Evidence of meeting #85 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ports.
A recording is available from Parliament.
Liberal
Maninder Sidhu Liberal Brampton East, ON
Before we get to the witnesses, I want to put out there that I have to leave, and some of our members have to leave, because we have QP prep at one o'clock. We have to get out of here.
Liberal
The Chair Liberal Judy Sgro
Okay. Thank you very much.
Mr. Guy and Mr. Chan, whoever wants to start, you have the floor for the moment.
Robin Guy Vice-President and Deputy Leader, Government Relations, Canadian Chamber of Commerce
Thank you very much, Madam Chair.
Good morning, honourable members.
The Canadian Chamber of Commerce is the country's largest business association, with an active network of over 400 chambers of commerce and boards of trade, representing nearly 200,000 businesses of all sizes and in all sectors and regions of our country.
I am joined today by my colleague Pascal Chan, the senior director of transportation, infrastructure and construction.
As a trading nation, our trade infrastructure matters more to Canada than many other countries around the world. In fact, two of every three dollars that Canada makes rely on moving goods. This is significantly higher than the OECD average of just over 50%. When Canadian businesses can't import or export goods reliably, we undermine our ability to grow our economy—
Liberal
The Chair Liberal Judy Sgro
Mr. Guy, can I ask you to hold for a minute?
Do I have unanimous consent to continue allowing the witnesses to speak?
Vice-President and Deputy Leader, Government Relations, Canadian Chamber of Commerce
Our west coast is Canada's largest gateway to the world, handling over 800 million dollars' worth of cargo, from agri-food and potash to critical minerals and household necessities, every single day. That accounts for a quarter of Canada's total trade.
This summer we saw over 35 days of uncertainty and disruptions to our west coast gateways, including Vancouver, Vancouver Island and Prince Rupert, which caused major delays for Canadian businesses in virtually every sector across the country.
I'll repeat that 25% of our total trade stopped. That meant that Canadian potash had to cut production and sales during the strike, causing those who rely on Canadians for fertilizer to look elsewhere to ensure that they could continue to grow crops. This meant that businesses looking for replacement parts to fix machinery were delayed, causing production to slow or stop. It meant that fruits and vegetables that we bring to Canada were left to rot in containers as opposed to making it onto shelves for consumers to enjoy. Plain and simple, it meant that goods were going to become more expensive, thus fuelling inflation.
I'll stress to the committee that the damage from a strike does not simply take place in the days when workers are picketing. Businesses need certainty. They need to know that, if they are importing or exporting goods, those goods will get to where they need to go when they need to be there. If not, then suppliers will go elsewhere, and there's no guarantee that they'll come back.
When looking at Canada's record, many of our trading partners are beginning to question if Canada can reliably get goods to market. We saw that shortly after the west coast port strike with the St. Lawrence Seaway and with the uncertainty that is looming at the port of Montreal.
I must state that the Canadian chamber respects the right to collective bargaining. We believe sincerely that the best deals are reached at the table, but when negotiations break down and meaningful bargaining is no longer possible, the Canadian business community expects the government to show leadership and act in the best interests of the country.
The Canadian chamber calls on the government to use the tools that it currently has in its tool box to prevent a strike and then solve it. We applaud the Minister of Labour for directing a senior mediator to recommend terms for settlement to reach a fair deal. Unfortunately, we did not see that action until nearly two weeks into the port strike, when significant damage to the Canadian economy and Canada's reputation had already taken place, and that dragged on for further weeks while the union failed to ratify the agreement.
The review initiated by the Minister of Labour under section 106 of the Canada Labour Code is a key opportunity to do this to equip the government with more tools and to be able to avoid labour disruption while protecting the public interest. We need to make sure that the government has the ability to force the two sides together in the form of a binding resolution. We can't have the government waiting on the sidelines for two weeks before action is taken.
Canada's supply chains are only as strong as their weakest link. Government can't solve all of our supply chain issues, but it must look to enable policies that will enable trade and strengthen our supply chains.
Less than a month ago, the Minister of Labour told Canadians that our credibility as a trading nation depends on the stable operations of our supply chains and that we must do everything we can to preserve that stability. We couldn't agree more. However, the introduction of Bill C-58, which aims to prohibit the use of replacement workers during strikes, suggests that the government wants to move away from preserving stability. It is, in fact, doubling down on Canada being seen as an unreliable trading partner. We need our leaders to engage in an honest dialogue that will provide our government with the tools it needs to address our labour challenges while allowing employers and employees to bargain in the way they should.
For the sake of our economy, I would urge all parties to vote against this legislation.
Thank you for your time. I look forward to your questions.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
We go on to Mr. McKenzie, president and chief executive officer of Canpotex Limited.
Welcome, sir, and please accept our apologies for the delay.
Gordon McKenzie President and Chief Executive Officer, Canpotex Limited
No worries.
Thank you very much. Good morning from Saskatoon. Good afternoon in Ottawa.
Thank you for inviting Canpotex to appear today. As you mentioned, I'm Gord McKenzie, president and CEO of Canpotex, one of the world's largest suppliers of potash, based right here in Saskatoon, Saskatchewan.
Each year, we market and deliver approximately 13 million metric tons of Canadian potash to 40 overseas countries on behalf of our two shareholders: the Mosaic Company and Nutrien.
I'm pleased to be here today to discuss the impacts of the port of Vancouver strike. In short, the strike significantly impacted Canadian potash. Approximately 500,000 metric tons of planned potash shipments from the port of Vancouver were diverted or delayed. I can tell you the shipments will not be made up by the end of 2023.
Very importantly, it's hurt Canada's overall reputation as a reliable and stable trading partner.
As you would know, the port of Vancouver is the most important outlet for potash exports. Approximately 70% of Canpotex potash is handled by our terminal, Neptune Bulk Terminals, in North Vancouver. Today, Neptune is the largest potash handling facility in the world. We have invested heavily in making it the most cost-effective and efficient terminal.
The impacts began well in advance of the strike action. On June 28, railroads stopped launching our trains in Saskatchewan in anticipation of this strike. The backlogs were not cleared until the very end of August, at least. There was little capacity elsewhere in Canada to divert these shipments. We'd already been maximizing our third party terminal at the port of Saint John and through the port of Thunder Bay. We also had to rely more heavily on U.S. ports because of this strike.
One of the most harmful aspects of the strike was the unpredictability, particularly when the ILWU resumed picket lines on July 18. On July 19, Canpotex announced we were withdrawing all new sales offers around the world because of the supply chain uncertainty at the port of Vancouver. This was a step that we'd never taken before at Canpotex in our 51-year history.
Our inability to move potash created congestion in our shareholders' minds. This resulted in Nutrien announcing it was curtailing production at its Rocanville and Cory mines here in Saskatchewan.
You might ask, “Why does this matter? Why is this important?”
As you've heard this morning, reliability is critical. To potash customers overseas and, very importantly, for global food security, potash shipments are time-sensitive. A missed potash shipment can mean that potash doesn't get to a farmer's field, hurting food production.
Reliability is critical to Canada's brand overseas. It has been built over decades by exporters like Canpotex for 51 years.
Reliability is an important part of our brand as Canadians and potash producers, but it's also our competitive advantage. For example, last year, Canpotex shipped record volumes to Bangladesh, backfilling potash traditionally sourced from Russia. In March, the federal government proudly highlighted the agreement for Canpotex potash between the Canadian Commercial Corporation and the Government of Bangladesh. Bangladesh could trust that Canpotex would be a reliable and stable partner. We're proud to have stepped up in light of potash supply concerns stemming from Russia's illegal invasion of Ukraine.
We can't take this brand of reliability for granted. In just the last two years, we've experienced floods, wildfires, poor winter rail performance and numerous labour disruptions, including last month's strike at the St. Lawrence Seaway. All of these disruptions are adding up and risk chipping away at our strong Canadian reputation.
At Canpotex, we are doing what we can to protect our hard-earned reputation. I can say we've invested approximately $3 billion U.S. over the past two decades into our own supply chain, including building our own railcars, operating our own terminals on both the east and the west coasts, and chartering our own vessels.
The rest of the world is noticing, and I do not want competitors taking advantage of Canada's supply chain uncertainty. To be absolutely clear, our competitors from Russia and Belarus are at their near-traditional levels of potash exports presanctions or pre-Ukraine war.
I have one quick, sobering example for you.
Indonesia is the world's fifth-largest potash consumer, and potash is the largest Canadian export to that country. Earlier this month, the fertilizer press noted and reported on the impact the port of Vancouver strike had on Canadian potash exports to Indonesia, specifically. Indonesian importers took on more potash from Russia. Russia replaced Canada as their leading potash supplier in September as a direct result of this strike. In potash—
Liberal
The Chair Liberal Judy Sgro
Thank you very much. I'm sorry to interrupt, Mr. McKenzie. Time is very tight today.
Can I go to Ms. Anderson from the Greater Vancouver Board of Trade for five minutes?
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Madam Chair, would it be possible to reduce the time allocated to the next speaker in order to give us time to ask the witnesses some questions?
November 30th, 2023 / 12:50 p.m.
Conservative
Bridgitte Anderson President and Chief Executive Officer, Greater Vancouver Board of Trade
Thank you and good morning, Madam Chair, vice-chairs and members of the committee.
As mentioned, I'm Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade. I'm presenting today from the traditional territory of the Musqueam, Squamish and Tsleil-Waututh.
On behalf of our members—over 5,000 businesses—thank you for the opportunity to discuss the significant economic impacts of the 13-day strike this summer at Canada’s west coast ports.
This strike, the longest in almost four decades, unfolded against the backdrop of years of challenges in the supply chain that were largely outside of our control. The cumulation of these events impacted Canada's image and role as a stable partner in the global supply chain.
In March 2020, the pandemic's effects began a tidal wave of imbalances in container trade, as factories around the world shut down, leading to shortages, scarcity and hoarding. In July 2021, wildfires damaged rail lines and brought train shipments to a grinding halt. In November 2021, an atmospheric river caused billions of dollars of economic damage to two class 1 rail links and highway systems, which were heroically rebuilt.
These events highlight the extreme pressure that fuelled inflation and caused economic stress, some of which we were able to control and some of which we could not. We know we need to build climate resiliency into our supply chain, and our members are investing to do just that. These investments in our resiliency and growth will mean good-paying and, often, union jobs.
Against this backdrop, we were concerned, in the months leading up to July 1, about what the short- and long-term economic harms of a strike at the ports in Vancouver and Prince Rupert could be. We communicated to government and port-reliant industries about the damage that could occur if the strike shut down the ports. Regrettably, those fears came to fruition with a coast-wide strike on Canada Day.
During the strike, we launched a port shutdown calculator, a tool designed to visually depict the magnitude of trade disruption. The numbers were staggering. With 800 million dollars' worth of trade being disrupted each day, our calculator estimated the total economic impact of the strike to be a remarkable $10.7 billion.
This disruption reverberated across critical sectors nationwide, from manufacturing and retail to agriculture, energy and automotive dealers. Small businesses ran out of building and construction materials—materials needed to build critically needed homes. Local car dealers awaited shipments of vehicles and parts. Exporting industries lost their ability to move their products to market, making it more difficult to secure the global contracts that drive investment and employ Canadians. Pulp mills stood silent. Mining operations were curtailed, and businesses across Canada faced increased costs and prolonged wait times for goods. Moreover, the rerouting of goods destined for Canada to alternative ports not only incurred additional costs and delays for businesses but also needlessly amplified the environmental footprint of our trade.
While the strike unfolded in B.C., the effects were felt nationwide. We think of the port of Vancouver as “Canada's port”, for it moves as many goods as the next five largest ports combined, singlehandedly accounting for approximately 25% of Canada's total traded goods. This means that long-term disputes like the one experienced this summer have far-reaching impacts that affect the entire nation. Billions of dollars of goods bypassed Vancouver for other ports, especially Seattle, Tacoma and other U.S. and Mexican ports, as port swaps and diversions increased.
All of this cost Canada. Businesses were unable to adequately plan their operations and staffing without knowing if the ports would be open from one minute to the next. This was made worse by the back-and-forth with strike action.
Throughout this strike and in its aftermath, we consistently urged the federal government to explore additional tools to facilitate lasting agreements during labour disruptions that affect the entire economy. The review initiated by the Minister of Labour under section 106 of the Canada Labour Code is a key opportunity to do this.
In conclusion, I thank you once again for the opportunity to share insights into the impact of the strike. We look forward to collaborating with the government to ensure meaningful collective bargaining can take place without causing detrimental, nationwide consequences to our economy and our reputation as a reliable, stable trading partner.
Thank you.
Liberal
The Chair Liberal Judy Sgro
Thank you very much to our witnesses. We very much appreciate getting your comments on the record.
Mr. Martel.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Madam Chair, given the inconvenience we've had today, could we ask the witnesses to come back? They've prepared and made the effort to come and testify, but we can't even ask them questions.
Is it possible to invite them back to testify?
Liberal
The Chair Liberal Judy Sgro
We'll ask the clerk to extend that invitation if it works within the schedule that we've planned. If there are any particular questions that the committee wants to ask, possibly you could communicate directly with the witnesses and get that information as well. However, we'll certainly see if there is an opportunity to invite them back.
Go ahead, Mr. Baldinelli.
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
At a minimum, has the clerk receive written submissions that can be shared as well?
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
That's at a minimum. I mean, we have extended these offers to these important stakeholders to make presentations. I would appreciate an opportunity to ask questions, so if we could at least have the ability to see if they can return, that would be greatly appreciated.
Liberal
The Chair Liberal Judy Sgro
To all of the witnesses present, if you could submit, in writing to the clerk, any additional comments or areas that you want to reiterate, she will distribute those to all of the committee members.
Again, we apologize.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Madam Chair, would you at least allow me to ask them a question?
Liberal
The Chair Liberal Judy Sgro
I can't. It's gone beyond the 10 seconds.
Do I have permission to adjourn the meeting?