Thank you, Madam Chair and committee members. Thank you for the invitation to take part in your study of the 2023 strike at the port of Vancouver.
The Canadian Vehicle Manufacturers' Association is the industry association representing Canada's leading manufacturers of light and heavy-duty motor vehicles. Our membership includes Ford, General Motors and Stellantis.
CVMA members are at the forefront of new automotive investment in Canada. Over the past three years, Ford, GM and Stellantis have announced nearly $15 billion in new investment, most of which is focused on electric vehicle assembly and the battery supply chain. Critical infrastructure such as the port of Vancouver underpins the highly integrated automotive industry and Canada's competitiveness for new investment, including the $15 billion that I just referenced.
Supply chain disruptions are occurring with more regularity. With each incident, business is burdened with the cost of redirecting goods to maintain productivity and sales. The Vancouver and Montreal ports, Ambassador Bridge, St. Lawrence Seaway and rail and highway trade corridors are critical infrastructure that support the automotive supply chain for finished vehicles, parts and component inputs such as minerals at both Canadian and U.S. production facilities. The Vancouver port is a key transit point for parts and finished vehicles produced and sold in Canada and across North America.
In 2022 the port handled 333,000 vehicles, which represents about a quarter of Canadian vehicle sales. The Vancouver work stoppage quickly resulted in auto assembly production impacts on both sides of the border. Automotive manufacturers that depend on the port were forced to reroute shipments, which added significant costs and increased uncertainty at the worst possible time.
For Canadians, this means higher vehicle prices and delays just as the sector is rebounding from pandemic-related inventory shortages. It's also important to recognize that it can take weeks to recover from a backlog of shipments out of ports. The ripple effect on rail and transportation logistics is significant. Once the port resumes operations, there's considerable time before goods reach their destination, which can result in continued production delays and added cost.
To illustrate immediate and longer-term impacts of the Vancouver port disruption, one company incurred $5 million U.S. in premium freight costs. They have decreased the volume routed through the port of Vancouver by 22% since July and continue to move volume out of Vancouver. They now focus on U.S. west coast ports due to the ongoing port congestion issues in Vancouver.
Canada needs to improve its governance of its critical infrastructure to provide more stability for foreign direct investment, protect supply chains and be more coordinated and efficient in response to disruptions. Progress is needed on a national strategy for critical infrastructure.
CVMA has made a number of recommendations to government on this. They include the following.
Number one, we need to add trade infrastructure to the listing of national critical infrastructure definitions.
Number two, we need to work with industry to confirm priority ports of entry and trade corridors that should be designated critical infrastructure and to develop response plans including points of contact, information sharing protocols and service standards that could be launched in the event of a disruption.
Number three, we need the government to enhance its leadership role in the coordination of stakeholders and critical infrastructure owners and operators in response to disruptions like the one we witnessed at the port of Vancouver. This should include reviewing existing protocols, undertaking risk assessments, scenario planning and clarifying the respective roles of each level of government, as well as the most efficient communications channels to operate and execute in the event of a pending or occurring disruption.
With that, thanks for your time today. I look forward to any questions.