Robin Guy is vice-president and deputy leader of government relations at the Canadian Chamber of Commerce. David van Hemmen is vice-president at the Greater Vancouver Board of Trade.
Before the pandemic, we lived in a relatively comfortable world of globalization and efficient transportation networks, with stocked shelves and stable prices. But it has become painfully clear now that each supply chain disruption, whether caused by the pandemic, devastating wildfires or floods, comes with many costs, including higher prices for products we use every day or a shortage of products on store shelves.
The most recent threat is found in the form of impending labour disruptions across Canada’s West Coast ports, including two of the three largest ports in Canada, the Port of Vancouver and the Port of Prince Rupert.
These potential strikes are poised to have a significant and immediate impact on the livelihoods of Canadians and the health of Canadian businesses, and it is cause for concern that we have yet to see the federal government – which has responsibility for ports – signal its understanding of what is at stake.
About 25 per cent of our total traded goods flow through these ports. They’re Canada’s largest gateway, handling over $800-million worth of cargo – from agri-foods and potash, to critical minerals and household necessities – every single day. And they are once again at risk. During a recent strike at the Port of Montreal, the government of Canada estimated that a full shutdown of that port cost the Canadian economy $100-million a week. Given the size of Canada’s West Coast ports, the impact of strikes would be far greater.
The collective agreements between longshore workers have expired, with a strike set to begin as early as July 1. Such actions would have immediate effects across Canada’s already fragile supply chain. While we support the right to collective bargaining, and believe that the best deals are reached at the table, the disruption could hardly happen at a worse time.
A breakdown in port operations would severely affect manufacturing, retail, agriculture, automotive dealers and energy industries across the country. We are seeing signs that goods destined for Canada are already being routed to other ports, adding costs and increasing the environmental footprint of trade, all to Canadians’ detriment.
Port shutdowns would fuel inflation, increase costs for Canadians and businesses, and damage the Canadian economy. Add to that the fact that our exporting industries could face delays in getting their products to market, hampering their ability to earn income and secure global contracts that drive investment and support jobs here at home.
Ports in California faced rolling disruptions after 13 months of negotiations that only ended after U.S. President Joe Biden intervened. By taking action, Canada’s federal government could avoid the economic impact felt in the United States and Montreal by working with all parties to reach an agreement. Let’s roll up our sleeves and find common ground so we can avoid disruptions before they occur.
Canadians and businesses alike require stability in our supply chains. According to the Canadian Chamber of Commerce’s Business Data Lab, nearly a quarter of businesses have stated that supply chain issues will continue to remain a key obstacle to growth and that they expect these challenges to persist well into next year.
The federal government must bear in mind its responsibility for factors that could fuel the inflation fire.
Canadians expect our elected officials to work to ensure the preventable doesn’t hinder growth. To position Canada as a strong competitor and reliable trading partner to our allies and expand our economy, business must be able to get goods to and from market reliably and efficiently.
Recently, Canada’s Supply Chain Task Force report noted that wild swings in supply and demand arising from the pandemic, climate shocks such as wildfires and floods, and growing geopolitical uncertainty have put trade norms and flows at risk.
It’s a good short list of the many threats to our supply chains that require government action and support. Surely the threat of a full port shutdown should be added to that list.