Transport Committee on March 31st, 2022

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

I guess I'll just thank you again, then, for being here on this. Perhaps we could get a copy of the earlier report from 2019 that Mr. Badawey had. I'd really like to see that and I'm sure that the individuals here would. I'd like to see how many of those recommendations we did complete for you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Dowdall.

Next we have Ms. Koutrakis.

Ms. Koutrakis, the floor is now yours. You have five minutes.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you to all our witnesses for being here this afternoon.

It's really nice to see you again, Mr. Lemaire and Mr. Buhagiar. I don't recall if Monsieur Milette was at our round table.

It's really great to hear you. It gives me an opportunity to pick your brain a little more, Mr. Lemaire, on the supply chain commissioner. I'm sure you've put a lot of thought behind this. I'm wondering if you could share a little more with us about the kinds of powers this commissioner would have and the kinds of resources he or she would need.

It makes sense, obviously, for it to be an industry person. To whom would they report? What kinds of qualifications would be needed? Finally, do you know of any other country that has a supply chain commissioner in place, and how does that work?

[Ron Lemaire]

Thank you for the question. It's very good to see you again.

The quick answer is that the U.S. now has what they call a supply chain “czar”, but I don't think that's the right word that you want to use in this day and age. The commissioner, in essence, needs to have the authority.... You hit on a couple of key questions, and I think the U.S. is a good example to build on, but not the perfect example.

If we look at a commissioner in Canada in terms of the skill set, the individual has to have direct experience with the various modes of transportation in Canada in understanding the ports, understanding the trains and understanding the rail. There are some individuals who have that diversity. As Christian mentioned, the complexity that the industry person has to bring to the table is then in reconnecting, educating and bringing the departments together to make sure we understand where the short-term, mid-term and long-term solutions are.

On the power, this comes into a big discussion. Unfortunately, I do not think it sits within Transport. You need to elevate that responsibility higher within government. With regard to that, we've had some discussions on a couple of different areas, but as of yet, we haven't landed on what we feel would be the best mechanism. We're still looking at who would be in the best position to work with bureaucrats and elected officials to provide recommendations on changes to the regulatory environment in terms of looking at our Competition Act, looking at the Transportation Act and looking at the challenges we have around antitrust concerns relative to the shipping industry and some of those concerns on how we could potentially rectify it.

I would be happy to sit down in a meeting with any of the committee members to talk more. It's a complex answer, and I don't have time to deliver fully on it. I apologize.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Lemaire. Anything you can send forward to the committee for digging deeper into the weeds would be appreciated by all the members. Thank you for that.

My next question is for you, Mr. Buhagiar. You speak quite a bit about automation. You did the same thing during our round-table discussion about where automation is key. I'm wondering if you know of any ports in the U.S. or elsewhere that are leading in automation and that we can model.

[Christian Buhagiar]

Ms. Koutrakis, it's good to see you again.

MP Gladu, I think, was asking those questions earlier and suggested some organizations, such as the port authorities. They must be coming in for the next meeting of the committee. I might suggest that they might be in a better position to answer the question, but having said that, let me take it away and come back to the committee if we have some suggestions that might be best for you.

[Annie Koutrakis, Liberal, Vimy, QC]

Okay. That's great.

I have all my notes from the round table. As I was quickly writing down notes, you used an expression that I'll paraphrase. You said that innovation is not always big and sexy. You said that if we have innovation, we cannot have sacred cows. I believe that the sacred cows you were referring to were restrictions. If we are to remain competitive, do you feel that we need to be making some changes to red tape and, if so, what types of restrictions were you referring to?

[Christian Buhagiar]

Mr. Chair, through you to Ms. Koutrakis, I appreciate that I said those things and those are the things that you took down. Nevertheless, yes, I think that red tape has to be looked at.

I will say that, when I was speaking about sacred cows there—and here I'm going to look at the industry that I represent—supply chain professionals have grown up doing it a certain way. They've been taught to do it a certain way. One of the members, and I hope to follow up with him at some point, asked questions about just-in-time. Just-in-time works in Ron's field and it's critical. It's not critical everywhere.

We have to do supply chain differently. There are a lot of thinkers now who are suggesting that the way we did it, the way we looked at forecasting, because.... This committee's interest is really around transportation and infrastructure, but let's not forget that supply chain is beyond transportation and infrastructure and logistics. It's demand and forecasting. It's a very long end-to-end chain, and it all has to function together.

This notion that we can just get better at forecasting, as one sacred cow, because the supply chain professionals generally think, let's get better at forecasting.... We're not going to get better at forecasting, so we have to get rid of those sacred cows.

[The Chair, Liberal, Peter Schiefke]

Thank you, Ms. Koutrakis.

We will continue with Mr. Barsalou‑Duval.

Mr. Barsalou‑Duval, you have the floor for two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Mr. Buhagiar, I liked the fact that you finished answering the question by referring to sacred cows. Before that, you talked about just-in-time. Now, when I was a student, just-in-time was the holy grail of supply. I'm not saying that this method doesn't have its advantages, quite the contrary.

In a way, do you consider that just-in-time can be seen by many people in the industry as a sacred cow?

[Christian Buhagiar]

Mr. Chair, through you to the member, I think for sure, for some within the industry, that and other types of ways and approaches to doing business are sacred cows. If we're going to be a country that is truly resilient, we have to work through that. That's going to take the leadership of individuals who sit on this committee, governments, other business leaders and organizations like Ron's and Dave's and Steve's and mine, to start the conversation so that they're not viewed as sacred cows and they're not scary.

Let's be clear: People grew up and were trained in these ways, as you suggested yourself. The key for me in moving forward is that if we're going to be resilient.... I don't love the word because I'm not sure I can define it, but we need to be responsive. Supply chains need to respond better than they're able to do in the construct of what we have today. That's beneficial for everybody. That responsiveness necessitates visibility. If you don't know where you are and how you're operating at that moment in time, you can't respond well.

That's the key for me with resiliency, and something that I would certainly encourage this committee to continue to unpack with other witnesses.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you for your answer.

I will go further. Since we started this discussion, I feel that everyone is coming to some kind of consensus that the supply chain problem was predictable. The causes were identifiable, in that the problems are now occurring in the form of a major crisis, but we will not necessarily be able to find short-term solutions, because we are dealing with a backlog of problems.

Despite the apparent consensus on the need to take a long-term view and the fact that changes will take time, are there short-term measures that can be taken to improve the situation?

[The Chair, Liberal, Peter Schiefke]

I'll ask for a short answer, please.

[Christian Buhagiar]

Mr. Chair, through you to the member, I think there are probably a number of things we can do. However, if there are those types of small wins, I think they are going to be restricted to certain segments and sectors. Ron has talked about this, and Dave has talked about this. I think you have to pick some sectors, some parts within the sector, and you'll get smaller wins there.

For a system change, there are not going to be quick fast wins. I think you're correct in saying that there's a longer-term approach, but we need to lead to get there.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Buhagiar.

Thank you very much, Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I have a question about automation in the port sector, probably for Mr. Buhagiar again.

We talked about automation as an approach to resolving some of these supply chain issues. It would seem that there are limitations to that on the labour side. When L.A. and Long Beach automated, it cost 70% of their workforce. When I talk to folks in the port sector, especially ports that are growing rapidly, they tell me that rapid growth really mitigates the labour-shedding impact of automation, but there must be limits to that.

I'm wondering how we mitigate the long-term impacts of automation in the port sector. We're talking about a 70% reduction in workforce. That's really significant for communities. What are your thoughts on that?

[Christian Buhagiar]

Mr. Chair, through you to the member, I'm not sure I could give an answer that would be valuable or instructive. What I will say is that the goal of automation can be to replace workforce. The goal of automation can be to elevate the workforce and allow them to do their work. Those are choices that will be made at individual ports and through strategies, so it's best to ask the individual ports.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I appreciate the response, Mr. Buhagiar. I think that, in an ideal world, we would use technology to increase the requirement for labour for people working in all of these sectors. The reality, though, that we see across so many sectors, whether it's the auto sector or the forest sector in my neck of the woods, is that investments in technology result in fewer jobs per unit of output or, in the transport sector, per unit shipped.

This is a very concerning situation. Obviously we're not going to solve it in the remaining five minutes today, but I am struck by the challenges that this creates for communities, especially communities where a significant part of the workforce is employed in the transportation sector in the supply chain. Looking down the road, we're going to have to address that challenge around employment.

I'm sorry. That didn't have a question mark at the end. It was just a general comment.

I'll cede the remainder of my time, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach.

Next we have Ms. Lantsman.

Ms. Lantsman, you have five minutes. The floor is now yours.

[Melissa Lantsman, Conservative, Thornhill, ON]

Thank you so much, Mr. Chair.

Thanks to all of the witnesses for being with us on this Thursday afternoon.

I want to question the canola growers.

You talked a little bit about the labour shortage—at least I think I have that right in terms of who mentioned it. I know this isn't the labour committee, but I want to know if you can comment on Canada's capacity to train and recruit the right labour when it comes to supply chain jobs and supply chain expertise.

[Dave Carey]

I believe that would probably be better for Mr. Lemaire. The labour issues we alluded to were more around the union dynamics with the rail, but I think Ron spoke more to labour issues and maybe the foreign worker side.

I can speak to there just generally being a problem filling positions across the economy, certainly as we return from COVID, but I might defer to Mr. Lemaire, as I believe it was his testimony.

[Ron Lemaire]

Mr. Chair, I'm happy to quickly respond.

The temporary foreign worker program, whether on farm or off farm, is unto itself a separate program, but the temporary foreign worker program from post-farm gate is where we're asking the government to increase the cap from 10% to 30% in an emergency strategy to try to bring more workers in to fill some of those key roles. That could be everything from butchers to working in meat plants to functioning in warehouses and produce packing sheds or anything that doesn't have a direct link to the farm. That's one example of a quick change in solutions.

I had mentioned immigration as another key strategy and targeted structure. The work currently under way with the government to streamline and support those Ukrainians who are coming to Canada during the crisis and trying to support them, potentially with whatever resources they need and potential employment, is another option that our industry is very open to, not only for those Ukrainian refugees coming to Canada but others coming to the country as well.

[Melissa Lantsman, Conservative, Thornhill, ON]

I want to change over to the issue of rail. We've had a number of issues over the past couple of years and just recently.

Can you talk a bit about what the stopgap is? Is it the lack of infrastructure? Is it the lack of service? Is it in terms of getting products to market or getting products to the coasts?

[Dave Carey]

Guy, do you want to answer that?

[Guy Milette]

Yes, I'm going to share that answer.

One of the problems we have with rail is the fleet, and the quantity of equipment that is available. We have seen in the past several years the number of ships going to the Halifax port increase incredibly. If the rails only have 500 pieces of equipment available in a day and there's a capacity for 1,000 containers, it's just backlogging continuously.

Don't forget that there are at least two, three or four different companies involved from the shipping line to the unloading, to the subcontracting carrier that will move the containers, sometimes directly from the port to rail, which may be only one or two kilometres, but sometimes it's not available straight at the port. Then there are the rail transportation services and a fourth company, locally, that will actually take the container to your yard.

Most of these companies are short on labour, so you have a lack of equipment and everyone is backlogging on jobs. For every company you deal with, every step will have a few days' delay here and a few days' delay there. In the end, it easily adds up to a week to 10 days, but the availability of equipment is definitely a key feature.