From: Larry McCabe To: Janice Hallahan; Andrea Fisher Subject: FW: Hillwatch Funding report Date: September-14-18 2:02:05 PM Attachments: Hillwatch funding feasibility report Port of Goderich Aug 29,2018 - Final for circulation.pdf CA From: Rowland Howe [mailto:[email protected]] Sent: September-14-18 11:42 AM To: Larry McCabe <[email protected]> Subject: Hillwatch Funding report Larry - please find attached the report prepared for GPMC by the Hillwatch group in Ottawa. Please let me know if there are any questions or concerns Rowland _____________________________________________ Rowland Howe President Goderich Port Management Corp. 245 North Harbour Rd W. Goderich Ontario N7A 3Z2 519 524 4247 1 August 29, 2018 Hillwatch Funding Feasibility Report to the Goderich Port Management Corporation (GPMC) Michael Teeter Principal Hillwatch Inc. PO Box 4824, Station E. Ottawa, Ontario, K1S5H9 [email protected] 613-769-9212 2 Contents 1. Executive Summary 2. Proposed Action Plan 3. Strategic Considerations for Funding this Port Expansion 4. Federal Infrastructure Programs a. Transport Canada and Transportation Infrastructure b. Infrastructure Canada: Investing in Canada- Rural and Northern Communities Component c. Environment Component of the Federal Infrastructure programs 5. Ontario Government Programs a. Infrastructure Ontario (IO) program definitions and priorities b. Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) 6. Some Private Sector Considerations 3 1. Executive Summary Michael Teeter of Hillwatch Inc. was hired by the Goderich Port Management Corporation (GPMC) to undertake this phase 2 Port of Goderich funding expansion feasibility study. Research and communications with government and stakeholders has been undertaken over the past 7 weeks. The response of government officials for the most part has been excellent. Federal and Provincial officials have been encouraging and helpful. This report concludes that time is of the essence and that funding for the second phase of the Port Expansion is indeed feasible under the Rural and Northern component of the 2017 Canada-Ontario Infrastructure Agreement (Building Canada Fund). By September 30, Infrastructure Ontario (IO) must submit to Infrastructure Canada its policy framework for the program and will publish its administrative processes defining priority funding areas later this fall. This report suggests that the Phase 2 Port of Goderich expansion could be one of the Ontario priority projects under this component of the bilateral agreement. At this stage, the Goderich port project meets all the major funding criteria as established by the Federal-Ontario bilateral agreement. The new Ontario government has important Ministers that are important to project selection and these are Ministers that would be familiar with Goderich and the Port. Of note is the Ontario Minister of Infrastructure (IO) Monte McNaughton, the Minister of Education Lisa Thompson and the Minister of Agriculture, Food and Rural Affairs (OMAFRA) Ernie Hardeman. The Association of Municipalities of Ontario (AMO) annual meeting was held in Ottawa from August 19 to 22. Meetings were held during the Conference and the project was discussed by Goderich officials and participants at the Conference. In due course, Goderich staff will be making a report to Town Council. Following the AMO meeting, the town and the port could work together to keep the project in the minds of decision makers as IO proceeds to publish its application criteria. An action plan to achieve this is outlined in Section 2. This report also examines other federal and provincial funding programs, and concludes that the Rural and North Component of the Building Canada Fund is the most relevant funding program at this time. The federal Trade and Transportation Corridors program is also somewhat relevant; however, projects funded under this program must be national in scope and in the next year at least be projects in the territorial North only. The body of this report also features conversations with possible new stakeholders and customers or users of the Port. Relevant officials and contact information are also itemized in the body of this report. An action plan is itemized in section 2. 4 2. Proposed Action Plan This report concludes that the Rural and Northern Infrastructure Component of the Canada- Ontario 2017 Infrastructure Agreement (Building Canada Fund) is the best funding prospect in the near term. Port of Goderich phase 2 expansion meets many of the important funding parameters including small community beneficiary, improvements to marine infastructure, appropriate project size, multi-party financing potential (e.g. federal, provincial, municipal (Port), municipality is the owner of the Port (and main beneficiary of the expansion), and there is a strong possibility for significant regional economic development and potential aboriginal community benefits. Also, the timing is very good. Infrastructure Ontario (IO) must submit to Infrastructure Canada, by September 30, 2018, its proposed policy framework under the 2017 bilateral Federal- Ontario Infrastructure Agreement. With a new provincial government recently in place, funding priorities have yet to be set in stone, and therefore this presents a great opportunity to inject this expansion into the provincial government acceptable project list. Goderich is a good political location. The federal MP is a Conservative in a federal Liberal government, and therefore the potential federal political outcomes are not ideal. However, the federal funding parameters have already been set by the 2017 Agreement and the opportunity for federal political intervention has been minimized. In essence, the province has the key federal-provincial project selection role. The Goderich MLA is the Minister of Education; the Infrastructure Ontario Minister is the MLA for the neighbouring riding and the Ontario Minister of Agriculture, Food and Rural Affairs also represents a close by riding. Politically, the stars appear to be aligned. Here is a sequence of the proposed action plan: • Town of Goderich officials should discuss the project at the AMO conference in Ottawa, August 19 to 22. Key Ministers are: Monte McNaughton (IO), Ernie Hardeman (OMAFRA) and Lisa Thompson (Education). We understand that meetings/discussions have been held and that Town staff will be presenting a report to Council in due course. • GPMC and Town should closely follow IO announcements as they consider and then publish the specific funding criteria for the Canada-Ontario Infrastructure Agreement. • GPMC and the Town should formally apply for funding when appropriate. • GPMC/Town should contact key user/partner stakeholders including senior executives at Goderich-Exeter Railway and Bruce Power. • Town/GPMC should coordinate local stakeholder, including seeking involvement/assistance from OMAFRA regional reps, with a view to asking stakeholders to write Ministers with a letter of support. • GPMC should contact Port customers asking them to send in letter of support to the Infrastructure Ontario Minister with a copy to the OMAFRA and Education Ministers. • IO appears to have not set specific time limits at this point but have committed to publishing application processes and priority funding parameters sometime this fall. GPMC and the Town should be as involved in this process as possible. 5 Note: Key government and private sector contact names and contact information are in the body of this report. The body of the report begins in Section 3 and there may be some redundancy between these sections and the points in the Executive Summary and Action Plan. 3. Strategic Considerations for funding this Port Expansion Government infrastructure funding is typically program in nature. In other words, both federal and provincial governments fund infastructure according to priorities established by Cabinet and then funded by Parliaments and Legislatures through specific programs that match these priorities. Infrastructure funding is also usually multi-party in nature. In other words, there is a federal portion, provincial portion and municipal portion for all funding at the local, regional or municipal level. Projects of national or provincial scope may only have two funding partners, the federal and provincial governments. Sometimes there is a private sector component to funding, irrespective of whether or not the project is a Public-Private Partnership. The strategic issue here is that funding for the Goderich port has to fit within an existing set of funding priorities and funding programs. It also has to likely be multi-party in nature. As a result this paper carefully examines relevant federal and provincial government programs in order to make conclusions about project funding feasibility. Politics can also play an important role and this has to be carefully considered as we review a path forward. For example, currently, Goderich is represented in federal Parliament by an Opposition MP but is represented in the Ontario Legislature by an important Cabinet Minister. Strategically, the best political scenario would be for federal programs to be established and funded that are consistent with port expansion, and that these programs have a strong provincial "ask" associated with them. This means that if federal funding exists where the funding priorities are consistent with the expansion, and where provincial governments determine the precise projects consistent with these federal funds, then the possibility of project