Port Meets Council: Harbor Bottom Blues

As I have explained elsewhere, I watched that two-hour, June 3 meeting between the CBRM council Port of Sydney staff and board members and need to write something about it to justify having lost that small chunk of my life, so have decided to try to provide some context for Port of Sydney CEO Marlene Usher’s presentation and subsequent question and answer session.

Usher told council there were “two files” she considered “important” for the development of the port — navigational aids and the acquisition of the harbor bottom. I dealt with the navigational aids here, so we will now discuss ownership of the Sydney harbor bottom, which I will also also call the “seabed” and the “harbor bed,” rather indiscriminately.


‘Things stopped’

Usher told council that taking ownership of the Sydney harbor bed is something that “going forward, we should consider” because “it would be a very good source of revenue.”

But ownership of the Sydney harbor bed has been considered key to port development for well over a decade now and has been the subject of negotiation since at least 2013, according to port consultant Neil MacNeil, author of the famous “rejected” Port of Sydney progress report, who wrote that after some initial discussions between Transport Canada and CBRM, it was agreed in January 2014, “that a transfer would be negotiated with the Province of Nova Scotia for a nominal value, i.e. one dollar. The Province would then transfer the harbour bed to CBRM, also for a nominal value.”

In October 2014, Jim Gogan of Breton Law Group appeared before CBRM council to discuss the divesture process. Mayor Cecil Clarke introduced him as “an official working on behalf of the CBRM as the lead negotiator and legal counsel in the discussions with Transport Canada on the port file,” although, given those negotiations were between the province and the Department of Transport, I’m not sure what Gogan was doing, exactly — he’d later be described in the press as “keeping track” of the negotiations on behalf of the CBRM. (Certainly, he was paid for it, “ongoing legal work” on “harbor divestiture issues” was one of the services for which the Port of Sydney paid Breton Law $150,000 between 2016-2018.)

RMS Queen Mary 2, Sydney NS, 2016

The RMS Queen Mary 2 in Sydney Harbour, 1 October 2016. (Photo by Ken Heaton, CC BY-SA 4.0, via Wikimedia Commons)

Whatever his actual role in the process, Gogan appeared at that October 2014 council meeting to say divesture talks had hit a snag because the Kwilmu’kw Maw-klusuaqn Negotiation Office (KMKNO), the organization representing 12 Nova Scotian First Nations, had complained it had not been adequately consulted on the transfer.

By September 2015, though, council was being asked to approve “the agreements reached in Phase 1 and II of the Aboriginal Consultation Process” related to harbor divestiture and all seemed set to proceed but instead, according to what Marlene Usher told council last week, “things stopped.” (That is literally what she told council — “things stopped” — like somebody’s batteries ran out.)

Now, Usher thinks the municipality should form another committee to pursue the acquisition of the harbor bottom and it should include representatives of the provincial government because:

Nova Scotia Lands is heavily involved with all harbor acquisitions in Nova Scotia.

I think she could have been more clear about the fact that the transfer of ownership of the harbor bottom is being negotiated by the province — I know the negotiations are ongoing because I asked Transport Canada in February 2021 and was told:

Transport Canada has no further update on the transfer of public ports in Nova Scotia at this time. Transport Canada intends to continue its discussions with the province on the potential transfer.

I also would like to know what role, precisely, she expects this CBRM committee to play in these negotiations.


Revenue source

But there’s another problem with Usher’s proposal, which is that owning the harbor bottom is no guarantee of “revenues,” as a 2011 Port of Sydney “governance” report (funded by Enterprise Cape Breton Corporation to the tune of $1 million) explained:

The federal government currently collects approximately $450,000 annually in the Port for harbour dues. If the government divests its ownership interest in the harbour bed, the government no longer has the legal authority to charge harbour dues and will lose this revenue stream. Unfortunately, however, divestiture to a local entity does not automatically transfer this revenue stream to the new owner and it is unclear how this can be accomplished. Transport Canada’s current position is only the Government of Canada or a Canada Port Authority (acting as its agent) may legally collect harbour dues.

The report said Sydney was unlikely to be able to meet the criteria to become a CPA, chiefly because it it not “financially self-sustaining.” The recommendation was that it choose another model of governance (which it did) and pressure the government for permission to collect harbor dues.

And according to Neil MacNeil, the federal government was looking to carve out a section of the harbor for Marine Atlantic, which accounts for 40% of harbor dues.

But Usher doesn’t deal in nuance, so when District 8 Councilor James Edwards asked her what difference owning the harbor bed would make, she said:

Well, they [the federal government] do collect harbor dues currently now in the harbor, as they do in Halifax, and those, all of the harbor dues, the hundreds of thousands of dollars, it fluctuates, that goes to General Treasury, to the federal government, when it could be retained locally.

She made no distinction between the federal government collecting harbor dues in Sydney and the Port of Halifax collecting them as a Canadian Port Authority, although they are two different things. She didn’t mention that Sydney would be unlikely to meet the criteria to become a CPA or that gaining ownership of the harbor bed doesn’t guarantee we’d be allowed to collect harbor dues.

Her answer was incomplete to the point of being misleading.



MacNeil’s rejected report said that in addition to harbor dues, the other “paramount” issue related to the harbor bottom was “reaching an undertaking with the Government of Canada that CBRM is not responsible for future remediation costs in resolving harbour bed contamination issues.”

An environmental indemnity from the Government of Canada could provide the taxpayers of CBRM insurance against future remediation costs associated with the contaminants now in the the harbour bed. Sydney Harbour has served as an industrial harbour under the 147 years of ownership by the Government of Canada and the crown should address this issue prior to transfer….Many studies over the past years confirm that there are contaminants in the harbour bed.

In Usher-speak, this became:

If you recall, [harbor bottom divestiture] is specifically excluded from our strategic plan and I know it was done, there were concerns about risk and having some financial responsibility that we wouldn’t be able to manage.

The word “contamination” wasn’t mentioned.

But if she knows where negotiations between the Department of Transport and the province stand — if she has some sense of whether issues like collecting harbor dues, giving part of the harbor to Marine Atlantic or relieving the CBRM of any responsibility for harbor bed contamination have been resolved or are likely to be resolved any time soon — this meeting would have been a really good opportunity to share that information.


Council minutes

There’s one other meeting item I’d like to mention here and that’s District 10 Councilor Darren Bruckschwaiger’s suggestion, to Usher, that the port board should provide the minutes from its meetings to the municipal clerk so they can be posted to the CBRM website.

Usher responded that the decision not to publish its minutes was taken by the board at its first meeting, that it hasn’t been revisited since, but that it could be.

I don’t think the port board should have a choice about whether or not it publishes its minutes, council should simply insist upon it. (And District 6 Councilor Glenn Paruch agrees, he said he thought allowing the board to vote on whether not it published its own minutes was “sketchy.” Richard Paul, who sits on the Port Board as the representative for Membertou, took exception to this statement saying there was absolutely nothing “sketchy” about not releasing their minutes. But he didn’t explain why a public board refusing to let the public in on what’s it’s doing is not sketchy, so I’m with Paruch.)