COMMENTARY · 5th February 2011
Ridley Terminals - Do we live in Canada or some country called "North America"?
Ocean waters can be deceptive. On the surface, all appears to be calm. But beneath the sparkling waves lurk powerful currents and treacherous undertows. And so it is with nation states in today's globalized economy.
Take for example, Ridley Terminals which is situated at the port of Prince Rupert on the Pacific Ocean, and is used to export coal and other resources to Asia and other parts of the world.
Recent announcements about the facility, which is a federal government crown corporation, appear to be all good news. For example, Ridley Terminals has recently signed new contracts with certain coal shippers which, according to the terminal's chairperson, promises to "protect jobs" in northern BC, "increase tax revenues" and "enable miners in both northern BC and Northwest Alberta to open new mines or grow existing [ones]."
But let's delve a little deeper here. Just who are the "coal shippers" that the crown corporation Ridley Terminals has signed these contracts with? It turns out that they are U.S. coal mining companies with operations in Wyoming and Montana. It also turns out that the contracts have allowed these U.S. companies to lock up 40% of Ridley Terminals shipping capacity.
Why is this a problem? Well, both northern and southern British Columbia are major coal producing regions. Companies like Teck Resources, Western Coal and Grande Cache Coal, all have substantial operations in British Columbia and rely on Ridley Terminals to ship their coal out in a timely manner to the ravenous Asian market.
According to these Canadian producers, handing over 40% of Ridley Terminal capacity to U.S. coal producers will clog up shipping for them and, in the long run, choke off Canadian mining investment. In that regard, First Coal Corp., which has plans to start a new coal mine in B.C., is already expressing concerns about its investment.
Teck CEO Don Lindsay has strongly criticized this decision, as has Pierre Gratton, of the Mining Association of BC. Gratton says that "What this effectively means is that a Canadian Crown corporation is putting the interests of U.S. production and U.S. jobs ahead of Canadian jobs, and that is a real concern for us and it should be for all Canadians" (Globe and Mail, Jan. 25, 2011).
On the CFIS 93.1 Meisner Show on Jan. 31, Blair Lekstrom, MLA for Peace River South, stated, in regards to this controversy, that BC producers must have first priority in terms of shipping coal out of Ridley Terminal.
In addition, the Ridley Terminals Users Group, which is made up of Teck and other Canadian coal producers, has called for a meeting with the federal government to discuss what it terms is Ridley Terminal's "complete lack of faith in addressing the requirements of Canadian commodity producers." As one possible solution, the coal producers want Ottawa to "fast track" terminal expansion to accommodate increased demand.
So just who is Ridley Terminals, a federal crown corporation, supposed to be serving? For its part, the Harper government in Ottawa has not clarified this issue in any meaningful way.
However, according to the Ridley Terminal "profile" on the Government of Canada website, "the terminal was built to provide an export point for vast reserves of metallurgical and thermal coal in northeastern British Columbia." Note the emphasis on "northeastern British Columbia."
In still another part of the federal government website, the "mandate" of the terminal is also described. According to this "mandate", the purpose of the terminal is "[to play] an important role in supporting Canada's export coal, petroleum coke and wood pellet business", and that the terminal's "focus" is to "help Canadian shippers compete more effectively in the international market by minimizing transportation costs." Note the reference to "Canada" and "Canadians".
It all seems pretty clear. That is until we examine recent statements by the CEO of Ridley Terminals, George Dorsey. Just for some background here. George Dorsey is the CEO of Edgewood Holdings, a private equity and advisory firm, that was awarded a contract in 2008 to manage the operations of Ridley Terminals. Dorsey is originally from the U.S. and Edgewood Holdings itself is based in the state of Vermont. Both Dorsey and Edgewood Holdings have had extensive business dealings with a variety of North American coal, energy, mining, and other resource interests.
Why was Dorsey and his American-based company, given the position of managing a Canadian crown corporation, which has a highly strategic location for the national interest of Canada? That is a whole other question unto itself.
Let's just look at what, according to George Dorsey, is the purpose of Ridley Terminals. Arch Coal, which is one of the U.S. companies that has locked up 40% of the terminal capacity, issued a press release on January 18 just after the deal was reached. In this press release, Dorsey is quoted as saying that "[Ridley Terminal's] vision is to provide value to its parent company and expand its role as a leading trade gateway between North American and world markets."
Note that Dorsey is not saying "northeastern BC" or “Canadian”, as the federal government Ridley Terminal website does, but rather "North American" markets. And so it is that BC and Canada disappear beneath the waves of what is now termed "North America".
Interestingly enough, Ridley Terminals has praised the role of CN Rail in "advancing the discussion" to cinch the deal with the American coal producers. CN Rail, of course, thanks to privatization at the federal level, is now primarily a U.S. controlled company and has an obvious vested interest in shipping American coal over its thousands of miles of tracks to the port of Prince Rupert.
Thus we have a U.S. firm, Edgewood Holdings, put in charge of a highly strategic Canadian crown corporation, and then arranging, with the help of a U.S. rail company, a deal that gives 40% terminal capacity to a group of U.S. coal companies at the expense of Canadian coal producers. Sweet deal, indeed.
All of this, of course, is further complicated by the fact that a number of the Canadian-based coal companies are themselves multinationals, with operations in the U.S. and other countries, and in that regard, also have conflicting loyalties. One of the charges levelled against these companies is that they have been receiving subsidized rates from the terminal.
But that issue aside, the question must be asked: Where is the BC and Canadian public interest in this recent shipping deal that appears to give huge advantage to American coal interests over BC-based coal mining operations? In this "brave new world" of globalization, it appears that the public interest of the people of BC and of Canada are in grave danger of being lost in the treacherous currents of inter-monopoly competition and multinational deal-making. In this regard, the issue is not to line up with one or other of the competing monopoly interests but rather with what is the public interest.
Some business analysts are suggesting that Ridley Terminals should be completely privatized, and there are rumblings that the Harper government may go this route eventually, whether it be handing over the facility to a consortium of coal producers or to some other kind of private corporate interests. This would be a huge mistake. We have already seen the problems associated with selling off publicly-owned national and provincial railways to a foreign monopoly such as CN Rail.
As a result of these rail privatizations, serious contradictions have arisen between CN Rail and its Canadian-based forestry, grain and coal suppliers. In effect, key sections of the Canadian economy are now subject to the whims and sectional interests of a foreign rail monopoly, which has the power to favour or punish suppliers, and expand or whither economic growth.
Privatizing Ridley Terminals would be a disaster for British Columbian and Canadian national interests. The opposite should take place. A strategic facility like the terminal should be made completely public, run by Canadians, and in the interest of the people of northeastern BC and other regions of BC and Canada.
In case George Dorsey and Prime Minister Harper missed it, our country is Canada, not "North America".
Peter Ewart is a writer and columnist based in Prince George, British Columbia. He can be reached at: peter.ewart,,,shaw.ca