Good afternoon.

There's so much happening in the world of marine transportation and Asia-Pacific trade these days. You can't open a newspaper or watch the evening news without our business literally unfolding in front of your eyes.

Record exports. Record container volumes. New investments in terminal infrastructure and equipment. New investments in road and rail.

We have new security standards. New technologies and operating systems. New partnerships. And new opportunities for virtually every sector of our business.

It's an exciting time. But what's really important for me is the opportunity, just for an hour or so on an occasion like today to come together with colleagues, with business partners, customers and even competitors to reflect on what we've accomplished.

Because 2004 was a truly extraordinary year for the Port of Vancouver. And I want to recognize and celebrate all that we've accomplished together over the past 12 months.

But it's not simply program initiatives and performance measures that I want to highlight for you today. Because I think something more fundamental something far more important to the future of our port has been accomplished.

I stood at this podium last year and talked about the tremendous opportunities that lay before us, and the challenges we faced in seizing those opportunities.

One of the things I talked about was the public consciousness about ports in British Columbia. I suggested that we in Vancouver had the opportunity to become one of the world's great port cities like Singapore, Hong Kong or Rotterdam but that we had yet to convince ourselves of that destiny.

Well, I think we've had a breakthrough. Over the past 12 months, we've seen a fundamental shift in the way our elected leaders, our business leaders, our community leaders and regular British Columbians see and understand our ports and transportation industries.

I think people are beginning to understand just how critical this gateway is to the nation. But it's more than that.

People are also beginning to understand the promise that resides within the Port of Vancouver. They have seen the rise of China and understand the incredible potential that Asia Pacific trade represents.

They have come to view our transportation sector as more than just a facilitator of economic expansion but as a growth industry in its own right. In fact, right here in British Columbia, we have a government and an elected leader that has targeted ports, transportation and Asia-Pacific trade as a cornerstone of this provinces economic strategy for the coming decade.

We've come a long way, but we have a long road ahead of us as well, and a lot of hurdles to overcome together. But overcome them we must if we are to fully achieve our growth potential.

But something has changed in the past 12 months. And I think the VPA and our partners at the Port of Vancouver can take a great deal of pride in the leadership role we've played to affect that change.

Despite the demands of leadership, however, it's absolutely true that you can get nothing done in the transportation sector without collaboration. It is an industry that demands partnership.

And so I want to talk about some of the significant accomplishments of the VPA and the Port of Vancouver in 2004. The single thread that ties all of these accomplishments together is that they were achieved in collaboration with our partners in the transportation sector, the broader business community, government and communities.

There is perhaps no better example of the benefits of partnership and collaboration in our sector than the B.C. Ports Strategy which was initially called for by the VPA in 2003 and principally developed in 2004.

For those of you who don't know, the B.C. Ports Strategy is an initiative of the provincial government working with the provinces ports and transportation stakeholders, as well as other levels of government.

It not only identifies the infrastructure development that must occur at Canada's Pacific ports to capture the Asia Pacific trade opportunities that lay before us. It also identifies the public policy and competitiveness issues we must address to optimize our growth.

Based on expansion at the Port of Vancouver, the Port of Prince Rupert and Fraserport, the B.C. Ports Strategy forecasts that total container volumes on Canada's West Coast will grow to 5 to 7 million TEUs by 2020.

In combination with our bulk, breakbulk and cruise sectors, this level of growth will create 45,000 new direct jobs across the country, while contributing an additional $3.1 billion to Canada's GDP each year.

These are very significant benefits, and they will accrue to industries, companies, workers and communities throughout B.C. and right across our country. So perhaps it's not surprising that we have generated so much interest and so much support for our Asia-Pacific growth strategy.

We at the Port of Vancouver handled import and export cargo last year of nearly 74 million tonnes. That's an 11 per cent increase over 2003.

The vast majority of this tonnage 77 per cent was bulk and breakbulk cargo, including record shipments of sulphur, potash and a resurgence in wood products. At 25 million tonnes, coal maintained its status as our leading commodity shipment representing 44% of total bulk cargo.

Breakbulk traffic accounted for 3.3 million tonnes. And, of course, the Port of Vancouver saw record container volumes of 1.66 million TEUs last year.

It's our belief that the Port of Vancouver will grow from 74 million tonnes to over 100 million tonnes by 2020.

Which for our container business means we'll have to update, expand or develop a new container terminal every two years between 2006 and 2016. In fact, this work has already begun.

In 2004, the operators of two existing container facilities on the south shore of Burrard Inlet, Vanterm and Centerm undertook multi-million dollar expansion projects. The VPA also advanced its efforts to add a third-berth to the existing Deltaport container terminal at Roberts Bank.

All of these initiatives are part of a phased campaign to ensure that the Port of Vancouver and the Province of British Columbia secures a growing share of the rapidly expanding North American container market.

In fact, we have five discrete projects either planned or underway to expand container terminal capacity at our port. The capital cost for these projects is estimated at about $1.5 billion to be jointly financed by the VPA, our terminal operators and government partners.

They will increase our container terminal capacity to more than 5 million TEUs. And they will generate an estimated 38,000 new jobs across Canada.

So the VPA and the Port of Vancouver not only played a significant role in forging the BC Ports Strategy last year. We also made significant progress on the infrastructure projects necessary to deliver that strategy.

Equally important, however, is the issue of operating efficiencies and ensuring that our transportation system has the capacity to move cargo to and from Canada's ports. And here too we have accomplished a great deal by working with our partners.

You know, with the containers that are flooding our shore year after year, a lot of people forget that the Port of Vancouver is still predominantly an export port. As I said, some 77 per cent of the cargo that passed through our terminals last year was bulk, and breakbulk exports of Canadian resource commodities.

That the emergence of China as a global economic powerhouse is driving the rapid growth of Asia-Pacific container trade is clear to all of us. But we have to remember that China's manufacturing and domestic requirements are also creating tremendous export opportunities for Canada's resource industries our minerals industry, coal producers, petrochemicals, agriculture and forest product companies.

For the Port of Vancouver and our partners in road and rail transportation, this creates a sort of Double Jeopardy.

Not only are we facing year-over-year increases in container volumes, our customers in the bulk and breakbulk business are also moving to respond to the huge export market opportunities in Asia. The tracks and trucks carrying Canada's exports to our port are the same ones having to accommodate the ever growing volume of imports.

And so ensuring that our integrated transportation system operates efficiently is absolutely key. We have to work together with railways, trucking companies, distribution centres and other facets of the Canadian logistics chain to ensure that we can move these goods quickly and efficiently throughout the country.

There's no sense building more port capacity if we don't have sufficient support infrastructure and carrying capacity on our intermodal system. And I'm proud to say that we have made tremendous progress in this area over the past year by working with our partners in road and rail.

Another area of success for our port has been engaging our overseas customers. And we marked a very important milestone in this regard in 2004.

It was 10 years ago last year that the Port of Vancouver became the first North American port to open a trade office in China. Last fall, we led a large delegation from the port on a trade mission to China and other Asian trading centres in part to celebrate this important anniversary.

The Board of Directors, Executive and staff all take a lot of pride in the role that the Port of Vancouver has played in opening up Canada's Asian trading relationships. Today, we are greatly admired and respected by our customers in Asia. They want us to build more capacity. They want to ship their containers through our port, and to import our commodities to help fuel their economic expansion.

At the Port of Vancouver we have always understood that were in a service business, and have worked extremely hard to provide competitive, efficient and cost-effective service to our customers. They in turn have been loyal to us, and have helped facilitate our growth and expansion.

So we are in a very favourable position today to continue to expand our trading relationship with China and the rest of Asia. If we build it and if we maintain our competitiveness and operational efficiencies they will surely come.

Before I close this afternoon, I want to talk about a few of our successes closer to home. For as much as were an international business with a global outlook, we must also ensure that we work with our host communities and acknowledge our responsibilities as they do theirs.

Many of our accomplishments have been achieved by working in collaboration with local partners. Accomplishments based on shared goals and shared values.

The first success of 2004 relates to safety and security at the Port of Vancouver.

On July 1, 2004, our port fully met the demanding requirements of the International Ship and Port Security Code enforced by the International Marine Organization. This important milestone culminated years of planning and collaboration among the VPA, port terminals and government agencies.

The VPA has invested some $12.8 million on security initiatives at the Port of Vancouver, while our terminal operators have invested between $250,000 and $2 million per terminal. I should also acknowledge the $115 million commitment made by Canada's federal government to support port security measures across the country.

Not only has our commitment to security at the Port of Vancouver met and exceeded requirement for ports engaged in international trade. It has substantially enhanced the security and safety of port workers and the communities in which we operate.

And while enhanced port security has certainly come with a price tag, it also presents a commercial and competitive benefit to our port. Ensuring the secure, reliable and timely movement of goods through the Port of Vancouver is critical to our current and future success.

Another important obligation that the VPA has to its local communities relates to environmental stewardship.

This is a longstanding commitment at the Port of Vancouver. In fact, we were the first North American port to develop an environmental services department to monitor and manage the environment surrounding our port operations.

Our environmental program at the Port of Vancouver is very broad, and involves both direct action and working with our partners to address key issues and concerns. The program I'd like to highlight this afternoon relates to air quality and the growing concern about the contribution that ports and marine traffic make to overall air quality in the region.

We have been working and testing a diesel fuel additive to reduce emissions from port and terminal equipment. This has been adopted by several operations around the port.

We are also working on an initiative, with others to create a Sulphur Emissions Control Area for the West Coast of North America which would reduce these emissions from marine traffic by 50%.

This means the Port of Vancouver's total contribution to air pollution in the GVRD will actually decline while our business continues to grow over the next decade.

We are committed to working with our partners internationally and domestically to maintain our environmental integrity. At the GVRD Council of Councils meeting on the 9th of April I expressed our wish to be a partner with the GVRD on this fundamental area of the lower mainland.

And finally, I want to talk about some of the things were doing to ensure that our operations fit comfortably into the communities in which we operate.

In 2004, the Vancouver Port Authority undertook a broad range of initiatives to foster better communication and understanding with our immediate neighbours. We undertook more than nine meetings in adjacent municipalities to inform them of our Port Land Use Plan.

We played a leading role in the Greater Vancouver Gateway Council, supporting the development of transportation infrastructure throughout the region to address traffic congestion and goods movement.

And we opened a new public space and interpretive centre as part of the VPA office development to advance public education and understanding about port operations. It's been very successful and very warmly received.

Finally, the VPA has undertaken extensive community consultations over the past year in support of our Deltaport Third-Berth Project at Roberts Bank.

Through that process, we've learned a great deal about local frustrations with road and rail congestion. More than that, we have pledged to work collaboratively with government, with transportation authorities, with the railways and other stakeholders to find solutions to these local traffic issues.

Again, if we are to grow and operate our business successfully, we have to align our interests with the interests of our host communities. And that's exactly what we're doing.

I'm going to close today by quoting some highlights from the recently released Port of Vancouver Economic Impact Study. If there's one accomplishment we can share with all of our partners, it is the economic contribution that our port has made to this province and this country.

In 2004, the Port of Vancouver shipped Canadian import and export goods valued at $43 billion. That's a 48 per cent increase over 2000.

In 2004, we supported more than 30,00 direct and 69,000 total jobs across Canada, and paid $2.9 billion in wages. That's an increase of about 12 per cent.

In 2004, our contribution to Canada's GDP increased to more than $4 billion - up 19 per cent in the past four years.

Finally, in 2004 the Port of Vancouver generated nearly $763 million in direct tax payments to all three levels of government. That's an increase of 23% over 2000.

These are very significant economic benefits. I'm very proud of them, as should we all be.

We have achieved this level of economic success by working together. But there is much more work to do and a great deal more to accomplish.

I want to thank you for your time and attention today.

I'd now like to introduce Tom Winkler, Vice President and Chief Financial Officer of the Vancouver Port Authority, to present our financial statements.





For more information, please contact:

Anne McMullin,
Director, Corporate Communications and Public Affairs
Vancouver Port Authority
(604) 665-9069 (office)
(604) 665-9073 (fax)
(604) 218-1403 (cellular)
anne.mcmullin@portvancouver.com

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