International Trade Committee on Dec. 5th, 2023

[Brian Kingston]

Yes, likewise, and we did provide input to Transport Canada as this was under way, to help with that assessment, so that sounds appropriate.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

That's perfect.

As Mr. Dick indicated last week, “Businesses begin to make adjustments when they anticipate that there could be uncertainty. They don't necessarily wait for the disruption, so there have been impacts as people seek to mitigate risks when they anticipate there is a vulnerability and an uncertainty as to the outcome.” I was reading from the blues from the Thursday, November 30, 2023 meeting.

What he was referencing was the collective agreement that expired on March 31, 2023. Would you agree that those numbers, albeit the numbers that you weighed in on, could possibly be even higher, considering that—as I think you said, Mr. Adams—the perception of predictability in Canadian ports is at risk these days?

[David Adams]

From my perspective, I think that makes sense, and I know for certain that my members did take contingency planning far before this strike occurred.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Mr. Kingston.

[Brian Kingston]

Yes, the impacts are the same. What we've seen is that companies have now reduced their dependence on the port of Vancouver. They would have planned in advance when they saw a potential for disruptions, and now volumes have gone down as a result.

I would also note, as Mr. Adams outlined, that given an upcoming potential work stoppage at the Port of Montreal, and given that disruptions have become a feature, not a bug, of the Canadian transportation system, companies will take contingency actions well in advance.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Minister Dreeshen, thanks for joining us today.

You wrote a letter dated July 11, and it was within about a week of the work stoppage. In the letter, you encouraged both the ILWU and the BCMEA to not only—

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Excuse me, Madam Chair.

There's still a problem with the interpretation. I don't think it's the interpreter. I don't think the microphone is working properly.

[The Chair, Liberal, Judy Sgro]

Sorry for the interruption. Could you try it again?

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Minister Dreeshen, in your letter encouraging an immediate resolution to the strike, was the purpose of your letter...? In terms of your reason for writing the letter, Minister, was there a perception of a lack of leadership by the Canadian government and Canadian government officials?

[Devin Dreeshen]

We just like to see consistency. I think there was great federal leadership for the Port of Montreal strike that happened just a year prior. There was one day of strike action, and Parliament passed back-to-work legislation and made sure that the port was functioning and that the supply chain across the country wouldn't be disrupted.

We applauded that as a government, knowing that goods would continue to flow—both imports and exports. We were left dismayed, however, by the fact that the west coast's port strike was not treated with the same urgency by the same federal government just a year later. It was left to linger for over a month at Canada's number one and soon-to-be number two largest ports. When I consider the disruptions and the cascading effect that it had across the country for companies turning off shifts, ending shifts and affecting workers all across Canada, in Alberta, B.C., Saskatchewan and Manitoba, it really seems that the company was held hostage by not being able to get products to market.

I think that the urgency was appropriate in Montreal's case, but on the west coast, there were so many question marks as to why the federal government treated it differently.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

That's great. Thank you for providing that.

In terms of lingering impacts you're seeing that exist today, you touched on some of the examples.

I'm curious as to whether there are more that you can provide. As indicated, the numbers we got from the transport department—$13-billion shipment loss and $1-billion economic loss—seem to take in a bit of the timeline of events, but obviously there's potential for other impacts in the longer term.

I'm hoping you might be able to expand on some potential examples that you're still seeing.

[Devin Dreeshen]

Sure.

There's a high level of wheat, canola, fuel, canola oil and wood from Alberta going out through west coast ports. Those are the big, main exports. They're all in the billions of dollars.

I know it's said a lot that Canada has a reputation as a reliable shipper. A lot of those impacts are behind the scenes. You have Canadian companies trying to create products here in Canada and then obviously sell them and export them around the world. When customers on the other side, around the world, are seeing that products aren't being shipped in from Canada, you're then seeing those customers choosing not to use Canadian products or purchase Canadian goods.

Then you're seeing a competitive disadvantage, where they are buying products from other places around the world that have wheat, canola, fuel, canola oil and wood, and we're seeing a price decrease for Canadian products.

There are so many different aspects to workers being affected in the country and to our competitiveness around the world in being able to sell products. It hurts on both sides when you don't have a functioning supply chain.

[The Chair, Liberal, Judy Sgro]

Thank you, Minister.

We'll move on to Mr. Sidhu for six minutes, please.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Madam Chair, and thanks to our witnesses for taking the time to join us here this morning.

My first question will be for Mr. Kingston.

You mentioned that over 300,000 vehicles went through the port of Vancouver. A quarter of Canadian vehicle sales went through this port, as we heard. You mentioned a decrease in vehicle cargo even before this strike, over the last number of years.

What is behind this decrease when, overall, Canada's trade numbers are up?

[Brian Kingston]

Thank you.

Prior to this strike, the automotive industry, globally, was still recovering from a semiconductor shortage. We have seen that shortage impact trade volumes of vehicles in North America and around the world. There were pandemic-related shortages of semiconductors, which resulted in tens of millions of vehicles not being produced that would have originally been planned for production.

That was a big factor and a driver of the reduced volumes in sales numbers, as well as some of the inventory challenges that we saw leading up to this. That's why these disruptions in Vancouver, and also in Montreal, were so problematic. They happened right as the industry was starting to recover in terms of trade volumes, and this set production back yet again.

[Maninder Sidhu, Liberal, Brampton East, ON]

There was a global shortage of semiconductors that led to the decrease in these ports, even before the strike.

You mentioned a few recommendations in your opening remarks. I'm hoping you can expand on recommendation three.

[Brian Kingston]

Absolutely.

For our third recommendation, we are hopeful that the recently established supply chain office will be able to do some of this through Transport Canada. We'd like to see the federal government enhance its leadership and coordination role with respect to critical trade infrastructure ports.

What I mean by that is identifying where those key ports and conduits are that absolutely have to be functional, and then doing risk assessment and scenario planning around disruptions. As I noted, this is becoming a feature of the Canadian economy, not an irregular occurrence, so unfortunately we need to plan for it.

We'd like to see better communications plans and coordination among all levels of government when there are these disruptions, so that industry can at least know who to call and, effectively, how to find a way around the transportation infrastructure conduit to make sure that products continue to move.

[Maninder Sidhu, Liberal, Brampton East, ON]

You mentioned that trade volumes are down at the port of Vancouver.

Are you seeing other ports with the same trend line?

[Brian Kingston]

Yes.

At least from an auto perspective, between the Port of Montreal and the port of Vancouver, we see that real reputational damage has been done. Companies are, as much as possible, trying to reduce their dependence on those ports to make sure that, should there be stoppages, they have a contingency plan in place.

Again, with the upcoming potential for a strike at the Port of Montreal at the end of this month, companies have to plan for that. They're routing product through the United States as much as possible. Those volumes have come down as a result.

[Maninder Sidhu, Liberal, Brampton East, ON]

Mr. Adams, you mentioned climate change, the impacts it's having on our supply chain ecosystems, and the importance of our addressing that—whether it's through investing $1 billion in charging infrastructure, promoting electric vehicles or putting more funding toward research and innovation—and working with industries to help combat climate change.

You also mentioned the bottlenecks in our supply chain. Some of that is being addressed through our national trade corridors fund, with billions of dollars to help relieve some of the pressures in the ecosystems, whether we're talking about rail lines, trucking or air cargo.

What more can be done to relieve some of these pressures, in your opinion, Mr. Adams?

[David Adams]

I think we've already talked about it. It's just taking a holistic approach to the transportation infrastructure, and that's one thing we've tried to do as an association. Every year, we bring together the rail community, the truck carrier community and the ports, and we try to have a collective discussion about how to make the system work better, because one challenge is that whenever you talk to just one party, they point the finger and say, “It's not us. It's the rails, or it's the ports that are the real problem.”

It harkens back to what Mr. Kingston relayed as well. We need to have a more holistic and comprehensive view of transportation infrastructure and the various components of it in our society.

[Maninder Sidhu, Liberal, Brampton East, ON]

In your conversations with stakeholders from within the ecosystem, are they looking at innovation that perhaps other countries are bringing in at their ports? Is that part of the conversation?

[David Adams]

I don't really have a line of sight into that, but I anticipate they probably are. It's like any industry looking at best practices around the world.

[Maninder Sidhu, Liberal, Brampton East, ON]

I have a minute left, if you want to add anything else.

[David Adams]

One thing I would say is that if you look at our ports, the reality is that most of our ports are inbound ports for automotive, primarily finished vehicles. In Canada we export very little as far as finished vehicles and even parts through our ports, so it's an import issue, really. Where the border issues are problematic for the North American industry, for our collective members, is the north-south dialogue and the border there for manufacturing and distribution in North America.