Ottawa considering funding for proposed Strait of Canso container terminal

The Canadian government says it may be willing to put some money into a proposed container terminal in Nova Scotia's Strait of Canso, creating a second shipping port in the province in addition to the one located in Halifax.

That's welcome news to officials in Cape Breton Regional Municipality, which is also hoping to attract a container terminal for Sydney harbour, but it doesn't sit well with the Port of Halifax and its labour union.

Proponents are looking to build a terminal in Melford, near Mulgrave in Guysborough County, at an estimated cost of more than $700 million. They received federal and provincial approvals 15 years ago, but the project has never been built.

Now, the federal transport minister's office says it is considering a funding request from the Melford terminal operators.

Port developers in Melford and CBRM say they are closer to the Mediterranean and the Suez Canal than Halifax, providing an advantage in access to European and Asian markets, and both say they have plenty of land available for logistics and transfer facilities.

They also say the Halifax terminals are restricted by their urban surroundings.

Halifax port concerned

The Port of Halifax had a busy year last year, following a visit the previous year from the largest container ship to ever reach the east coast of North America.

The port is also making improvements that would move more cargo by rail and get heavy trucks out of the downtown area.

In an email, the Port of Halifax said it has the capacity to double its traffic from last year and it is "concerning" to hear of potential funding for a competitor that is not governed by a port authority.

Canadian port authorities operate independently from government, but are guided by a board of directors that includes representatives from industry and all levels of government.

In addition, the Port of Halifax said its data suggest a new terminal would cost in excess of $1.5 billion "and there is currently no demand for it."

The Halifax Longshoremen's Association, which represents workers at the port, said in a statement the federal government is jeopardizing its members.

"The port [of Halifax] is Nova Scotia's largest private sector employer, generating over 12,400 high-paying direct and indirect jobs and $1.7 billion in annual economic activity," the union said.

"The notion the federal government would fund a new competitor for the Port of Halifax is ludicrous."

If the Melford terminal is built, 24 kilometres of rail line will need to be constructed another 10 kilometres of existing rail bed refurbished in order to connect the ice-free port to a CN line leading to the rest of the country and the United States.

The terminal project received environmental approvals in 2008 and its provincial permit to build has been extended numerous times.

The federal government has confirmed that Melford proponents recently asked for funding under the National Trade Corridors Fund, but it won't say how much was requested and would only say it is under consideration.

Several media outlets have reported that Melford is asking for $175 million, but no one would confirm that number.

Melford vice-president Richie Mann declined an interview request, saying the funding pitch is still before the government. However, he did say the proponents are optimistic that construction of a new terminal will start within a year.

CBRM has been working to land a container terminal in Sydney harbour for several years and is hoping it will be located on land created with materials left over from the dredging of the harbour back in 2012.

Sydney proponents say there is also plenty of property nearby for logistics.

CBRM's promoters say it has room for a facility nearly three times the size of Halifax's and in the meantime, they are pursuing an offshore wind turbine marshalling project that would take up a portion of the waterfront and 80 hectares of land.

They're also touting the harbour's connection to the rest of North America by rail. But the rail line across Cape Breton Island covers more than 100 kilometres and hasn't seen a train since 2015, when the railway owner applied to discontinue and abandon it.

The province has been paying the company a subsidy to keep the line in place, amounting to more than $4 million so far, but it hasn't been maintained and a study pegged the cost of refurbishing the line so it could carry containers at more than $100 million.

CBRM 'on upswing of development'

CBRM Mayor Amanda McDougall said despite all that, the possibility of federal investment in a container terminal outside of Halifax is "fantastic" news.

"This is an indication that our region is on the upswing of development, specifically around ports, and it can only mean good for the whole seaboard," she said. "No one port ... is going to be able to handle it all themselves."

Cape Breton-Canso Liberal MP Mike Kelloway, who represents much of rural Cape Breton Island and the Guysborough area, said he supports Melford's request for federal funding.

He said government help for transportation infrastructure is important in order to improve supply chains and increase Canada's world competitiveness.

But funding decisions are based on the best business case and it doesn't mean government is picking winners and losers, Kelloway said.

"Time and time again we see ... the benefits of cluster businesses working hand in glove and sometimes it's competition, but I believe that competition brings out the best in people and the best in business."

He also said there's room for more than one terminal in Nova Scotia.

"I'm bullish on the fact that we can be a port province, that there's enough opportunity out there to warrant that."