Strategic Context

Planning and Strategic Issues

Canada's continued economic prosperity depends upon its success in world trade. A fundamental shift is taking place in the global economy with Asia occupying an increasingly central role. British Columbia and Canada are working to expand trade and investment ties with Asia's booming economies. Economic growth in places like China, India, South Korea, and Japan offers businesses in British Columbia and the rest of Canada enormous opportunities to expand trade and tap into existing markets as well as establish new ones.

Unprecedented growth in Chinese export volumes and increasing demands for coal and iron ore imports have made China an important growth engine for the world economy. At present, China is Canada's second largest trading partner and British Columbia's largest offshore trading partner. China currently accounts for 60 per cent of growth in world trade. By 2020, China is forecast to be the world's second largest economy and a key driver of Asia Pacific trade expansion, with plans to quadruple 2000 gross domestic product levels and expand Chinese ports throughput capacity above the current 2.6 billion tonnes of cargo handled annually.

India, with its newly thriving economy, also has potential to become a far more significant trading partner for both Canada as a whole and B.C. in particular. As economic reforms accelerate in India, continued optimism exists for its economic growth prospects. The forecast annual economic growth rate of 8.2 per cent over the next 20 years¹ is expected to place India as one of the most powerful economies in the world.

British Columbia's geographic location gives us a tremendous natural advantage as Canada's Pacific Gateway to North America. By 2020, Asia Pacific container traffic is projected to increase by 300 per cent and air passenger traffic is expected to double. Canada's west coast ports, airports and supporting road and rail networks — as key gateways to Asia — have enormous potential to capture significant opportunities being presented by growing markets.

The Ministry is working with all levels of government and industry to facilitate the development of Canada's Pacific Gateway to benefit the economy of British Columbia and Canada. Joint solutions for land use, short sea shipping, new facilities such as inland container terminals, as well as infrastructure and border efficiencies will optimize multi-modal capacity, efficiency and productivity.

British Columbia's transportation system is a catalyst for economic growth and prosperity, but the system's future depends on continuous improvement and careful planning. The pressures and anticipated trends, opportunities and risks facing the Ministry as it helps to create jobs are outlined below.

The Ministry has an effective risk management process, through which risks that are likely to have a significant impact on costs or the Ministry's ability to meet its goals and objectives are identified and mitigated as appropriate.

Trade

• Expansion of British Columbia gateways for growing trade between Asia and North America will require major investments in transportation infrastructure.
• The provincial government's Ports Strategy has set a goal of expanding British Columbia's share of west coast Asia Pacific container traffic from 9 to 17 per cent by the year 2020, thereby creating 32,000 jobs in the province and increasing the provincial gross domestic product by $2.2 billion.
• Other Pacific gateways in the United States and Mexico will continue to upgrade their port and inland facilities to take advantage of the enormous trade potential with Asia.
• British Columbia's resource industries will continue to rely on cost-effective transportation to compete in world markets, requiring an integrated multimodal transportation system that links resources to processing facilities and products to markets.

Access

• Improved access to British Columbia's heartlands and the safe transportation of goods and people through challenging topography will continue to be required to support the province's economy.

Investment

• Partnerships with local governments, the federal government and the private sector will play an important role in the timely provision of transportation infrastructure to relieve congestion and address safety concerns.
• Aging transportation infrastructure will generate the need for continued investment to keep British Columbia competitive.
• Effective transportation policy and smart regulations will become increasingly important to encourage investment.

Growth

• Demand for transportation will continue to increase with economic development and population growth.
• Increased transportation will result in environmental impacts which will need to be managed.
• Urban growth will place further pressure on transportation infrastructure, which will necessitate:
• improved provincial and municipal road networks;
• protection of existing networks; and
• development of alternative modes of transportation to manage travel demand.
• Road transport will remain the preferred alternative for personal and work trips over short and medium distances, although expanding transit options and cycling networks will provide urban commuters with viable alternatives.

Growth, Trade and Investment

• Upgrading transportation infrastructure will position British Columbia to take advantage of the enormous trade potential with Asia and other major trading partners.
• Transportation projects in the Lower Mainland will play a key role in improving Greater Vancouver as a livable region, while addressing challenges arising from expanding trade and increasing population. These projects include the Ministry's Gateway Program, new rapid transit lines, and work with the Greater Vancouver Transportation Authority (TransLink).
• Canada has recently entered into a number of new bilateral air service agreements with other countries and has a new international air policy designed to pursue the negotiation of "open skies" agreements when it is in Canada's overall interest. Such agreements enable carriers to make routing decisions based on their business needs and allow Canadian airports and communities to market themselves internationally to attain the full potential benefit of their geographic advantages.
• The federal Pacific Gateway Strategy and Corridor Initiative provides an opportunity for the Ministry to partner with the federal government on infrastructure, policy and non-infrastructure initiatives to build an efficient, secure and reliable transportation system.

Cooperation

• Continued cooperation with local governments, the federal government, First Nations, other western provinces and territories, and industry will provide a strategic synergy which supports industry growth, reinvestment and innovation.
• Continued pursuit of a policy framework that promotes investment from non-government partners will facilitate the province's timely delivery of a safe transportation system.

Costs

• Wide variations in fuel and oil prices due to world events affect the cost of oil-based products used by the Ministry, such as asphalt, and are increasing costs for the delivery and maintenance of transportation infrastructure and services.
• Increasing costs of construction materials such as steel and concrete will also place pressure on limited Ministry resources.
• Increasing worldwide demand for petroleum products and limited production capacity will continue to put upward pressure on motor fuel prices, but its positive effect of shifting consumer preferences to more fuel-efficient transportation will negatively impact the fuel tax revenue dedicated for funding highway improvements and rehabilitation.
• Potential labour shortages in key occupations may affect infrastructure improvements by raising costs or delaying completion.

Security

• Security concerns or trade protectionism may disrupt cross-border trade in spite of infrastructure improvements.
• Weather and natural occurrences such as slides, floods, avalanches, earthquakes and fires are highly unpredictable and could result in major disruptions to the transportation system.