LATE DISTRIBUTION
   FOR CS&B SEPT. 26, 1996       SUPPORTS ITEM NO. 4
                                                CS&B COMMITTEE AGENDA
                                                SEPTEMBER 26, 1996   

                                 POLICY REPORT
                                     OTHER

                                      Dated: September 24, 1996
                                      Dept.  File No.

   TO:       Standing Committee on City Services and Budgets

   FROM:     City Manager

   SUBJECT:  Bill C-44, The Canada Marine Act


   RECOMMENDATIONS

        A.   Council urge the Federal Government to provide a legislative
             framework for national ports that is flexible and robust so
             that ports can respond to the realities of the world in which
             they operate.  If there is a need to limit the activities of
             port authorities, then those limitations should be part of the
             Letters Patent which are much more easily adjusted to local
             and changing circumstance.

        B.   Council advise the Federal Government that a direct financial
             return on federal land through a charge on gross revenues or
             other formula is inappropriate, given the financial
             constraints under which the ports will operate, the
             competitive environment, and the absence of an obligation to
             pay full taxes to municipalities.

        C.   Council request that the Minister include a representative
             from the City of Vancouver and the Port of Vancouver in any
             group advising on the development of letters patent and the
             implementation of the legislation in the Port of Vancouver.

        D.   Council advise the Federal Government that provision of crown
             agency status through the legislation is appropriate, subject
             to the maintenance of the required financial separation and
             appropriate arrangements to manage issues of land use and
             municipal regulation.

        E.   Council urge the Federal Government to provide for a director
             appointed by the City of Vancouver and a director appointed by
             the other municipalities in the Port of Vancouver. 

        F.   Council urge the Federal Government to amend the legislation
             to provide that the Chair of the Board of a port authority be
             elected by the directors.  Alternatively, the letters patent
             for Vancouver should state this requirement.

        G.   Council urge the Federal Government to relax the criteria for
             directors to permit a broader range of expertise.

        H.   Council urge the Federal Government to ensure that the
             legislation sets high standards for the avoidance of a real or
             perceived conflict of interest.

        I.   Council urge the Minister of Transport, the Solicitor-General,
             and the Attorney-General to convene discussions with
             representatives of the municipalities to examine how policing
             responsibilities in British Columbia ports can best be met,
             with  the clear understanding that municipalities will not be
             required to fund additional police services without full
             compensation.

        J.   Council urge the Federal Government to provide a mechanism and
             sufficient time for a smooth transition between the present
             Ports Canada Police jurisdiction and the establishment of
             replacement policing

        K.   Council reiterate its position that the new port authorities
             be subject to the same payment-in-lieu of taxes rules that
             apply to other federal property, or that they become taxable,
             and urge the Federal Government to ensure that the new
             legislation does not result in a net increase in costs to
             municipalities through any combination of additional
             responsibilities for municipalities and changes in the payment
             of grants-in-lieu. 

        L.   Council urge the Federal Government that if grants-in-lieu are
             to be retained rather than implementing full taxation, the
             process be revised to provide for year by year finalization of
             grants and an appeal mechanism to ensure certainty for both
             municipalities and ports.

        M.   Council urge the Federal Government to permit broader land
             uses within the Port, so long as they comply with municipal
             zoning or joint port-municipal land use agreements, and to
             enable port authorities to enter into binding land use
             agreements with municipalities, subject to an override by the
             Governor-in-Council.

   COUNCIL POLICY

   There is no Council policy related directly to this matter.  Council has
   previously considered the issues discussed in this report and passed
   resolutions which are described in the Background section below.

   SUMMARY

   This report sets out issues arising from Bill C-44 and its impact on the
   City and the Port of Vancouver. The legislation would eliminate the
   Canada Ports Corporation and replace the Vancouver Port Corporation with
   a semi-autonomous port authority. As the legislation is written, port
   authorities would not be agents of the Crown.

   The legislation provides port authorities with greater autonomy in some
   areas, but introduces restrictions on the activities the port
   authorities can carry on, which may limit their effectiveness. The
   structure provides some representation for municipalities, but this is
   considered inadequate.  Recommendations for presentation to the
   Transport Committee are advanced to address these concerns.

   Elimination of the Canada Ports Corporation means elimination of the
   Ports Canada Police.  Their policing role must be absorbed by other
   agencies.  This report supports a joint review by the Minister of
   Transport, Solicitor-General and Attorney-General to examine policing
   needs and develop a solution that will not increase policing costs to
   municipalities.

   In response to municipal concerns, the legislation does not provide for
   a negotiated fee for municipal services, but neither does not it provide
   for grants-in-lieu of taxes.  Port Authorities should pay grants-in-lieu
   of taxes or normal taxes, and recommendations for submission to the
   Transport Committee are presented in that regard.

   The legislation places inappropriate restrictions on land use in the
   Port.  There is no provision in the legislation for development of
   joint, binding land use plans with municipalities. Recommendations for
   submission to the Transport Committee which would address these issues
   are presented.

   PURPOSE

   The purpose of this report is to bring Council up to date on
   developments arising from Bill C-44, the Canada Marine Act, which will
   provide a fundamental change in the way the Port of Vancouver is
   managed, and to seek Council direction for the City to address several
   issues of importance before the House of Commons Committee reviewing the
   draft legislation.

   BACKGROUND

   In December 1995, the Minister of Transport (Douglas Young) released a
   proposal to alter the structure of the port and harbour system in Canada
   extensively.  For the City of Vancouver, the most
   significant component of the proposal is the replacement of the Canada
   Ports Corporation and the Vancouver Port Corporation with a local port
   authority.  While the Crown is to retain ownership of all lands at port
   sites in Canada, they will be placed in the care and management of a
   semi-autonomous, not-for-profit corporation.

   On February 27, 1996, Council considered a report from the City Manager
   dealing with the new national marine policy and the Port of Vancouver. 
   Council approved recommendations which reflected the City's position on
   four significant areas of concern: policing of port lands;
   payments-in-lieu of taxes; local representation on the port authority
   board of directors and the accountability of that board; and land use
   and development. 

   In June 1996, the Federal Government introduced Bill C-44 (the Canada
   Marine Act) into the House of Commons and referred it for review by the
   Commons Transport Committee.

   DISCUSSION

   Bill C-44 provides the legislative framework within which the port and
   harbour system in Canada will be transformed to conform to the new
   marine policy.  Statements by federal ministers have helped to clarify
   the intent of some aspects of the legislation.  The basic thrust of the
   policy proposed in 1995 is largely unchanged, and the issues raised by
   Council earlier this year are still relevant.  

   The City's interest in this legislation is mainly related to the new
   operating environment for major ports. Staff have reviewed the draft
   legislation and have identified several significant areas which may be
   of continuing concern. We are commenting from two perspectives: issues
   which will directly affect the City, and issues which will affect the
   operation of the Port as a commercial entity.

   As a general comment, the legislation does not address some issues which
   are important to the City. In addition, we believe the legislation is
   overly rigid in its definition of the activities in which a port
   authority can engage and inconclusive with regard to several issues
   important to the operation of an effective port system. The legislation
   is very clear that the financial obligations of a port are not financial
   obligations of the Federal Government, and that the port is to stand on
   its own feet.  Having said that, the legislation then restricts the Port
   significantly in the activities it may carry on and ties the Port back
   to Ottawa for approvals for some basic aspects of its business.

   1.   Powers and Capacities

   The intention of the new National Marine Policy was to make it easier
   for national ports to operate.  The preamble to the legislation speaks
   of "... making the system of Canadian ports competitive, efficient and
   commercially oriented..." yet many provisions of the legislation will
   work against that objective.  

   General Authorities

   Bill C-44 defines the activities of the new port authorities in a very
   narrow and restrictive way, limiting their ability to undertake many of
   the activities now available to the national ports, including the Port
   of Vancouver.  Section 24 of the legislation limits the powers of the
   organization to 

        "engage in activities within the port related directly to
        shipping, navigation, the transportation of passengers and
        goods and the handling and storage of goods."
        (emphasis added)

   Rather than being enabled, port authorities are being severely limited
   to the extent that many current activities of national ports may not be
   permitted.   These might include:

   -    Operating trade promotion offices in foreign countries;

   -    Operating "duty-free" zones for the processing (rather than
        handling) of goods;

   -    Entering into partnerships with local governments or other agencies
        for enhancing access to Ports, for creating parks and recreational
        areas, for tourism promotion, or for coordination of emergency
        planning and response;

   -    Using real property not currently needed for port development for
        purposes other than the handling and storage of goods.  For
        example, parking, restaurant, and other short term uses will not be
        allowed, even though they are in the commercial or other interests
        of the port;

   -    Holding a port conference outside the specific boundaries of the
        port; and

   -    Providing consulting or development services to developing ports or
        selling information or software.

   Land Holdings

   Section 6 of the legislation provides that the Minister may issue
   letters patent which will identify the federal and other property 
   managed and owned by the port, set out the makeup of the Board, and
   other matters consistent with the Act. Section 36(5) states that a port
   may "manage, occupy, or hold only the real property set out in its
   letters patent". In Section 38(2), the port is authorized to dispose of
   real property that it owns, subject to the issuance of supplementary
   letters patent. 

   It appears that in order to enter into a property transaction, however
   trivial, within the port, the port will be required to obtain
   supplementary letters patent.  An arrangement between the City of
   Vancouver and the Port to consolidate and exchange certain holdings for
   the convenience and mutual advantage of both, not involving federal
   lands, would require approval in Ottawa. A property arrangement with the
   City which requires that the Port purchase land outside the Port may not
   be possible.

   Financial Issues

   Section 27(3) provides that a port authority may not "mortgage,
   hypothecate, or pledge or otherwise create a security interest in the
   property it manages or holds".   While the Port can dispose of property
   it owns, albeit with the issuance of supplementary letters patent, it is
   legislatively precluded from mortgaging the same property for financial
   purposes

   Section 6(h) requires that the letters patent include the formula for
   annual payments by the Port to the Federal Government.  The major ports
   will now be required to stand on their own financial feet; they do not
   pay full taxes to municipalities; they must function in a competitive
   environment; and the benefit from their effective operation extends
   across the country.  The Federal Government should be content to see the
   benefit from effective port operation as sufficient return on the
   federal lands that ports manage, and not require a financial
   contribution.  So long as the Federal Government is not authorizing
   payment of full taxes to municipalities, a requirement that the ports
   pay the federal government is effectively downloading directly to
   municipal governments.

   Development of Letters Patent

   The Minister has indicated that users will be asked to advise on the
   development of the letters patent for a port.  It may be noteworthy that
   the Minister has not said that the Port of Vancouver will be represented
   in the group giving advice on letters
   patent.  Given the significance of the letters patent in the operation
   of the Port, Council should ask the Minister to include a municipal and
   a Port of Vancouver representative on the advisory group.

   It is recommended that:

        Council urge the Federal Government to provide a legislative
        framework for national ports that is flexible and robust so
        that ports can respond to the realities of the world in which
        they operate.  If there is a need to limit the activities of
        port authorities, then those limitations should be part of the
        Letters Patent which are much more easily adjusted to local
        and changing circumstances.

        Council advise the Federal Government that the a direct
        financial return on federal land through a charge on gross
        revenues or other formula is inappropriate, given the
        financial constraints under which the ports will operate, the
        competitive environment, and the absence of an obligation to
        pay full taxes to municipalities.  

        Council request that the Minister include a representative
        from the City of Vancouver and the Port of Vancouver in any
        group advising on the development of letters patent and the
        implementation of the legislation in the Port of Vancouver.

   2.   Relationship to the Federal Government

   Staff have been advised by the Port that the legislation appears to
   remove the Port's status as an agent of the Crown.  This change could
   make it subject to the provincial corporation capital tax and municipal
   regulations for the lands it owns directly.  To some degree, it may also
   impact on the Port's status and marketing efforts in other countries
   where these activities are typically conducted by governments.

   From a federal perspective, granting crown agency status presumably 
   might reduce the financial "firewall" between ports and the government
   it is creating through this legislation.  There may also be a concern
   about federal agency status for a corporation which is not directly
   controlled by the government.

   From a municipal policy perspective, the ability to apply zoning
   controls to a subset of the lands controlled by the Port has some
   limited value. From an administrative perspective, it is undesirable to
   have a mix of regulated and unregulated lands.  It is certainly
   undesirable to have the Port subject to taxation by any other level of
   government when the Port is not paying full municipal taxes to
   compensate for the expenditures municipalities make in the delivery of
   services.

   The Federal Government is imposing significant restrictions on the Port,
   and retaining substantial control through the letters patent.  On
   balance, staff believe it would be desirable for the Port to retain its
   status as an agent of the crown if issues of the makeup of the Port
   Board and the management of land use are appropriately dealt with.

        Council advise the Federal Government that provision of crown
        agency status through the legislation is appropriate, subject
        to the maintenance of the required financial separation and
        appropriate arrangements to manage issues of land use and
        municipal regulation.

   3.   Governance and Accountability

   Section 6(f) and Section 12 deal with the appointment of a board for the
   Port of Vancouver of between nine and eleven members: one nominated by
   the Minister, one appointed by British Columbia, one appointed jointly
   by Alberta, Manitoba, and Saskatchewan, one appointed by the
   municipalities named in the letters patent, the CEO, and the remainder
   nominated by the Minister in consultation with users. The Chair may, but
   apparently not necessarily, be elected by the directors.

   This formula would provide four community representatives, the CEO, and
   four to six user representatives.  It would be desirable to have an
   additional municipal representative, for a total of five community
   representatives, five user representatives, and the CEO.  This would
   provide an appropriate balance and enhance municipal representation. 
   Council previously approved this position. It is recommended:

        Council urge the Federal Government to provide for a director
        appointed by the City of Vancouver and a director appointed by
        the other municipalities in the Port of Vancouver.

   It is appropriate in Vancouver that the Chair be elected by the
   directors so there is local input to the selection.  Either the
   legislation should be adjusted to state that the directors shall elect
   the Chair, or if for some reason this is not appropriate nationally, the
   letters patent for the Vancouver Port Authority should reflect that
   requirement.  It is recommended:

        Council urge the Federal Government to amend the legislation
        to provide that the Chair of the Board of a port authority be
        elected by the directors.  Alternatively, the letters patent
        for Vancouver should state this requirement.

   Section 13 requires that "Directors of a port authority shall have
   generally acknowledged and accepted stature within the transportation
   industry or the business community and relevant knowledge and extensive
   experience related to the management of a business, to the operation of
   a port or to maritime trade". This requirement is much more restrictive
   than that in the present legislation, and inappropriate.  It would
   preclude directors with specialized expertise valuable to be Board. 
   Specifically, from the perspective of municipalities it would eliminate
   potential directors whose expertise is in local or regional government
   or community affairs.

   It is recommended:

        Council urge the Federal Government to relax the criteria for
        directors to permit a broader range of expertise.

   Section 14 excludes certain individuals from being directors, including
   elected officials, employees of a government, and anyone who in the
   opinion of the Minister is an officer or employee of a user.  However,
   this would still permit directors who have an interest in businesses
   which are users of Port services, or could stand to benefit from Port
   activities.  It is recommended:

        Council urge the Federal Government to ensure that the
        legislation sets high standards for the avoidance of a real or
        perceived conflict of interest.

   4.   Port Policing

   With the restructuring of the port system, the Canada Port Corporation,
   the umbrella organization in the Canadian port system, will be disbanded
   and along with it the Ports Canada Police.  Under the current system,
   the Ports Canada Police provide policing and security services to the
   Vancouver Port Corporation, for which the corporation pays about $3.0
   million annually.  These are in addition to the services provided
   individually or collectively by the RCMP, Canada Customs and the
   municipal police departments.

   With the dismantling of the Ports Canada Police, responsibility for port
   policing remains uncertain and the issues identified by Council in
   February 1996 remain valid.  Responsibility for policing will have to be
   transferred to other jurisdictions and/or agencies following an
   assessment and arrangements for compensation.  There are a variety of
   levels on which security and policing is necessary in the port:

   -    the owner's responsibility for the security of the property and
        buildings

        In February, 1996, Council took the position that the new port
        authority should take responsibility for this level of security
        should the Ports Canada Police be disbanded.  Bill C-44 does not
        address this issue directly, however, the Minister of Transport has
        indicated that the responsibility for these services will fall to
        the new port authority.  As the City does not supply services at
        this level to its taxpayers, it should be clear to the government
        that this is not a role the City will play on port lands.  Equally,
        however, it should be clear that police agencies will require full
        access to port facilities, and security services must be developed
        on this basis.

   -    the "normal standard" of policing that is provided by the local
        police department to all taxpayers

        The City already provides policing services to the port related to
        certain types of criminal investigations. As long as the port
        authority continues to make payments-in-lieu of taxes for the
        property it occupies, the City should continue to do so whether or
        not the Ports Canada Police are disbanded.  It should be noted,
        however, that this level of service is far from adequate for a port
        environment.

   -    police services falling under the realm of federal responsibility
        which arise because of the unique nature of the port operation but
        which do not require involvement of federal enforcement

        There may be enforcement areas where the City may be required to
        provide services beyond the normal level to the port authority. 
        However, in these cases, the federal government should provide full
        funding, or the port should be required to pay user fees in
        addition to payments-in-lieu of taxes.

   -    police services falling under the realm of federal responsibility
        because of the need for federal enforcement
        These services arise from need to deal with drugs, organized crime,
        illicit alcohol or arms trade, immigration, national security or
        emergency planning.  It is beyond the mandate and role of the
        Vancouver Police Department or other municipal police forces to
        provide for enforcement at this level and Council took that
        position in February. Transport Minister David Anderson has
        acknowledged in a letter to the B.C. Attorney General that the lead
        role in these areas has always been played by federal enforcement
        agencies, including Canada Customs and the RCMP, and these agencies
        will continue to carry that responsibility under the new port
        regime.  It is essential that these agencies have adequate
        resources for these tasks.

   Elimination of the Ports Canada Police will require the assumption of
   additional policing duties by local municipalities and the RCMP. Bill
   C-44 leaves in question the issue of how these responsibilities for
   policing will be divided among the agencies and how any transition
   necessary as a result of the disbanding of the Ports Canada Police would
   be handled.  However, the Transport Minister indicates he has initiated
   discussions at the federal level concerning the establishment of a
   broad, multi-jurisdictional review of policing issues in Canadian ports.

   Council should support this initiative, so long as municipalities and
   the Attorney-General are fully involved and the discussions are
   predicated on the Federal Government assuming its full responsibilities
   for the unique policing problems associated with ports, including drug
   enforcement, organized crime, immigration, alcohol and arms trade,
   customs, maritime terrorism, and peacetime emergency planning.  In many
   cases, these responsibilities will best be carried out by cross agency
   task forces, or handled through the existing Coordinated Law Enforcement
   Unit, but funding must be provided from the Federal Government.

   The Chief Constable believes that the Port is not adequately policed
   under current circumstances due to resource limitations, and that the
   City would have to expand its police department if port policing
   responsibilities were to be transferred.  Municipalities should not be
   required to accept additional costs as a result of the elimination of
   the Ports Canada Police.  Where municipal forces have to be enlarged to
   meet policing responsibilities on port lands, these costs must be met
   either through direct payments from the ports, or enlarged
   grants-in-lieu of taxes through the elimination of some or all of the
   present exemptions.

   It is recommended:

        Council urge the Minister of Transport, the Solicitor-General,
        and the Attorney-General to convene discussions with
        representatives of the municipalities to examine how policing
        responsibilities in British Columbia ports can best be met,
        with  the clear understanding that municipalities will not be
        required to fund additional police services without full
        compensation.

        Council urge the Federal Government to provide a mechanism and
        sufficient time for a smooth transition between the present
        Ports Canada Police jurisdiction and the establishment of
        replacement policing functions.

   5.   Payments-in-lieu of taxes

   When the proposed National Marine Policy was made public in 1995, it
   included a provision by which federal ports remaining part of the
   national port system would be offered a unilateral federal exemption
   from payments-in-lieu of taxes.  In their place, each local port
   authority would have been expected to negotiate user fees for municipal
   services with neighboring municipal governments.

   Payment-in-lieu of taxes is only an issue in cases where federal
   property is held by the government or its agencies.  Port land and
   facilities leased to private operators (such as Vanterm in Vancouver)
   are fully taxable.

   City Council and the FCM took the position that this was an unacceptable
   way for the port authorities to exist in a municipal setting.  The
   proposal also ran contrary to a consensus position on payments-in-lieu
   of taxes that had been negotiated among FCM, Public Works Canada and the
   Federal Treasury Board that requires the federal government and its
   agencies to respect the local assessment and taxation regimes as part of
   fulfilling their responsibilities as property owners.

   Pressures brought by municipal governments and the FCM convinced the
   Transport Minister to withdraw these proposals.  While Bill C-44 is
   silent on the exact tax status of the restructured national ports, both
   the Transport Minister and the President of the Treasury Board have
   indicated that the current provisions of the Municipal Grants Act will
   apply to the new port authorities and that municipalities should not
   expect to be worse off financially than under the current system.

   It is important to note that the Port does not pay the equivalent of
   full property taxes through grants-in-lieu.  There are significant
   exemptions from grants-in-lieu of taxes.  Elimination of these
   exemptions or applying normal taxation would increase revenue to
   municipalities.  Further, the present grants-in-lieu process is flawed. 
   As Council has been advised, the Port of Vancouver and federal Municipal
   Grants staff have recently reviewed the basis for past grants estimates
   over a period of more than ten years, and concluded that the City has
   been overpaid by in excess of $3 million.  The Port is unilaterally
   recovering that overpayment over time; the 1996 payment to the City has
   been reduced by $.5 million.  The recovery of alleged overpayments
   dating back ten years is questionable in the context of normal
   commercial practice.  The grants-in-lieu system should be revised to
   eliminate this possibility and to provide an appeal mechanism. This
   problem would of course not arise if the Port were taxed normally on an
   annual basis.

   The Port has argued that full taxation would impact heavily on its
   competitive position.  It is vitally important to the region, the
   province and the country that the Port of Vancouver remain competitive,
   however, this should not be achieved at the expense of property owners
   and taxpayers in Vancouver and other neighboring municipalities.  This
   is particularly true, as previously noted, when the Federal Government
   is requiring Ports to contribute a share of revenue.

   It is recommended:

        Council reiterate its position that the new port authorities
        be subject to the same payment-in-lieu of taxes rules that
        apply to other federal property, or that they become taxable,
        and urge the federal government to ensure that the new
        legislation does not result in a net increase in costs to
        municipalities through any combination of additional
        responsibilities for municipalities and changes in the payment
        of grants-in-lieu.

        Council urge the Federal Government that if grants-in-lieu are
        to be retained rather than implementing full taxation, the
        process be revised to provide for year by year finalization of
        grants and an appeal mechanism to ensure certainty for both
        municipalities and ports.

   6.   Land Use and Development

   At present, the Federal Government relies on its constitutional
   prerogative to avoid compliance with local planning authority.  While
   this prerogative extends to the Vancouver Port Corporation, the VPC and
   the City have established a good working relationship with respect to
   the development of port lands.  Council is aware of the joint planning
   initiatives undertaken with respect to port lands west of Main Street
   and of the agreement that development east of Main Street will be follow
   a review process not dissimilar to the development application process
   that applies to development on private lands.

   The working relationship, however, is a function of the personnel and
   Board presently in place at the Port.  There is no certainty that it
   would survive a change in staff or the Board.

   Bill C-44 does not require port authorities to adhere to municipal
   zoning and development processes.  However, the legislation does limit
   the type of development that can occur on port land in two ways.  First,
   the legislation limits the activities of port authorities to those
   directly related to marine transport and commerce and the conditions
   under which port lands can be leased.  This limitation will provide some
   protection against inappropriate land use.  However, it also precludes
   the Port providing non-port facilities sought by municipalities. In
   particular, facilities and parks for the public to access the waterfront
   might be precluded.  Since the Port controls the majority of the Burrard
   waterfront in Vancouver, this is unacceptable.

   Second, the legislation requires port authorities to develop and publish
   a land use plan, and to hold a public meeting to solicit input from the
   public, within six months of its incorporation.   This presumably
   provides some opportunity for municipal input.  However, it puts the
   municipality in the same category as public individuals.  There is no
   explicit provision for the Port and adjacent municipalities to reach
   agreement on a land use plan for the Port.

   While federal land is exempt from municipal zoning control, this
   exemption is not extended to land purchased directly by a port
   authority.  This could lead to a situation in which a patchwork of
   properties having to meet different standards could develop.  In
   addition, developments might end up being structured based on who
   controls development, as opposed to the most sensible land use plan. The
   City has a strong interest in seeing port lands developed for port
   purposes and subjecting all properties, whether owned by the port
   authority or the Crown, to land use control is the best way to ensure
   that development occurs in a way that is sensitive to the surrounding
   area.

   The FCM position seeks mandatory compliance with municipal planning
   authority and specific political authorization from the Minister for any
   action by port authorities which is at variance with official municipal
   plans and bylaws.  Council has endorsed this position, and it remains
   appropriate.

   Finally, the Bill C-44 provides significant restrictions on the ability
   of port authorities to utilize federal land.  For example, leases may be
   only for purposes of operating the port, thereby eliminating the
   possibility that property may be developed for non port uses.  In areas
   where industrial port uses are inappropriate (such as Vancouver's
   central waterfront) there would be no possibility of a waterfront park,
   convention centre, or hotel.

   These provisions place unnecessary limitations on the utilization of
   port lands, while at the same time avoiding legitimate municipal
   involvement in land use decisions. It is recommended:

        Council urge the Federal Government to permit broader land
        uses within the Port, so long as they comply with municipal
        zoning or joint port municipal land use agreements, and to
        enable port authorities to enter into binding land use
        agreements with municipalities, subject to an override by the
        Governor in Council.

   CONCLUSION

   Many of the changes proposed in Bill C-44 will benefit the Port on an
   operational basis.  However, there are significant limitations on the
   authority of the Port which will directly effect the Port's ability to
   function; preclude municipalities achieving objectives related to
   waterfront uses; and potentially increase municipal costs for policing. 
   Payments of grants-in-lieu of taxes is not addressed in the legislation
   as it currently stands.

   Changes in the legislation to address these issues and provide for
   improved municipal representation on the Board of Directors could
   resolve these concerns.  Recommendations for such changes are provided
   in this report for Council to communicate to the Transport Committee.

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