Sylvain Charlebois is a professor of food distribution and policy, and director of the Agri-Food Analytics Lab, at Dalhousie University
After a harvest from hell across the country, farmers now have to deal with a new problem: the CN railway strike.
More than 3,000 employees of Canadian National Railway Co. are now off the job. They are asking for better working conditions and improved safety measures. Perhaps not the most “sellable” issue out there for Canadians, given that commuter rail services will likely not be disrupted. However, the strike likely will not end soon.
We often see action from organized labour at certain points of an economic cycle when workers feel an opportunity to lobby for better working conditions. CN posted a healthy profit last quarter as revenues rose 4 per cent, although the company did revise its earnings outlook owing to a weakening economy. Workers saw a window and are taking advantage of this profit. However, for the agriculture sector, this couldn’t be happening at a worse time.
Thousands of grain growers are still coping with early winter conditions, as they are desperately trying to get their crops harvested. More than a million hectares of canola in the Prairies are under snow, according to news reports. And now, for many farmers, access to markets is essentially non-existent. For most locations that CN serves, it is the only option available to farmers in that area. The only one.
Overseas markets are critical to the survival of the sector. Canada was to export 21 million tonnes of wheat this year and about nine million tonnes of canola seed. The CN strike may severely compromise the agrifood sector’s ability to deliver and execute its overseas contracts. The strike could also prevent the delivery of supplies to farmers, such as propane, which they need to dry goods and heat facilities. Logistics go both ways.
We rarely see logistics as the backbone of our economy: It’s hidden, but it is there. We buy and consume products every day that rely on logistics to get to whatever point of sale we interact with. Even if 60 per cent of the striking workers’ jobs have been filled by managers, CN’s efficiency will be affected by the strike.
The essential question is this: Should Parliament intervene? Already, many provinces and dozens of trade groups have begun pressing the federal government for back-to-work legislation. This pressure is coming even though the government is not in position do to pass any new laws until a Speaker is elected and the Speech from the Throne is voted on.
When the previous strike happened, in 2009, the Harper government did not hesitate to intervene and the strike lasted just a few days. This time around, not only is Parliament not sitting, but it’s not clear how the new government will react to such measures. While Liberal governments have intervened in the past, this time they may feel bargaining needs to do its work. And in a minority situation, the government would need the support of at least another party. The Conservatives are likely the only major party that would support the government in such a move. For the Bloc Québécois and the NDP, back-to-work legislation would likely be a non-starter.
Beyond the politics of it all lies Canada’s reputation in logistics. It’s just awful. Canada is known to be a land of few options, transportation inefficiencies and bottlenecks. It’s been like this for years. Given the size of our economy and landmass, Canada’s investment levels on public infrastructure should have been at least triple what we have seen since 1980. Just south of us, the United States offers great infrastructure, including well-maintained roads, high intermodal capacity and multiple options to move products. It is easy and less costly for any sector to use U.S. distribution channels, including agriculture. Yet farmers who are located far from the U.S. border are highly vulnerable to labour disputes and disruptions like this one.
Canada started to take logistics seriously about a decade ago when the federal government launched the Asia-Pacific Gateway and Corridor Initiative, forcing all provinces to work together and invest in our floundering infrastructure. Yet those efforts must deal with a huge backlog of challenges as most of our transportation system, from Halifax to Vancouver, has been undercapitalized for years. Labour disputes have only compounded the problem.
Our trading partners are familiar with our domestic challenges, compelling some to look elsewhere for grains and other agrifood commodities. This latest dispute will likely give them a new excuse to look away. Given the global nature of agrifood systems, this is certainly not what our farmers and food processors need.
The economic impact of this labour dispute is real. However, unlike what some may suggest, this won’t push our economy into recession, but it won’t help. Consequently, our government may not be keen to force an end to this trade dispute, but it certainly needs to think about how it can do a better job in providing our agrifood sector better access to market.
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