P&H scraps port deal

Wednesday, January 29, 2014

By JIM ALGIE

Without dredging, the port of Owen Sound has a limited future in Ontario’s Great Lakes grain trade, Parrish & Heimbecker Business Development Manager Steve Kell said Wednesday.

Sole owner since 1956 of Great Lakes Elevators Co. Ltd. in Owen Sound, the Winnipeg-based grain firm has broken off talks with Transport Canada about future ownership of the federally-owned port. The agency began seeking new ownership since announcing a broad, divestiture plan in the mid-1990s.

Both Kell and Transport Canada officials are bound by confidentiality agreements restricting what they can say about their negotiations. Questions about who pays for harbour dredging costs, however, were a likely factor in P & H’s decision to walk away.

Bruce, Grey, Owen Sound MP Larry Miller, who also happens to chair the House of Commons Transportation Committee, has already begun to pressure Transport Canada officials for dredging regardless of who owns the port. The Conservative MP met Wednesday with officials in Transport Minister Lisa Raitt’s office and plans to meet soon with Raitt.

“My goal and my plan is that harbour is going to be dredged, divestiture or not,” Miller said in an interview from Ottawa. “They’re two separate issues and I’m going to continue to work on that,” he said.

P & H began negotiating port takeover with Transport Canada after earlier talks broke down between Transport Canada and the city of Owen Sound.

“The issue is that Transport Canada has bundled dredging the harbour with divesting the harbour,” Kell said in an interview from his Toronto office. “They’ve done that for probably the last 10 years any time anybody said anything about dredging the channel.”

“It’s a bit like saying we’re not going to fix the roof of the house until somebody agrees to buy the house,” he said.

Relatively low water levels in Lake Huron in recent years are part of the story, limiting ship size and loading for trips in and out of Owen Sound. It further complicates already complex grain transport issues because of large crops and jammed facilities across much of the country. When shipping resumes this spring, record autumn rains and heavy snowfall across the upper Great Lakes watershed could help float larger loads.

“I don’t really want to be definitive if it’s two years or three years because I really don’t know,” Kell said of a practical deadline on dredging in Owen Sound. “But any time there’s more sediment in the bottom of the channel it isn’t better,” he said.

Parrish & Heimbecker is a 105-year-old, privately-owned firm which operates grain-handling facilities in five Great Lakes ports. None of the other four harbours where the company does business has comparable issues to those in Owen Sound, Kell said. P & H has participated in ownership of Owen Sound facilities for 85 years but bought out other partners in 1956.

The harbour occupies a long inlet from Georgian Bay which is subject to siltation from two rivers. It has required periodic dredging throughout its history.

Recent changes in the grain trade and a push by P & H, which also operates a variety of milling, livestock feeding and food processing enterprises in nearby Hanover, Ont., have enhanced use of the Owen Sound storage and handling business over the past 14 years.

“There’s been some really good business going both ways,” into and out of the Owen Sound elevator, Kell said. “We ramped it way up,” he said.

Failure to dredge the harbour and further limits on shipping could reduce elevator traffic.

“In the last few years, probably, wheat and corn from Grey-Bruce have gone into Owen Sound to be exported to other parts of the world,” Kell said. If the Owen Sound elevator became impractical for ship access, grain from area farms would have to find other paths to market.

Outbound grain in Owen Sound facilities comes mainly from Grey, Bruce, western Simcoe and northern Dufferin counties, Kell said.

UPDATE January 30 2014: "It is very important to farmers growing grain in the Bruce, Grey and north Wellington Area," Grain Farmers of Ontario chair Henry Van Ankum said of the Owen Sound terminal in an emailed statement, Thursday.

"Having a nearby, terminal delivery point as an option is very beneficial for these farmers, particularly as yields and acreages grow in this area of the province," Van Ankum said. END OF UPDATE

Miller was a farmer before he was elected to Parliament and knows the importance of the Owen Sound elevators to area growers.

“It’s huge,” Miller said of elevator use. “There’s a lot of product shipped out of there; I see trucks coming and going all the time,” he said.

“It’s a busy port and it has needed dredging for a long time,” Miller said. “Transport Canada made a decision to divest and a lot (of ports) were divested,” Miller said. “It doesn’t change the fact for me that that harbour needs dredging and that’s what I’m going to work for.” BF