018

Mott MacDonald Canada Ltd registered in Canada no. 2232292. Suite 301, 30 Vancouver Fraser Port Authority Duncan Street, Toronto, ON M5V 2C3

Mott MacDonald | Gateway Rail Assessment 2030 Executive Summary

Issue and revision record

Revision Date Originator Checker Approver Description A 2018/01/24 W. Mak A. Wells J. Sutcliffe Issued for Information B1 2018/02/23 W. Mak Draft Issue B 2018/03/16 W. Mak A. Wells J. Sutcliffe Final Issue C 2018/04/06 W. Mak A. Wells J. Sutcliffe Final Issue

Document reference: 382729-MMD-00-P0-RP-RW-0004

Information class: Standard

This document is issued for the party which commissioned it and for specific purposes connected with the above- captioned project only. It should not be relied upon by any other party or used for any other purpose.

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This R eport has been prepar ed sol el y for use by the party which commissi oned it (the 'Client') in connection with the capti oned pr oject. It shoul d not be used for any other purpose. N o person other than the Client or any party who has expr essl y agreed terms of reli ance with us (the 'Recipi ent(s)') may r el y on the content, infor mation or any views expr essed in the R eport. T his R eport is confi denti al and contains pr opri etary intell ectual pr operty and we accept no duty of car e, r esponsibility or li ability to any other recipi ent of this R eport. N o repr esentati on, warranty or undertaking, express or i mplied, is made and no responsi bility or liability is accepted by us to any party other than the Client or any Reci pient(s), as to the accuracy or co mpleteness of the i nfor mati on contai ned i n this R eport. F or the avoi dance of doubt thi s Report does not i n any way pur port to i nclu de any legal, insurance or fi nanci al advice or opi nion.

We disclai m all and any liability whether arising i n tort, contr act or other wise which we might otherwise have to any party other than the Cli ent or the Reci pient(s), in respect of this Report, or any infor mation contained in it. We accept no responsi bility for any error or omissi on in the Report which is due to an error or omissi on in data, i nfor mation or statements supplied to us by other parti es i ncludi ng the Cli ent (the 'Data'). We have not independentl y verified the D ata or other wise exami ned i t to deter mi ne the accuracy, completeness, sufficiency for any purpose or feasi bility for any particular outcome incl uding fi nanci al.

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Mott MacDonald | Gateway Rail Assessment 2030 Executive Summary

Contents

1 Project Rationale 1

2 Gateway Rail Assessment 2030 4 2.1 Stakeholder Engagement Process 4 2.2 Development of Rail Input Parameters 5 2.3 Gateway 2030 Simulation 6

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Mott MacDonald | Gateway Rail Assessment 2030 1 Executive Summary

1 Project Rationale

The Gateway Transportation Collaboration Forum (GTCF) was founded in 2014 by the Vancouver Fraser Port Authority (VFPA) to collaboratively develop and gain funding approval for transportation and related infrastructure necessary for supporting continued trade growth in the Greater Vancouver Gateway (the Gateway). The Gateway comprises of approximately 2,900 km2 of land within the Greater Vancouver region. It also hosts Canada’s largest port where it is home to 27 major deep-sea and domestic marine terminals operating over five business sectors: automobile, container, cruise, breakbulk and project cargo, and bulk. The terminal facilities are supported by an extensive rail system that connects the Gateway to the rest of Canada through the Fraser Canyon as well as a large portion of the United States via connections to the south. Rail service to the terminals is provided by three Class 1 railroads and one regional short line railroad on a shared regional Gateway rail network with other passenger rail services. The freight and passenger rail service providers include:

● Canadian National Railway (CN); ● Canadian Pacific Railway (CP); ● Burlington Northern Santa Fe Railway (BNSF); ● Southern Railway of British Columbia (SRY); ● VIA Rail; ● Rocky Mountaineer; ● West Coast Express commuter train services offered by Translink; and, ● Amtrak. The Gateway can be divided into four distinct trade areas that are intrinsically connected with one another by the regional rail and road networks. The four trade areas are as follows:

● North Shore Trade Area (NSTA); ● South Shore Trade Area (SSTA); ● Fraser River Trade Area (FRTA); and, ● Roberts Bank Trade Area (RBTA).

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Mott MacDonald | Gateway Rail Assessment 2030 2 Executive Summary

Figure 1 illustrates the four trade areas’ boundaries in relation to the Gateway’s rail and road network.

Figure 1: Trade Areas within the Greater Vancouver Gateway in Relation to Rail Network

Note: Rail network shown in Blue.

The GTCF’s steering committee is made up of regional transportation agencies that include senior executives from BC Ministry of Transportation and Infrastructure, TransLink, Vancouver Fraser Port Authority, Transport Canada, and the Greater Vancouver Gateway Council. Building upon the success of the Asia-Pacific Gateway and Corridor Initiative that saw the realization of multiple Gateway transportation improvement projects between 2006 and 2013, the GTCF’s goal is to coordinate efforts and better position the Gateway to drive funds where they will have the greatest impact for Canadian and regional economy.

Studies commissioned by the GTCF have identified a list of approximately 40 infrastructure projects across the Gateway as potential opportunities to relieve road traffic congestion and increase trade corridor capacity (including rail).

The projects were grouped to provide a number of strategic and technical benefits, including:

● Higher stated capacity expansion by optimizing flow over an entire corridor, as opposed to spot solutions that create constraints elsewhere; ● Better funding leverage by including more partners and spreading partner funding across projects to fill funding gaps; ● Greater competition for project design and construction by offering larger scale opportunities; ● Optimized construction and design innovation given the similar nature of the assets and ability to spread research and development costs over a larger range of projects; ● Accelerated project delivery timelines given the ability of the contractor and developer to move and rotate different construction crews between projects; and, ● Lower costs to procure and administer projects by using a single procurement approach.

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Mott MacDonald | Gateway Rail Assessment 2030 3 Executive Summary

The Government of Canada announced in 2016 its Transportation 2030 vision which outlined Canada’s commitment to invest $10.1 billion over the next 11 years in transportation infrastructure projects. As a result, the Trade and Transportation Corridors Initiative was created by Transport Canada as a subset of this funding plan and dedicated $2 billion of the Federal government’s investment specifically towards the National Trade Corridor Fund (NTCF). The fund is a merit-based program purposed to strengthen the Canadian economy by supporting improvement projects over the next 11 years that would increase efficiency and reliability of existing trade corridors and grow the Canadian economy. The NTCF is expected to have multiple intakes for improvement project applications over the next decade with at least two subsequent national calls for projects likely in 2020 and 2022.

From the list of identified infrastructure projects, 23 projects were deemed to be priority in supporting near-term trade growth within the Gateway. The selected projects were further combined into nine funding applications to be submitted for the NTCF’s first intake and they are as follows:

Table 1: Project Groups Under Consideration for First NTCF Funding Application Intake Group Number and Name Project Name 1. North Shore Corridor Capacity Improvement Project Thornton Tunnel Ventilation Upgrade (NSCCIP) Douglas Road Grade Separation Thornton Tunnel Approach Siding 2. Harris Road Underpass & Kennedy Road Overpass Harris Road Grade Separation Project Kennedy Road Grade Separation New Vancouver Intermodal Facility Siding

3. Bell Road Overpass Project Bell Road Grade Separation Matsqui Junction Siding Extension

4. Burrard Inlet Road & Rail Improvement Project Centennial Road Overpass Project (CROP) (BIRRIP) Waterfront Road Access Improvement Project Commissioner Street Rail and Road Expansion Project Cascadia Support Tracks Project

5. Pitt River Road and Colony Farm Road Rail Colony Farm Road Overpass Overpasses Project Double Tracking of CP Westminster Subdivision

6. Portside-Blundell Overpass and Upgrade Project Grade Separation of the Portside / Blundell / No. 8 Road Intersection Blundell Road Widening Portside Road Extension Across No. 7 Road Canal Pitt River Road Overpass

7. Westwood Street & Kingsway Avenue Grade Westwood Street Grade Separation Separation Project Kingsway Avenue Grade Separation

8. Mountain Highway Underpass Project Mountain Highway Underpass Project

9. Whistle Cessation and Rail Crossing Information Whistle Cessation at Various Locations System Project Rail Crossing Information System (RCIS) at Various Locations

Although the remaining improvement projects have not been submitted, they will be required to support Gateway growth to 2030 and shall be considered as future candidates for subsequent NTCF intake submissions.

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Mott MacDonald | Gateway Rail Assessment 2030 4 Executive Summary

2 Gateway Rail Assessment 2030

As a member of the GTCF, VFPA engaged Mott MacDonald and its sub-consultant, MainLine Management, to support this Greater Vancouver Gateway 2030 initiative by undertaking a capacity study of the Greater Vancouver rail network for a future year of 2030. The purpose of the study was to identify smart infrastructure investments on existing rail corridors to help eliminate bottlenecks and improve the reliability of supply chain systems to support Gateway trade growth towards year 2030 and beyond.

At a high level, the study scope can be summarized into the following tasks:

● Survey of rail-related stakeholders (providers and recipients of rail services) handling trade commodities of national significance across the Gateway; ● Assessment of stakeholder data to develop realistic input parameters for the 2030 rail network simulation model; ● Development of high-level rail infrastructure concepts; ● Simulation of the Greater Vancouver rail network for theoretical year 2030; and, ● Assessment of simulation results and support VFPA’s funding application team by providing technical and financial outputs with respect to rail-related aspects and projects. Subsequent sections and the graphic below briefly describes the study’s key events and milestones leading up to the first funding application intake’s deadline and beyond.

July 2017 August 2017 September 5 2017 Engage and collect Late August 2017 NTCF deadline for Begin simulating GVG stakeholder's plans for Develop rail concepts Expressions of 2030 model Year 2030 Interest (EOI)

September 2017 October 2017 November 6 2017 Q1 2018 Complete 2030 Develop outputs and NTCF deadline for On-going support and simulation and provide business case Phase 1 project stakeholder analyse resutls support funding applications engagement

2.1 Stakeholder Engagement Process VFPA and Mott MacDonald engaged 30 different stakeholders across the four trade areas, including railroads, major commodity shippers, and rail-serviced marine terminals, to survey current throughputs and operational plans as well as aspirations leading up to 2030. Furthermore, Class 1 and short line railroads were comprehensively consulted to ensure that aspirations within each trade area were not significantly misaligned from the railroads’ future operating plans and commodity market forecasts.

The marine terminals surveyed handle the majority of trade commodities within the Gateway. These terminals have forecasted growth in excess of 90% by 2030. Table 2 summarizes the anticipated growth in trade commodity volumes that were captured during the consultation.

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Mott MacDonald | Gateway Rail Assessment 2030 5 Executive Summary

Table 2: Consolidated Cross-Berth Throughput Captured During Engagement Sessions, By Trade Area Trade Areas Current Volume Anticipated Volume Percentage Increase (2016) (2030) North Shore (NSTA) 33.7 Mt/a 67.6 Mt/a 100% South Shore (SSTA) 33.4 Mt/a 57.6 Mt/a 73% Fraser River (FRTA) * 23.0 Mt/a 46.9 Mt/a 104% Roberts Bank (RBTA) 41.0 Mt/a 82.0 Mt/a 100% Notes: - All volumes are reported as cross-berth throughput in Millions of Metric Tonnes per Annum (Mt/a). - Surveyed throughputs have been moderated based on infrastructure capacity, feedback from suppliers, and market forecasts. * - Short-sea shipping forestry products have been excluded from the analysis as rail network demand only makes up a limited portion of forestry products’ cross-berth throughputs.

2.2 Development of Rail Input Parameters Mott MacDonald, supported by MainLine Management, built upon an existing simulation model to investigate where the constraints and bottlenecks might be located within the Gateway rail network. With the last major revision of the simulation model taking place in 2013 and significant changes in railroad operation occurring within the last year, an overhaul of the simulation model was undertaken to ensure that the simulation reflected the latest proposed operating procedures. Three sets of rail-related input parameters were required to update the model: train traffic volume, rail operating plans, and infrastructure changes (road and rail).

The surveyed terminals’ annual throughputs were converted from tonnage to an equivalent number of train deliveries and removals required over a five-day period. These five-day blocks of train traffic were then collected into sets of loading charts for each Gateway Trade Area.

Due to the complicated nature of railroading, VFPA and Mott MacDonald undertook extensive engagement with Class 1 and short line railroads to extract operating plans and procedures which included, but is not limited to, the following parameters:

● Start and end destinations; ● Scheduled time for spot (delivery) and removal of trains; ● Rolling stock changes; ● Train configurations including lengths and makeups; ● Preferred train routing across the Gateway; ● Dwell time within terminal to replicate loading and unloading processes; ● Inspection requirements and locations; and, ● Crew change requirements and locations.

The combination of the train loading charts and the rail operating plans form the basis from which virtual train traffic was generated.

The simulated scenario replicates a future year 2030’s rail network and train throughput volumes. Recognizing the anticipated timeline of Gateway throughput growth by 2030, the simulation model incorporates the nine project groups submitted for the first intake as well as other identified key rail infrastructure projects. Although the additional projects are required to support the 2030 volumes, these projects are not necessarily required to support the projected near-term growth in the Gateway.

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Mott MacDonald | Gateway Rail Assessment 2030 6 Executive Summary

The additional projects included in the 2030 simulation are candidates for submission in subsequent funding application intakes and are as follows:

● Grade separation of Piper Avenue (Burnaby) to allow one additional North or South Shore train to stage along the BNSF New Westminster Subdivision; ● Double tracking between CN Thornton Yard and Brownsville to further support facility expansions in the area; and, ● Road closure in New Westminster and extension of existing tracks toward the New Westminster Rail Bridge to optimize utilization of the existing bridge infrastructure.

2.3 Gateway 2030 Simulation The primary tool used for the capacity analysis is Berkeley Simulation Software’s Rail Traffic Controller (RTC) program. This software is the tool used by North American Class 1 Railroads to identify capital infrastructure projects and assess changes in rail traffic operations. The RTC software has been used in this study to replicate train movements across the entire Gateway rail network. The software’s outputs provide a better understanding of rail traffic demands and infrastructure requirements along the various rail corridors. The geographic extents of the rail simulation model are bound by the following landmarks:

● Northern extent: Capilano River; ● Eastern extent: Approximately 6 km east of the Mission Rail Bridge; ● Southern extent: Canada-US border; and, ● Western extent: Georgia Strait. The model was successfully simulated over five days to allow trains to fully arrive and depart the rail network. Within the five days, peak operations are also considered. Outputs from the model have been compiled using data over the three middle days to ensure that non-daily or irregularly scheduled trains (e.g. VIA Rail’s the Canadian passenger route) are captured within the results.

The primary metrics to describe rail network capacity are average delay minutes per train over each 10 miles travelled and whether requested trains arrive within the same day that they were scheduled to arrive. To simplify the results, Figure 2 (overleaf) illustrates the key landmarks within the Greater Vancouver area and colour coded delays on vital rail segments within the rail network.

The simulation results indicate that the Gateway rail network, while capable of handling the anticipated trade growth, will be constrained once peak rail traffic growth reaches the 2030 train volumes. This is particularly evident along the rail corridor that connects from CN Thornton Yard to the North Shore Trade Area. While the rail infrastructure improvements included in the 2030 simulation will provide enough additional capacity for the network to function, additional infrastructure and operational changes are required for any further growth and to reduce the identified congestion at peak 2030 rail operations.

This phased approach to delivering capacity-enabling infrastructure will have the benefit of allowing implementation timelines to adapt to increased network capacity demands as new terminals and terminal expansion projects become operational. Furthermore, the flexibility in the implementation schedule allows for further operational flexibility to be afforded to the railways.

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Mott MacDonald | Gateway Rail Assessment 2030 7 Executive Summary

Figure 2: Gateway 2030 Simulation Results in Graphical Form

The simulated volumes are based on stakeholder plans collected during the engagement sessions. These volumes are higher than the Province’s trade commodity forecasts, which have been estimated at a more conservative growth rate. Whether these projected volumes can be achieved is highly dependent on whether developments occur at the terminals as planned and on the timeline to which they are implemented. Furthermore, throughput volumes do not instantaneously increase over night; several operational and infrastructure changes in the supply chain will be required to achieve the simulated 2030 volumes. Therefore, stakeholders can benefit from the simulation results by taking appropriate action in advance to plan for the necessary infrastructure.

Moreover, the results will help guide VFPA and its consultants on which infrastructure improvements should be given the highest priority. Additional Gateway infrastructure and operational changes have already been identified as potential solutions to alleviate the 2030 rail network’s observed strain. However, further simulation is required to evaluate the effectiveness of these additional changes which could potentially reprioritize projects for the next NTCF application intake in 2020.

Analysis of the results also verified that five of the identified infrastructure project groups with grade separation components (groups 1, 2, 3, 4, and 5) are urgently required within the next few years and are essential for the rail network to meet the anticipated near-term volume growth.

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Mott MacDonald | Gateway Rail Assessment 2030 8 Executive Summary

Table 3 provides an overview of the grade separation projects included in the project groups and their respective rail infrastructure opportunities. The grade separation structures will be designed to accommodate additional rail infrastructure opportunities if the rail components are not immediately implemented after grade separation is complete.

Table 3: Infrastructure Project Groups for Near-Term Road and Rail Growth Group Road / Rail Grade Rail Infrastructure Opportunity Supported Trade No. Separation Project Area 1 Douglas Road New 18,000 ft siding and Thornton Tunnel Ventilation NSTA/SSTA Upgrade 2 Harris Road & Kennedy Road New 16,000 ft siding for added operational flexibility NSTA/SSTA/FRTA 3 Bell Road Extend existing Matsqui siding from 6,300 ft to All Trade Areas accommodate up to 12,000 trains 4 Centennial Road & Various track reconfiguration and new tracks for SSTA Commissioner Street increased throughput and efficient operations 5 Pitt River Road & Colony Farm Double tracking between Sapperton and MacAulay NSTA / FRTA Road wyes on CP Westminster Subdivision 6 No. 8 Road / Portside Road / Extend existing yard tracks to allow more efficient train FRTA Blundell Road handling and enable the addition of a new bulk facility at VFPA’s Area 5 site in Richmond 7 Westwood Street & Kingsway Addition of parallel track to improve operational NSTA/SSTA/FRTA Avenue flexibility adjacent to CP’s main switching yard

Proportional usage of the capacity-enabling infrastructure is summarized in Table 4 below. The usage was allocated based on the future anticipated growth tonnages moved through the Gateway to the various Trade Areas using assumed routings through the existing rail corridors.

Table 4: Usage breakdown of infrastructure improvement projects by Trade Areas Usage Percentage (Split by Trade Areas) Group Infrastructure Projects North Shore South Shore Fraser River Roberts Bank No. Trade Area Trade Area Trade Area Trade Area 1 Douglas Road Grade Separation 73% 27% ------Thornton Tunnel Ventilation Upgrade 100% ------2 Harris Road and Kennedy Road --- 31% 59% 10% Grade Separations 3 Bell Road Grade Separation 27% 20% 19% 34% 4 BIRRIP --- 100% ------5 Pitt River Road and Colony Farm 76% --- 24% --- Road Grade Separations 6 No. 8 Road / Portside Road / Blundell ------100% --- Road Grade Separation 7 Westwood Street Grade Separation --- 100% ------Kingsway Avenue Grade Separation 76% --- 24% --- 8 Mountain Highway Underpass 100% ------Note: Whistle Cessation and Rail Crossing Information System Project has been excluded as it primarily benefits the surrounding residential communities as well as the road traffic users.

However, given the complex and potentially ever-changing environment that railroads operate under, the proportional usage breakdown by Trade Area presented in Table 4 would change should operations differ from those currently modelled and would warrant revisiting.

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Mott MacDonald | Gateway Rail Assessment 2030 9 Executive Summary

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Technical Memo

Project: Second Narrows Rail Bridge Capacity Analysis

Our reference: 397107-MMD-05-P0-MO-RW-0001 Rev 0 Your reference: ---

Prepared by: W. Mak Date: 6 Nov 2020

Approved by: J. Sutcliffe Checked by: A. Wells

Subject: Summary of Rail Capacity Analysis Methodology

1 Introduction

The Second Narrows Rail Bridge (SNB) is a vertical-lift railway bridge that crosses the Burrard Inlet. It provides the only viable rail link between the North Shore Trade Area (NSTA) and the rest of the Lower Mainland’s rail network. The rail bridge’s 160 m lift span is raised to allow transit by a variety of marine vessels, including trade-enabling commodity carriers, tugboats, patrol boats, and pleasure craft, during which no rail movements can occur. In 2017, the Vancouver Fraser Port Authority (VFPA) and its partners sought and received federal funding for infrastructure investments to improve the rail corridor leading to the North Shore Trade Area, of which the SNB is a part. Implementation of these projects will support trade fluidity and growth on this corridor. However, the raising of the SNB for marine traffic consumes valuable service windows for North Shore Trade Area trains, thereby reducing available rail capacity to the trade area. Over the next 10 to 15 years, it is expected that both marine and rail traffic will significantly increase, and these rail-vessel conflicts will become more common. VFPA engaged Mott MacDonald to investigate and quantify the availability, capacity, and utilization of the SNB for rail traffic.

This document is to summarize the assumptions and methodology undertaken by Mott MacDonald (MMCL) to determine the SNB theoretical rail capacity. Moreover, VFPA’s interpretation of the analysis outputs are detailed at the end of the memo.

2 Methodology

The utilization of the SNB is complex; it is affected by factors such as marine and rail traffic not running to strict timetables and marine transits being constrained to tidal limitations. The methodology adopted by Mott MacDonald to determine a theoretical rail capacity therefore required several assumptions.

Three horizon years, 2010, 2018, and 2030, were considered for this analysis. Each horizon year was assessed using the following process:

1. Determine the annual and daily train movements required to achieve the cross-berth terminal throughput / demand; 2. Determine a theoretical daily average for unconstrained SNB rail capacity – assess how many train movements the rail bridge could support if there were no marine transits; and, Mott MacDonald 2

3. Determine a theoretical daily average for constrained SNB rail capacity – consider marine traffic demand and subsequent bridge raising / lowering processes to determine the constrained SNB rail capacity. Each of these components are further discussed in the sections below.

2.1 Study Area and Infrastructure The SNB is located at the east end of the Burrard Inlet Figure 2.1: SNB study area, rail segment with a number of rail-served marine terminals to the north in red and CN’s Thornton Tunnel immediately to the south.

MMCL’s study area spans from today’s train staging North Shore Signals location east of Douglas Road crossing, at the south end, to the rail signals on the northern side of the SNB. The rail BURRARD INLET segment assumed for the study, as illustrated in red on Figure 2.1, is approximately 6.3 km long and, as it is single-tracked, can only support uni-directional train Second Narrows Rail Bridge movements. This segment is a single entity where only one train can occupy the “signal block” between each end of the segment at a time.

Between Douglas Road and the SNB is the 3.4 km-long Thornton Thornton Tunnel. Between successive trains servicing the Tunnel Douglas North Shore using the tunnel, exhaust fumes from Road locomotives must be cleared.

Two infrastructure scenarios were considered for the Willingdon Junction future 2030 horizon year:

1. Do nothing: rail-related infrastructure as understood during the 2019 analysis (as per Figure 2.1); and, 2. With infrastructure improvements: closing of the Douglas Road at-grade crossing, grade separation of Holdom Avenue, addition of a new rail siding immediately east of the Willingdon Junction, and upgrades to the Thornton Tunnel ventilation system. – The road closure, grade separation, and the addition of the siding track will enable CN to stage trains closer to Willingdon Junction, thereby increasing utilization of the signal block through reduction of the block’s occupation time. – The Thornton Tunnel ventilation upgrades would effectively halve the current time required to clear exhaust fumes from the tunnel, thereby extending availability of the signal block for subsequent trains.

2.2 Rail Demand Rail demand was determined through a combination of assumptions and datasets:

● Historical cross-berth throughput data provided by VFPA; ● 2030 terminal throughput aspirations and operational changes, as captured during 2017 industry stakeholder engagement; and, ● Current and forecasted change in train consist trends (e.g. average grain trains increasing in length from 6,000 ft up towards 8,500 ft from 2019 onwards).

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The rail demand, as expressed in number of trains required per day and separated out by terminal destinations, was derived from each horizon year’s cross-berth throughput, typical train configuration, annual days of terminal operation, and rail car variables, such as car length and cargo load capacity.

Train lengths have a direct impact on the time it takes for a train to entirely traverse the signal block identified in Section 2.1. Commodity type, originating location, train carrier, and availability of equipment all have an impact on the train sizes received at the NSTA terminals. Weighted averages of each horizon year’s train lengths were assumed for all trains traversing the study’s rail segment.

2.3 Unconstrained Bridge Capacity In order to quantify the impact of marine traffic on the bridge’s rail capacity, the unconstrained capacity for rail movements across the signal block was determined for each horizon year over a 24-hour period.

The terminal handling and rail operations outside of the study area were ignored or “blackholed”. The analysis also assumed that trains are readily available on both ends of the rail segment and would alternate between north-bound and south-bound movements. The assumed “one train in, one train out” philosophy was a conservative assumption to not overinflate benefits of flighting multiple trains in the same direction and served as effectively metering trains. Travel times were determined for north- and south-bound traffic. An average of both travel times was assumed to determine the SNB rail capacity.

The first train travelling through the Thornton Tunnel for the day assumes that no tunnel ventilation is required. Each successive train is required to wait for the clearing of exhaust fumes from the tunnel. Both infrastructure scenarios were considered for the 2030 horizon year to assess capacity with and without improvements.

2.4 Constrained Bridge Capacity In advance of MMCL’s analysis of the SNB rail capacity, VFPA commissioned Ausenco to carry out a separate marine traffic simulation study to understand marine demand across the SNB. One set of marine simulation outputs for the three horizon years was provided by Ausenco to MMCL for assessing against the rail traffic.

As tidal cycles vary day by day, MMCL’s study was completed by analysing the average day. Moreover, it is understood that marine transits take priority over rail traffic as there are limited number of tidal windows available to marine vessels. The remaining windows available for rail traffic were then used to determine the number of train movements that could be supported. Any time that the bridge is available for a train movement, but the bridge availability is insufficient for a train to fully traverse the segment, this was recorded and considered as lost rail capacity. These three components (marine utilization, rail utilization and lost rail capacity) are further illustrated for a sample analysis day on Figure 2.2 below.

Figure 2.2: Sample 24-hour period of SNB utilization

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Once all three horizon years and 2030’s two separate infrastructure scenarios were assessed, the following metrics were averaged over each of the horizon years:

● Bridge capacity utilization by marine traffic; ● Bridge capacity availability to rail traffic; ● Bridge capacity required to accommodate rail traffic demand; and, ● Bridge capacity lost.

3 Application of Outputs

The North Shore Trade Area is unique in having only one rail connection to the rest of the rail network. As a result, it has a heavy reliance on the capacity of the Second Narrows Rail Bridge to meet throughput targets and continue accommodate growth in the trade area. Despite introducing additional rail capacity to the trade area, bridge openings to support marine activities will reduce rail capacity benefits enabled by the proposed infrastructure.

Using the outputs from the rail bridge capacity analysis, VFPA has determined that:

● The marine traffic demand will be responsible for 37% of the available capacity of the Second Narrows Rail Bridge; and, ● Rail movements to / from the North Shore Trade Area will be responsible for 63% of the bridge’s available capacity.

Disclaimer: This Report has been prepared solely for use by the party which commissioned it (the 'Client') in connection with the captioned project. It should not be used for any other purpose. No person other than the Client or any party who has expressly agreed terms of reliance with us (the 'Recipient(s)') may rely on the content, information or any views expressed in the Report. This Report is confidential and contains proprietary intellectual property and we accept no duty of care, responsibility or liability to any other recipient of this Report. No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by us to any party other than the Client or any Recipient(s), as to the accuracy or completeness of the information contained in this Report. For the avoidance of doubt this Report does not in any way purport to include any legal, insurance or financial advice or opinion.

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