Declaration of Emergency Committee on Nov. 24th, 2022

[Drew Dilkens]

We've had no response from the federal government yet to our request for funding, but I think part of the solution here is to respond to the letter, which would bring all three levels of government together to find a pathway that says that if this happens again, here's how we collectively respond and here's who pays for what, based on those responsibilities, and really helps to expedite the response in a way that would minimize the disruption if this were to ever happen again.

[Claude Carignan]

All right. Thank you.

[The Joint Chair, Bloc, Rhéal Fortin]

Thank you, Senator Carignan.

Thank you, Mr. Dilkens and Mr. Willett.

I'm going to suspend the meeting so that we can bring in our second panel.

[The Joint Chair, Bloc, Rhéal Fortin]

We are now resuming the meeting with our second panel.

Joining us from the Canadian Vehicle Manufacturers' Association, we have Brian Kingston, president and chief executive officer, and Jennifer Steeves, director of industry and consumer affairs.

Joining us by video conference, from the Canadian Trucking Alliance, are Stephen Laskowski, president, and Geoffrey Wood, senior vice-president of policy.

Welcome to all four of you. Each group will have five minutes for opening remarks.

You can go first, Mr. Laskowski.

[Stephen Laskowski, President, Canadian Trucking Alliance]

Thank you very much, Mr. Chair and committee members.

CTA is an alliance of seven provincial trucking associations in Canada. Its board is made up of trucking executives from over 70 carriers ranging from small to very large companies.

Regarding CTA's position on protest, well before and throughout the events of 2022, CTA made its position on protests targeting public road infrastructure known. CTA does not support and strongly disapproves of any protest on public highways, roadways and bridges. CTA believes that such actions, especially those that interfere with public safety, are not how disagreements with government policies should ever be expressed.

Coming out of this committee, CTA would recommend that a national plan involving all provinces, federal and all relevant enforcement agencies and international bridge crossings be formed to develop plans to protect our nation's critical trade infrastructure from potential future protests and/or ending them very quickly and peacefully.

Regarding the blockades' impact on the trade community, these blockades had a very detrimental impact on our members, their drivers, customers and businesses. Although most of our comments today are focused on the economic impact in the international trade community, let us never forget the impact of these events on the economic backbone of our nation's labour force, the commercial truck driver. The impact of these blockades on their physical and mental health was significant, as was the impact on their ability to make a living.

As we are all aware, trade with the United States is critical to Canada's economic health. Over half of the $850 billion in total Canadian trade conducted with the United States on a customs basis in 2021 was moved by truck.

Let's also remember that multiple crossings were impacted across Canada. This impacted and sent shock waves through our entire trade community, which was noted by the deputy minister of Transport Canada, the Bank of Canada and the Canadian Chamber of Commerce throughout the crisis.

We also heard reaction from U.S. politicians, including a Michigan Democrat who said, “The one thing that couldn't be more clear is that we have to bring American manufacturing back home to states like Michigan.” Even the White House press secretary mentioned President Biden's concerns with regard to what was happening in Canada.

Very quickly, in B.C. on the Pacific Highway, nearly 2,000 trucks per day cross there. In February, year over, trade trucks fell by 6%. The Surrey Board of Trade said, “These ongoing protests are really sabotaging our economy, sabotaging our infrastructure, and sabotaging the livelihoods of businesses, jobs and families.”

In Alberta, the blockades lasted for almost two weeks. Eight hundred trucks a day cross at Coutts.Deputy Prime Minister Chrystia Freeland has stated that $48 million in trade was lost each day of those blockades.

In Manitoba, 1,100 trucks a day cross at Emerson. The Deputy Prime Minister has estimated that the trade impact there was $73 million a day.

The Ambassador Bridge, which I'll leave to the folks at the auto manufacturing association, was obviously impacted. Truck traffic fell by almost 27% year over year in February because of these blockades. Seven thousand trucks a day cross at that bridge.

At the Blue Water Bridge, there were pop-up protests those very same days. As the trucking industry switched to the Blue Water Bridge because of the Ambassador shutdown, so did the protesters, as they did with the Peace Bridge and pop-up protests there. About 2,600 trucks a day cross there.

In Nova Scotia and New Brunswick, both those provinces had to issue mandates about public highway protesting.

CTA strongly believes that all bridge crossings and authorities, provinces and federal enforcement agencies did their best throughout the crisis to end these blockades as quickly as possible in a peaceful manner. The commission is currently looking into whether the government's invocation of the Emergencies Act was appropriate under the circumstances.

We have all heard testimony from several witnesses who are in favour and some who are against the government's decision. I and the CTA are not national security experts. That said, within days of the Emergencies Act being invoked, the process stopped. The pop-up blockades stopped. Bridges reopened, trade restarted, and our nation's commercial truck drivers' lives were returned to them.

For the record, when the Emergencies Act was invoked, CTA supported its use. From our perspective, the invocation of the Emergencies Act achieved the objective we were looking for, which was a quick and peaceful conclusion to the blockades and an end to the pop-up protests on highways and bridges.

There may be some disagreement as to whether the act is meant for situations and circumstances such as the one we found ourselves in this past winter. Again, I am not a national security expert. From where I sit, if people are uncomfortable with invoking the Emergencies Act for situations like this, then we need to work together to find a substitute that is just as quick, powerful and effective.

My last closing comment is to reiterate what I said in my opening point. To repeat a previous comment, CTA would recommend developing a national plan that would involve all provinces, the federal government and relevant enforcement agencies. The plan would reflect various international crossing structural and authority oversight, and would develop a plan to protect our nation's critical trade infrastructure from potential future protests and/or ending them very quickly and peacefully.

Thank you, Mr. Chair.

[The Joint Chair, Bloc, Rhéal Fortin]

Thank you, Mr. Laskowski.

You may go ahead now, Mr. Kingston. You have five minutes.

[Brian Kingston, President and Chief Executive Officer, Canadian Vehicle Manufacturers' Association]

Thank you, Joint Chairs and honourable members.

Thanks for the invitation to appear here today as part of your study.

The Canadian Vehicle Manufacturers' Association—CVMA—is the industry association that represents Canada's leading manufacturers of light- and heavy-duty motor vehicles. Our membership includes Ford, General Motors and Stellantis, also known as FCA Canada.

The auto industry is responsible for approximately $13 billion in annual economic activity, 117,000 direct jobs and an additional 371,000 jobs in the aftermarket services and dealership networks. The industry is our second-largest export sector, with $36.5 billion in exports in 2021.

The auto industry is highly integrated with the U.S. through both supply chain relationships and the shipment of final vehicles. Parts may cross the Canada-U.S. border seven to nine times in advance of installation in a vehicle. Over 90% of Canadian-built vehicles are exported, with the overwhelming majority going to the United States.

Auto production relies on efficient supply chain logistics for the shipment of parts, components and vehicles. Assembly facilities depend on regular and predictable deliveries of parts that operate at full capacity. Any delay or disruption to the supply chain—even very minor—can have an immediate effect on production and trade. Given the integration of the industry with the U.S., the efficient movement of goods across the border every single day is particularly important.

The Ambassador Bridge plays a key role in the industry as Canada's most important border crossing. It's responsible for approximately 25% of Canada's annual goods trade. With five OEMs assembling vehicles in Ontario, the bridge is a key conduit for motor vehicles and parts.

The February blockade at the Ambassador Bridge exposed weaknesses in Canada's border management practices and trade infrastructure that need to be addressed to make the supply chain more resilient.

There is additional complexity with this particular trade corridor, as the customs plaza is under federal jurisdiction, the 401 is under provincial jurisdiction and the road leading into the plaza is municipal. It took significant time to identify each respective government lead and to coordinate, share information and determine what capabilities were required to resolve the trade blockage.

In an effort to accelerate this process, the CVMA filed an affidavit in support of the auto parts manufacturer injunction against the protesters on February 10.

While our members greatly appreciated all of the efforts of every level of government that worked to find solutions to mitigate the impact, the blockade resulted in automotive companies on both sides of the border undertaking extraordinary measures at great cost to divert trade to other border crossings. These other crossings simply did not have the capacity to handle higher trade volumes without significant disruption to supply schedules, which, of course, we witnessed. This meant that auto plants were forced to cease production. This affected thousands of people employed in the industry, not just in Canada, but also in the United States.

The blockade on the bridge came at an already challenging time for the industry, due to fragile supply chains under pressure from pandemic-related shortages and backlogs. In fact, North American vehicle production has still not returned to prepandemic levels.

This incident, combined with other recent port and railway disruptions, has undermined Canada's reputation as a reliable jurisdiction for the production and movement of goods. We must learn from these events to ensure that Canada has plans in place to quickly respond to future disruptions. Failing to address these weaknesses could impact our competitiveness, not just for existing auto manufacturing but also for future auto investment.

We should establish processes for quick and efficient coordination and communication between industry, multiple levels of government and other appropriate stakeholders to mitigate future disruptions to the supply chain.

We recommend the following.

First, identify a clear federal lead to provide guidance and direction when there is any threat to the uninterrupted movement of commercial goods. This lead should have the ability to coordinate with other levels of government and counterparts in the United States to ensure that decisions are made quickly and that disruptions are dealt with swiftly, with updates communicated regularly to industry.

Second, enhance the legislative tools to address future blockades or disruptions, such as the Keeping Ontario Open for Business Act, which established prohibitions and enforcement mechanisms to prevent persons from impeding access to, egress from or the ordinary use of protected infrastructure. The federal government should consider broader powers to quickly deal with blockades, powers that would preclude the necessity of invoking the Emergencies Act.

With that, I thank you. I appreciate your time and look forward to any questions.

[The Joint Chair, Bloc, Rhéal Fortin]

Thank you, Mr. Kingston. Please speak more slowly when you answer questions. That will make things easier for the interpreters.

We'll begin the first round now.

Starting things off will be Mr. Brock for five minutes.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for their participation and attendance tonight.

Mr. Laskowski, I listened very carefully to your opening statement. What I didn't hear are the reasons and the rationale for members of your alliance to be protesting in the first place. You're well aware of that, because you were advocating for that as early as January 5, 2022. Is that fair to say?

[Stephen Laskowski]

Are you stating that the CTA was supporting the protests?

[Larry Brock, Conservative, Brantford—Brant, ON]

I'm not saying that at all. I'm saying that you understand the rationale behind why these people were protesting. You had several unvaccinated truck drivers you were supporting as early as January 5, 2022.

[Stephen Laskowski]

I do not understand what you mean by supporting unvaccinated drivers.

[Larry Brock, Conservative, Brantford—Brant, ON]

On January 5, 2022, you issued a statement that I'm looking at right now. That was really on the eve of the Canadian government and the U.S. government making announcements that as of January 15 and January 22 respectively, only fully vaccinated Canadians and Americans could travel back and forth.

You were aware of those dates.

[Stephen Laskowski]

Correct.

[Larry Brock, Conservative, Brantford—Brant, ON]

It says that the “CTA...requested both governments meet and consult with key members of the supply chain to determine a more suitable date for enforcement that would be...less disruptive to the...supply chain, which [was] already struggling to function at normal capacity.”

Do you agree with that?

[Stephen Laskowski]

Correct.

[Larry Brock, Conservative, Brantford—Brant, ON]

At that point, “neither government” gave you “any indication” that they would reconsider “enforcing the mandates [that] month” and had not “provided any...details” to you.

Is that correct?

[Stephen Laskowski]

Correct.

[Larry Brock, Conservative, Brantford—Brant, ON]

You indicated further that there was “a modest uptick of drivers getting vaccinated at some companies”, but there was a “higher-than-normal turnover and others declaring their intention to leave the industry or seek employment in the provincially regulated sector over the impending mandate at the border.”

Is that correct?

[Stephen Laskowski]

Correct.

[Larry Brock, Conservative, Brantford—Brant, ON]

You anticipated that the industry was going to lose “12,000-16,000...cross-border commercial drivers if the mandate [took] effect [that] month”.

Is that correct?

[Stephen Laskowski]

Correct.

[Larry Brock, Conservative, Brantford—Brant, ON]

You quoted “as many as 30,000 Canadian federally regulated drivers exiting the supply chain.”

Is that correct?

[Stephen Laskowski]

Correct.

[Larry Brock, Conservative, Brantford—Brant, ON]

The “CTA continues to caution the Government of Canada that implementing a domestic mandate on federally regulated carriers and their employees [would] further exacerbate the driver shortage, [the] disruption to the supply chain and [the] rising costs on consumers.”

Do you stand by that statement?