Thank you, Mr. Chair, and good afternoon.
On behalf of Supply Chain Canada and our almost 8,000 members, I want to start by thanking the committee for the opportunity to speak with you today.
The COVID-19 crisis has, over the last two years, demonstrated just how vulnerable our supply chains can be. Disruptions create real challenges in the everyday lives of Canadians. Supply chain issues do fuel inflation and resolving global supply chain issues would help with inflation, but the issues are complex and multi-faceted. Labour disruptions and challenges related to production, sourcing and transportation have all created challenges and disruptions, coupled with the challenge of increased demand in certain sectors.
I want to take a moment to recognize the hard work and innovative approach so many supply chain professionals have taken over the last few years. They rose to the challenge and they ensured that Canadians were supplied and supported through great effort. I saw the innovation. I personally saw the collaboration and the plain old elbow grease and hard work every day as I watched these folks.
However, disruptions have been real, and they will continue to present challenges moving forward. Supply chains, as my colleagues have said, are complex, multifactorial systems that have a significant downstream effect, which means that even when things are improving, the challenges are by no means over. We are pleased that the Government of Canada is creating a supply chain task force to make recommendations on short- and long-term actions. At Supply Chain Canada, we look forward to playing a role with the task force.
COVID-19 has revealed and exacerbated weaknesses that already existed in the system. This was noted earlier by my colleague. Challenges have included production, sourcing, labour and transportation issues that have led to many disruptions and shortages. It's vital that Canada become more self-reliant, have more internal capacity and have systems that can collaborate more easily to solve these challenges. Think, for instance, of a port authority that can more easily integrate with rail and shipping to quickly increase or decrease capacity as needed. That would certainly allow for a significant smoothing of the chain.
The COVID-19 pandemic saw changes in demand patterns from consumers, major congestion at various ports across Canada, and certainly, as noted, higher container rates. Today, approximately 12% of global ocean vessel capacity is unavailable due to delays. Prior to the pandemic, that was more normally at 2%.
Existing infrastructure is also a major concern. Canada must focus on increasing the capacity and scalability of our gateways and ports to ensure that our supply chains remain healthy and prepared for future impacts. The modernization and digitization, including the automation of some duties of existing infrastructure, will help to ensure that industry workers have the capability to move cargo more efficiently and responsibly. This is a major overhaul, but one that we believe is critical.
The infrastructure of our five major gateways is extremely stretched. Modernizing port infrastructure creates a heavy financial burden and oftentimes requires a drawn-out process, which generally deters the private sector from making the necessary improvements. It will be valuable for government to work with the private sector to ensure that infrastructure is upgraded and capable. Doing so will reduce dwell times, thereby smoothing the functioning of the entire chain and loosening bottlenecks. A smooth and reliable supply chain helps to ensure that cross-border trade between Canada and our partners is predictable. It is vital that governments and industry leaders work toward improving logistical systems across Canada to allow for a more interconnected and collaborative approach.
Supply chain solutions cannot be implemented through an isolated approach. My colleague Ron mentioned a whole-of-government approach. I believe that's necessary among all levels of government to properly address the difficulties faced by different sectors of the supply chain. The interconnectedness of supply chains in Canada is going to require an ambitious national strategy aimed at tackling the challenges of the various sectors.
Mr. Chair, thank you, and certainly, as my colleagues have noted, I'll also be pleased to answer any questions that members have.