Auto sector, food transportation hit as border blockades spread across country

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The economic fallout from the border blockades mounted on Thursday, as Ontario’s auto plants cut production and food producers faced delayed shipments.

Protesters opposed to vaccine mandates and other pandemic health measures have for several days blocked border crossings in Coutts, Alta., and Windsor, halting or slowing the flow of much of Canada’s trade with the United States. The demonstrations, which began almost two weeks ago with the occupation of the area around Parliament Hill in Ottawa, spread on Thursday to the crossing at Emerson, Man., and disrupted traffic at the border at Sarnia, Ont.

The stoppage of truck traffic caused automakers in Ontario and Michigan to halt production intermittently and send workers home.

The Ambassador Bridge, which links Windsor with Detroit, is Canada’s busiest border crossing and carries more than $450-million worth of goods each day.

Toronto-based meat importer Terry Verk said he has already had to absorb thousands of dollars in losses because his trucks from the U.S. are arriving late, with meat that is past its expiration date. Mr. Verk, owner of T. Verk Trading Inc., supplies chicken, beef and pork to processors and retailers. These companies only accept meat from animals that have been slaughtered within a strict time limit.

Meat processors “have a receiving time from the kill date of the animals,” Mr. Verk said. “If they have a five-day or a six-day receiving [window] that means the meat is harvested on one day, it’s deboned the next day, and then we have a day to get a truck under it and get it signed off by the USDA and on the road to come to Canada for further processing.”

His trucks that cross the border using the Ambassador Bridge now take 72 hours to make what used to be a 24-hour trip.

The truckloads, each of which contains meat worth tens of thousands of dollars, are insured for theft and collision but not shipping delays. He was able to send back one late truck with $75,000 worth of meat to the U.S. supplier, but is stuck with others. “The meat’s going into the garbage,” Mr. Verk said.

Meanwhile, Toyota Motor Corp. said its factory in Cambridge, Ont., has ceased production this week because of a lack of parts and other factors.

Ford Motor Co.’s Oakville assembly was operating on shorter shifts for the second day Thursday, said Shane Wark, assistant to the national president at Unifor, which represents 20,000 Canadians who work at the Detroit Three automakers and 18,000 who work at parts makers.

Stellantis NV shortened production shifts at a number of factories in Ontario and the United States on Wednesday and Thursday because of the blockade in Windsor. The day shift at the minivan plant in Windsor was cut short on Thursday. “We are operating on a shift by shift basis, based on available parts,” said Lou Ann Gosselin, a spokeswoman for Stellantis. In Oshawa, General Motors Corp. shortened its production run Wednesday. On Thursday, GM was forced to cancel two production shifts at a plant in Michigan, where it builds sport utility vehicles.

Stellantis said the “situation at the Ambassador Bridge, combined with an already fragile supply chain, will bring further hardship to people and industries still struggling to recover from the COVID-19 pandemic. We hope a resolution can be reached soon so our plants and our employees can return to normal operations.”

Linda Hasenfratz, chief executive officer of parts maker Linamar Corp., said in a statement she is “watching with concern” the protest at the border.

“The last thing any business needs right now is to be shut down yet again,” she said. “Cutting Canada off from our biggest trading partner can ultimately have only one impact, reducing output. To the protestors, please get off the bridge and let our people get back to work earning money for their families.”

The White House said Wednesday it was talking to automakers, Canada and customs officials to try to avoid disruptions to auto production.

“You need the parts to build the vehicles,” Mr. Wark said. “They don’t get the parts, they don’t build. They send people home, they get reduced hours, reduced pay. And this is in a sector that has already been hit incredibly hard by other supply chain issues.”

The pandemic spurred waves of supply chain snarls caused by labour shortages, factory shutdowns and soaring costs for shipping, fuel and other expenses. The auto sector has reduced production and laid off large numbers of employees for two years because of a shortage of semi-conductors. “We were just trying to move past that and then we have this situation at the border,” Mr. Wark said.

Companies facing higher transportation costs are losing tens of thousands of dollars a day because of the blockade, said Ron Lemaire, president of the Canadian Produce Marketing Association. “It’s more strain on a system that cannot bear to absorb any more cost – that is pushing it all now through to the consumer, who’s already strained and dealing with food inflation,” he said. This is particularly urgent because Canada is so reliant on imported produce at this time of year, Mr. Lemaire said, and because perishable products have a limited window to reach store shelves.

“We’re asking the government to start taking action to ensure perishable product, and food that’s essential to food security in Canada, be prioritized and move through the border as quickly as possible,” Mr. Lemaire said, “but also put measures in place once they’ve dealt with these demonstrations, to ensure that we don’t continue to see these pop up across the country.”

The Retail Council of Canada is “gravely concerned” about the disruptions at the Ambassador Bridge and in Coutts, spokesperson Michelle Wasylyshen wrote in an e-mailed statement. She said protests could lead to shutdowns and layoffs in Canada, as well as some product shortages and increased prices for affected items such as fruits and vegetables.

With files from Andrew Willis and Reuters

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