International Trade Committee on Nov. 30th, 2023

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order. Welcome to meeting number 85 of the Standing Committee on International Trade.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Therefore, members are attending in person in the room and remotely using the Zoom application.

I need to make a few comments for the benefit of witnesses and members.

Please wait until I recognize you by name before speaking. If you are online, please mute yourself when you are not speaking. I ask all participants to be careful when handling the earpieces in order to prevent feedback. If any technical issues arise, please inform me immediately. We may need to suspend to deal with any issues.

I remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, October 17, 2023, the committee is beginning its study on the 2023 strike at the port of Vancouver.

We have with us today, from the Department of Transport, Robert Dick, assistant deputy minister, supply chain office; Christian Dea, chief economist and director general, transportation and economic analysis; and Sonya Read, director general, marine policy.

Welcome to all of you. I apologize for starting late, but you know how things go when we have votes. Please keep to your points. You have up to five minutes, but if you prefer to use less time, please ensure you make the point you want the committee to hear in the time you have.

Mr. Dick, I invite you to make an opening statement of up to five minutes.

[Robert Dick, Assistant Deputy Minister, Supply Chain Office , Department of Transport]

Thank you very much.

Good morning. I am pleased to appear before the committee on behalf of Transport Canada.

I would like to begin by acknowledging that I am speaking with you today from the traditional unceded Anishinabe Algonquin territory.

With me from the department are Christian Dea, chief economist and director general of transportation economic analysis, as well as Sonya Read, director general of marine policy.

On July 1, 2023, following a 72-hour notice, 7,200 International Longshore and Warehouse Union of Canada dock workers along Canada's west coast—from Vancouver to Prince Rupert and on Vancouver Island—went on strike. That strike lasted a total of 13 days.

As Transport Canada's assistant deputy minister for the Pacific region office at the time, I was charged with monitoring the impacts to our supply chains through Canada's Pacific gateway, as well as enabling participants to get better information to manage their supply chains.

Before detailing these impacts, I will provide some economic context.

The Pacific gateway facilitates Canada's trade with Asia and South America. It handles roughly $1 billion in trade per day and makes up roughly 40% of Canada's total trade volume outside North America. Port activity in Vancouver and Prince Rupert alone—Canada's first-largest and third-largest ports—supports approximately 119,000 jobs directly and indirectly.

While passenger cruise, bulk grain and coal through certain marine terminals continued to move uninterrupted, the disruption impacted many supply chains.

On the import side, Canadian manufacturers could not get the materials needed to continue production, which had cascading effects on cross‑border industries like auto manufacturing. Other businesses experienced delays in receiving seasonal consumer goods.

On the export side, windows to provide potash—needed by global markets to fertilize crops—were narrowed. Forestry companies had to reduce production and some high value refrigerated goods, such as fresh pork, perished before they could reach their markets.

Overall, it is estimated that the 13-day disruption affected the movement of roughly $10 billion in goods.

Supply chains involve complex logistics and are not designed to pivot on a dime. Impacts during times of disruption are unavoidable, but transparent, timely communication can be a powerful antidote to uncertainty, especially in circumstances where no one knows how long the disruption will last.

During the disruption, while respecting the integrity of the collective bargaining process that the labour program oversaw, Transport Canada created a focal point for information exchange to help supply chain users and operators alike develop a common operating picture. Leading up to and during the disruption, Transport Canada hosted daily virtual meetings with anywhere from 50 to over 100 participants, including major shippers and retailers, port authorities, railways and off-dock logistics providers. These supply chain participants came together to hear operational updates from different nodes of the supply chain.

The meetings also served as a venue for Labour Canada to provide factual updates on negotiations, dispelling any misconceptions around the process that was strictly between the workers, employers and their representatives. Furthermore, convening calls with the collective allowed industry to see that they were not isolated actors, but rather integral components of a larger, interdependent whole, which was essential to a disciplined and orderly restart.

Transport Canada also remained in close and regular communication with key operators and major shippers on a bilateral basis, recognizing the commercially sensitive nature of some of the information shared.

These efforts to gather real-time operational information from supply chain participants, combined with Transport Canada's in-house analytical capacity, helped shape a complete and accurate picture for ministers and cabinet. Following the disruption, it took supply chains approximately four to six weeks to recover.

In October, the Minister of Labour initiated a process, under section 106 of the Canada Labour Code, to examine the structural issues underlying that disruption, as well as similar disputes at other ports in Canada in the past. This work remains with the labour program and is ongoing.

In the broader context, the events and shocks to our supply chains over the last few years—a global pandemic, natural disasters and geopolitical forces—have highlighted a need for government leadership to ensure efficient, fluid, resilient and reliable supply chains. Budget 2023 laid the groundwork to establish a national supply chain office that would work with industry, labour, indigenous groups and other orders of government to increase the fluidity, efficiency, resilience and reliability of our supply chains.

Madam Chair, I'll conclude my remarks there.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Dick.

We've reduced it to five minutes each to ensure we can get to our next panel.

Mr. Seeback, you have five minutes.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thank you, Madam Chair.

The World Bank ranks the port of Vancouver the third-worst port in the world, in terms of efficiency and performance. It's 368th out of 370. I've read that report. It does not include labour disruptions.

Does anyone on the panel think that having a 13-day strike, or strikes of a similar duration, improves the ranking of the port of Vancouver and its current position as the third-worst port in the world?

[Sonya Read, Director General, Marine Policy, Department of Transport]

My understanding of the World Bank rating is that it includes a number of different factors. As you noted, the labour dispute was not part of those. As far as I'm aware, unless the methodology includes labour disputes, it would not necessarily have an impact on the ranking, except for the fact that you would see the downstream impacts of the labour dispute on the efficiency of the flow of cargo through the port.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

This ranking is based on efficiency and performance.

Would you agree with me that a 13-day strike would have a negative effect on the efficiency and performance of the port?

[Sonya Read]

As I said, I can't speak about the methodology of the World Bank report.

I would say that economic evidence demonstrated that the labour disruption disrupted the flow of cargo through the port and that it took a number of weeks, post-labour disruption, to clear out that backlog. There were corresponding impacts on the efficiency of movement of cargo through the port during the disruption and in the catch-up period thereafter.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Do we have an estimate of what the actual economic impact of the strike was?

Mr. Dea, you are, I guess, the economist...economic analysis. I've certainly seen a number somewhere in the range of $10 billion. Does the government have an actual estimate? The Greater Vancouver Board of Trade said it's about $10.7 billion.

Do you have an impact, or did the government do an assessment of what that impact was?

[Christian Dea, Chief Economist and Director General, Transportation and Economic Analysis, Department of Transport]

Thank you for the question. I'll provide a bit more context before providing a few more numbers.

It is important to understand that we are a small trading nation. In that regard, everything affecting the fluidity of the movement of merchandise in terms of export and import affects Canadian businesses and communities. It may also impact the reputational aspect of Canada as a trading nation.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I will get to that, but I have very limited time—five minutes.

Have you done an estimate of the economic impact of the strike at the port of Vancouver? If so, what was that dollar figure?

[Christian Dea]

Yes, we did.

Again, there are three ways to look at that.

You mentioned some numbers that are more related to the shipments that were affected. That's in an order of magnitude between $10 billion to $13 billion, in terms of the value of shipments affected due to the strike.

There will be between $750 million to $1 billion in net economic loss associated with the 13-day strike at the port.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

For example, I know there's a business in my riding that installs vents in chicken barns for ventilation, etc. They weren't able to get their product on time, which meant their workers had to work overtime.

Does that ever get factored into this—the economic loss for businesses that have to work overtime but may not be able to charge for that overtime? Does this analysis go into that?

[Christian Dea]

In the estimate, we're doing two things, roughly speaking. We have analytical tools and models that allow us to assess the macroeconomic and sectoral impact, but we're also validating that with industry to make sure the numbers reflect the reality of the industry.

The point you're raising—net economic loss—is factored in. This means that, if some Canadian businesses are losing production or if the cost increases to move either their commodity or their products to their client, it's factored into the analytics we're doing.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Do you have a document—

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry, Mr. Seeback.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I just want to see a prepared internal document.

Could you provide that document to the committee?

Five minutes isn't enough time to get into it.

[The Chair, Liberal, Judy Sgro]

Exactly. Thank you, Mr. Seeback.

We're on to Mr. Sidhu.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you.

Thanks to the witnesses for being here today.

We all know Canada's ports play a significant role in the lives of Canadians, handling more than 90% of Canada's marine traffic. More than 343 million tonnes of cargo were shipped through our ports in 2021 alone. It's Canada's port authorities, or CPAs, that advance the growth and prosperity of the Canadian economy by managing these key marine infrastructures and services.

Earlier this week, I had the pleasure of addressing the Canadian Association of Importers and Exporters. We heard directly from them about the value ports add in terms of getting their products to market around the world and the economic value of creating jobs right here in Canada.

I'd like to hear more from the witnesses here.

Could you share with our committee how Bill C-33 would optimize traffic management by Canada's port authorities, and the benefits that could be realized through this important legislation?

[Sonya Read]

Bill C-33 proposes a number of legislative amendments, particularly related to vessel traffic management. It would provide greater capacity for ports to actively manage vessel traffic going in and out, and help improve the fluidity of the supply chain in terms of the presence of vessels unloading and loading cargo.

It also provides a framework for ports to collect certain types of data from port users to help support active traffic management. That is also an important input in terms of providing a line of sight into when vessels need to be at port, what cargo they're moving and how long they can be expected to remain in port.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that.

As part of the study, we're also looking at port-related innovation that could help with efficiency and performance.

Based on your expertise, I'm wondering if there are other ports in Canada or across the world that we can look to and learn from in terms of innovation.

[Sonya Read]

I would say there are a number of ports worldwide that have demonstrated incredible amounts of innovation with respect to things like traffic management and the use of different data and tools to improve the flow of cargo through their ports. Some of their operating contexts are a bit different from those in Canada. This has an impact on the type of innovation that can be applied in a certain circumstance.

We have seen a number of ports leveraging data—my colleague may be able to speak about some of those—particularly in Europe and the United States. They're leveraging data quite effectively to work with terminal operators, other port users, shippers and carriers to support supply chain management.

[Christian Dea]

When you look at best practices internationally, there are a few around the world where the ports seem to be a bit more advanced in terms of their ways to manage logistics, their digitization activities, their automatization or their ways to plan and coordinate activities in more integrated ways with their users and their clients.

When you look at best practices, Singapore is probably one of the ports being identified but in a different context, as my colleague mentioned. It's a single port and it's also a state element, so the context is very different. There are also other ports in Europe, for instance in Rotterdam.

There are three ports in France that have developed a partnership in order to bring about the notion that they want to have more resiliency in terms of the capacity of the different ports, in Paris, Rouen and Le Havre, to serve and to ensure more resiliency in the ways they serve their clients.

In North America, there are different ports that are moving forward. Generally speaking, most of the ports in North America are still at the same level in terms of the digitalization or the logistic capacity. Globally, we're probably lagging a little bit compared to some big European ports or Asian ports in that regard.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry. Your time is up.

We'll move on to Mr. Savard-Tremblay for five minutes, please.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

My thanks to all the witnesses. We apologize in advance if we have to interrupt this testimony to go and vote. Let's try to be efficient with the time we have, though.

In a 2018 brief to the Government of Canada on the port modernization review, the Association of Canadian Port Authorities made several recommendations to Transport Canada. In particular, it recommended establishing a joint “future vision” group with Canada Port Authorities to define future innovations in logistics, transportation, trade diversification, and identify new trends and needs.

Has such a committee or group already been established?

[Sonya Read]

We haven't formalized a committee in that regard. However, the department meets very regularly with the Association of Canadian Port Authorities and the individual CPAs on a number of initiatives being undertaken through Transport Canada.

We are also in the process of establishing a regularized table to talk about the whole range of issues impacting ports within the Transport Canada purview, so we'll be establishing those regular meetings on an ongoing basis. There are different tables, as well, that port authorities participate in, individually or in part through their association, which provide various inputs into the initiatives through Transport Canada.

I know that my colleague Mr. Dick will be looking at how to ensure the inputs of Canadian port authorities are taken into account in terms of the solutions and the priorities that form the work of the supply chain office.